Primoris Services Corporation Announces 2019 First Quarter Financial Results
- Board of Directors Declares
$0.06 Per Share Cash Dividend
- Chairman of the Board Transition
Financial Highlights
- 2019 Q1 revenue of
$661.6 million , compared to$504.1 million in 2018 Q1- 2019 Q1 MSA revenue of
$292.9 million , a 100% increase over 2018 Q1 MSA revenue
- 2019 Q1 MSA revenue of
- 2019 Q1 net income attributable to Primoris of
$1.9 million , or$0.04 per fully diluted share, compared to$0.7 million , or$0.01 per fully diluted share, in 2018 Q1 - 2019 Q1 SG&A 6.5% of revenue, compared to 2018 Q1 7.3% of revenue
- Record Total Backlog of
$2.9 billion atMarch 31, 2019 ; 6.5% increase overDecember 31, 2018 - Both Fixed Backlog and MSA Backlog grew sequentially from
December 31, 2018
- Both Fixed Backlog and MSA Backlog grew sequentially from
The Company also announced that on
Mr. King continued, “Looking forward to the remainder of 2019 and into 2020, we are encouraged by the prospects for growth available in multiple end markets and are re-affirming our guidance. Our MSA revenue, anchored by our natural gas and electric utility work, continues to grow. We believe the demand for grid hardening will continue to expand, and there are also opportunities for us to leverage our skillset. We have seen the market for smaller diameter pipeline work and field services projects increase, and we have confidence in the large diameter pipeline market. Recent progress towards FID on major
CHAIRMAN OF THE BOARD TRANSITION
On
2019 FIRST QUARTER RESULTS OVERVIEW
Revenue was
Segment Revenues
(in thousands, except %)
(unaudited)
For the three months ended March 31, | ||||||||||||
2019 | 2018 | |||||||||||
% of | % of | |||||||||||
Total | Total | |||||||||||
Segment | Revenue | Revenue | Revenue | Revenue | ||||||||
Power | $ | 145,383 | 22.0 | % | $ | 166,555 | 33.0 | % | ||||
Pipeline | 134,814 | 20.4 | % | 57,583 | 11.4 | % | ||||||
Utilities | 146,206 | 22.1 | % | 166,710 | 33.1 | % | ||||||
Transmission | 118,443 | 17.9 | % | - | - | |||||||
Civil | 116,712 | 17.6 | % | 113,271 | 22.5 | % | ||||||
Total | $ | 661,558 | 100.0 | % | $ | 504,119 | 100.0 | % |
Segment Gross Profit
(in thousands, except %)
(unaudited)
For the three months ended March 31, | ||||||||||||
2019 | 2018 | |||||||||||
% of | % of | |||||||||||
Segment | Segment | |||||||||||
Segment | Gross Profit | Revenue | Gross Profit | Revenue | ||||||||
Power | $ | 20,198 | 13.9 | % | $ | 24,071 | 14.5 | % | ||||
Pipeline | 15,016 | 11.1 | % | 7,891 | 13.7 | % | ||||||
Utilities | 8,241 | 5.6 | % | 9,051 | 5.4 | % | ||||||
Transmission | 6,628 | 5.6 | % | - | - | |||||||
Civil | 2,377 | 2.0 | % | 3,547 | 3.1 | % | ||||||
Total | $ | 52,460 | 7.9 | % | $ | 44,560 | 8.8 | % |
Power, Industrial, & Engineering Segment (“Power”): Revenue decreased by
Pipeline & Underground Segment (“Pipeline”): Revenue increased by
Utilities & Distribution Segment (“Utilities”): Revenue decreased by
Transmission & Distribution Segment (“Transmission”): The Transmission segment was created in connection with the acquisition of Willbros in the second quarter of 2018.
Civil Segment (“Civil”): Revenue increased by
OTHER INCOME STATEMENT INFORMATION
Selling, general and administrative (“SG&A”) expenses were
Interest expense for the three months ended
The effective tax rate on income attributable to Primoris (excluding noncontrolling interests) was 29.0% for the three months ended
OUTLOOK
Based on an expected third quarter 2019 remobilization date for a major pipeline project in backlog and anticipated MSA spending, the Company estimates that for the fiscal year ending
BACKLOG
Expected Next Four | ||||||||||||
Quarters Total | ||||||||||||
Backlog at March 31, 2019 (in millions) | Backlog Revenue | |||||||||||
Segment | Fixed Backlog | MSA Backlog | Total Backlog | Recognition | ||||||||
Power | $ | 421 | $ | 137 | $ | 558 | 86 | % | ||||
Pipeline | 618 | 42 | 660 | 41 | % | |||||||
Utilities | 37 | 765 | 802 | 100 | % | |||||||
Transmission | 27 | 442 | 469 | 100 | % | |||||||
Civil | 451 | — | 451 | 73 | % | |||||||
Total | $ | 1,554 | $ | 1,386 | $ | 2,940 | 80 | % |
At
At
Total Backlog at
Backlog, including estimated MSA revenue, should not be considered a comprehensive indicator of future revenues. Revenue from certain projects, such as cost reimbursable and time-and-materials projects, do not flow through backlog. At any time, any project may be cancelled at the convenience of our customers.
CONFERENCE CALL
Interested parties may participate in the call by dialing:
- (877) 407-8293 (Domestic)
- (201) 689-8349 (International)
Presentation slides to accompany the conference call are available for download in the Investor Relations section of Primoris’ website at www.prim.com. Once at the Investor Relations section, please click on “Events & Presentations”.
If you are unable to participate in the live call, a replay may be accessed by dialing (877) 660-6853, conference ID 13689890, 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' website at www.prim.com.
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
Company Contact | |
Ken Dodgen | Kate Tholking |
Executive Vice President, Chief Financial Officer | Vice President, Investor Relations |
(214) 740-5608 | (214) 740-5615 |
kdodgen@prim.com | ktholking@prim.com |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Revenue | $ | 661,558 | $ | 504,119 | ||||
Cost of revenue | 609,098 | 459,559 | ||||||
Gross profit | 52,460 | 44,560 | ||||||
Selling, general and administrative expenses | 42,931 | 36,956 | ||||||
Merger and related costs | — | 1,695 | ||||||
Operating income | 9,529 | 5,909 | ||||||
Other income (expense): | ||||||||
Foreign exchange (loss) gain | (185 | ) | 257 | |||||
Other income (expense), net | (370 | ) | (12 | ) | ||||
Interest income | 349 | 272 | ||||||
Interest expense | (5,592 | ) | (1,998 | ) | ||||
Income before provision for income taxes | 3,731 | 4,428 | ||||||
Provision for income taxes | (795 | ) | (212 | ) | ||||
Net income | $ | 2,936 | $ | 4,216 | ||||
Less net income attributable to noncontrolling interests | (989 | ) | (3,528 | ) | ||||
Net income attributable to Primoris | $ | 1,947 | $ | 688 | ||||
Dividends per common share | $ | 0.060 | $ | 0.060 | ||||
Earnings per share: | ||||||||
Basic | $ | 0.04 | $ | 0.01 | ||||
Diluted | $ | 0.04 | $ | 0.01 | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 50,770 | 51,479 | ||||||
Diluted | 51,188 | 51,747 | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
March 31, | December 31, | |||||||
2019 | 2018 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 73,985 | $ | 151,063 | ||||
Accounts receivable, net | 397,786 | 372,695 | ||||||
Contract assets | 366,435 | 364,245 | ||||||
Prepaid expenses and other current assets | 38,123 | 36,444 | ||||||
Total current assets | 876,329 | 924,447 | ||||||
Property and equipment, net | 369,128 | 375,884 | ||||||
Operating lease assets | 153,168 | — | ||||||
Deferred tax assets | 1,492 | 1,457 | ||||||
Intangible assets, net | 78,450 | 81,198 | ||||||
Goodwill | 207,410 | 206,159 | ||||||
Other long-term assets | 4,789 | 5,002 | ||||||
Total assets | $ | 1,690,766 | $ | 1,594,147 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 190,244 | $ | 249,217 | ||||
Contract liabilities | 194,094 | 189,539 | ||||||
Accrued liabilities | 165,923 | 117,527 | ||||||
Dividends payable | 3,051 | 3,043 | ||||||
Current portion of long-term debt | 66,872 | 62,488 | ||||||
Total current liabilities | 620,184 | 621,814 | ||||||
Long-term debt, net of current portion | 307,273 | 305,669 | ||||||
Noncurrent operating lease liabilities, net of current portion | 104,039 | — | ||||||
Deferred tax liabilities | 7,268 | 8,166 | ||||||
Other long-term liabilities | 41,617 | 51,515 | ||||||
Total liabilities | 1,080,381 | 987,164 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity | ||||||||
Common stock | 5 | 5 | ||||||
Additional paid-in capital | 147,208 | 144,048 | ||||||
Retained earnings | 459,959 | 461,075 | ||||||
Accumulated other comprehensive loss | (534 | ) | (908 | ) | ||||
Noncontrolling interest | 3,747 | 2,763 | ||||||
Total stockholders’ equity | 610,385 | 606,983 | ||||||
Total liabilities and stockholders’ equity | $ | 1,690,766 | $ | 1,594,147 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 2,936 | $ | 4,216 | ||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities (net of effect of acquisitions): | ||||||||
Depreciation | 18,952 | 14,368 | ||||||
Amortization of intangible assets | 2,748 | 2,424 | ||||||
Stock-based compensation expense | 487 | 215 | ||||||
Gain on sale of property and equipment | (2,217 | ) | (1,104 | ) | ||||
Other non-cash items | 80 | 40 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (24,722 | ) | 30,669 | |||||
Contract assets | (2,328 | ) | 2,970 | |||||
Other current assets | (2,231 | ) | (6,356 | ) | ||||
Other long-term assets | 182 | (499 | ) | |||||
Accounts payable | (59,198 | ) | (9,987 | ) | ||||
Contract liabilities | 2,590 | (31,721 | ) | |||||
Operating lease assets and liabilities, net | (1,447 | ) | — | |||||
Accrued liabilities | (9,663 | ) | (1,806 | ) | ||||
Other long-term liabilities | 1,735 | 231 | ||||||
Net cash (used in) provided by operating activities | (72,096 | ) | 3,660 | |||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (14,377 | ) | (19,125 | ) | ||||
Issuance of a note receivable | — | (10,000 | ) | |||||
Proceeds from sale of property and equipment | 4,398 | 3,734 | ||||||
Net cash used in investing activities | (9,979 | ) | (25,391 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under revolving line of credit | 40,000 | — | ||||||
Payments on revolving line of credit | (40,000 | ) | — | |||||
Proceeds from issuance of long-term debt | 23,105 | — | ||||||
Repayment of long-term debt | (17,170 | ) | (12,870 | ) | ||||
Proceeds from issuance of common stock purchased under a long-term incentive plan | 1,804 | 1,498 | ||||||
Dividends paid | (3,043 | ) | (3,087 | ) | ||||
Other | (26 | ) | (23 | ) | ||||
Net cash provided by (used in) financing activities | 4,670 | (14,482 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 327 | — | ||||||
Net change in cash and cash equivalents | (77,078 | ) | (36,213 | ) | ||||
Cash and cash equivalents at beginning of the period | 151,063 | 170,385 | ||||||
Cash and cash equivalents at end of the period | $ | 73,985 | $ | 134,172 | ||||
Source: Primoris Services Corporation