MYR Group Inc. Announces Fourth-Quarter and Full Year 2023 Results
- Record quarterly revenues of $1.00 billion and full-year revenues of $3.64 billion
- Strong quarterly net income of $24.0 million and full-year net income of $91.0 million
- Record quarterly EBITDA of $52.8 million and full-year EBITDA of $188.2 million
- Backlog of $2.51 billion reflecting a healthy bidding environment and infrastructure investment
- Positive market indicators and growth strategies position the company well for continued success in 2024
- Decrease in fourth-quarter net income by 2.2% compared to the same period in 2022
- Gross margin decrease to 9.7% in the fourth quarter of 2023 from 11.1% in 2022
- Increase in SG&A expenses and interest expense for the fourth quarter and full year of 2023
- Gross margin decrease to 10.0% for the full year of 2023 from 11.4% in 2022
Insights
The reported financial results of MYR Group Inc. for the fourth quarter and full year of 2023 exhibit significant growth in revenue, achieving a record quarterly revenue of $1.00 billion and a full-year revenue of $3.64 billion. This marks a continuation of a nine-year trend of increasing annual revenues for the company. The construction sector, specifically related to electric utility infrastructure, has seen a surge in demand, likely influenced by the ongoing push for electrification and renewable energy projects. The T&D (Transmission & Distribution) and C&I (Commercial & Industrial) segments are driving this growth, with both reporting record quarterly revenues.
Despite the increase in revenues, the company has experienced a decrease in gross margin to 9.7% for the quarter, down from 11.1% in the previous year and to 10.0% for the full year, down from 11.4%. This decline is attributed to labor and project inefficiencies, supply chain disruptions, inflationary pressures and other factors. It's important to note that while the top-line growth is robust, the margin compression might indicate rising costs and operational challenges that could affect profitability if not managed effectively.
The company's backlog of $2.51 billion is a critical indicator of future performance, reflecting a healthy bidding environment and ongoing investments in infrastructure. However, it is slightly down from the previous quarter, which may warrant attention to assess whether it is a sign of market saturation or other competitive pressures.
MYR Group's performance must be contextualized within the broader infrastructure and construction markets, which have been buoyed by government spending and a focus on clean energy projects. The company's significant involvement in clean energy projects is a strategic alignment with industry trends, likely contributing to its revenue growth. The 16.2% increase in fourth-quarter revenues year-over-year and the 21.1% increase for the full year suggest that MYR is effectively capitalizing on market opportunities.
However, the report also highlights challenges such as labor inefficiencies and supply chain disruptions, which are common in the industry but could pose risks to future performance. The company's ability to navigate these issues while maintaining profitability will be crucial. Furthermore, the increase in SG&A expenses indicates investment in operational growth but also necessitates monitoring to ensure that administrative costs do not erode profit margins excessively.
From an economic perspective, MYR Group's results reflect broader economic conditions, such as rising interest rates and inflationary pressures. The increase in interest expense to $1.9 million for the quarter is indicative of the higher cost of borrowing, a trend that businesses across various sectors are grappling with. This could affect MYR's capital structure and financing strategy going forward.
Additionally, the effective tax rate increase for the fourth quarter to 32.3% from 31.3% the previous year, although slight, is an important detail for stakeholders as it affects net income. The company's ability to optimize its tax strategy in the face of changing tax policies will be important for maintaining its bottom line.
It is also worth noting the company's reliance on non-GAAP financial measures such as EBITDA to evaluate performance. While these measures can provide valuable insights into operational efficiency and cash flow, stakeholders should also consider GAAP measures for a comprehensive understanding of the company's financial health.
THORNTON, Colo., Feb. 28, 2024 (GLOBE NEWSWIRE) -- MYR Group Inc. (“MYR”) (NASDAQ: MYRG), a holding company of leading specialty contractors serving the electric utility infrastructure, commercial and industrial construction markets in the United States and Canada, announced today its fourth-quarter and full year 2023 financial results.
Fourth Quarter 2023 Highlights
- Record quarterly revenues of
$1.00 billion - Strong quarterly net income of
$24.0 million , or$1.43 per diluted share - Record quarterly EBITDA of
$52.8 million
Full Year 2023 Highlights
- Record full-year revenues of
$3.64 billion - Record full-year net income of
$91.0 million , or$5.40 per diluted share - Record full-year EBITDA of
$188.2 million - Strong backlog of
$2.51 billion
Management Comments
Rick Swartz, MYR’s President and CEO, said, “We finished 2023 with solid financial performance in the fourth quarter, and annual revenues of
Fourth Quarter Results
MYR reported fourth-quarter 2023 revenues of
Consolidated gross profit increased to
Selling, general and administrative expenses (“SG&A”) increased to
Amortization of intangible assets decreased to
Interest expense increased to
Income tax expense was
For the fourth quarter of 2023, net income was
Full Year Results
MYR reported record revenues of
Consolidated gross profit was
SG&A increased to
Amortization of intangible assets decreased to
Interest expense increased to
Income tax expense was
For the full year of 2023, net income was
Backlog
As of December 31, 2023, MYR's backlog was
Balance Sheet
As of December 31, 2023, MYR had
Non-GAAP Financial Measures
To supplement MYR’s financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), MYR uses certain non-GAAP measures. Reconciliation to the nearest GAAP measures of all non-GAAP measures included in this press release can be found at the end of this release. MYR’s definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.
MYR believes that these non-GAAP measures are useful because they (i) provide both management and investors meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results, (ii) permit investors to view MYR’s performance using the same tools that management uses to evaluate MYR’s past performance, reportable business segments and prospects for future performance, (iii) publicly disclose results that are relevant to financial covenants included in MYR’s credit facility and (iv) otherwise provide supplemental information that may be useful to investors in evaluating MYR.
Conference Call
MYR will host a conference call to discuss its fourth-quarter and full year 2023 results on Thursday, February 29, 2024 at 8:00 a.m. Mountain time. To participate via telephone and join the call live, please register in advance here: https://register.vevent.com/register/BI2cabb3d2e38b4e0d8a2efe632b6ada9d. Upon registration, telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number and a unique passcode. Participants may access the audio-only webcast of the conference call from the Investors page of MYR Group’s website at myrgroup.com. A replay of the webcast will be available for seven days.
About MYR
MYR Group is a holding company of leading, specialty electrical contractors providing services throughout the United States and Canada through two business segments: Transmission & Distribution (T&D) and Commercial & Industrial (C&I). MYR Group subsidiaries have the experience and expertise to complete electrical installations of any type and size. Through their T&D segment they provide services on electric transmission, distribution networks, substation facilities, clean energy projects and electric vehicle charging infrastructure. Their comprehensive T&D services include design, engineering, procurement, construction, upgrade, maintenance and repair services. T&D customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. Through their C&I segment, they provide a broad range of services which include the design, installation, maintenance and repair of commercial and industrial wiring generally for airports, hospitals, data centers, hotels, stadiums, commercial and industrial facilities, clean energy projects, manufacturing plants, processing facilities, water/waste-water treatment facilities, mining facilities, intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure. C&I customers include general contractors, commercial and industrial facility owners, government agencies and developers. For more information, visit myrgroup.com.
Forward-Looking Statements
Various statements in this announcement, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenue, income, capital spending, segment improvements and investments. Forward-looking statements are generally accompanied by words such as “anticipate,” “believe,” “encouraged,” “estimate,” “expect,” “intend,” “likely,” “may,” “objective,” “outlook,” “plan,” “possible,” “potential,” “project,” “remain confident,” “should,” “unlikely,” or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this announcement speak only as of the date of this announcement; we disclaim any obligation to update these statements (unless required by securities laws), and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. No forward-looking statement can be guaranteed and actual results may differ materially from those projected. Forward-looking statements in this announcement should be evaluated together with the many uncertainties that affect MYR's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of MYR's Annual Report on Form 10-K, and in any risk factors or cautionary statements contained in MYR's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
MYR Group Inc. Contact:
Kelly M. Huntington, Chief Financial Officer, 847-290-1891, investorinfo@myrgroup.com
Investor Contact:
David Gutierrez, Dresner Corporate Services, 312-780-7204, dgutierrez@dresnerco.com
Financial tables follow…
| MYR GROUP INC. Consolidated Balance Sheets As of December 31, 2023 and 2022 | |||||||
| (in thousands, except share and per share data) | December 31, 2023 | December 31, 2022 | |||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 24,899 | $ | 51,040 | |||
| Accounts receivable, net of allowances of | 521,893 | 472,543 | |||||
| Contract assets, net of allowances of | 420,616 | 300,615 | |||||
| Current portion of receivable for insurance claims in excess of deductibles | 8,267 | 9,325 | |||||
| Refundable income taxes | 4,034 | 8,944 | |||||
| Prepaid expenses and other current assets | 46,535 | 47,824 | |||||
| Total current assets | 1,026,244 | 890,291 | |||||
| Property and equipment, net of accumulated depreciation of | 268,978 | 233,175 | |||||
| Operating lease right-of-use assets | 35,012 | 30,544 | |||||
| Goodwill | 116,953 | 115,847 | |||||
| Intangible assets, net of accumulated amortization of | 83,516 | 87,557 | |||||
| Receivable for insurance claims in excess of deductibles | 33,739 | 34,210 | |||||
| Investment in joint venture | 8,707 | 3,697 | |||||
| Other assets | 5,597 | 3,537 | |||||
| Total assets | $ | 1,578,746 | $ | 1,398,858 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities | |||||||
| Current portion of long-term debt | $ | 7,053 | $ | 5,074 | |||
| Current portion of operating lease obligations | 9,237 | 9,711 | |||||
| Current portion of finance lease obligations | 2,039 | 1,127 | |||||
| Accounts payable | 359,363 | 315,323 | |||||
| Contract liabilities | 240,411 | 227,055 | |||||
| Current portion of accrued self-insurance | 28,269 | 28,752 | |||||
| Accrued income taxes | 237 | — | |||||
| Other current liabilities | 100,593 | 79,918 | |||||
| Total current liabilities | 747,202 | 666,960 | |||||
| Deferred income tax liabilities | 48,230 | 45,775 | |||||
| Long-term debt | 29,188 | 35,479 | |||||
| Accrued self-insurance | 51,796 | 51,287 | |||||
| Operating lease obligations, net of current maturities | 25,775 | 20,845 | |||||
| Finance lease obligations, net of current maturities | 314 | 2,313 | |||||
| Other liabilities | 25,039 | 15,999 | |||||
| Total liabilities | 927,544 | 838,658 | |||||
| Commitments and contingencies | |||||||
| Shareholders’ equity | |||||||
| Preferred stock – | — | — | |||||
| Common stock – | 167 | 165 | |||||
| Additional paid-in capital | 162,386 | 161,427 | |||||
| Accumulated other comprehensive loss | (3,880 | ) | (6,300 | ) | |||
| Retained earnings | 492,529 | 404,908 | |||||
| Total shareholders’ equity | 651,202 | 560,200 | |||||
| Total liabilities and shareholders’ equity | $ | 1,578,746 | $ | 1,398,858 | |||
| MYR GROUP INC. Consolidated Statements of Operations Three Months and Twelve Months Ended December 31, 2023 and 2022 | |||||||||||||||
| Three months ended December 31, | For the year ended December 31, | ||||||||||||||
| (in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Contract revenues | $ | 1,004,197 | $ | 863,956 | $ | 3,643,905 | $ | 3,008,542 | |||||||
| Contract costs | 906,702 | 767,687 | 3,279,508 | 2,664,580 | |||||||||||
| Gross profit | 97,495 | 96,269 | 364,397 | 343,962 | |||||||||||
| Selling, general and administrative expenses | 59,993 | 57,953 | 234,611 | 222,424 | |||||||||||
| Amortization of intangible assets | 1,221 | 2,162 | 4,907 | 9,009 | |||||||||||
| Gain on sale of property and equipment | (921 | ) | (631 | ) | (4,214 | ) | (2,378 | ) | |||||||
| Income from operations | 37,202 | 36,785 | 129,093 | 114,907 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest income | 148 | 129 | 888 | 187 | |||||||||||
| Interest expense | (1,880 | ) | (1,328 | ) | (4,939 | ) | (3,563 | ) | |||||||
| Other income (expense), net | 23 | 188 | (38 | ) | 2,673 | ||||||||||
| Income before provision for income taxes | 35,493 | 35,774 | 125,004 | 114,204 | |||||||||||
| Income tax expense | 11,451 | 11,201 | 34,014 | 30,823 | |||||||||||
| Net income | $ | 24,042 | $ | 24,573 | $ | 90,990 | $ | 83,381 | |||||||
| Income per common share: | |||||||||||||||
| – Basic | $ | 1.44 | $ | 1.48 | $ | 5.45 | $ | 4.98 | |||||||
| – Diluted | $ | 1.43 | $ | 1.46 | $ | 5.40 | $ | 4.91 | |||||||
| Weighted average number of common shares and potential common shares outstanding: | |||||||||||||||
| – Basic | 16,695 | 16,575 | 16,682 | 16,760 | |||||||||||
| – Diluted | 16,838 | 16,787 | 16,837 | 16,980 | |||||||||||
| MYR GROUP INC. Consolidated Statements of Cash Flows Twelve Months Ended December 31, 2023 and 2022 | |||||||
| For the year ended December 31, | |||||||
| (in thousands) | 2023 | 2022 | |||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 90,990 | $ | 83,381 | |||
| Adjustments to reconcile net income to net cash flows provided by operating activities: | |||||||
| Depreciation and amortization of property and equipment | 54,231 | 49,161 | |||||
| Amortization of intangible assets | 4,907 | 9,009 | |||||
| Stock-based compensation expense | 8,376 | 7,922 | |||||
| Deferred income taxes | 2,056 | 9,573 | |||||
| Gain on sale of property and equipment | (4,214 | ) | (2,378 | ) | |||
| Other non-cash items | 96 | 2,294 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable, net | (48,527 | ) | (86,939 | ) | |||
| Contract assets, net | (119,246 | ) | (64,421 | ) | |||
| Receivable for insurance claims in excess of deductibles | 1,529 | (14 | ) | ||||
| Prepaid expenses and other assets | 560 | 1,640 | |||||
| Accounts payable | 37,250 | 109,008 | |||||
| Contract liabilities | 13,151 | 58,001 | |||||
| Accrued self-insurance | 17 | 4,999 | |||||
| Other liabilities | 29,840 | (13,752 | ) | ||||
| Net cash flows provided by operating activities | 71,016 | 167,484 | |||||
| Cash flows from investing activities: | |||||||
| Proceeds from sale of property and equipment | 5,608 | 1,990 | |||||
| Cash paid for acquisitions, net of cash acquired | — | (110,660 | ) | ||||
| Purchases of property and equipment | (84,736 | ) | (77,056 | ) | |||
| Net cash flows used in investing activities | (79,128 | ) | (185,726 | ) | |||
| Cash flows from financing activities: | |||||||
| Borrowings under revolving lines of credit | 562,901 | 198,697 | |||||
| Repayments under revolving lines of credit | (562,615 | ) | (185,782 | ) | |||
| Payment of principal obligations under equipment notes | (4,598 | ) | (1,047 | ) | |||
| Payment of principal obligations under finance leases | (1,143 | ) | (1,592 | ) | |||
| Borrowings under equipment notes | — | 24,184 | |||||
| Proceeds from exercise of stock options | 20 | 40 | |||||
| Debt refinancing costs | (2,129 | ) | — | ||||
| Repurchase of common stock | (2,868 | ) | (36,981 | ) | |||
| Payments related to tax withholding for stock-based compensation | (7,936 | ) | (6,791 | ) | |||
| Net cash flows used in financing activities | (18,368 | ) | (9,272 | ) | |||
| Effect of exchange rate changes on cash | 339 | (3,538 | ) | ||||
| Net decrease in cash and cash equivalents | (26,141 | ) | (31,052 | ) | |||
| Cash and cash equivalents: | |||||||
| Beginning of period | 51,040 | 82,092 | |||||
| End of period | $ | 24,899 | $ | 51,040 | |||
| MYR GROUP INC. Unaudited Consolidated Selected Data, Unaudited Performance Measure and Reconciliation of Non-GAAP Measure For the Three and Twelve Months Ended December 31, 2023 and 2022 and As of December 31, 2023, 2022, 2021 and 2020 | |||||||||||||||
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (dollars in thousands, except share and per share data) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Summary Statement of Operations Data: | |||||||||||||||
| Contract revenues | $ | 1,004,197 | $ | 863,956 | $ | 3,643,905 | $ | 3,008,542 | |||||||
| Gross profit | $ | 97,495 | $ | 96,269 | $ | 364,397 | $ | 343,962 | |||||||
| Income from operations | $ | 37,202 | $ | 36,785 | $ | 129,093 | $ | 114,907 | |||||||
| Income before provision for income taxes | $ | 35,493 | $ | 35,774 | $ | 125,004 | $ | 114,204 | |||||||
| Income tax expense | $ | 11,451 | $ | 11,201 | $ | 34,014 | $ | 30,823 | |||||||
| Net income | $ | 24,042 | $ | 24,573 | $ | 90,990 | $ | 83,381 | |||||||
| Effective tax rate | 32.3 | % | 31.3 | % | 27.2 | % | 27.0 | % | |||||||
| Per Share Data: | |||||||||||||||
| Income per common share: | |||||||||||||||
| – Basic | $ | 1.44 | $ | 1.48 | $ | 5.45 | $ | 4.98 | |||||||
| – Diluted | $ | 1.43 | $ | 1.46 | $ | 5.40 | $ | 4.91 | |||||||
| Weighted average number of common shares and potential common shares outstanding: | |||||||||||||||
| – Basic | 16,695 | 16,575 | 16,682 | 16,760 | |||||||||||
| – Diluted | 16,838 | 16,787 | 16,837 | 16,980 | |||||||||||
| (in thousands) | December 31, 2023 | December 31, 2022 | December 31, 2021 | December 31, 2020 | |||||||
| Summary Balance Sheet Data: | |||||||||||
| Total assets | $ | 1,578,746 | $ | 1,398,858 | $ | 1,121,092 | $ | 995,859 | |||
| Total shareholders’ equity | $ | 651,202 | $ | 560,200 | $ | 519,102 | $ | 429,288 | |||
| Goodwill and intangible assets | $ | 200,469 | $ | 203,404 | $ | 115,119 | $ | 117,430 | |||
| Total funded debt (1) | $ | 36,241 | $ | 40,553 | $ | 4,503 | $ | 29,420 | |||
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||||||||||||||
| (dollars in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
| Segment Results: | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||
| Contract revenues: | |||||||||||||||||||||||||||
| Transmission & Distribution | $ | 591,541 | 58.9 | % | $ | 513,687 | 59.5 | % | $ | 2,089,196 | 57.3 | % | $ | 1,745,792 | 58.0 | % | |||||||||||
| Commercial & Industrial | 412,656 | 41.1 | 350,269 | 40.5 | 1,554,709 | 42.7 | 1,262,750 | 42.0 | |||||||||||||||||||
| Total | $ | 1,004,197 | 100.0 | % | $ | 863,956 | 100.0 | % | $ | 3,643,905 | 100.0 | % | $ | 3,008,542 | 100.0 | % | |||||||||||
| Operating income (loss): | |||||||||||||||||||||||||||
| Transmission & Distribution | $ | 42,886 | 7.2 | % | $ | 41,331 | 8.0 | % | $ | 149,703 | 7.2 | % | $ | 138,886 | 8.0 | % | |||||||||||
| Commercial & Industrial | 8,707 | 2.1 | 12,681 | 3.6 | 45,889 | 3.0 | 43,159 | 3.4 | |||||||||||||||||||
| Total | 51,593 | 5.1 | 54,012 | 6.3 | 195,592 | 5.3 | 182,045 | 6.0 | |||||||||||||||||||
| Corporate | (14,391 | ) | (1.4 | ) | (17,227 | ) | (2.0 | ) | (66,499 | ) | (1.8 | ) | (67,138 | ) | (2.2 | ) | |||||||||||
| Consolidated | $ | 37,202 | 3.7 | % | $ | 36,785 | 4.3 | % | $ | 129,093 | 3.5 | % | $ | 114,907 | 3.8 | % | |||||||||||
See notes at the end of this earnings release
| MYR GROUP INC. Unaudited Performance Measures and Reconciliation of Non-GAAP Measures Three and Twelve Months Ended December 31, 2023 and 2022 | |||||||||||||||
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (in thousands, except share, per share data, ratios and percentages) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Financial Performance Measures (2): | |||||||||||||||
| EBITDA (3) | $ | 52,829 | $ | 51,979 | $ | 188,193 | $ | 175,750 | |||||||
| EBITDA per Diluted Share (4) | $ | 3.14 | $ | 3.09 | $ | 11.17 | $ | 10.35 | |||||||
| EBIA, net of taxes (5) | $ | 26,041 | $ | 26,882 | $ | 97,511 | $ | 92,422 | |||||||
| Free Cash Flow (6) | $ | 21,679 | $ | 65,224 | $ | (13,720 | ) | $ | 90,428 | ||||||
| Book Value per Period End Share (7) | $ | 38.67 | $ | 33.38 | |||||||||||
| Tangible Book Value (8) | $ | 450,733 | $ | 356,796 | |||||||||||
| Tangible Book Value per Period End Share (9) | $ | 26.77 | $ | 21.26 | |||||||||||
| Funded Debt to Equity Ratio (10) | 0.1 | 0.1 | |||||||||||||
| Asset Turnover (11) | 2.60 | 2.68 | |||||||||||||
| Return on Assets (12) | 6.5 | % | 7.4 | % | |||||||||||
| Return on Equity (13) | 16.2 | % | 16.1 | % | |||||||||||
| Return on Invested Capital (14) | 16.1 | % | 18.6 | % | |||||||||||
| Reconciliation of Non-GAAP Measures: | |||||||||||||||
| Reconciliation of Net Income to EBITDA: | |||||||||||||||
| Net income | $ | 24,042 | $ | 24,573 | $ | 90,990 | $ | 83,381 | |||||||
| Interest expense, net | 1,732 | 1,199 | 4,051 | 3,376 | |||||||||||
| Income tax expense | 11,451 | 11,201 | 34,014 | 30,823 | |||||||||||
| Depreciation and amortization | 15,604 | 15,006 | 59,138 | 58,170 | |||||||||||
| EBITDA (3) | $ | 52,829 | $ | 51,979 | $ | 188,193 | $ | 175,750 | |||||||
| Reconciliation of Net Income per Diluted Share to EBITDA per Diluted Share: | |||||||||||||||
| Net income per share | $ | 1.43 | $ | 1.46 | $ | 5.40 | $ | 4.91 | |||||||
| Interest expense, net, per share | 0.10 | 0.07 | 0.24 | 0.20 | |||||||||||
| Income tax expense per share | 0.68 | 0.67 | 2.02 | 1.82 | |||||||||||
| Depreciation and amortization per share | 0.93 | 0.89 | 3.51 | 3.42 | |||||||||||
| EBITDA per Diluted Share (4) | $ | 3.14 | $ | 3.09 | $ | 11.17 | $ | 10.35 | |||||||
| Reconciliation of Non-GAAP measure: | |||||||||||||||
| Net income | $ | 24,042 | $ | 24,573 | $ | 90,990 | $ | 83,381 | |||||||
| Interest expense, net | 1,732 | 1,199 | 4,051 | 3,376 | |||||||||||
| Amortization of intangible assets | 1,221 | 2,162 | 4,907 | 9,009 | |||||||||||
| Tax impact of interest and amortization of intangible assets | (954 | ) | (1,052 | ) | (2,437 | ) | (3,344 | ) | |||||||
| EBIA, net of taxes (5) | $ | 26,041 | $ | 26,882 | $ | 97,511 | $ | 92,422 | |||||||
| Calculation of Free Cash Flow: | |||||||||||||||
| Net cash flow from operating activities | $ | 42,624 | $ | 93,758 | $ | 71,016 | $ | 167,484 | |||||||
| Less: cash used in purchasing property and equipment | (20,945 | ) | (28,534 | ) | (84,736 | ) | (77,056 | ) | |||||||
| Free Cash Flow (6) | $ | 21,679 | $ | 65,224 | $ | (13,720 | ) | $ | 90,428 | ||||||
See notes at the end of this earnings release.
| MYR GROUP INC. Unaudited Performance Measures and Reconciliation of Non-GAAP Measures As of December 31, 2023, 2022 and 2021 | |||||||
| (in thousands) | December 31, 2023 | December 31, 2022 | |||||
| Reconciliation of Book Value to Tangible Book Value: | |||||||
| Book value (total shareholders' equity) | $ | 651,202 | $ | 560,200 | |||
| Goodwill and intangible assets | (200,469 | ) | (203,404 | ) | |||
| Tangible Book Value (8) | $ | 450,733 | $ | 356,796 | |||
| Reconciliation of Book Value per Period End Share to Tangible Book Value per Period End Share: | |||||||
| Book value per period end share | $ | 38.67 | $ | 33.38 | |||
| Goodwill and intangible assets per period end share | (11.90 | ) | (12.12 | ) | |||
| Tangible Book Value per Period End Share (9) | $ | 26.77 | $ | 21.26 | |||
| Calculation of Period End Shares: | |||||||
| Shares outstanding | 16,684 | 16,564 | |||||
| Plus: common equivalents | 155 | 220 | |||||
| Period End Shares (15) | 16,839 | 16,784 | |||||
| (in thousands) | December 31, 2023 | December 31, 2022 | December 31, 2021 | |||||||||
| Reconciliation of Invested Capital to Shareholders Equity: | ||||||||||||
| Book value (total shareholders' equity) | $ | 651,202 | $ | 560,200 | $ | 519,102 | ||||||
| Plus: total funded debt | 36,241 | 40,553 | 4,503 | |||||||||
| Less: cash and cash equivalents | (24,899 | ) | (51,040 | ) | (82,092 | ) | ||||||
| Invested Capital | $ | 662,544 | $ | 549,713 | $ | 441,513 | ||||||
| Average Invested Capital (16) | 606,129 | 495,613 | ||||||||||
See notes at the end of this earnings release.
(1) Funded debt includes borrowings under our revolving credit facility and the outstanding balances of our outstanding equipment notes.
(2) These financial performance measures are provided as supplemental information to the financial statements. These measures are used by management to evaluate our past performance, our prospects for future performance and our ability to comply with certain material covenants as defined within our credit agreement, and to compare our results with those of our peers. In addition, we believe that certain of the measures, such as book value, tangible book value, free cash flow, asset turnover, return on equity and debt leverage are measures that are monitored by sureties, lenders, lessors, suppliers and certain investors. Our calculation of each measure is described in the following notes; our calculation may not be the same as the calculations made by other companies.
(3) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is not recognized under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to net cash flows provided by operating activities as a measure of liquidity. Certain material covenants contained within our credit agreement are based on EBITDA with certain additional adjustments, including our interest coverage ratio and leverage ratio, which we must comply with to avoid potential immediate repayment of amounts borrowed or additional fees to seek relief from our lenders. In addition, management considers EBITDA a useful measure because it provides MYR Group Inc. and its investors with an additional tool to compare MYR Group Inc. operating performance on a consistent basis by removing the impact of certain items that management believes to not directly reflect the company’s core operations. Management further believes that EBITDA is useful to investors and other external users of MYR Group Inc. financial statements in evaluating the company’s operating performance and cash flow because EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, useful lives placed on assets, capital structure and the method by which assets were acquired.
(4) EBITDA per diluted share is calculated by dividing EBITDA by the weighted average number of diluted shares outstanding for the period. EBITDA per diluted share is not recognized under GAAP and does not purport to be an alternative to income per diluted share.
(5) EBIA, net of taxes is defined as net income plus net interest plus amortization of intangible assets, less the tax impact of net interest and amortization of intangible assets. The tax impact of net interest and amortization of intangible assets is computed by multiplying net interest and amortization of intangible assets by the effective tax rate. Management uses EBIA, net of taxes, to measure our results exclusive of the impact of financing and amortization of intangible assets costs.
(6) Free cash flow, which is defined as cash flow provided by operating activities minus cash flow used in purchasing property and equipment, is not recognized under GAAP and does not purport to be an alternative to net income , cash flow from operations or the change in cash on the balance sheet. Management views free cash flow as a measure of operational performance, liquidity and financial health.
(7) Book value per period end share is calculated by dividing total shareholders’ equity at the end of the period by the period end shares outstanding.
(8) Tangible book value is calculated by subtracting goodwill and intangible assets at the end of the period from shareholders’ equity at the end of the period. Tangible book value is not recognized under GAAP and does not purport to be an alternative to book value or shareholders’ equity.
(9) Tangible book value per period end share is calculated by dividing tangible book value at the end of the period by the period end number of shares outstanding. Tangible book value per period end share is not recognized under GAAP and does not purport to be an alternative to income per diluted share.
(10) The funded debt to equity ratio is calculated by dividing total funded debt at the end of the period by total shareholders’ equity at the end of the period.
(11) Asset turnover is calculated by dividing the current period revenue by total assets at the beginning of the period.
(12) Return on assets is calculated by dividing net income for the period by total assets at the beginning of the period.
(13) Return on equity is calculated by dividing net income for the period by total shareholders’ equity at the beginning of the period.
(14) Return on invested capital is calculated by dividing EBIA, net of taxes, less any dividends, by average invested capital. Return on invested capital is not recognized under GAAP, and is a key metric used by management to determine our executive compensation.
(15) Period end shares is calculated by adding average common stock equivalents for the quarter to the period end balance of common shares outstanding. Period end shares is not recognized under GAAP and does not purport to be an alternative to diluted shares. Management views period end shares as a better measure of shares outstanding as of the end of the period.
(16) Average invested capital is calculated by adding net funded debt (total funded debt less cash and marketable securities) to total shareholders’ equity and calculating the average of the beginning and ending of each period.
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