Primoris Services Corporation Announces 2014 Third Quarter Financial Results
Board of Directors Authorizes Quarterly Cash Dividend
Q3 2014 Financial Highlights
-
Revenue of
$613 million in the third quarter of 2014 compared to$551 million in the third quarter of 2013 -
Net income attributable to Primoris of
$27.4 million , or$0.53 per diluted share, in the third quarter of 2014 compared to$21.8 million , or$0.42 per diluted share, in the third quarter of 2013 -
At
September 30, 2014 :-
$146 million in cash, cash equivalents and short-term investments -
Total backlog of
$1.80 billion
-
The company also announced that on
2014 THIRD QUARTER RESULTS OVERVIEW
Revenue for the 2014 third quarter increased by 11.2% to
From an end-market perspective for the three months ended
Gross profit was essentially unchanged in the 2014 third quarter compared to the same period last year. The primary reason for the reduction in the gross profit as a percentage of revenue was the impact of a large power project in the West segment in 2013.
SEGMENT RESULTS
In the third quarter, the Company reorganized its business segments to
match the change in the Company's internal organization and management
structure. The new operating segments include:
-
West Construction Services - The West
Construction Services segment includes the underground and industrial
operations and construction services performed by ARB, ARB Structures,
Rockford,
Q3 Contracting , and Vadnais, acquired inJune 2014 . Most of the entities perform work primarily inCalifornia ; however, Rockford operates throughout the Unites States and Q3C operates inColorado and the upper Midwest United States. The segment also includes the operations of the Blythe Power Constructors joint venture. -
East Construction Services - The East
Construction Services segment includes the
James Construction Group ("JCG") Heavy Civil division, the JCG Infrastructure and Maintenance division, BW Primoris, and Cardinal Contractors construction business, located primarily in the southeasternUnited States and in theGulf Coast region ofthe United States and which perform heavy civil construction, infrastructure, and maintenance operations. -
Energy - The Energy segment businesses
are located primarily in the southeastern
United States and in theGulf Coast region ofthe United States . The segment includes the PES pipeline and gas facility construction and maintenance operations, theJCG Industrial division and the newly acquired Surber and Ram-Fab operations. Additionally, the segment includes theCalifornia -basedOnQuest, Inc. and OnQuest Canada, ULC operations for the design and installation of high-performance furnaces and heaters for the oil refining, petrochemical and power generation industries.
Segment Revenues |
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(in thousands, except %) |
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For the three months ended |
||||||||||||
2014 | 2013 | |||||||||||
Unaudited | Unaudited | |||||||||||
% of | % of | |||||||||||
Segment | Segment | |||||||||||
Segment |
Revenue | Revenue | Revenue | Revenue | ||||||||
West Construction Services | $ | 289,405 | 47.2 | % | $ | 362,362 | 65.7 | % | ||||
East Construction Services | 135,450 | 22.1 | % | 117,537 | 21.3 | % | ||||||
Energy | 188,382 | 30.7 | % | 71,434 | 13.0 | % | ||||||
Total | $ | 613,237 | 100.0 | % | $ | 551,333 | 100.0 | % | ||||
For the nine months ended |
||||||||||||
2014 | 2013 | |||||||||||
Unaudited | Unaudited | |||||||||||
% of | % of | |||||||||||
Segment | Segment | |||||||||||
Segment |
Revenue | Revenue | Revenue | Revenue | ||||||||
West Construction Services | $ | 747,823 | 46.8 | % | $ | 828,242 | 58.9 | % | ||||
East Construction Services | 360,975 | 22.6 | % | 316,218 | 22.5 | % | ||||||
Energy | 489,804 | 30.6 | % | 261,881 | 18.6 | % | ||||||
Total | $ | 1,598,602 | 100.0 | % | $ | 1,406,341 | 100.0 | % | ||||
Segment Gross Margin |
||||||||||||
(in thousands, except %) |
||||||||||||
For the three months ended |
||||||||||||
2014 | 2013 | |||||||||||
Unaudited | Unaudited | |||||||||||
% of | % of | |||||||||||
Gross | Segment | Gross | Segment | |||||||||
Segment |
Profit | Revenue | Profit | Revenue | ||||||||
West Construction Services | $ | 46,240 | 16.0 | % | $ | 62,520 | 17.3 | % | ||||
East Construction Services | 9,110 | 6.7 | % | 4,527 | 3.9 | % | ||||||
Energy | 20,123 | 10.7 | % | 8,418 | 11.8 | % | ||||||
Total | $ | 75,473 | 12.3 | % | $ | 75,465 | 13.7 | % | ||||
For the nine months ended |
||||||||||||
2014 | 2013 | |||||||||||
Unaudited | Unaudited | |||||||||||
% of | % of | |||||||||||
Gross | Segment | Gross | Segment | |||||||||
Segment |
Profit | Revenue | Profit | Revenue | ||||||||
West Construction Services | $ | 115,723 | 15.5 | % | $ | 133,195 | 16.1 | % | ||||
East Construction Services | 24,595 | 6.8 | % | 19,575 | 6.2 | % | ||||||
Energy | 46,106 | 9.4 | % | 28,328 | 10.8 | % | ||||||
Total | $ | 186,424 | 11.7 | % | $ | 181,098 | 12.9 | % | ||||
West Construction Services: Revenue decreased by
East Construction Services: Revenue increased by
Energy: Revenue increased by
Selling, general and administrative expenses ("SG&A") were
Operating income for the 2014 third quarter was
Net other income and expenses in the 2014 third quarter was income of
The provision for income taxes for the 2014 third quarter was
Net income attributable to Primoris for the 2014 third quarter was
Fully diluted weighted average shares outstanding for the 2014 third quarter increased by 0.2% to 51.8 million from 51.7 million in last year's third quarter.
OTHER FINANCIAL INFORMATION
Primoris' balance sheet at
BACKLOG |
|||||||||
Backlog at |
|||||||||
Segment |
Fixed Backlog | MSA Backlog | Total Backlog | ||||||
West Construction Services |
$ | 163 | $ | 394 | $ | 557 | |||
East Construction Services | 1,009 | 14 | 1,023 | ||||||
Energy | 161 | 54 | 215 | ||||||
Total | $ | 1,333 | 462 | 1,795 | |||||
At
At
Total Backlog at
Backlog, including estimated MSA revenues, should not be considered a comprehensive indicator of future revenue, as a portion of Primoris' revenue is still derived from projects that are not part of backlog, including time-and-equipment, time-and-materials, and cost-reimbursable-plus-fee contracts. Projects that are considered a part of Total Backlog may be still be cancelled by our customers.
CONFERENCE CALL
Interested parties may participate in the call by dialing:
- (877) 407-8293 (Domestic)
- (201) 689-8349 (International)
If you are unable to participate in the live call, a replay may be accessed by dialing (877) 660-6853, passcode 13594816, and will be available for approximately two weeks. The conference call will also be broadcast live over the Internet and can be accessed and replayed through the Investor Relations section of Primoris's website at www.prim.com. Once at the Investor Relations section, please click on "Events & Presentations".
ABOUT PRIMORIS
Founded in 1960, Primoris, through various subsidiaries, has grown to
become one of the largest construction service enterprises in
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements,
including with regard to the Company's future performance. Words such as
"estimated," "believes," "expects," "projects," "may," and "future" or
similar expressions are intended to identify forward-looking statements.
Forward-looking statements inherently involve known and unknown risks,
uncertainties, and other factors, including without limitation, those
described in this press release and those detailed in the "Risk Factors"
section and other portions of our Annual Report on Form 10-K for the
period ended
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(In Thousands, Except Per Share Amounts) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended |
Nine Months Ended |
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|
|
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2014 |
2013 |
2014 |
2013 |
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Revenue | $ | 613,237 | $ | 551,333 | $ | 1,598,602 | $ | 1,406,341 | ||||||||
Cost of revenue | 537,764 | 475,868 | 1,412,178 | 1,225,243 | ||||||||||||
Gross profit | 75,473 | 75,465 | 186,424 | 181,098 | ||||||||||||
Selling, general and administrative expenses | 36,162 | 36,478 | 99,087 | 96,657 | ||||||||||||
Operating income | 39,311 | 38,987 | 87,337 | 84,441 | ||||||||||||
Other income (expense): | ||||||||||||||||
Income (loss) from non-consolidated entities | 5,250 | 113 | 5,264 | 169 | ||||||||||||
Foreign exchange gain (loss) | (101 | ) | 91 | 74 | 3 | |||||||||||
Other expense | (201 | ) | (376 | ) | (642 | ) | (809 | ) | ||||||||
Interest income | 14 | 32 | 80 | 95 | ||||||||||||
Interest expense | (1,778 | ) | (1,579 | ) | (4,642 | ) | (4,501 | ) | ||||||||
Income before provision for income taxes | 42,495 | 37,268 | 87,471 | 79,398 | ||||||||||||
Provision for income taxes | (15,105 | ) | (14,075 | ) | (32,813 | ) | (30,272 | ) | ||||||||
Net income | 27,390 | 23,193 | 54,658 | 49,126 | ||||||||||||
Net income attributable to noncontrolling interests | - | (1,348 | ) | (432 | ) | (1,947 | ) | |||||||||
Net income attributable to Primoris | 27,390 | 21,845 | 54,226 | 47,179 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic: | $ | 0.53 | $ | 0.42 | $ | 1.05 | $ | 0.92 | ||||||||
Diluted: | $ | 0.53 | $ | 0.42 | $ | 1.05 | $ | 0.91 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 51,606 | 51,568 | 51,622 | 51,529 | ||||||||||||
Diluted | 51,759 | 51,671 | 51,759 | 51,595 | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(In Thousands, Except Share Amounts) | |||||||
(Unaudited) | |||||||
|
|
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2014 | 2013 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 144,150 | $ | 196,077 | |||
Short-term investments | 2,080 | 18,686 | |||||
Customer retention deposits and restricted cash | 411 | 5,304 | |||||
Accounts receivable, net | 388,381 | 304,955 | |||||
Costs and estimated earnings in excess of billings | 96,150 | 57,146 | |||||
Inventory and uninstalled contract materials | 58,271 | 51,829 | |||||
Deferred tax assets | 13,133 | 13,133 | |||||
Prepaid expenses and other current assets | 11,653 | 12,654 | |||||
Total current assets | 714,229 | 659,784 | |||||
Property and equipment, net | 262,835 | 226,512 | |||||
Intangible assets, net | 42,471 | 45,303 | |||||
Goodwill | 118,626 | 118,626 | |||||
Other long-term assets | 404 | 468 | |||||
Total assets | $ | 1,138,565 | $ | 1,050,693 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 158,118 | $ | 127,302 | |||
Billings in excess of costs and estimated earnings | 164,428 | 173,365 | |||||
Accrued expenses and other current liabilities | 100,052 | 91,079 | |||||
Dividends payable | 2,062 | 1,805 | |||||
Current portion of capital leases | 1,796 | 3,288 | |||||
Current portion of long-term debt | 35,024 | 28,475 | |||||
Current portion of contingent earnout liabilities | 6,136 | 5,000 | |||||
Total current liabilities | 467,616 | 430,314 | |||||
Long-term capital leases, net of current portion | 1,009 | 2,295 | |||||
Long-term debt, net of current portion | 197,857 | 191,051 | |||||
Deferred tax liabilities | 10,092 | 10,092 | |||||
Long-term contingent earnout liabilities, net of current portion | 810 | 4,233 | |||||
Other long-term liabilities | 14,543 | 14,260 | |||||
Total liabilities | 691,927 | 652,245 | |||||
Stockholders' equity | |||||||
Common stock | 5 | 5 | |||||
Additional paid-in capital | 159,920 | 159,196 | |||||
Retained earnings | 286,765 | 238,216 | |||||
Noncontrolling interests | (52 | ) | 1,031 | ||||
Total stockholders' equity | 446,638 | 398,448 | |||||
Total liabilities and stockholders' equity | $ | 1,138,565 | $ | 1,050,693 |
Executive
Vice President, Chief Financial Officer
pmoerbeek@prim.com
or
Director of Investor Relations
ktholking@prim.com
Source:
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