Property Plant and Equipment and Intangible Assets

9 Months Ended

Sep. 27, 2024

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment and Intangible Assets

Note 5. Property, Plant and Equipment and Intangible Assets

The following tables summarize the components of property, plant and equipment as of September 27, 2024 and December 29, 2023 and depreciation expense for the three and nine months ended September 27, 2024 and September 29, 2023.


	September 27,			December 29,
(In thousands)	2024			2023
Building, land and leasehold improvements	$	171		$	4,002
Machinery, equipment, and vehicles		50,565			70,250
Office equipment, software and construction in progress		7,093			9,324
Property, plant and equipment, gross		57,829			83,576
Accumulated depreciation		(36,433	)		(37,203	)
Property, plant and equipment, net	$	21,396		$	46,373


	Three Months Ended				Nine Months Ended
	September 27,		September 29,		September 27,		September 29,
	2024		2023		2024		2023
(In thousands)
Depreciation expense	$	2,737	$	3,604	$	9,515	$	10,687

Depreciation is recorded within cost of revenue and selling, general and administrative expenses and is calculated using the straight-line method over the estimated useful lives of the assets, or in the case of leasehold improvements and capitalized leases, the lesser of the remaining term of the lease or its estimated useful life.

During the three months ended September 27, 2024, Shimmick completed the sale-leaseback of the Company's equipment yard in Tracy, California. The agreement consummated the sale of the equipment yard for $20.5 million and allows us to continue using the property pursuant to a separately executed seven-year lease. The Company received net proceeds of $17 million, after adjustments for prepaid rent through February 2026 and related closing costs, which were used to repay borrowings under the Revolving Credit Facility. As a result of the sale, the Company recorded a gain of $17 million in Gain on sale of assets within the condensed consolidated statements of operations.

During the three months ended September 27, 2024, Shimmick made the strategic decision to enhance the Company’s current enterprise resource planning (ERP) system rather than implementing a new platform which, due to prior capitalized pre-implementation costs and remaining contractual obligations of $5 million included in accrued expenses in the accompanying condensed consolidated balance sheets, resulted in a one-time charge of $16 million recorded in the three months ended September 27,

2024. The write-off is recorded in ERP pre-implementation asset impairment and associated costs within the condensed consolidated statements of operations.

The following tables present the Company’s finite-lived intangible assets, including the weighted average useful lives for each major intangible asset category and in total:


	September 27, 2024
(In thousands)	Weighted Average Remaining Useful Life in Years		Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net
Trademark		3.3	$	10,600	$	(5,679	)	$	4,921
Customer contracts		2.3		6,373		(3,982	)		2,391
Total			$	16,973	$	(9,661	)	$	7,312


	December 29, 2023
(In thousands)	Weighted Average Remaining Useful Life in Years		Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net
Trademark		4	$	10,600	$	(4,543	)	$	6,057
Customer contracts		3		6,527		(3,340	)		3,187
Total			$	17,127	$	(7,883	)	$	9,244

The Company’s estimated aggregate remaining amortization is as follows:


	Amortization
(In thousands)	Expense
2024	$	644
2025		2,577
2026		2,577
2027		1,514
Total	$	7,312