Primoris Services Corporation Announces 2016 Fourth Quarter and Full Year Financial Results
- 2016 Q4 revenues of
$601.9 million , compared to 2015 Q4 revenues of$497.1 million - 2016 Q4 net income attributable to Primoris of
$14.5 million , compared to 2015 Q4 net income attributable to Primoris of$12.6 million - 2016 revenues of
$1,996.9 million , compared to 2015 revenues of$1,929.4 million - 2016 net income attributable to Primoris of
$26.7 million , compared to 2015 net income attributable to Primoris of$36.9 million - A total backlog of
$2.80 billion at December 31, 2016- A 34% increase over 2015's year-end total backlog and
- A 4% sequential quarterly increase over third quarter 2016's total backlog
- A cash balance of
$135.8 million atDecember 31, 2016 - A record tangible net worth of
$337.3 million atDecember 31, 2016 , a 5% increase over tangible net worth atDecember 31, 2015 .
The Company also announced that on
2016 FOURTH QUARTER RESULTS OVERVIEW
Revenues in the fourth quarter 2016 increased by
SEGMENT RESULTS
-
West Construction Services ("West segment") -- The West segment includes the underground and industrial operations and construction services performed by ARB,
ARB Structures, Inc. , Rockford, Q3C, and Vadnais. ARB and ARB Structures perform work primarily inCalifornia ; while, Rockford operates throughoutthe United States and Q3C operates inColorado and the upper Midwest United States. The segment also includes two joint venture operations. The West segment consists of business headquartered primarily in theWestern United States . -
East Construction Services ("East segment") -- The East segment includes the JCG Heavy Civil division, JCG Infrastructure and Maintenance division,
BW Primoris andCardinal Contractors, Inc. construction businesses, located primarily in the southeasternUnited States and theGulf Coast region ofthe United States . -
Energy ("Energy segment") -- The Energy segment includes the operations of the
Primoris Energy Services ("PES") pipeline and gas facility construction and maintenance operations and thePES Industrial division, whose operations are located primarily in the southeasternUnited States and in theGulf Coast region. Also included are the Primoris Aevenia,Inc. ("Aevenia"), Mueller, Northern, Surber and Ram-Fab operations and theOnQuest, Inc. and OnQuest Canada, ULC operations, which provide for the design and installation of liquid natural gas ("LNG") facilities and high-performance furnaces and heaters for the oil refining, petrochemical and power generation industries.
Segment Revenues
(in thousands, except %)
For the three months ended |
|||||||||||||
2016 Unaudited |
2015 Unaudited |
||||||||||||
% of | % of | ||||||||||||
Total | Total | ||||||||||||
Segment | Revenue | Revenue | Revenue | Revenue | |||||||||
West | $ | 388,491 | 64.6 | % | $ | 228,828 | 46.0 | % | |||||
East | 122,997 | 20.4 | % | 149,952 | 30.2 | % | |||||||
Energy | 90,375 | 15.0 | % | 118,365 | 23.8 | % | |||||||
Total | $ | 601,863 | 100.0 | % | $ | 497,145 | 100.0 | % | |||||
Segment Gross Profit
(in thousands, except %)
For the three months ended |
||||||||||||||
2016 Unaudited |
2015 Unaudited |
|||||||||||||
% of | % of | |||||||||||||
Gross | Segment | Gross | Segment | |||||||||||
Segment | Profit | Revenue | Profit | Revenue | ||||||||||
West | $ | 57,849 | 14.9 | % | $ | 38,536 | 16.8 | % | ||||||
East | (581 | ) | -0.5 | % | 8,901 | 5.9 | % | |||||||
Energy | 11,348 | 12.6 | % | 16,288 | 13.8 | % | ||||||||
Total | $ | 68,616 | 11.4 | % | $ | 63,725 | 12.8 | % | ||||||
West Segment: Revenues in the West segment increased by
East Segment: Revenues in the East segment declined by
Energy Segment: Revenues in the Energy segment decreased by
OTHER INCOME STATEMENT INFORMATION
Selling, general and administrative expenses ("SG&A") were
Operating income for the 2016 fourth quarter was
Net non-operating items in the 2016 fourth quarter resulted in expenses of
The provision for income taxes for the 2016 fourth quarter was
Net income attributable to Primoris for the 2016 fourth quarter was
Fully diluted weighted average shares outstanding for the 2016 fourth quarter increased slightly to 52.0 million from 51.8 million in the fourth quarter of 2015. The increase in shares was due to shares issued to certain senior managers and executives as part of the Primoris Long-Term Retention Plan and as compensation to the non-employee members of the Board of Directors.
2016 FULL YEAR RESULTS OVERVIEW
Segment Revenues
(in thousands, except %)
For the twelve months ended |
|||||||||||||
2016 Unaudited |
2015 Unaudited |
||||||||||||
% of | % of | ||||||||||||
Total | Total | ||||||||||||
Segment | Revenue | Revenue | Revenue | Revenue | |||||||||
West | $ | 1,041,341 | 52.2 | % | $ | 913,626 | 47.4 | % | |||||
East | 521,301 | 26.1 | % | 612,174 | 31.7 | % | |||||||
Energy | 434,306 | 21.7 | % | 403,615 | 20.9 | % | |||||||
Total | $ | 1,996,948 | 100.0 | % | $ | 1,929,415 | 100.0 | % | |||||
Segment Gross Profit
(in thousands, except %)
For the twelve months ended |
||||||||||||||
2016 Unaudited |
2015 Unaudited |
|||||||||||||
% of | % of | |||||||||||||
Gross | Segment | Gross | Segment | |||||||||||
Segment | Profit | Revenue | Profit | Revenue | ||||||||||
West | $ | 145,239 | 13.9 | % | $ | 130,255 | 14.3 | % | ||||||
East | (15,938 | ) | (3.1 | %) | 42,523 | 6.9 | % | |||||||
Energy | 72,006 | 16.6 | % | 47,095 | 11.7 | % | ||||||||
Total | $ | 201,307 | 10.1 | % | $ | 219,873 | 11.4 | % | ||||||
OTHER FINANCIAL INFORMATION
Primoris' balance sheet at
Based on expected start dates for current projects in backlog, 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 | Expected Next Four Quarters Total Backlog Revenue Recognition |
|||||||||
West | $ | 1,271 | $ | 616 | $ | 1,887 | 58 | % | |||||
East | 641 | 21 | 662 | 70 | % | ||||||||
Energy | 214 | 35 | 249 | 100 | % | ||||||||
Total | $ | 2,126 | $ | 672 | $ | 2,798 | |||||||
At
At
Total Backlog at
Backlog, including estimated MSA revenues, should not be considered a comprehensive indicator of future revenues. There is a certain percentage of total revenues, from projects such as cost reimbursable and time-and-materials projects, that do not flow through backlog. Any project may still be cancelled at the convenience of our customers.
SHARE REPURCHASE PLAN
The Company's Board of Directors has authorized a share repurchase program under which Primoris may, from time to time and depending on market conditions, share price and other factors, acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of
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, conference ID 13656164, and will be available for approximately two weeks. The conference call will also be broadcast live over the
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 | Twelve Months Ended | ||||||||||||||||
|
|
||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Revenues | $ | 601,863 | $ | 497,145 | $ | 1,996,948 | $ | 1,929,415 | |||||||||
Cost of revenues | 533,247 | 433,420 | 1,795,641 | 1,709,542 | |||||||||||||
Gross profit | 68,616 | 63,725 | 201,307 | 219,873 | |||||||||||||
Selling, general & administrative expenses | 39,692 | 40,851 | 140,842 | 151,703 | |||||||||||||
Impairment of |
- | 401 | 2,716 | 401 | |||||||||||||
Operating income | 28,924 | 22,473 | 57,749 | 67,769 | |||||||||||||
Other income (expense): | |||||||||||||||||
Foreign exchange gain (loss) | (86 | ) | (338 | ) | 202 | (763 | ) | ||||||||||
Other income (expense) | (37 | ) | 1,451 | (315 | ) | 1,723 | |||||||||||
Interest income | 27 | 34 | 149 | 56 | |||||||||||||
Interest expense | (2,160 | ) | (2,125 | ) | (8,914 | ) | (7,688 | ) | |||||||||
Income before provision for income taxes | 26,668 | 21,495 | 48,871 | 61,097 | |||||||||||||
Provision for income taxes | (11,902 | ) | (8,787 | ) | (21,146 | ) | (23,946 | ) | |||||||||
Net income | 14,766 | 12,708 | 27,725 | 37,151 | |||||||||||||
Net income attributable to noncontrolling interests | (296 | ) | (153 | ) | (1,002 | ) | (279 | ) | |||||||||
Net income attributable to Primoris | $ | 14,470 | $ | 12,555 | $ | 26,723 | $ | 36,872 | |||||||||
Earnings per share: | |||||||||||||||||
Basic: | $ | 0.28 | $ | 0.24 | $ | 0.52 | $ | 0.71 | |||||||||
Diluted: | $ | 0.28 | $ | 0.24 | $ | 0.51 | $ | 0.71 | |||||||||
Weighted average common shares outstanding: | |||||||||||||||||
Basic | 51,771 | 51,676 | 51,762 | 51,647 | |||||||||||||
Diluted | 52,021 | 51,825 | 51,989 | 51,798 | |||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
(Unaudited)
|
|
|||||||
2016 | 2015 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 135,823 | $ | 161,122 | ||||
Customer retention deposits and restricted cash | 481 | 2,598 | ||||||
Accounts receivable, net | 388,000 | 320,588 | ||||||
Costs and estimated earnings in excess of billings | 138,618 | 116,455 | ||||||
Inventory and uninstalled contract materials | 49,201 | 67,796 | ||||||
Prepaid expenses and other current assets | 19,258 | 18,265 | ||||||
Total current assets | 731,381 | 686,824 | ||||||
Property and equipment, net | 277,346 | 283,545 | ||||||
Deferred tax asset - long-term | - | 1,075 | ||||||
Intangible assets, net | 32,841 | 36,438 | ||||||
127,226 | 124,161 | |||||||
Other long-term assets | 2,004 | 211 | ||||||
Total assets | $ | 1,170,798 | $ | 1,132,254 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 168,110 | $ | 124,450 | ||||
Billings in excess of costs and estimated earnings | 112,606 | 139,875 | ||||||
Accrued expenses and other current liabilities | 108,006 | 93,596 | ||||||
Dividends payable | 2,839 | 2,842 | ||||||
Current portion of capital leases | 188 | 974 | ||||||
Current portion of long-term debt | 58,189 | 54,436 | ||||||
Total current liabilities | 449,938 | 416,173 | ||||||
Long-term capital leases, net of current portion | 15 | 22 | ||||||
Long-term debt, net of current portion | 203,381 | 219,853 | ||||||
Deferred tax liabilities | 9,830 | - | ||||||
Other long-term liabilities | 9,064 | 12,741 | ||||||
Total liabilities | 672,228 | 648,789 | ||||||
Stockholders' equity | ||||||||
Common stock | 5 | 5 | ||||||
Additional paid-in capital | 162,128 | 163,344 | ||||||
Retained earnings | 335,218 | 319,899 | ||||||
Non-controlling interest | 1,219 | 217 | ||||||
Total stockholders' equity | 498,570 | 483,465 | ||||||
Total liabilities and stockholders' equity | $ | 1,170,798 | $ | 1,132,254 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Twelve Months Ended | |||||||||||
|
|||||||||||
2016 | 2015 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 27,725 | $ | 37,151 | |||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Depreciation | 61,433 | 58,408 | |||||||||
Amortization of intangible assets | 6,597 | 6,793 | |||||||||
2,716 | 401 | ||||||||||
Stock-based compensation expense | 1,627 | 1,050 | |||||||||
Gain on sale of property and equipment | (4,677 | ) | (2,116 | ) | |||||||
Net deferred tax liabilities (assets) | 10,905 | (7,004 | ) | ||||||||
Changes in assets and liabilities: | |||||||||||
Customer retention deposits and restricted cash | 2,117 | (2,117 | ) | ||||||||
Accounts receivable | (65,806 | ) | 19,528 | ||||||||
Costs and estimated earnings in excess of billings | (22,163 | ) | (47,499 | ) | |||||||
Other current assets | 17,665 | 4,949 | |||||||||
Other long-term assets | (1,792 | ) | 189 | ||||||||
Accounts payable | 42,934 | (5,086 | ) | ||||||||
Billings in excess of costs and estimated earnings | (27,519 | ) | (19,619 | ) | |||||||
Contingent earnout liabilities | - | (6,722 | ) | ||||||||
Accrued expenses and other current liabilities | 14,492 | 11,729 | |||||||||
Other long-term liabilities | (3,677 | ) | (1,658 | ) | |||||||
Net cash provided by operating activities | $ | 62,577 | $ | 48,377 | |||||||
Cash flows from investing activities: | |||||||||||
Purchase of property and equipment | (58,027 | ) | (67,097 | ) | |||||||
Proceeds from sale of property and equipment | 9,603 | 9,889 | |||||||||
Sale of short-term investments | - | 30,992 | |||||||||
Cash paid for acquisitions | (10,997 | ) | (22,302 | ) | |||||||
Net cash used in investing activities | $ | (59,421 | ) | $ | (48,518 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of long-term debt | 45,000 | 75,278 | |||||||||
Repayment of capital leases | (793 | ) | (1,336 | ) | |||||||
Repayment of long-term debt | (57,719 | ) | (43,927 | ) | |||||||
Proceeds from issuance of common stock purchased by management under long-term incentive plan | 1,440 | 1,621 | |||||||||
Cash distribution to non-controlling interest holder | - | (29 | ) | ||||||||
Repurchase of common stock | (4,999 | ) | - | ||||||||
Dividends paid | (11,384 | ) | (9,809 | ) | |||||||
Net cash provided by (used in) financing activities | $ | (28,455 | ) | $ | 21,798 | ||||||
Net change in cash and cash equivalents | (25,299 | ) | 21,657 | ||||||||
Cash and cash equivalents at beginning of the period | 161,122 | 139,465 | |||||||||
Cash and cash equivalents at end of the period | $ | 135,823 | $ | 161,122 |
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Company Contact
Executive Vice President, Chief Financial Officer
(214) 740-5602
pmoerbeek@prim.com
Director of Investor Relations
(214) 740-5615
ktholking@prim.com
Source:
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