Primoris Services Corporation
May 10, 2010

Primoris Services Corporation Announces First Quarter 2010 Financial Results

Q1 2010 Financial Highlights , May 10, 2010 (GlobeNewswire via COMTEX News Network) -- Revenues increased 41.6% to $175.0 million from $123.6 million in Q1 2009 -- Gross margin rose to 14.0% of revenues from 11.7% of revenues in Q1 2009 -- Operating margin increased to 6.1% of revenues from 5.7% of revenues in Q1 2009 -- Net income of $6.7 million, or $0.15 per diluted share, compared to Q1 2009 net income of $5.6 million, or $0.17 per diluted share -- $112.3 million in cash and short-term investments at March 31, 2010

LAKE FOREST, Calif., May 10, 2010 (GLOBE NEWSWIRE) -- Primoris Services Corporation (Nasdaq:PRIM) (Nasdaq:PRIMW) ("Primoris" or "Company") today announced financial results for its first quarter ended March 31, 2010. Primoris's results for the first quarter of 2010 include the results of James Construction Group (JCG), which was acquired on December 18, 2009, and Cravens Services, Inc., which was acquired on October 3, 2009.

Brian Pratt, Chairman, President and Chief Executive Officer of Primoris, commented, "Our results for the first quarter of 2010 reflect the benefits of our acquisitions and show the promise of our recently expanded service platform and geographic presence with the addition of JCG. As shown by the decrease in revenues for our legacy businesses, we are still feeling the impact of the economic issues that affected our markets and operating results in 2009; however, we are encouraged by what appears to have been a bottoming of the backlog for our legacy businesses in the fourth quarter of 2009 and by the current active bidding environment. We believe that our end markets will continue to show improvement in the second half of 2010 and will evolve into a more robust operating environment by year end and into 2011. We remain positioned to capitalize on the opportunities that an improving economic environment can present to experienced, well-capitalized, and well-managed companies."

Q1 2010 Financial Results Overview

Consolidated revenues for the first quarter of 2010 increased by $51.4 million, or 41.6%, to $175.0 million from the first quarter of 2009, due primarily to a $96.0 million revenue contribution from JCG and, to a much lesser extent, Cravens Services. Excluding the impact of these acquired businesses, revenues declined by $44.6 million from the same quarter a year ago, reflecting reduced revenues across all business lines, especially in underground and industrial projects. This reduction in revenues was the result of a reduced level of new work acquired last year.

Gross profit for the first quarter of 2010 rose to $24.5 million, or 14.0% of revenues, from $14.5 million, or 11.7% of revenues, in the first quarter of 2009. This increase was primarily attributable to an $8.7 million profit contribution from the recent acquisitions, the successful close out of underground and industrial projects compared to the first quarter of 2009 and the recent conversion of a fixed-price contract to a reimbursable cost contract.

Segment Results

In prior periods, the Company reported two operating segments: "Construction Services" and "Engineering." Following the acquisition of JCG, we made a change in our management structure, and effective January 1, 2010, the reportable operating segments are:

  --  East Construction Services -- incorporates JCG's construction business,
      located primarily in the southeastern United States, as well as
      businesses along the Gulf Coast region, including Cardinal Contractors,
      Cardinal Mechanical, and Cravens.

  --  West Construction Services -- includes construction performed in the
      western United States, primarily in California and Nevada, by ARB, ARB
      Structures and Stellaris LLC.

  --  Engineering -- incorporates the results of Onquest, Inc. and Born
      Heaters Canada, ULC.



                        For the three months ended March 31,
                       ---------------------------------------

                               2010                 2009
                       --------------------  -----------------

                                     % of               % of
                                    Segment            Segment

  Segment                Revenue    Revenue   Revenue  Revenue
  ----------------     -----------  -------  --------  -------
                                     (Unaudited)
  East
   Construction
   Services               $104,236    59.6%   $14,739    11.9%
  West
   Construction
   Services                 59,887    34.2%    90,044    72.9%

  Engineering               10,859     6.2%    18,767    15.2%
                       -----------  -------  --------  -------
   Total                  $174,982   100.0%  $123,550   100.0%



                        For the three months ended March 31,
                       ---------------------------------------

                               2010                 2009
                       --------------------  -----------------

                                     % of               % of
                                    Segment            Segment
                          Gross               Gross
  Segment                 Profit    Revenue   Profit   Revenue
  ----------------     -----------  -------  --------  -------
                                     (Unaudited)
  East
   Construction
   Services                 $9,621     9.2%    $1,710    11.6%
  West
   Construction
   Services                $12,211    20.4%   $11,087    12.3%

  Engineering                2,641    24.3%     1,709     9.1%
                       -----------  -------  --------  -------
   Total                   $24,473    14.0%   $14,506    11.7%

East Construction Services: the $89.5 million increase in revenue was attributable to the 2009 additions of JCG and Cravens Services in the fourth quarter 2009. These acquisitions contributed $96.0 million in revenue, which was partially offset by a $6.5 million revenue decline primarily in water and wastewater projects. The $7.9 million gross profit increase was due primarily to JCG's $8.6 million gross margin contribution compared to the first quarter of 2009.

West Construction Services: the $30.2 million decline in revenues for the first quarter 2010 from the same period last year was primarily attributable to lower project revenues across the Company's major business lines due to the continuing general industry downturn. The $1.1 million gross profit increase for the first quarter of 2010 from the prior year's quarter was due to the impact of smaller, higher margin jobs and the impact of converting a fixed-price contract to a cost reimbursable contract.

Engineering: revenues decreased by $7.9 million from the first quarter of 2009, primarily attributable to the completion of one large international project and several smaller projects which reduced revenues in the current quarter. The segment margin benefitted from the completion of the international project and from lower allocation of overhead expenses due to the lower activity level in the segment.

Selling, general and administrative expenses of $13.8 million for the first quarter of 2010 increased $6.3 million, or 85.5%, from $7.4 million in the same period last year. This increase was primarily attributable to the addition of the acquired businesses in the fourth quarter of 2009, as well as lower activity and overhead absorption in the Engineering segment, and increased audit and consulting fees.

Operating income for the 2010 first quarter increased to $10.7 million, or 6.1% of total revenues, from $7.1 million, or 5.7% of total revenues, for the same period last year.

Net other expense for the first quarter of 2010 was $0.1 million compared to net other income of $2.1 million for the first quarter of 2009, due to lower income from non-consolidated entities and higher interest expense in the first quarter of 2010. Interest expense for the first quarter of 2010 increased to $1.3 million from $0.5 million in the first quarter of 2009 primarily due to the interest expense associated with subordinated debt incurred in the JCG acquisition of $0.7 million.

Income from continuing operations before provision for income taxes for the first quarter of 2010 was $10.7 million, or 6.1% of revenues, as compared to $9.2 million, or 7.5% of revenues, in the first quarter of 2009.

The provision for income taxes for the first quarter of 2010 increased to $4.0 million, for an effective tax rate of 37.1%, from $3.6 million, for an effective tax rate of 39.0%, in the prior year quarter.

Net income for the first quarter of 2010 rose to $6.7 million, or $0.15 per diluted share, from net income of $5.6 million, or $0.17 per diluted share, in the same period in 2009. Fully diluted shares outstanding for the first quarter of 2010 increased by 40.2% to 45.5 million from 32.5 million in last year's first quarter, due to the impact of 8.2 million shares issued for the JCG acquisition, 2.5 million shares issued as a final earn-out portion of the Rhapsody and Primoris merger, the conversion in the quarter of 0.6 million warrants and the dilutive impact of the remaining 4.0 million warrants.

Other Financial Information

Primoris's balance sheet at March 31, 2010 reported cash and cash equivalents of $83.3 million, short-term investments of $29.0 million, working capital of $57.3 million, total debt and capital leases secured by equipment of $42.2 million, subordinated acquisition debt of $51.0 million and stockholders' equity of $153.5 million. Additionally, the balance sheet included a $9.6 million liability representing the estimated fair value for earn-out payments relating to the 2009 acquisitions.

Backlog

Total backlog at March 31, 2010 was $824.4 million, an increase of $29.0 million from $795.4 million at December 31, 2009. The March 31, 2010 amount includes $514.6 million added by the acquisitions of JCG and Cravens Services. Primoris expects that approximately $492.2 million, or 59.7% of the total backlog at March 31, 2010, 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.

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 today, May 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 infrastructure companies in the United States. Serving diverse end markets, 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 recent acquisition of 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, 2009 and other filings with the Securities and Exchange Commission, including the Company's Form 10-Q to be filed on May 10, 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
                     (Unaudited)
       (In Thousands, Except Per Share Amounts)


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

                                   March     March
                                     31,       31,
                                    2010      2009
                                  --------  --------

  Revenues                        $174,982  $123,550

  Cost of revenues                 150,509   109,044
                                  --------  --------
   Gross profit                     24,473    14,506
  Selling, general and
   administrative expenses          13,755     7,416
                                  --------  --------
   Operating income                 10,718     7,090
  Other income (expense):
   Income from
    non-consolidated entities          968     2,167
   Foreign exchange gain                92       229
   Interest income                     180       259

   Interest expense                (1,307)     (526)
                                  --------  --------

  Income from continuing
   operations, before
   provision for income taxes       10,651     9,219

  Provision for income taxes       (3,953)   (3,599)
                                  --------  --------
   Income from continuing
    operations                       6,698     5,620
  Income on discontinued
   operations, net of income
   taxes                                --        20
                                  --------  --------

   Net income                       $6,698    $5,640
                                  ========  ========

  Earnings per share:

  Basic:
  ---------------------------
  Income from continuing
   operations                        $0.20     $0.19
  Income on discontinued
   operations                         $ --      $ --
                                  --------  --------

  Net income                         $0.20     $0.19
                                  ========  ========


  Diluted:
  ---------------------------
  Income from continuing
   operations                        $0.15     $0.17
  Income on discontinued
   operations                         $ --      $ --
                                  --------  --------

  Net income                         $0.15     $0.17
                                  ========  ========

  Weighted average common
   shares outstanding:

   Basic                            33,202    30,116
                                  ========  ========

   Diluted                          45,544    32,477
                                  ========  ========

           CONDENSED CONSOLIDATED BALANCE SHEETS
                       (Unaudited)
                      (In Thousands)


                                                December
                                    March 31,      31,
                                      2010        2009
                                   -----------  --------
               ASSETS              (Unaudited)

  Current assets:
   Cash and cash equivalents           $83,289   $90,004
   Short-term investments               29,000    30,058
   Restricted cash                       6,931     6,845
   Accounts receivable, net            117,610   108,492
   Costs and estimated earnings
    in excess of billings               16,187    11,378
   Inventory                            24,683    22,275
   Deferred tax assets                   5,630     5,630
   Prepaid expenses and other
    current assets                      10,029     5,501
   Current assets from
    discontinued operations                 --     5,304
                                   -----------  --------
    Total current assets               293,359   285,487
   Property and equipment, net          90,653    92,568
   Investment in non-consolidated
    entities                             2,174     5,599
   Intangible assets, net               31,314    32,695

   Goodwill                             59,678    59,678
                                   -----------  --------

   Total assets                       $477,178  $476,027
                                   ===========  ========

   LIABILITIES AND STOCKHOLDERS'
               EQUITY

  Current liabilities:
   Accounts payable                    $65,888   $62,568
   Billings in excess of costs
    and estimated earnings             113,397   114,035
   Accrued expenses and other
    current liabilities                 35,716    34,992
   Distributions and dividends
    payable                              1,102     2,987
   Current portion of capital
    leases                               3,859     4,220
   Current portion of long-term
    debt                                 6,568     6,482
   Current portion of
    subordinated debt                    9,165    10,397
   Current liabilities of
    discontinued operations                333     6,511
                                   -----------  --------
    Total current liabilities          236,028   242,192
   Long-term debt, net of current
    portion                             24,694    26,368
   Long-term capital leases, net
    of current portion                   7,130     7,734
   Long-term subordinated debt,
    net of current portion              41,863    43,853
   Deferred tax liabilities              2,643     2,643

   Other long-term liabilities          11,350     9,278
                                   -----------  --------

    Total liabilities                  323,708   332,068
                                   -----------  --------

  Commitments and contingencies
  Stockholders' equity
   Common stock                              3         3
   Additional paid-in capital          104,738   100,644
   Retained earnings                    48,577    42,982
   Accumulated other
    comprehensive income                   152       330
                                   -----------  --------

    Total stockholders' equity         153,470   143,959
                                   -----------  --------
    Total liabilities and
     stockholders' equity             $477,178  $476,027
                                   ===========  ========

This news release was distributed by GlobeNewswire, www.globenewswire.com

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

(C) Copyright 2010 GlobeNewswire, Inc. All rights reserved.

News Provided by COMTEX