Primoris Services Corporation
Primoris Services Corp (Form: 8-K, Received: 11/06/2017 17:26:07)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

November 6, 2017

Date of Report (Date of earliest event reported)

 

Primoris Services Corporation

(Exact name of Registrant as specified in its charter)

 

 

Delaware

 

001-34145

 

20-4743916

(State or other jurisdiction

 

(Commission File Number)

 

(I.R.S. Employer

of incorporation)

 

 

 

Identification No.)

 

2100 McKinney Avenue, Suite 1500, Dallas, Texas 75201

(Address of principal executive offices)

(Zip Code)

 

(214) 740-5600

Registrant’s telephone number, including area code

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

              Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

              Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

              Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

              Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 


 

 

 

Item 2.02                         Results of Operations and Financial Condition.

 

On November 6, 2017,  Primoris Services Corporation, a Delaware corporation (“Primoris”, the “Company”) issued a press release announcing its financial performance for the third quarter ended September  30, 2017 and for the nine months ended September 30, 2017.

 

The information contained in the press release attached hereto is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, and shall not be deemed incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 8.01              Other Events.

Declaration of Cash Dividend to Stockholders

On November 2, 2017, the Board of Directors declared a cash dividend of $0.06 per common share for stockholders of record as of December 29, 2017,  payable on or about January 15, 2018.

  Item 9.01.                    Financial Statements and Exhibits.

(d)   Exhibits .

 

 

 

 

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release dated November 6, 2017

 


 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

 

 

 

 

 

PRIMORIS SERVICES CORPORATION

 

 

 

 

Dated: November 6, 2017

 

By:

/s/ Peter J. Moerbeek

 

 

 

Peter J. Moerbeek

 

 

 

Executive Vice President, Chief Financial Officer

 

3


 

 

Exhibit 99.1

PSC_PRIMORIS 300

 

 

PRIMORIS SERVICES CORPORATION ANNOUNCES 2017 THIRD QUARTER FINANCIAL RESULTS

 

 

Board of Directors Increased Quarterly Cash Dividend to $0.06 Per Share

 

Financial Highlights

 

·

2017  Q3 revenues of $608.3 million, a 20%  increase over 2016 Q3

·

2017 Q3 gross profit of $70.4 million, a 40% increase over 2016 Q3

·

2017 Q3 net income attributable to Primoris of $20.6 million, a $16.1 million (357%  )increase over 2016  Q3.  Earnings per share of $0.40 increased by $0.31 from 2016  Q3

·

At September 30, 2017, total backlog of $2.6 billion

 

Dallas, TX – November 6, 2017– Primoris Services Corporation (NASDAQ GS: PRIM) (“Primoris” or “Company”) today announced financial results for its third quarter ended September 30,  2017.

 

The Company also announced that on November 2, 2017 its Board of Directors authorized a 9% increase in the quarterly cash dividend to $0.06 per share from $0.055 per share.  The cash dividend will be paid to stockholders of record on December 29, 2017, payable on or about January 15, 2018. 

 

David King, President and Chief Executive Officer of Primoris, commented, “Primoris’ third quarter results are a reflection of our performance serving our diverse end markets.  We  experienced year over year revenue gains at the majority of our business units, with notable gains from our power projects, Gulf Coast based pipeline work and Utilities & Distribution segment.  Our utility businesses grew revenue not just with current customers but also with new customers in new geographies.  As we expected last quarter, the Civil segment’s gross margins returned to profitability, and as we work off legacy jobs, we believe margins should continue to improve for the segment.  Our acquisition strategy is paying off, as we saw positive contributions from all of our recent acquisitions.

 

“While hurricanes across the Gulf Coast had some impact on our third quarter results, we are extremely proud of the earnings we achieved.  Our crews are not only working profitably; they are working safely, and that is every bit as important.  Our backlog declined slightly to end the quarter at $2.62 billion, but our sales team continues doing an outstanding job of developing new projects.  Every segment reported new business awards contributing to the backlog results.”

 

Mr. King concluded,  “As we look at the year ahead, we have provided our guidance for the next four quarters based on our expectations of the timing of major projects and project awards, but we remain mindful that start and award dates remain uncertain.  Nevertheless, we see improving opportunities for growth in all of our end markets, especially for pipeline work and EPC projects and for utility work on top of our stable base business.”

 


 

 

2017 THIRD QUARTER RESULTS OVERVIEW

 

Revenues in the third quarter 2017 were $608.3 million, an increase of $100.5 million compared to the same period in 2016.  Gross profit for the third quarter 2017 was $70.4 million, an increase of $20.3 million compared to the same period in 2016.  Gross profit as a percentage of revenue increased to 11.6% for the third quarter 2017, compared to 9.9% for the same period in 2016.

 

Selling, general, and administrative expenses in the 2017 third quarter were $42.6 million compared to $36.0 million in the same period of 2016.  The primary reason for the increase in SG&A is from the businesses acquired subsequent to the third quarter of 2016.  SG&A as a percentage of total revenue was 7.0% in the 2017 third quarter compared to 7.1% in the same period of 2016.

 

Included in other income in the 2017 third quarter is $6.0 million of unrealized gain from a short-term investment in marketable securities.  We do not anticipate that such a gain would recur with any frequency

 

SEGMENT RESULTS

 

Through the end of the year 2016, Primoris segregated its business into three reportable segments: the Energy segment, the East Construction Services segment, and the West Construction Services segment.  In the first quarter 2017, Primoris changed its reportable segments to match the changes in the Company’s realigned internal organization and management structure.  A Form 8-K was filed on April 7, 2017 containing historical revenue, margin, and backlog information for the new segments.

 

·

Power, Industrial, and Engineering (“Power”) - The Power segment operates throughout the United States and specializes in a range of services that include full EPC project delivery, turnkey construction, retrofits, upgrades, repairs, outages, and maintenance for entities in the petroleum, petrochemical, water, and other industries.

·

Pipeline and Underground (“Pipeline”) – The Pipeline segment operates throughout the United States and specializes in a range of services, including pipeline construction, pipeline maintenance, pipeline facility work, compressor stations, pump stations, metering facilities, and other pipeline-related services for entities in the petroleum and petrochemical industries.

·

Utilities and Distribution (“Utilities”) – The Utilities segment operates primarily in California and the Midwest and Southeast regions of the United States and specializes in a range of services, including utility line installation and maintenance, gas and electric distribution, streetlight construction, substation work, and fiber optic cable installation.

·

Civil – The Civil segment operates primarily in the Southeast and Gulf Coast regions of the United States and specializes in highway and bridge construction, airport runway and taxiway construction, demolition, heavy earthwork, soil stabilization, mass excavation, and drainage projects.

 

 

 


 

 

Segment Revenues

(in thousands, except %)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended September 30, 

 

 

 

2017

 

2016

 

 

 

 

 

 

% of

 

 

 

 

% of

 

 

 

 

 

 

Total

 

 

 

 

Total

 

Segment

    

Revenue

    

Revenue

    

Revenue

    

Revenue

 

Power

 

$

154,178

 

25.3%

 

$

101,811

 

20.0%

 

Pipeline

 

 

84,357

 

13.9%

 

 

106,042

 

20.9%

 

Utilities

 

 

246,524

 

40.5%

 

 

186,985

 

36.8%

 

Civil

 

 

123,252

 

20.3%

 

 

112,990

 

22.3%

 

Total

 

$

608,311

 

100.0%

 

$

507,828

 

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months ended September 30, 

 

 

 

2017

 

2016

 

 

 

 

 

 

% of

 

 

 

 

% of

 

 

 

 

 

 

Total

 

 

 

 

Total

 

Segment

    

Revenue

    

Revenue

    

Revenue

    

Revenue

 

Power

 

$

443,191

 

24.6%

 

$

367,025

 

26.3%

 

Pipeline

 

 

402,425

 

22.4%

 

 

217,182

 

15.6%

 

Utilities

 

 

576,446

 

32.0%

 

 

447,858

 

32.1%

 

Civil

 

 

378,916

 

21.0%

 

 

363,020

 

26.0%

 

Total

 

$

1,800,978

 

100.0%

 

$

1,395,085

 

100.0%

 

 

Segment Gross Profit

(in thousands, except %)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended September 30, 

 

 

 

2017

 

2016

 

 

    

 

 

    

% of

    

 

 

    

% of

 

 

 

 

 

 

Segment

 

 

 

 

Segment

 

Segment

 

Gross Profit

 

Revenue

 

Gross Profit

 

Revenue

 

Power

 

$

18,842

 

12.2%

 

$

10,893

 

10.7%

 

Pipeline

 

 

12,084

 

14.3%

 

 

32,402

 

30.6%

 

Utilities

 

 

36,081

 

14.6%

 

 

33,925

 

18.1%

 

Civil

 

 

3,414

 

2.8%

 

 

(27,091)

 

(24.0%)

 

Total

 

$

70,421

 

11.6%

 

$

50,129

 

9.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months ended September 30, 

 

 

 

2017

 

2016

 

 

    

 

 

    

% of

    

 

 

    

% of

 

 

 

 

 

 

Segment

 

 

 

 

Segment

 

Segment

 

Gross Profit

 

Revenue

 

Gross Profit

 

Revenue

 

Power

 

$

52,498

 

11.8%

 

$

36,570

 

10.0%

 

Pipeline

 

 

79,575

 

19.8%

 

 

43,870

 

20.2%

 

Utilities

 

 

76,701

 

13.3%

 

 

68,651

 

15.3%

 

Civil

 

 

1,183

 

0.3%

 

 

(16,400)

 

(4.5%)

 

Total

 

$

209,957

 

11.7%

 

$

132,691

 

9.5%

 

 

 

 


 

 

Power, Industrial, & Engineering Segment :  Revenue in the Power segment increased by $52.4 million in the third quarter of 2017, compared to the same period in 2016.  The increase was primarily due to increased revenues from a joint venture power plant project in Southern California and a power plant construction project in the mid-Atlantic region that began late in the third quarter of 2016.  Acquisitions completed subsequent to the third quarter of 2016 contributed $6.8 million to the increase.  Segment gross profit increased by $7.9 million in the third quarter of 2017, compared to the same period in 2016.  The increase is primarily due to the increased revenues from the power plant projects and acquisitions, slightly offset by decreased revenue from a petrochemical plant that achieved substantial completion in the second quarter of 2017.  Gross profit as a percentage of revenues increased to 12.2% in the third quarter of 2017, compared to 10.7% in the same period in 2016.

 

Pipeline & Underground Segment :  Revenue in the Pipeline segment decreased by $21.7 million in the third quarter of 2017, compared to the same period in 2016.  The third quarter of 2016 results included revenues of $27.5 million and gross profit of $26.7 million from the collection of disputed receivables; the following discussion excludes the collection revenue and gross profit.  Revenue in the Pipeline segment increased by $5.8 million in the third quarter of 2017, compared to the same period in 2016.  The increased revenues were primarily attributable to increased work at our Texas-based pipeline group and the Coastal acquisition that was completed in the second quarter of 2017.  Segment gross profit in the Pipeline segment increased by $6.4 million, primarily as the result of the increased revenues.  Gross profit as a percentage of revenues increased to 14.3% in the third quarter of 2017, compared to 7.3% in the same period in 2016.

 

Utilities & Distribution   Segment:    Revenue in the Utilities segment increased by $59.5 million in the third quarter of 2017, compared to the same period in 2016.  Approximately half of the increase came from increased revenue with California utilities, with increased revenues with Midwest utility customers and the second quarter 2017 acquisition of Florida Gas Contractors (now operating as Primoris Distribution Services) accounting for the remainder.  Segment gross profit increased by $2.2 million in the third quarter of 2017, compared to the same period in 2016, primarily as the result of the increased revenues.  Gross profit as a percentage of revenues decreased to 14.6% in the third quarter of 2017, compared to 18.1% in the same period in 2016.

 

Civil Segment:    Revenue in the Civil segment increased by $10.3 million in the third quarter 2017, compared to the same period in 2016.  The increased revenue primarily came from Texas DOT projects and a methanol plant project that began in 2017.  Segment gross profit increased by $30.5 million in the third quarter of 2017, compared to the same period in 2016.  The third quarter of 2016 included a $37.3 million write-down related to Belton, TX area I-35 highway projects.  Excluding the 2016 write-down, segment gross profit decreased by $6.8 million in the third quarter of 2017, compared to the same period in 2016.  The decrease resulted from the impact of both the hurricanes in Texas and the Gulf Coast and increased expected cost for highway jobs in Louisiana and Arkansas.  Gross profit as a percentage of revenues decreased to 2.8% in the third quarter of 2017, compared to 9.0% in the same period in 2016, excluding the impact of the I-35 projects.

 

OUTLOOK

 

Based on an expected second quarter 2018 start date for a major pipeline project in backlog, anticipated levels of customer maintenance, MSA spending, and new project awards, and given the continued uncertainty caused by the energy markets, the Company estimates that for the four quarters ending September 30, 2018, net income attributable to Primoris will be between $1.05 and $1.25 per fully diluted share.

 

BACKLOG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected Next Four

 

 

 

 

 

 

 

 

 

 

 

Quarters Total

 

 

Backlog at September 30, 2017 (in millions)

 

Backlog Revenue

 

Segment

Fixed Backlog

 

MSA Backlog

 

Total Backlog

 

Recognition

 

Power

$

418

 

$

41

 

$

459

 

 

78%

 

Pipeline

 

808

 

 

43

 

 

851

 

 

55%

 

Utilities

 

66

 

 

557

 

 

623

 

 

100%

 

Civil

 

683

 

 

 —

 

 

683

 

 

61%

 

Total

$

1,975

 

$

641

 

$

2,616

 

 

71%

 

 

At September 30, 2017, Fixed Backlog was $2.0 billion, compared to $2.1 billion at December 31, 2016.

 

At September 30, 2017, MSA Backlog was $641 million, compared to $672 million at December 31, 2016.  MSA Backlog represents estimated MSA revenues for the next four quarters.

 

 


 

 

 

Total Backlog at September 30, 2017 was $2.6 billion, compared to $2.8 billion at December 31, 2016. 

 

Backlog, including estimated MSA revenues, 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

 

David King, President and Chief Executive Officer, and Peter J. Moerbeek, Executive Vice President and Chief Financial Officer will host a conference call tomorrow, Tuesday, November 7, 2017 at 10:00 am Eastern Time / 9:00 am Central Time to discuss the results. 

 

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 13672829, 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. 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 construction service enterprises in the United States. Serving diverse end markets, Primoris provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to major public utilities, petrochemical companies, energy companies, municipalities, and other customers. The Company's national footprint extends from Florida, along the Gulf Coast, through California, into the Pacific Northwest and Canada. For additional information, please visit www.prim.com.

 

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 December 31, 2016, and other filings with the Securities and Exchange Commission.  Given these uncertainties, you should not place undue reliance on forward-looking statements.  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.

 

 

 

 

 

Company Contact

    

 

    

Peter J. Moerbeek

 

Kate Tholking

 

Executive Vice President, Chief Financial Officer

 

Director of Investor Relations

 

(214) 740-5602

 

(214) 740-5615

 

pmoerbeek@prim.com

 

ktholking@prim.com

 

 

 

 

 


 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

    

2017

    

2016

    

2017

    

2016

 

Revenue

 

$

608,311

 

$

507,828

 

$

1,800,978

 

$

1,395,085

 

Cost of revenue

 

 

537,890

 

 

457,699

 

 

1,591,021

 

 

1,262,394

 

Gross profit

 

 

70,421

 

 

50,129

 

 

209,957

 

 

132,691

 

Selling, general and administrative expenses

 

 

42,559

 

 

35,994

 

 

128,390

 

 

101,150

 

Impairment of goodwill

 

 

 —

 

 

2,716

 

 

 —

 

 

2,716

 

Operating income

 

 

27,862

 

 

11,419

 

 

81,567

 

 

28,825

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income

 

 

6,066

 

 

 —

 

 

6,066

 

 

 —

 

Foreign exchange gain (loss)

 

 

167

 

 

(92)

 

 

299

 

 

288

 

Other expense

 

 

(39)

 

 

(278)

 

 

(52)

 

 

(278)

 

Interest income

 

 

228

 

 

31

 

 

411

 

 

122

 

Interest expense

 

 

(2,198)

 

 

(2,246)

 

 

(6,605)

 

 

(6,754)

 

Income before provision for income taxes

 

 

32,086

 

 

8,834

 

 

81,686

 

 

22,203

 

Provision for income taxes

 

 

(9,952)

 

 

(4,078)

 

 

(28,644)

 

 

(9,244)

 

Net income

 

$

22,134

 

$

4,756

 

$

53,042

 

$

12,959

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less net income attributable to noncontrolling interests

 

 

(1,537)

 

 

(252)

 

$

(3,209)

 

$

(706)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Primoris

 

$

20,597

 

$

4,504

 

$

49,833

 

$

12,253

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

 

$

0.055

 

$

0.055

 

$

0.17

 

$

0.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.40

 

$

0.09

 

$

0.97

 

$

0.24

 

Diluted

 

$

0.40

 

$

0.09

 

$

0.96

 

$

0.24

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

51,441

 

 

51,780

 

 

51,491

 

 

51,759

 

Diluted

 

 

51,707

 

 

52,034

 

 

51,751

 

 

51,978

 

 

 

 

 

 

 

 

 


 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

September 30, 

 

 

December 31, 

 

 

    

2017

    

2016

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

143,235

 

$

135,823

 

Short-term investments

 

 

19,304

 

 

 —

 

Customer retention deposits

 

 

926

 

 

481

 

Accounts receivable, net

 

 

356,851

 

 

388,000

 

Costs and estimated earnings in excess of billings

 

 

177,662

 

 

138,618

 

Inventory and uninstalled contract materials

 

 

39,617

 

 

49,201

 

Prepaid expenses and other current assets

 

 

14,529

 

 

19,258

 

Total current assets

 

 

752,124

 

 

731,381

 

Property and equipment, net

 

 

305,046

 

 

277,346

 

Intangible assets, net

 

 

48,655

 

 

32,841

 

Goodwill

 

 

151,118

 

 

127,226

 

Other long-term assets

 

 

4,749

 

 

2,004

 

Total assets

 

$

1,261,692

 

$

1,170,798

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

153,677

 

$

168,110

 

Billings in excess of costs and estimated earnings

 

 

159,120

 

 

112,606

 

Accrued expenses and other current liabilities

 

 

125,626

 

 

108,006

 

Dividends payable

 

 

2,829

 

 

2,839

 

Current portion of capital leases

 

 

214

 

 

188

 

Current portion of long-term debt

 

 

62,697

 

 

58,189

 

Current portion of contingent earnout liabilities

 

 

1,252

 

 

 —

 

Total current liabilities

 

 

505,415

 

 

449,938

 

Long-term capital leases, net of current portion

 

 

245

 

 

15

 

Long-term debt, net of current portion

 

 

191,948

 

 

203,381

 

Deferred tax liabilities

 

 

9,830

 

 

9,830

 

Other long-term liabilities

 

 

13,007

 

 

9,064

 

Total liabilities

 

 

720,445

 

 

672,228

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

Common stock

 

 

 5

 

 

 5

 

Additional paid-in capital

 

 

160,277

 

 

162,128

 

Retained earnings

 

 

376,537

 

 

335,218

 

Non-controlling interest

 

 

4,428

 

 

1,219

 

Total stockholders’ equity

 

 

541,247

 

 

498,570

 

Total liabilities and stockholders’ equity

 

$

1,261,692

 

$

1,170,798

 

 

 

 


 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30, 

 

 

    

2017

    

2016

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

 

$

53,042

 

$

12,959

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation

 

 

43,064

 

 

46,430

 

Amortization of intangible assets

 

 

6,184

 

 

5,015

 

Goodwill and intangible asset impairment

 

 

477

 

 

2,716

 

Stock-based compensation expense

 

 

911

 

 

1,169

 

Unrealized gain on short-term investments

 

 

(5,980)

 

 

 —

 

Gain on sale of property and equipment

 

 

(3,880)

 

 

(3,361)

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

Customer retention deposits

 

 

(445)

 

 

(451)

 

Accounts receivable

 

 

41,870

 

 

27,093

 

Costs and estimated earnings in excess of billings

 

 

(38,464)

 

 

(39,936)

 

Other current assets

 

 

17,210

 

 

13,865

 

Other long-term assets

 

 

(2,745)

 

 

(1,963)

 

Accounts payable

 

 

(17,813)

 

 

10,036

 

Billings in excess of costs and estimated earnings

 

 

46,067

 

 

(41,584)

 

Accrued expenses and other current liabilities

 

 

17,858

 

 

18,580

 

Other long-term liabilities

 

 

4,076

 

 

49

 

Net cash provided by operating activities

 

 

161,432

 

 

50,617

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(57,346)

 

 

(52,137)

 

Proceeds from sale of property and equipment

 

 

7,027

 

 

7,763

 

Purchase of short-term investments

 

 

(13,588)

 

 

 —

 

Sale of short-term investments

 

 

350

 

 

 —

 

Cash paid for acquisitions

 

 

(66,205)

 

 

(4,108)

 

Net cash used in investing activities

 

 

(129,762)

 

 

(48,482)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from issuance of long-term debt

 

 

30,000

 

 

30,000

 

Repayment of capital leases

 

 

(191)

 

 

(626)

 

Repayment of long-term debt

 

 

(41,088)

 

 

(36,867)

 

Payment of debt issuance costs for amended and restated credit agreement

 

 

(631)

 

 

 —

 

Proceeds from issuance of common stock purchased under a long-term incentive plan

 

 

1,148

 

 

1,439

 

Repurchase of common stock

 

 

(4,999)

 

 

 —

 

Dividends paid

 

 

(8,497)

 

 

(8,536)

 

Net cash used in financing activities

 

 

(24,258)

 

 

(14,590)

 

Net change in cash and cash equivalents

 

 

7,412

 

 

(12,455)

 

Cash and cash equivalents at beginning of the period

 

 

135,823

 

 

161,122

 

Cash and cash equivalents at end of the period

 

$

143,235

 

$

148,667