Primoris Services Corporation
Mar 10, 2010

CORRECTING and REPLACING -- Primoris Services Corporation Announces 2009 Fourth Quarter and Year End Financial Results

Board of Directors Declares $0.025 Per Share Cash Dividend

LAKE FOREST, Calif., Mar 10, 2010 (GlobeNewswire via COMTEX News Network) -- In a release issued this morning by Primoris Services Corporation (Nasdaq:PRIM), please note that a correction has been made to the Condensed Consolidated Statements of Income for the Twelve Month Period Ended December 31, 2009; specifically, Basic Net Income Per Share for the period should read $0.81, not ($0.81). The corrected release follows:

Q4 2009 Financial Highlights

  --  Revenues of $117.2 million compared to $142.2 million in Q4 2008
  --  Gross margin rose to 17.2% of revenues from 12.8% of revenues in Q4 2008
  --  Operating margin increased to 6.7% of revenues from 5.8% of revenues in
      Q4 2008
  --  Primoris entered into an agreement to sell its Ecuador operations,
      resulting in loss from discontinued operations of $3.0 million, or $0.08
      per diluted share; in Q4 2008, the discontinued operations were at
      breakeven
  --  Income from continuing operations of $6.8 million, or $0.18 per diluted
      share compared to Q4 2008 income from continuing operations of $7.8
      million, or $0.23 per diluted share and compared to Q4 2008 pro forma
      income from continuing operations of $6.3 million, or $0.19 per diluted
      share
  --  $120.1 million in cash and short-term investments at December 31, 2009


Primoris Services Corporation (Nasdaq:PRIM) (Nasdaq:PRIMU) (Nasdaq:PRIMW) ("Primoris" or "Company"), one of the largest specialty contractors and engineering companies in the United States, today announced financial results for its fourth quarter and year ended December 31, 2009. Results for the 2009 and 2008 periods include the effect of discontinued operations from the Company's activities in Ecuador.

The Company also announced that its Board of Directors has declared a $0.025 per share cash dividend to stockholders of record as of March 31, 2010, payable on or about April 15, 2010.

Brian Pratt, Chairman, President and Chief Executive Officer of Primoris, commented, "During 2009 we focused on improving our basic business, including strengthening our relations with our clients and suppliers; securing better margined projects; managing and collecting cash; and evaluating acquisition opportunities as we sought to mitigate the impact of a lower volume year and capitalize on the opportunities that more difficult economic environments can present. With the acquisitions of James Construction Group and Cravens Partners, we nearly doubled the size of Primoris and broadened both our geographic and services reach. We also expanded our presence in the alternative energy space with the formation of Primoris Renewables. During the 2009 fourth quarter, we signed contracts totaling approximately $150 million that represented additional work in virtually all of our business lines. At the end of the year, we had built our cash position to $120.1 million, or approximately $3.67 per outstanding share, an increase of $32 million during the year."

Mr. Pratt concluded, "Although some of the issues that affected our markets and operating results during 2009 are expected to persist in the first half of 2010, we are optimistic that our greater size and resources have positioned us to capitalize on, what we believe, will be a more robust operating environment in the second half of this year and into 2011."

Q4 2009 Financial Results Overview

Consolidated revenues for the fourth quarter of 2009 decreased by $25.0 million, or 17.6% to $117.2 million from the fourth quarter of 2008. This decrease was due primarily to reductions in our California industrial business of $30.0 million, a decrease in Florida water and sewer construction of $9.0 million, a $7.8 million decrease in underground and a decrease of $4.1 million in our engineering segment, partially offset by increased revenues of $9.4 million from our cable and conduit business and $16.8 million from our two new acquisitions.

Gross profit for the fourth quarter of 2009 was $20.2 million compared to $18.3 million in the fourth quarter of 2008, primarily attributable to increased revenues and improved margins in the cable and conduit sector and contributions from our recent acquisitions. Profit margins in engineering were at higher than historical levels in the fourth quarter of 2009 as compared to the same period 2008 as we benefited from the completion of a large process project. Gross profit as a percentage of revenues for the fourth quarter of 2009 increased to 17.2% from 12.8% for the same period in 2008, due to the successful close out of projects and the benefit of more profitable fixed unit price and time and material contracts.

Revenues and gross profit for the fourth quarter of 2009 and 2008 for Primoris's two reportable segments were as follows:


                                  Three Months Ended December 31,
                           --------------------------------------------
                                    ($ in 000's -- Unaudited)

                                    2009                   2008
                           ----------------------  --------------------

                                       Percentage            Percentage
                                           of                    of
                             Amount     Revenue     Amount    Revenue
                           ----------  ----------  --------  ----------

  Construction
   Services
  -----------------

   Revenue                   $103,443              $124,324
   Gross profit               $18,366       17.8%   $17,402       14.0%



  Engineering
  -----------------

   Revenue                    $13,796               $17,874
   Gross profit                $1,806       13.1%      $860        4.8%

A significant portion of the $20.9 million decline in Construction Services segment revenues was the result of a $10.5 million decrease in work performed at the Chevron Corporation Richmond Refinery project located in California. A state judge halted work on the project due to environmental issues in July 2009. That ruling is currently under appeal. The remaining revenue decline was a result of the substantial completion of underground and water and wastewater construction projects in 2008 which were not replaced with new projects in 2009 as customers delayed capital spending due to a slowdown in the general economy. The revenue decreases were partially offset by higher revenues in the cable and conduit sector, as well as the revenue contribution from the James Construction Group and Cravens Partners acquisitions. Revenues for the Engineering segment decreased by 22.8%, due primarily to completion this year of several large 2008 projects.

Selling, general and administrative expenses of $12.3 million for the fourth quarter of 2009 increased $2.3 million, or 23%, from $10.0 million in the same period last year. The change was primarily due to decreased SG&A allocations to cost of goods sold of $1.1 million as a result of lower engineering segment activity and transaction costs of $1.2 million associated with the acquisition of James Construction Group.

Operating income for the 2009 fourth quarter decreased to $7.8 million, or 6.7% of total revenues, compared to $8.3 million, or 5.8% of total revenues, for the same period last year.

During December 2009, the Company determined to discontinue all operations in Ecuador and a plan was put in place to sell the stock ownership of the Ecuador company. Primoris recorded a loss from discontinued operations of $3.0 million in the fourth quarter of 2009 compared to breakeven in the fourth quarter of 2008. In February 2010, the Company entered into an agreement for the sale of the Ecuador business, the consummation of which did not have a material impact to the Company's operations.

Net other income for the fourth quarter of 2009 was $3.2 million compared to $2.2 million for the fourth quarter of 2008. Other income included $3.4 million income from non-consolidated entities, $0.3 million in foreign exchange gain and $0.1 million in interest income. Other income was reduced by $0.5 million in interest expense.

Income from continuing operations before provision for income taxes for the fourth quarter of 2009 increased to $11.1 million, or 9.4% of revenues, from $10.4 million, or 7.3% of revenues, in the fourth quarter of 2008.

The provision for income taxes increased to $4.3 million for the fourth quarter of 2009 for an effective tax rate of 38.6% compared to a rate of 25.1% in the prior year quarter. The increase was the result of a change in tax status from that of Subchapter S of the Internal Revenue Code to that of Subchapter C of the Code associated with the July 2008 merger of Rhapsody Acquisition Corp. and Primoris Corporation. If the Company had been taxed for the entire fourth quarter of 2008 as a C-Corporation, on a pro forma basis, the 2008 tax provision would have been $4.2 million for an effective tax rate of 39.8%.

Net income for the fourth quarter of 2009 was $3.7 million, or $0.10 per share (reflecting a tax rate of 38.6%), compared to net income of $7.8 million, or $0.23 per share (reflecting a tax rate of 25.1%), in the same period in 2008. On a pro forma basis net income for the fourth quarter of 2008 would have been $6.3 million, or $0.19 per diluted share (reflecting a pro forma tax rate of 39.8%). The Company believes that pro forma net income for prior periods is a better indicator of performance for comparison purposes. Fully diluted shares outstanding for the fourth quarter 2009 were approximately 38.1 million compared to 33.3 million for the prior year fourth quarter, an increase of 14.3%.

Other Financial Information

Primoris's balance sheet at December 31, 2009 reported cash and cash equivalents of $90.0 million, short-term investments of $30.1 million, working capital of $43.3 million, total long-term debt secured by equipment of $34.1 million, long-term subordinated acquisition debt of $43.9 million and stockholders' equity of $144.0 million. Additionally, the balance sheet included a $9.3 million liability representing the estimated fair value for earn-out payments relating to the 2009 acquisitions.

Backlog

Total backlog at December 31, 2009 was $795.4 million, an increase of $444.4 million, or 126.6%, from $351.0 million at December 31, 2008, excluding Ecuador's discontinued operations. The December 31, 2009 amount includes $546.9 million added by the acquisitions of James Construction Group and Cravens Partners. In addition, the total backlog amount at December 31, 2009 included approximately $40.0 million, compared to $88.0 million at December 31, 2008, related to the previously disclosed demobilization at Chevron Corp's Richmond Refinery project located in California. Excluding any work for the Chevron project, Primoris expects that approximately 60% of the total backlog at December 31, 2009, will be recognized as revenue during 2010.

Backlog should not be considered a comprehensive indicator of future revenues, as a significant portion of Primoris' revenues are derived from projects that are not part of a backlog calculation. During 2009, approximately $135.3 million of revenue - $78.9 million attributable to Primoris and $56.4 million attributable to James Construction Group -- was generated by projects completed under master service agreements, time and material contracts, and fixed unit price contracts.

Conference Call

Brian Pratt, Chairman, President and Chief Executive Officer, and Peter J. Moerbeek, Executive Vice President, Chief Financial Officer will host a conference call on Wednesday, March 10, 2010 at 11:30 am Eastern Time / 8:30 am Pacific Time to discuss the results. Interested parties may participate in the call by dialing (866) 255-7436 (Domestic) or (706) 634-4739 (International). The conference call will also be broadcast live via the Investor Relations section of Primoris's website at www.primoriscorp.com. Once at the Investor Relations section, please click on "Events & Presentations". If you are unable to participate in the live call, the conference call will be archived and can be accessed for approximately 90 days.

About Primoris

Primoris, through various subsidiaries, is one of the largest specialty contractors and engineering companies in the United States. Primoris provides a wide range of construction, fabrication, maintenance and replacement services, as well as engineering services to major public utilities, petrochemical companies, energy companies, municipalities and other customers. With the addition of the James Construction Group, Primoris has a significant presence in the Gulf States region where it provides heavy civil construction services. Primoris is also a leading water and wastewater contractor in the state of Florida, and a specialist in designing and constructing complex commercial and industrial concrete structures in California. For additional information on Primoris, please visit www.primoriscorp.com.

The Primoris Services Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5527

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," and "future" or similar expressions are intended to identify forward-looking statements. Forward-looking statements inherently involve risks and uncertainties, 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 year ended December 31, 2008 and other filings with the Securities and Exchange Commission, including the Company's Form 10-K to be filed on or before March 12, 2010. Primoris does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (in thousands except per share amounts)



                                                                 Twelve Months
                                          Three Months Ended         Ended
                                          ------------------  ------------------

                                          December  December  December  December
                                          31, 2009  31, 2008  31, 2009  31, 2008
                                          --------  --------  --------  --------

  Revenues                                $117,239  $142,198  $467,010  $597,822

  Cost of revenues                          97,067   123,936   391,435   527,380
                                          --------  --------  --------  --------
   Gross profit                             20,172    18,262    75,575    70,442
  Selling, general and administrative
   expenses                                 11,956     9,616    34,781    30,544

  Merger related stock expense                 390       375       390     4,050
                                          --------  --------  --------  --------
   Operating income                          7,826     8,271    40,404    35,848
  Other income (expense):
   Income from non-consolidated entities     3,411     1,564     8,753     6,065
   Foreign exchange gain (loss)                260       788       293       855
   Interest income                              86       361       640     1,710

   Interest expense                          (516)     (543)   (1,979)   (2,250)
                                          --------  --------  --------  --------
    Income from continuing operations
     before provision for income taxes      11,067    10,441    48,111    42,228

  Provision for income taxes               (4,273)   (2,625)  (18,350)   (4,926)
                                          --------  --------  --------  --------
   Income from continuing operations         6,794     7,816    29,761    37,302
  Loss on discontinued operations, net
   of income taxes                         (3,048)      (20)   (3,849)     (869)
                                          --------  --------  --------  --------

   Net income                               $3,745    $7,796   $25,912   $36,433
                                          ========  ========  ========  ========

  Earnings (loss) per share:

  Basic:
  --------------------------------------
  Income from continuing operations          $0.21     $0.26     $0.93     $1.42

  (Loss) on discontinued operations        $(0.10)     $0.00   $(0.12)   $(0.03)
                                          --------  --------  --------  --------

  Net income                                 $0.11     $0.26     $0.81     $1.39
                                          ========  ========  ========  ========


  Diluted:
  --------------------------------------
  Income from continuing operations          $0.18     $0.23     $0.86     $1.32

  (Loss) on discontinued operations        $(0.08)     $0.00   $(0.11)   $(0.03)
                                          --------  --------  --------  --------

  Net income                                 $0.10     $0.23     $0.75     $1.29
                                          ========  ========  ========  ========
  Weighted average common shares
   outstanding

   Basic                                    32,644    29,977    31,937    26,258
                                          ========  ========  ========  ========

   Diluted                                  38,113    33,344    34,418    28,156
                                          ========  ========  ========  ========

  Pro forma net income data -- Unaudited
   2008:
  Income from continuing operations,
   before provision for income tax, as
   reported                                          $10,441             $42,228

  Pro forma provision for income tax                 (4,161)            (16,797)
                                                    --------            --------
  Pro forma income from continuing
   operations                                         $6,280             $25,431
                                                    ========            ========
  Pro forma income (loss) on
   discontinued operations                                 2               (592)
                                                    --------            --------

  Pro forma net income                                $6,282             $24,839
                                                    ========            ========
  Pro forma earnings per share
  Basic -- income from continuing
   operations                                          $0.21               $0.97
  Basic -- (loss) on discontinued
   operations                                          $0.00             ($0.02)
  Basic -- net income                                  $0.21               $0.95
  Diluted - income from continuing
   operations                                          $0.19               $0.90
  Diluted - (loss) on discontinued
   operations                                          $0.00             ($0.02)
  Diluted - net income                                 $0.19               $0.88

          CONDENSED CONSOLIDATED BALANCE SHEET
                     (in thousands)


                                    December  December
                                       31,       31,
                                      2009      2008
                                    --------  --------
               ASSETS

  Current assets:
   Cash and cash equivalents         $90,004   $72,848
   Short-term investments             30,058    15,036
   Restricted cash                     6,845     8,556
   Accounts receivable, net          108,492    90,622
   Costs and estimated earnings in
    excess of billings                11,378    19,793
   Inventory                          22,275     2,349
   Deferred income taxes               5,630     5,591
   Prepaid expenses and other
    current assets                     5,501       798
   Current assets from
    discontinued operations            5,304     6,862
                                    --------  --------
    Total current assets             285,487   222,455

   Property and equipment, net        92,568    24,820
   Other assets                           --       139
   Investment in non-consolidated
    ventures                           5,599       500
   Other intangible assets, net       32,695        52
   Goodwill                           59,678     2,842
   Non-current assets of
    discontinued operations               --     1,404
                                    --------  --------

    Total assets                    $476,027  $252,212
                                    ========  ========


   LIABILITIES AND STOCKHOLDERS'
                EQUITY

  Current liabilities:
   Accounts payable                  $62,568   $50,991
   Billings in excess of costs and
    estimated earnings               114,035    71,193
   Accrued expenses and other
    current liabilities               34,992    25,171
   Distributions and dividends
    payable                            2,987     5,696
   Current portion of capital
    leases                             4,220     2,198
   Current portion of long-term
    debt                               6,482     5,679
   Current portion of subordinated
    debt                              10,397        --
   Current liabilities of
    discontinued operations            6,511     7,464
                                    --------  --------
    Total current liabilities        242,192   168,392

   Long-term debt, net of current
    portion                           26,368    26,624
   Long-term capital leases, net
    of current portion                 7,734       341
   Long-term subordinated debt,
    net of current portion            43,853        --
   Deferred tax liabilities            2,643     1,425

   Other long-term liabilities         9,278        --
                                    --------  --------

    Total liabilities                332,068   196,782
                                    --------  --------

  Commitments and contingencies
  Stockholders' equity
   Common stock                            3         3
   Additional paid-in capital        100,644    34,796
   Retained earnings                  42,982    20,528
   Accumulated other comprehensive
    income                               330       103
                                    --------  --------

    Total stockholders' equity       143,959    55,430
                                    --------  --------
    Total liabilities and
     stockholders' equity           $476,027  $252,212
                                    ========  ========

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SOURCE: Primoris Services Corporation

CONTACT:  Primoris Services Corporation
Peter J. Moerbeek, Executive Vice President,
Chief Financial Officer
(949) 454-7121
pmoerbeek@primoriscorp.com
The Equity Group Inc.
Devin Sullivan, Senior Vice President
(212) 836-9608
dsullivan@equityny.com
Gerrard Lobo, Senior Account Executive
(212) 836-9610
globo@equityny.com

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