Everus Reports Strong Third Quarter 2024 Results
Everus Construction Group (NYSE: ECG) reported strong Q3 2024 financial results with revenues of $761.0 million, up 6.1% year-over-year. Net income increased 16.1% to $41.8 million, with earnings per share of 82 cents, up 15.5%. EBITDA grew 12.1% to $65.0 million. The company's backlog reached a record $2.88 billion, up 43.5% from prior year-end. Everus completed its spinoff from MDU Resources Group on Oct. 31, 2024, and reiterated its 2024 guidance with expected revenues of $2.65-2.85 billion and EBITDA of $220-240 million.
Everus Construction Group (NYSE: ECG) ha riportato forti risultati finanziari per il terzo trimestre del 2024, con ricavi di $761,0 milioni, in aumento del 6,1% rispetto all'anno precedente. L'utile netto è aumentato del 16,1%, raggiungendo $41,8 milioni, con un utile per azione di 82 centesimi, in crescita del 15,5%. L'EBITDA è cresciuto del 12,1%, arrivando a $65,0 milioni. Il portafoglio commesse dell'azienda ha raggiunto un record di $2,88 miliardi, con un incremento del 43,5% rispetto alla fine dell'anno precedente. Everus ha completato la sua scissione da MDU Resources Group il 31 ottobre 2024 e ha ribadito le sue previsioni per il 2024, con ricavi attesi di $2,65-2,85 miliardi e un EBITDA compreso tra $220-240 milioni.
Everus Construction Group (NYSE: ECG) reportó sólidos resultados financieros en el tercer trimestre de 2024, con ingresos de $761,0 millones, un aumento del 6,1% en comparación con el año anterior. Los ingresos netos aumentaron un 16,1%, alcanzando $41,8 millones, con ganancias por acción de 82 centavos, un incremento del 15,5%. El EBITDA creció un 12,1% hasta $65,0 millones. La cartera de pedidos de la compañía alcanzó un récord de $2,88 mil millones, un aumento del 43,5% en comparación con el cierre del año anterior. Everus completó su escisión de MDU Resources Group el 31 de octubre de 2024 y reiteró su guía para 2024, con ingresos esperados de $2,65 a $2,85 mil millones y un EBITDA de $220 a $240 millones.
Everus Construction Group (NYSE: ECG)는 2024년 3분기 재무 결과를 발표하며 $761.0 백만의 수익을 기록하여 전년 대비 6.1% 증가했다고 보고했습니다. 순이익은 16.1% 증가하여 $41.8 백만에 달하며, 주당 순이익은 82센트로 15.5% 증가했습니다. EBITDA는 12.1% 성장하여 $65.0 백만에 이르렀습니다. 회사의 수주 잔고는 $2.88 억으로 기록을 세우며 지난해 말 대비 43.5% 증가했습니다. Everus는 2024년 10월 31일 MDU Resources Group에서 분리 완료하였고, 2024년 예상 수익을 $2.65-2.85억, EBITDA는 $220-240 백만원으로 재확인했습니다.
Everus Construction Group (NYSE: ECG) a annoncé de solides résultats financiers pour le troisième trimestre 2024, avec des revenus de $761,0 millions, en hausse de 6,1% par rapport à l'année précédente. Le revenu net a augmenté de 16,1%, atteignant $41,8 millions, avec un bénéfice par action de 82 cents, en hausse de 15,5%. L'EBITDA a crû de 12,1% pour atteindre $65,0 millions. Le carnet de commandes de l'entreprise a atteint un niveau record de $2,88 milliards, en hausse de 43,5% par rapport à la fin de l'année précédente. Everus a complété sa séparation de MDU Resources Group le 31 octobre 2024 et a réitéré ses prévisions pour 2024, avec des revenus attendus entre $2,65 et $2,85 milliards et un EBITDA de $220 à $240 millions.
Everus Construction Group (NYSE: ECG) hat starke Finanzresultate für das dritte Quartal 2024 veröffentlicht, mit Einnahmen von $761,0 Millionen, was einem Anstieg von 6,1% im Jahresvergleich entspricht. Der Nettogewinn stieg um 16,1% auf $41,8 Millionen, mit einem Gewinn pro Aktie von 82 Cent, was einem Anstieg von 15,5% entspricht. Das EBITDA wuchs um 12,1% auf $65,0 Millionen. Der Auftragsbestand des Unternehmens erreichte einen Rekordwert von $2,88 Milliarden, ein Anstieg von 43,5% im Vergleich zum Vorjahr. Everus schloss am 31. Oktober 2024 die Abspaltung von MDU Resources Group ab und bekräftigte seine Prognosen für 2024 mit erwarteten Einnahmen von $2,65-2,85 Milliarden und einem EBITDA von $220-240 Millionen.
- Revenue increased 6.1% to $761.0 million
- Net income grew 16.1% to $41.8 million
- EBITDA increased 12.1% to $65.0 million
- Record backlog of $2.88 billion, up 43.5%
- Operating cash flows improved to $82.7 million from $61.4 million
- Free cash flow increased to $57.8 million from $45.5 million
- T&D segment net income margin declined 20 basis points to 8.1%
- T&D segment EBITDA margin decreased 50 basis points to 13.3%
- Drew $40.0 million under credit facility for working capital needs
Insights
The Q3 2024 results demonstrate robust financial performance with several key highlights: revenues increased
The company's successful spinoff from MDU Resources positions it for more focused capital allocation. With a new
The record backlog of
The company's focus on data center work and grid modernization aligns with major infrastructure investment trends. The reaffirmed guidance of
Third Quarter 2024 Summary
(all comparisons versus the prior-year period unless otherwise noted)
-
Revenues of
, +$761.0 million 6.1% . -
Net income of
, +$41.8 million 16.1% ; net income margin of5.5% , +50 basis points. -
Earnings of
82 cents per share, +15.5% . -
Earnings before interest, taxes, depreciation and amortization (EBITDA) of
, +$65.0 million 12.1% ; EBITDA margin of8.5% , +40 basis points. -
Backlog of
, +$2.88 billion 43.5% from prior year-end. - Reiterated 2024 full-year guidance.
- Completed spinoff from MDU Resources Group, Inc. on Oct. 31, 2024.
Management Commentary
“This has been a transformative period in our company’s evolution, highlighted by our successful tax-free spinoff from MDU Resources on Oct. 31,” said Jeffrey S. Thiede, president and CEO of Everus. “I want to thank our team members for their continued efforts and dedication that enabled us to successfully transition to being an independent, public company, which better positions us to effectively allocate capital and drive profitable growth while generating long-term value for our shareholders.
“Our third quarter results demonstrate the strength of our scaled national platform and market-leading local brands that are benefiting from strong secular tailwinds, including data center work,” Thiede said. “Third quarter revenue increased
Thiede said, “Based on our results through the first nine months of the year, continued strong momentum in our end markets and our disciplined focus on execution, we are reiterating our 2024 financial guidance that calls for revenues in the range of
Third Quarter 2024 Consolidated Results
Everus reported revenues increased to
The company's gross profit increased to
Everus' net income increased to
The company's EBITDA increased to
Everus' backlog increased to
Third Quarter 2024 Segment Results
Electrical and Mechanical
The company's E&M segment revenues increased to
E&M segment net income increased to
Transmission and Distribution
Everus' T&D segment revenues were
T&D segment net income increased to
Balance Sheet and Cash Flow Commentary
Balance Sheet
On Oct. 31, 2024, Everus entered into a five-year senior secured credit agreement, whereby it has the capacity to incur indebtedness of up to
Everus' working capital, defined as current assets minus current liabilities, was
Everus previously reported that its near-term priorities following the spinoff from MDU Resources will be organic growth investments, value-enhancing mergers and acquisitions, and balance sheet optimization.
Cash Flow
The company's operating cash flows were
The company's capital expenditures were
Everus had free cash flow of
Forecast for Full Year 2024
Everus is reaffirming previously provided guidance for 2024:
-
Revenue is expected to be in the range of
to$2.65 billion .$2.85 billion -
EBITDA is expected to be in the range
to$220 million , with EBITDA margins expected to be higher than 2023. See the Non-GAAP Financial Measures sections of this news release for further information and reconciliation.$240 million
The company's expected results for 2024 are based on these assumptions:
- Normal operating conditions.
- Normal economic conditions.
- Continued availability of labor, necessary equipment and materials.
Basis of Presentation
Prior to the spinoff from MDU Resources on Oct. 31, 2024, Everus Construction, Inc., including its subsidiaries, operated as a wholly owned subsidiary of Centennial and an indirect, wholly owned subsidiary of MDU Resources and not as a stand-alone company. Following the separation, Everus Construction is now a wholly owned subsidiary of Everus. As a result, third quarter 2024 results of operations, financial condition, cash flow and the accompanying unaudited condensed consolidated financial statements were prepared on a “carve-out” basis in connection with the spinoff and were derived from the unaudited condensed consolidated financial statements of MDU Resources as if Everus operated on a stand-alone basis during the periods presented. The calculation of basic and diluted earnings per share for the periods presented have been retrospectively adjusted to the number of shares outstanding on Oct. 31, 2024, the separation and distribution date. It is assumed that there were no dilutive or anti-dilutive equity instruments because there were no Everus stock-based awards outstanding during those periods.
Non-GAAP Financial Measures
Throughout this news release, Everus presents financial information prepared in accordance with
Conference Call
Management will discuss Everus' third quarter results on a webcast at 8:30 a.m. EST Nov. 7, 2024. The webcast and accompanying presentation materials can be accessed at investors.everus.com by selecting “Events & Presentations” and “Everus Q3 Earnings Call.” After the conclusion of the webcast, a replay will be available at the same location.
Participants also can listen to the webcast by phone at 646-307-1963 for toll-based
About Everus Construction Group
Everus Construction Group, Inc., a member of the S&P SmallCap 600® index, is Building America's Future™ by providing a full spectrum of construction services through its electrical and mechanical, and transmission and distribution specialty contracting services across
Forward-Looking Statements
Information in this news release includes certain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this news release, including statements about future performance, financial guidance and long-term targets and statements made by the CEO, are expressed in good faith and are believed by the company to have a reasonable basis. This news release highlights key growth strategies, projections and certain assumptions for the company and its subsidiaries and other matters for each of the company’s businesses. Many of these highlighted statements and other statements not historical in nature are “forward-looking statements.” Although the company believes that its expectations are based on reasonable assumptions as of the date they are made, there is no assurance the company’s projections, including estimates for growth, shareholder value creation and financial guidance, will be achieved. Please refer to assumptions contained in this news release, as well as the various important factors listed in Part I, Item 1A - Risk Factors in the company's recent Form 10 filing and subsequent filings with the Securities and Exchange Commission.
Changes in such assumptions and factors could cause actual future results to differ materially from growth and financial guidance. All forward-looking statements in this news release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. Except as required by law, the company does not undertake any obligation to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise.
Everus Construction Group, Inc. |
|||||||||||
Condensed Consolidated Statements of Income |
|||||||||||
(Unaudited) |
|||||||||||
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
(In thousands, except per share amounts) |
||||||||||
Operating revenues |
$ |
760,985 |
|
$ |
717,406 |
|
$ |
2,090,047 |
|
$ |
2,218,672 |
Cost of sales |
|
671,085 |
|
|
632,499 |
|
|
1,836,853 |
|
|
1,976,534 |
Gross profit |
|
89,900 |
|
|
84,907 |
|
|
253,194 |
|
|
242,138 |
Selling, general and administrative expenses |
|
36,191 |
|
|
34,816 |
|
|
109,292 |
|
|
102,519 |
Operating income |
|
53,709 |
|
|
50,091 |
|
|
143,902 |
|
|
139,619 |
Interest expense |
|
2,851 |
|
|
4,596 |
|
|
8,823 |
|
|
13,483 |
Other income |
|
1,071 |
|
|
1,208 |
|
|
3,683 |
|
|
2,705 |
Income before income taxes and income from equity method investments |
|
51,929 |
|
|
46,703 |
|
|
138,762 |
|
|
128,841 |
Income taxes |
|
13,995 |
|
|
11,423 |
|
|
37,606 |
|
|
32,822 |
Income from equity method investments |
|
3,833 |
|
|
734 |
|
|
7,797 |
|
|
4,718 |
Net income |
$ |
41,767 |
|
$ |
36,014 |
|
$ |
108,953 |
|
$ |
100,737 |
|
|
|
|
|
|
|
|
||||
Earnings per share: |
|
|
|
|
|
|
|
||||
Basic |
$ |
0.82 |
|
$ |
0.71 |
|
$ |
2.14 |
|
$ |
1.98 |
Diluted |
$ |
0.82 |
|
$ |
0.71 |
|
$ |
2.14 |
|
$ |
1.98 |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
||||
Basic |
|
50,972 |
|
|
50,972 |
|
|
50,972 |
|
|
50,972 |
Diluted |
|
50,972 |
|
|
50,972 |
|
|
50,972 |
|
|
50,972 |
Everus Construction Group, Inc. |
|||||
Condensed Consolidated Balance Sheets |
|||||
(Unaudited) |
|||||
|
September 30, 2024 |
|
December 31, 2023 |
||
|
(In thousands, except share and per share amounts) |
||||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
553 |
|
$ |
1,567 |
Receivables, net of allowances of |
|
632,131 |
|
|
534,100 |
Costs and estimated earnings in excess of billings |
|
174,102 |
|
|
158,529 |
Due from related-party |
|
12,270 |
|
|
11,507 |
Inventories |
|
46,923 |
|
|
42,709 |
Prepayments and other current assets |
|
20,553 |
|
|
17,651 |
Total current assets |
|
886,532 |
|
|
766,063 |
Noncurrent assets: |
|
|
|
||
Property, plant and equipment |
|
282,633 |
|
|
259,849 |
Less: accumulated depreciation |
|
153,272 |
|
|
143,831 |
Net property, plant and equipment |
|
129,361 |
|
|
116,018 |
Goodwill |
|
143,224 |
|
|
143,224 |
Other intangible assets, net of accumulated amortization of |
|
466 |
|
|
2,004 |
Operating lease right-of-use assets |
|
68,852 |
|
|
53,233 |
Noncurrent retention receivable |
|
32,849 |
|
|
21,355 |
Investments |
|
17,648 |
|
|
8,413 |
Other |
|
360 |
|
|
272 |
Total noncurrent assets |
|
392,760 |
|
|
344,519 |
Total assets |
$ |
1,279,292 |
|
$ |
1,110,582 |
Liabilities and Stockholder’s Equity |
|
|
|
||
Current liabilities: |
|
|
|
||
Billings in excess of costs and estimated earnings |
$ |
221,662 |
|
$ |
198,231 |
Accounts payable |
|
160,873 |
|
|
116,573 |
Taxes payable |
|
14,006 |
|
|
8,557 |
Due to related-party |
|
15,870 |
|
|
14,615 |
Accrued compensation |
|
66,960 |
|
|
44,721 |
Operating lease liabilities due within one year |
|
26,110 |
|
|
21,143 |
Accrued payroll-related liabilities |
|
37,292 |
|
|
35,342 |
Other accrued liabilities |
|
16,788 |
|
|
13,001 |
Total current liabilities |
|
559,561 |
|
|
452,183 |
Noncurrent liabilities: |
|
|
|
||
Related-party notes payable |
|
214,525 |
|
|
168,531 |
Deferred income taxes |
|
965 |
|
|
6,535 |
Operating lease liabilities |
|
43,247 |
|
|
32,504 |
Other |
|
7,691 |
|
|
1,979 |
Total noncurrent liabilities |
|
266,428 |
|
|
209,549 |
Total liabilities |
$ |
825,989 |
|
$ |
661,732 |
Commitments and contingencies |
|
|
|
||
Common stockholder’s equity: |
|
|
|
||
Common Stock, stated value |
$ |
1 |
|
$ |
1 |
Other paid-in capital |
|
137,947 |
|
|
136,184 |
Retained earnings |
|
315,355 |
|
|
312,665 |
Total stockholder’s equity |
|
453,303 |
|
|
448,850 |
Total liabilities and stockholder’s equity |
$ |
1,279,292 |
|
$ |
1,110,582 |
Everus Construction Group, Inc. |
|||||||
Condensed Consolidated Statements of Cash Flows |
|||||||
(Unaudited) |
|||||||
|
Nine months ended September 30, |
||||||
|
2024 |
|
2023 |
||||
|
(in thousands) |
||||||
Operating activities: |
|
|
|
||||
Net income |
$ |
108,953 |
|
|
$ |
100,737 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation |
|
16,961 |
|
|
|
15,658 |
|
Amortization |
|
1,538 |
|
|
|
1,575 |
|
Deferred income taxes |
|
(5,570 |
) |
|
|
(734 |
) |
Provision for credit losses |
|
(51 |
) |
|
|
4,385 |
|
Employee stock-based compensation costs |
|
1,034 |
|
|
|
517 |
|
Unrealized gain on investments |
|
(531 |
) |
|
|
— |
|
Gain on sale of assets |
|
(5,513 |
) |
|
|
(6,297 |
) |
Equity in earnings of unconsolidated affiliates, net of distributions |
|
(4,788 |
) |
|
|
(4,718 |
) |
Changes in current assets and liabilities, net of acquisitions: |
|
|
|
||||
Receivables |
|
(97,980 |
) |
|
|
(5,828 |
) |
Due from related-party |
|
(763 |
) |
|
|
1,381 |
|
Costs and estimated earnings in excess of billings |
|
(15,573 |
) |
|
|
(44,802 |
) |
Inventories |
|
(4,214 |
) |
|
|
(8,984 |
) |
Other current assets |
|
(2,303 |
) |
|
|
(2,512 |
) |
Accounts payable |
|
44,265 |
|
|
|
(11,125 |
) |
Due to related-party |
|
10 |
|
|
|
356 |
|
Billings in excess of costs and estimated earnings |
|
23,431 |
|
|
|
12,566 |
|
Other current liabilities |
|
32,760 |
|
|
|
6,540 |
|
Other noncurrent changes |
|
(8,984 |
) |
|
|
2,647 |
|
Net cash provided by operating activities |
|
82,682 |
|
|
|
61,362 |
|
Investing activities: |
|
|
|
||||
Capital expenditures |
|
(34,506 |
) |
|
|
(28,134 |
) |
Net proceeds from sale or disposition of property |
|
9,587 |
|
|
|
12,247 |
|
Investments |
|
(570 |
) |
|
|
(535 |
) |
Net cash used in investing activities |
|
(25,489 |
) |
|
|
(16,422 |
) |
Financing activities: |
|
|
|
||||
Repayment of related-party notes payable |
|
— |
|
|
|
(45,000 |
) |
Repayment of related-party short-term notes payable |
|
— |
|
|
|
(27,000 |
) |
Net amounts received from related-party cash management program |
|
45,994 |
|
|
|
62,527 |
|
Transfers to Centennial |
|
(104,201 |
) |
|
|
(37,026 |
) |
Net cash used in financing activities |
|
(58,207 |
) |
|
|
(46,499 |
) |
Decrease in cash and cash equivalents |
|
(1,014 |
) |
|
|
(1,559 |
) |
Cash and cash equivalents - beginning of period |
|
1,567 |
|
|
|
2,112 |
|
Cash and cash equivalents - end of period |
$ |
553 |
|
|
$ |
553 |
|
Everus Construction Group, Inc.
Segment and Other Financial Information
(Unaudited)
Revenues
The following table sets forth segment revenues for the periods indicated, as well as the percentage change from the prior period:
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||||||||
|
2024 |
|
2023 |
|
% Change |
|
2024 |
|
2023 |
|
% Change |
||||||||||
|
(In millions, except percentages) |
||||||||||||||||||||
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Electrical & Mechanical |
$ |
536.9 |
|
|
$ |
516.9 |
|
|
3.9 |
% |
|
$ |
1,481.7 |
|
|
$ |
1,680.2 |
|
|
(11.8 |
)% |
Transmission & Distribution |
|
228.5 |
|
|
|
204.5 |
|
|
11.7 |
% |
|
|
623.8 |
|
|
|
549.5 |
|
|
13.5 |
% |
Eliminations |
|
(4.4 |
) |
|
|
(4.0 |
) |
|
10.0 |
% |
|
|
(15.5 |
) |
|
|
(11.0 |
) |
|
40.9 |
% |
Total operating revenues |
$ |
761.0 |
|
|
$ |
717.4 |
|
|
6.1 |
% |
|
$ |
2,090.0 |
|
|
$ |
2,218.7 |
|
|
(5.8 |
)% |
Backlog
Backlog is a common measurement in the construction services industry. Everus' determination of backlog consists of the uncompleted portion of services to be performed under job-specific contracts. Contracts are subject to delays, defaults or cancellations; changes in scope of services to be provided; and adjustments to costs. Backlog also may be affected by project delays or cancellations resulting from weather conditions, external market factors and economic factors beyond Everus' control, among other things. Accordingly, there is no assurance that backlog will be realized. For the periods presented in the backlog table below, Everus did not experience any material impacts related to delays or cancellations of planned projects included in backlog. The timing of contract awards, duration of large new contracts and the mix of services can significantly affect backlog. Backlog at any point in time may not accurately represent revenue or net income realized in any period, and backlog as of the end of the year may not be indicative of revenue or net income expected to be realized in the following year. Backlog should not be relied upon as a stand-alone indicator of future results.
The following table provides estimated backlog as of the dates indicated and backlog that Everus reasonably estimates will be recognized within the next 12 months following Sept. 30, 2024:
|
|
Total backlog as
|
|
Total backlog as
|
|
Total backlog as
|
|||
|
(In millions) |
||||||||
Backlog: |
|
|
|
|
|
|
|||
Electrical & Mechanical |
|
$ |
2,567.9 |
|
$ |
1,685.6 |
|
$ |
1,526.0 |
Transmission & Distribution |
|
|
316.9 |
|
|
325.3 |
|
|
324.0 |
Total backlog |
|
$ |
2,884.8 |
|
$ |
2,010.9 |
|
$ |
1,850.0 |
Capital Expenditures
|
|
2024 Estimated |
|
|
|
(In millions) |
|
Total capital expenditures |
|
$ |
52 |
|
|
|
|
Note: Total capital expenditures is presented on a gross basis. |
Everus Construction Group, Inc.
Non-GAAP Financial Measures
In addition to information prepared in accordance with GAAP, the company evaluates operating performance using the non-GAAP financial measures of organic revenue, organic revenue growth, EBITDA and EBITDA margin, including applicable measures by segment, and evaluates its liquidity using the non-GAAP financial measure of free cash flow. These non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the company's results as reported under GAAP. Because of these limitations, organic revenue, organic revenue growth, EBITDA, EBITDA margin and free cash flow should not be considered as replacements for revenues, net income, net income margin and cash provided by (used in) operating activities, the most comparable GAAP measures, respectively. Non-GAAP financial measures are not standardized; therefore, it may not be possible to compare them with other companies’ organic revenue, organic revenue growth, EBITDA, EBITDA margin and free cash flow having the same or similar names.
Organic Revenue and Organic Revenue Growth
Everus uses organic revenue and organic revenue growth to measure its revenue performance on a consistent basis compared to prior years. The company believes these non-GAAP financial measures, in addition to the corresponding GAAP measures of revenue and revenue growth, are useful to investors as they provide a basis for consistently comparing revenue with prior years as well as comparing to other peer companies. Organic revenue is defined as the difference between current year and prior year revenues less the impact of acquired and divested companies in the past 12 months. Organic revenue growth is calculated by dividing organic revenue by prior year revenues.
EBITDA and EBITDA Margin
Everus utilizes EBITDA and EBITDA margin to consistently assess its operating performance and as a basis for strategic planning and forecasting since the company believes EBITDA closely correlates to long-term enterprise value. Everus believes that measuring performance on an EBITDA basis is useful to investors because it enables a more consistent evaluation of its operational performance period to period. Everus also believes these non-GAAP financial measures, in addition to the corresponding GAAP measures of net income and net income margin, are useful to investors and provide meaningful information about operational efficiency by excluding the impacts of differences in tax jurisdictions and structures, debt levels and capital investment. Investors also may use EBITDA to calculate leverage as a multiple of EBITDA. Management uses EBITDA and EBITDA margin, in addition to GAAP metrics, to evaluate the company's operating results, calculate compensation packages and determine leverage as a multiple of EBITDA to establish the appropriate funding of operations.
EBITDA is calculated by adding back interest expense, income taxes, and depreciation and amortization to net income. EBITDA margin is calculated by dividing EBITDA by operating revenues. EBITDA and EBITDA margin are considered non-GAAP financial measures and are comparable to the corresponding GAAP measures of net income and net income margin, respectively.
The following table reconciles net income to EBITDA and provides the calculation of EBITDA margin.
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||||||||
|
2024 |
|
2023 |
|
% Change |
|
2024 |
|
2023 |
|
% Change |
||||||||||
|
(In millions, except percentages) |
||||||||||||||||||||
Net income |
$ |
41.8 |
|
|
$ |
36.0 |
|
|
16.1 |
% |
|
$ |
109.0 |
|
|
$ |
100.8 |
|
|
8.1 |
% |
Interest expense |
|
2.8 |
|
|
|
4.7 |
|
|
(40.4 |
)% |
|
|
8.8 |
|
|
|
13.5 |
|
|
(34.8 |
)% |
Income taxes |
|
14.0 |
|
|
|
11.4 |
|
|
22.8 |
% |
|
|
37.6 |
|
|
|
32.8 |
|
|
14.6 |
% |
Depreciation and amortization |
|
6.4 |
|
|
|
5.9 |
|
|
8.5 |
% |
|
|
18.5 |
|
|
|
17.3 |
|
|
6.9 |
% |
EBITDA |
$ |
65.0 |
|
|
$ |
58.0 |
|
|
12.1 |
% |
|
$ |
173.9 |
|
|
$ |
164.4 |
|
|
5.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues |
$ |
761.0 |
|
|
$ |
717.4 |
|
|
6.1 |
% |
|
$ |
2,090.0 |
|
|
$ |
2,218.7 |
|
|
(5.8 |
)% |
Net income margin |
|
5.5 |
% |
|
|
5.0 |
% |
|
10.0 |
% |
|
|
5.2 |
% |
|
|
4.5 |
% |
|
15.6 |
% |
EBITDA margin |
|
8.5 |
% |
|
|
8.1 |
% |
|
4.9 |
% |
|
|
8.3 |
% |
|
|
7.4 |
% |
|
12.2 |
% |
The following tables reconcile net income to EBITDA by segment.
|
Three months ended September 30, 2024 |
|
Nine months ended September 30, 2024 |
||||||||||||||||
|
E&M |
T&D |
Corporate
|
Total |
|
E&M |
T&D |
Corporate
|
Total |
||||||||||
|
(In millions) |
||||||||||||||||||
Net income |
$ |
29.4 |
$ |
18.5 |
$ |
(6.1 |
) |
$ |
41.8 |
|
$ |
81.7 |
$ |
43.5 |
$ |
(16.2 |
) |
$ |
109.0 |
Interest expense |
|
— |
|
0.9 |
|
1.9 |
|
|
2.8 |
|
|
0.1 |
|
3.0 |
|
5.7 |
|
|
8.8 |
Income taxes |
|
9.8 |
|
6.2 |
|
(2.0 |
) |
|
14.0 |
|
|
28.5 |
|
14.6 |
|
(5.5 |
) |
|
37.6 |
Depreciation and amortization |
|
1.6 |
|
4.8 |
|
— |
|
|
6.4 |
|
|
4.8 |
|
13.8 |
|
(0.1 |
) |
|
18.5 |
EBITDA |
$ |
40.8 |
$ |
30.4 |
$ |
(6.2 |
) |
$ |
65.0 |
|
$ |
115.1 |
$ |
74.9 |
$ |
(16.1 |
) |
$ |
173.9 |
|
Three months ended September 30, 2023 |
|
Nine months ended September 30, 2023 |
||||||||||||||||
|
E&M |
T&D |
Corporate
|
Total |
|
E&M |
T&D |
Corporate
|
Total |
||||||||||
|
(In millions) |
||||||||||||||||||
Net income |
$ |
23.1 |
$ |
16.9 |
$ |
(4.0 |
) |
$ |
36.0 |
|
$ |
75.8 |
$ |
37.9 |
$ |
(12.9 |
) |
$ |
100.8 |
Interest expense |
|
1.4 |
|
1.4 |
|
1.9 |
|
|
4.7 |
|
|
4.7 |
|
3.2 |
|
5.6 |
|
|
13.5 |
Income taxes |
|
7.5 |
|
5.6 |
|
(1.7 |
) |
|
11.4 |
|
|
25.2 |
|
12.0 |
|
(4.4 |
) |
|
32.8 |
Depreciation and amortization |
|
1.6 |
|
4.3 |
|
— |
|
|
5.9 |
|
|
4.6 |
|
12.7 |
|
— |
|
|
17.3 |
EBITDA |
$ |
33.6 |
$ |
28.2 |
$ |
(3.8 |
) |
$ |
58.0 |
|
$ |
110.3 |
$ |
65.8 |
$ |
(11.7 |
) |
$ |
164.4 |
The following table provides EBITDA and the calculation of EBITDA margin by segment.
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||||||||
|
|
2024 |
|
2023 |
|
% Change |
|
2024 |
|
2023 |
|
% Change |
||||||||||
|
|
(In millions, except percentages) |
||||||||||||||||||||
Operating revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Electrical & Mechanical |
|
$ |
536.9 |
|
|
$ |
516.9 |
|
|
3.9 |
% |
|
$ |
1,481.7 |
|
|
$ |
1,680.2 |
|
|
(11.8 |
)% |
Transmission & Distribution |
|
|
228.5 |
|
|
|
204.5 |
|
|
11.7 |
% |
|
|
623.8 |
|
|
|
549.5 |
|
|
13.5 |
% |
Eliminations |
|
|
(4.4 |
) |
|
|
(4.0 |
) |
|
(10.0 |
)% |
|
|
(15.5 |
) |
|
|
(11.0 |
) |
|
(40.9 |
)% |
Total operating revenues |
|
$ |
761.0 |
|
|
$ |
717.4 |
|
|
6.1 |
% |
|
$ |
2,090.0 |
|
|
$ |
2,218.7 |
|
|
(5.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Electrical & Mechanical |
|
$ |
29.4 |
|
|
$ |
23.1 |
|
|
27.3 |
% |
|
$ |
81.7 |
|
|
$ |
75.8 |
|
|
7.8 |
% |
Transmission & Distribution |
|
|
18.5 |
|
|
|
16.9 |
|
|
9.5 |
% |
|
|
43.5 |
|
|
|
37.9 |
|
|
14.8 |
% |
Corporate and other |
|
|
(6.1 |
) |
|
|
(4.0 |
) |
|
(52.5 |
)% |
|
|
(16.2 |
) |
|
|
(12.9 |
) |
|
(25.6 |
)% |
Total net income |
|
$ |
41.8 |
|
|
$ |
36.0 |
|
|
16.1 |
% |
|
$ |
109.0 |
|
|
$ |
100.8 |
|
|
8.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Electrical & Mechanical |
|
$ |
40.8 |
|
|
$ |
33.6 |
|
|
21.4 |
% |
|
$ |
115.1 |
|
|
$ |
110.3 |
|
|
4.4 |
% |
Transmission & Distribution |
|
|
30.4 |
|
|
|
28.2 |
|
|
7.8 |
% |
|
|
74.9 |
|
|
|
65.8 |
|
|
13.8 |
% |
Corporate and other |
|
|
(6.2 |
) |
|
|
(3.8 |
) |
|
63.2 |
% |
|
|
(16.1 |
) |
|
|
(11.7 |
) |
|
37.6 |
% |
Total EBITDA |
|
$ |
65.0 |
|
|
$ |
58.0 |
|
|
12.1 |
% |
|
$ |
173.9 |
|
|
$ |
164.4 |
|
|
5.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income margin: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Electrical & Mechanical |
|
|
5.5 |
% |
|
|
4.5 |
% |
|
22.2 |
% |
|
|
5.5 |
% |
|
|
4.5 |
% |
|
22.2 |
% |
Transmission & Distribution |
|
|
8.1 |
% |
|
|
8.3 |
% |
|
(2.4 |
)% |
|
|
7.0 |
% |
|
|
6.9 |
% |
|
1.4 |
% |
Total net income margin |
|
|
5.5 |
% |
|
|
5.0 |
% |
|
10.0 |
% |
|
|
5.2 |
% |
|
|
4.5 |
% |
|
15.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA margin: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Electrical & Mechanical |
|
|
7.6 |
% |
|
|
6.5 |
% |
|
16.9 |
% |
|
|
7.8 |
% |
|
|
6.6 |
% |
|
18.2 |
% |
Transmission & Distribution |
|
|
13.3 |
% |
|
|
13.8 |
% |
|
(3.6 |
)% |
|
|
12.0 |
% |
|
|
12.0 |
% |
|
— |
% |
Total EBITDA margin |
|
|
8.5 |
% |
|
|
8.1 |
% |
|
4.9 |
% |
|
|
8.3 |
% |
|
|
7.4 |
% |
|
12.2 |
% |
The following table provides EBITDA guidance reconciliation for the full year 2024.
|
Low |
|
High |
||
|
(In millions) |
||||
Net income |
$ |
140.0 |
|
$ |
150.0 |
Interest expense |
|
10.0 |
|
|
15.0 |
Income taxes |
|
45.0 |
|
|
50.0 |
Depreciation and amortization |
|
25.0 |
|
|
25.0 |
EBITDA |
$ |
220.0 |
|
$ |
240.0 |
Free Cash Flow
Everus uses free cash flow as a measure of liquidity that indicates how much cash the company can produce after taking cash outflows from operations and assets into consideration. The company believes this non-GAAP financial measure, in addition to the corresponding GAAP measure of cash provided by (used in) operating activities, is useful to investors because it provides meaningful information about the company’s financial health and ability to generate cash, support additional debt obligations, pay future dividends and fund growth. Free cash flow does not represent residual cash flow available for discretionary purposes.
Free cash flow is defined as net cash provided by (used in) operating activities less net capital expenditures.
The following table reconciles net cash provided by operating activities to free cash flow.
|
Nine months ended September 30, |
||||||
|
2024 |
|
2023 |
||||
|
(In millions) |
||||||
Net cash provided by operating activities |
$ |
82.7 |
|
|
$ |
61.4 |
|
Purchases of property, plant and equipment |
|
(34.5 |
) |
|
|
(28.1 |
) |
Cash proceeds from sale of property, plant and equipment |
|
9.6 |
|
|
|
12.2 |
|
Free cash flow |
$ |
57.8 |
|
|
$ |
45.5 |
|
Non-GAAP Financial Guidance
The company is unable to reconcile forward-looking non-GAAP financial guidance relating 2024 EBITDA margin and long-term targets of organic revenue, organic revenue growth, and EBITDA to their nearest GAAP measure because the company is unable to predict the timing of these adjustments with a reasonable degree of certainty. By their very nature, non-GAAP adjustments are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact the company and its financial results. Therefore, the company is unable to provide a reconciliation of 2024 EBITDA margin guidance, and reconciliations of long-term organic revenue, organic revenue growth and EBITDA guidance.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106298553/en/
Media Contact
Laura Lueder, director of communications, 701-221-6444
Investor Contact
Paul Bartolai, Vallum Advisors, 773-489-5692, investors@everus.com
Source: Everus Construction Group
FAQ
What was Everus Construction Group's (ECG) revenue in Q3 2024?
When did Everus Construction Group (ECG) complete its spinoff from MDU Resources?
What is Everus Construction Group's (ECG) backlog value as of Q3 2024?