MYR Group Inc. Announces New $75 Million Share Repurchase Program

Rhea-AI Summary

MYR Group Inc. announced a new $75 million share repurchase program, allowing the company to buy back its outstanding shares of common stock. The program will be in effect until November 8, 2024, or until the funds are exhausted. The company plans to use cash on hand and borrowings under its credit facility to fund the repurchases. MYR Group aims to drive value for its shareholders and invest in growth opportunities through this initiative.

Positive

• The approval of a new share repurchase program demonstrates the company's confidence in its market segments and long-term growth potential.

• The commitment to driving value for shareholders and strategically deploying capital for organic growth opportunities and strategic acquisitions showcases a focus on generating strong returns.

• The company's strong balance sheet will support the execution of the repurchase program and other investment initiatives.

Negative

• None.

Insights

Financial Analyst

The new $75 million share repurchase program announced by MYR Group Inc. reflects a significant capital allocation decision that signals confidence in the company's intrinsic value relative to its current market price. From an investor's perspective, this may imply that the company's leadership believes the stock is undervalued or that it is an opportune time to return capital to shareholders, which could be interpreted as a bullish signal. However, it's important to scrutinize the funding mechanism for the repurchase program. MYR Group intends to use cash on hand and borrowings under its credit facility, which could potentially increase leverage and interest expenses. Investors should balance the potential EPS accretion from reduced share count against the financial impacts of any new debt taken on to finance the buybacks. Considering the effects of such capital activities is important for evaluating potential shifts in shareholder equity and future company financial flexibility.

Market Research Analyst

MYR Group's active approach to capital management, particularly through the initiation of a share repurchase program, is typically seen as a mechanism to enhance shareholder value. The timing, coinciding with the expiration of its prior repurchase program, suggests a disciplined approach to stock buybacks. This action, alongside the CEO's statements about long-term growth potential and strategic capital deployment, provides insights into the company's broader financial strategy. It indicates a commitment to shareholder returns, which might be favorably viewed by the market. Investors often interpret repurchase programs as a sign of management's confidence in the business's prospects. However, the true impact on the stock price will depend on the market's perception of the company's future earnings and growth opportunities. In addition, the choice to repurchase shares rather than invest in new projects or increase dividends could be dissected in terms of opportunity costs and the overall balance of capital allocation strategies.

THORNTON, Colo., May 06, 2024 (GLOBE NEWSWIRE) -- MYR Group Inc. (“MYR Group” or the “Company”) (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 a new share repurchase program (“Repurchase Program”). The Repurchase Program authorizes the Company to repurchase, in the aggregate, up to $75.0 million of its outstanding shares of common stock from time to time on the open market or in privately negotiated transactions, based on market and business conditions, applicable contractual and legal requirements and other factors in accordance with applicable federal securities laws. The Repurchase Program will expire on November 8, 2024, or when the authorized funds are exhausted, whichever is earlier. The Company is not obligated to acquire any specific amount of common stock, and the Company’s Board of Directors may modify or terminate the Repurchase Program at any time at its sole discretion without notice. The Company intends to fund the Repurchase Program with cash on hand and through borrowings under its credit facility. The Repurchase Program was authorized by the Board of Directors and will be effective on May 9, 2024. The Company’s prior $75.0 million repurchase program commenced on November 9, 2023 and is scheduled to expire on May 8, 2024.

Management Comments
Rick Swartz, MYR Group’s President and CEO, said, “We are pleased to announce the approval of a share repurchase program by our Board of Directors. This plan demonstrates the confidence we have in our market segments and our firm’s long-term growth potential.” Mr. Swartz continued, “We remain committed to driving value for all MYR Group shareholders and directing capital to investments that generate strong returns. Through the strength of our balance sheet, we will continue to strategically deploy capital through the execution of organic growth opportunities, strategic acquisitions, and the repurchase of our common stock.”

About MYR Group Inc.
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,” “estimate,” “expect,” “intend,” “likely,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “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 Group's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A. of MYR Group's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in any risk factors or cautionary statements contained in MYR Group'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

FAQ

<p>What did MYR Group Inc. announce?</p>

MYR Group Inc. announced a new $75 million share repurchase program.

<p>When will the Repurchase Program expire?</p>

The Repurchase Program will expire on November 8, 2024, or when the authorized funds are exhausted, whichever is earlier.

<p>How does MYR Group plan to fund the Repurchase Program?</p>

MYR Group plans to fund the Repurchase Program with cash on hand and through borrowings under its credit facility.

<p>Who authorized the Repurchase Program?</p>

The Repurchase Program was authorized by the Company's Board of Directors.

<p>What is the purpose of the Repurchase Program?</p>

The Repurchase Program aims to drive value for MYR Group shareholders and invest in growth opportunities.