Primoris Services Corporation Announces 2015 Second Quarter Financial Results
Board of Directors Authorizes Quarterly Cash Dividend
Financial Highlights
-
2015 Q2 revenues of
$483.5 million -
2015 Q2 net income attributable to Primoris of
$3.6 million -
A record total backlog of
$2.2 billion atJune 30, 2015 - A 19.9% year-over-year increase over 2014 Q2 backlog
- A 10.3% year-to-date increase over 2014 Q4 backlog
The Company also announced that on
2015 SECOND QUARTER RESULTS OVERVIEW
Revenues in the second quarter 2015 decreased by
From an end-market perspective, our revenues during the second quarter
2015 decreased by
SEGMENT RESULTS
In the third quarter of 2014, the Company reorganized its business segments to match the change in the Company's internal organization and management structure. The current operating segments include: the West Construction Services Segment, the East Construction Services Segment, and the Energy Segment (which includes the previous Engineering segment). All prior period amounts related to segment operations have been reclassified throughout this press release to reflect the new operating segments.
-
West Construction Services ("West segment")
- The West segment includes the underground and industrial operations
and construction services performed by ARB, ARB Structures, Rockford,
Q3 Contracting , and Vadnais, acquired inJune 2014 . Many of the entities perform work primarily inCalifornia ; however, Rockford operates throughoutthe United 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 ("East segment")
- The East segment includes the
James Construction Group ("JCG") Heavy Civil division, the JCG Infrastructure and Maintenance ("I&M") division, BW Primoris, and Cardinal Contractors, located primarily in the southeasternUnited States and in theGulf Coast region ofthe United States , and performs heavy civil construction and infrastructure and maintenance operations. -
Energy ("Energy segment") - The Energy
segment businesses are located primarily in the southeastern
United States , theGulf Coast region and the upper Midwest region ofthe United States . The segment includes the PES pipeline and gas facility construction and maintenance operations, thePES Industrial division, the Surber and Ram-Fab divisions, and Aevenia ("Primoris AV"), acquiredFebruary 2015 . Additionally, the segment includes theOnQuest, Inc. and OnQuest Canada, ULC operations for the design and installation of liquefied natural gas ("LNG") facilities and 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 |
|||||||||||||||||
2015
Unaudited |
2014
Unaudited |
||||||||||||||||
% of | % of | ||||||||||||||||
Total | Total | ||||||||||||||||
Segment |
Revenue | Revenue | Revenue | Revenue | |||||||||||||
West | $ | 239,999 | 49.6 | % | $ | 224,391 | 43.5 | % | |||||||||
East | 154,887 | 32.0 | % | 118,554 | 23.0 | % | |||||||||||
Energy | 88,659 | 18.4 | % | 172,346 | 33.5 | % | |||||||||||
Total | $ | 483,545 | 100.0 | % | $ | 515,291 | 100.0 | % | |||||||||
For the six months ended |
|||||||||||||||||
2015
Unaudited |
2014
Unaudited |
||||||||||||||||
% of | % of | ||||||||||||||||
Total | Total | ||||||||||||||||
Segment |
Revenue | Revenue | Revenue | Revenue | |||||||||||||
West | $ | 426,384 | 48.7 | % | $ | 458,418 | 46.5 | % | |||||||||
East | 278,587 | 31.8 | % | 225,524 | 22.9 | % | |||||||||||
Energy | 171,354 | 19.5 | % | 301,423 | 30.6 | % | |||||||||||
Total | $ | 876,325 | 100.0 | % | $ | 985,365 | 100.0 | % | |||||||||
Segment Gross Profit |
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(in thousands, except %) |
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For the three months ended |
|||||||||||||||||
2015
Unaudited |
2014
Unaudited |
||||||||||||||||
% of | % of | ||||||||||||||||
Gross | Segment | Gross | Segment | ||||||||||||||
Segment |
Profit | Revenue | Profit | Revenue | |||||||||||||
West | $ | 30,444 | 12.7 | % | $ | 37,809 | 16.8 | % | |||||||||
East | 9,115 | 5.9 | % | 8,727 | 7.4 | % | |||||||||||
Energy | 6,937 | 7.8 | % | 14,658 | 8.5 | % | |||||||||||
Total | $ | 46,496 | 9.6 | % | $ | 61,194 | 11.9 | % | |||||||||
For the six months ended |
|||||||||||||||||
2015
Unaudited |
2014
Unaudited |
||||||||||||||||
% of | % of | ||||||||||||||||
Gross | Segment | Gross | Segment | ||||||||||||||
Segment |
Profit | Revenue | Profit | Revenue | |||||||||||||
West | $ | 51,908 | 12.2 | % | $ | 69,483 | 15.2 | % | |||||||||
East | 18,223 | 6.5 | % | 15,485 | 6.9 | % | |||||||||||
Energy | 14,370 | 8.4 | % | 25,983 | 8.6 | % | |||||||||||
Total | $ | 84,501 | 9.6 | % | $ | 110,951 | 11.3 | % | |||||||||
West Segment: Revenues for the West segment increased by
East Segment: Revenues in the East segment increased by
Energy Segment: Revenues in the Energy segment decreased by
Selling, general and administrative expenses ("SG&A") were
Operating income for the second quarter 2015 was
Net non-operating items in the second quarter 2015 resulted in expense
of
The provision for income taxes for the second quarter 2015 was
Net income attributable to Primoris for the second quarter 2015 was
Fully diluted weighted average shares outstanding for the second quarter increased slightly to 51.82 million from 51.80 million in the second quarter 2014.
OTHER FINANCIAL INFORMATION
Primoris' balance sheet at
Based on current projects in backlog and anticipated levels of customer
maintenance, MSA spending, and new project awards, the Company estimates
that for the four quarters ending
BACKLOG |
|||||||||||||||
Backlog at |
|||||||||||||||
Segment |
Fixed Backlog | MSA Backlog | Total Backlog | ||||||||||||
West | $ | 579 | $ | 394 | $ | 973 | |||||||||
East | 930 | 5 | 936 | ||||||||||||
Energy | 258 | 32 | 291 | ||||||||||||
Total | $ | 1,767 | 431 | 2,199 | |||||||||||
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 derived from projects that are not part of backlog, including time-and-equipment, time-and-materials, and cost-reimbursable-plus-fee contracts. All projects that are considered a part of Total Backlog may 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 will be available for approximately two weeks and may be accessed by dialing (877) 660-6853, passcode 13614563. The conference call will also be broadcast live over the Internet and can be accessed and replayed through the Investor Relations section of Primoris' 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 publicly traded specialty construction and
infrastructure companies 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 Share Amounts) (Unaudited) |
|||||||||||||||||||||
Three Months Ended
|
Six Months Ended
|
||||||||||||||||||||
2015 |
2014 |
2015 |
2014 |
||||||||||||||||||
Revenue | $ | 483,545 | $ | 515,291 | $ | 876,325 | $ | 985,365 | |||||||||||||
Cost of revenue | 437,049 | 454,097 | 791,824 | 874,414 | |||||||||||||||||
Gross profit | 46,496 | 61,194 | 84,501 | 110,951 | |||||||||||||||||
Selling, general and administrative expenses | 38,547 | 33,213 | 72,307 | 62,925 | |||||||||||||||||
Operating income | 7,949 | 27,981 | 12,194 | 48,026 | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||
Income (loss) from non-consolidated entities | - | - | - | 14 | |||||||||||||||||
Foreign exchange gain (loss) | (140 | ) | 149 | 296 | 175 | ||||||||||||||||
Other expense | (45 | ) | (327 | ) | (89 | ) | (441 | ) | |||||||||||||
Interest income | 6 | 14 | 18 | 66 | |||||||||||||||||
Interest expense | (1,738 | ) | (1,196 | ) | (3,660 | ) | (2,864 | ) | |||||||||||||
Income before provision for income taxes | 6,032 | 26,621 | 8,759 | 44,976 | |||||||||||||||||
Provision for income taxes | (2,340 | ) | (10,618 | ) | (3,395 | ) | (17,708 | ) | |||||||||||||
Net income | 3,692 | 16,003 | 5,364 | 27,268 | |||||||||||||||||
Net income attributable to noncontrolling interests | (54 | ) | - | (54 | ) | (432 | ) | ||||||||||||||
Net income attributable to Primoris | 3,638 | 16,003 | 5,310 | 26,836 | |||||||||||||||||
Earnings per share: | |||||||||||||||||||||
Basic: | $ | 0.07 | $ | 0.31 | $ | 0.10 | $ | 0.52 | |||||||||||||
Diluted: | $ | 0.07 | $ | 0.31 | $ | 0.10 | $ | 0.52 | |||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||
Basic | 51,666 | 51,655 | 51,619 | 51,631 | |||||||||||||||||
Diluted | 51,815 | 51,804 | 51,770 | 51,759 |
CONDENSED CONSOLIDATED BALANCE SHEETS |
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|
|
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2015 | 2014 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 85,970 | $ | 139,465 | |||||||
Short-term investments | - | 30,992 | |||||||||
Customer retention deposits and restricted cash | 1,385 | 481 | |||||||||
Accounts receivable, net | 318,513 | 337,382 | |||||||||
Costs and estimated earnings in excess of billings | 109,537 | 68,654 | |||||||||
Inventory and uninstalled contract materials | 65,248 | 58,116 | |||||||||
Deferred tax assets | 13,555 | 13,555 | |||||||||
Prepaid expenses and other current assets | 32,488 | 31,720 | |||||||||
Total current assets | 626,696 | 680,365 | |||||||||
Property and equipment, net | 286,275 | 271,431 | |||||||||
Intangible assets, net | 39,860 | 39,581 | |||||||||
Goodwill | 124,562 | 119,410 | |||||||||
Other long-term assets | 2,200 | 400 | |||||||||
Total assets | $ | 1,079,593 | $ | 1,111,187 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 129,892 | $ | 128,793 | |||||||
Billings in excess of costs and estimated earnings | 138,176 | 158,595 | |||||||||
Accrued expenses and other current liabilities | 85,960 | 83,401 | |||||||||
Dividends payable | 2,841 | 2,062 | |||||||||
Current portion of capital leases | 1,319 | 1,650 | |||||||||
Current portion of long-term debt | 41,249 | 38,909 | |||||||||
Current portion of contingent earnout liabilities | 737 | 5,901 | |||||||||
Total current liabilities | 400,174 | 419,311 | |||||||||
Long-term capital leases, net of current portion | 274 | 657 | |||||||||
Long-term debt, net of current portion | 192,054 | 204,029 | |||||||||
Deferred tax liabilities | 19,484 | 19,484 | |||||||||
Long-term contingent earnout liabilities, net of current portion | 1,075 | 1,021 | |||||||||
Other long-term liabilities | 9,852 | 12,899 | |||||||||
Total liabilities | 622,913 | 657,401 | |||||||||
Stockholders' equity | |||||||||||
Common stock | 5 | 5 | |||||||||
Additional paid-in capital | 162,624 | 160,186 | |||||||||
Retained earnings | 294,030 | 293,628 | |||||||||
Noncontrolling interests | 21 | (33 | ) | ||||||||
Total stockholders' equity | 456,680 | 453,786 | |||||||||
Total liabilities and stockholders' equity | $ | 1,079,593 | $ | 1,111,187 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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Six months Ended | |||||||||||
|
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2015 | 2014 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 5,364 | 27,268 | |||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Depreciation | 28,512 | 23,941 | |||||||||
Amortization of intangible assets | 3,370 | 3,687 | |||||||||
Loss (gain) on sale of property and equipment | (24 | ) | (809 | ) | |||||||
Income from non-consolidated entities | — | (14 | ) | ||||||||
Stock—based compensation expense | 524 | 409 | |||||||||
Changes in assets and liabilities: | |||||||||||
Customer retention deposits and restricted cash | (904 | ) | 5,248 | ||||||||
Accounts receivable | 21,603 | (6,366 | ) | ||||||||
Costs and estimated earnings in excess of billings | (40,581 | ) | (30,965 | ) | |||||||
Other current assets | (6,726 | ) | (9,846 | ) | |||||||
Accounts payable | 356 | 3,273 | |||||||||
Billings in excess of costs and estimated earnings | (21,318 | ) | (15,268 | ) | |||||||
Contingent earnout liabilities | (4,910 | ) | (4,559 | ) | |||||||
Accrued expenses and other current liabilities | 3,820 | 3,232 | |||||||||
Other long-term assets | (1,800 | ) | - | ||||||||
Other long-term liabilities | (4,547 | ) | (2,068 | ) | |||||||
Net cash provided by (used in) operating activities | (17,261 | ) | (2,837 | ) | |||||||
Cash flows from investing activities: | |||||||||||
Purchase of property and equipment | (35,674 | ) | (38,625 | ) | |||||||
Proceeds from sale of property and equipment | 3,602 | 3,017 | |||||||||
Purchase of short-term investments | — | (2,280 | ) | ||||||||
Sale of short-term investments | 30,992 | 18,686 | |||||||||
Cash received for the sale of Alvah minority interest | — | 1,189 | |||||||||
Cash paid for acquisitions | (22,302 | ) | (6,354 | ) | |||||||
Net cash used in investing activities | (23,382 | ) | (24,367 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of long-term debt | 11,000 | 15,400 | |||||||||
Repayment of capital leases | (714 | ) | (1,967 | ) | |||||||
Repayment of long-term debt | (20,635 | ) | (18,673 | ) | |||||||
Proceeds from issuance of common stock purchased under a long-term incentive plan | 1,621 | 1,671 | |||||||||
Dividends paid | (4,124 | ) | (3,612 | ) | |||||||
Cash distribution to non-controlling interest holder | — | (1,515 | ) | ||||||||
Net cash provided by (used in) financing activities | (12,852 | ) | (8,696 | ) | |||||||
Net change in cash and cash equivalents | (53,495 | ) | (35,900 | ) | |||||||
Cash and cash equivalents at beginning of the period | 139,465 | 196,077 | |||||||||
Cash and cash equivalents at end of the period | $ | 85,970 | $ | 160,177 | |||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20150806005392/en/
Primoris
Executive Vice
President, Chief Financial Officer
pmoerbeek@prim.com
or
Director of Investor Relations
ktholking@prim.com
Source: Primoris
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