Primoris Services Corporation Reports Fourth Quarter and Full Year 2023 Results
- Strong revenue growth of 29.3% in 2023 compared to 2022.
- Net income of $126.1 million for 2023, down 5.2% due to higher expenses.
- Adjusted net income increased to $154.7 million in 2023.
- Record total backlog of $10.9 billion at the end of 2023.
- Fourth quarter revenue increased by 14.0% compared to the previous year.
- Net income for the fourth quarter was $37.7 million, down 9.3%.
- Adjusted net income for the fourth quarter was $46.4 million.
- Primoris paid down $120 million of borrowings in the fourth quarter.
- Optimistic outlook for 2024.
- None.
Insights
The reported revenue increase of 29.3% for Primoris Services Corporation is a significant indicator of the company's growth, particularly in the Energy and Utilities segments. This surge can be attributed to strategic acquisitions such as PLH and B Comm, which have evidently contributed to the expansion of the company's revenue base. However, the 5.2% decrease in net income highlights the impact of higher income tax and interest expenses, which investors should monitor as potential risks to profitability. The record backlog of $10.9 billion suggests a robust pipeline of future revenue, which could support sustained growth and provide a measure of predictability in future earnings.
From a liquidity perspective, the increase in net cash provided by operating activities by $115.2 million is a strong positive, demonstrating improved working capital management. This operational efficiency, coupled with the paydown of $120 million of borrowings, reflects a solid financial position and may influence the company's creditworthiness and borrowing costs. The financial data presented, particularly the Adjusted EBITDA increase of 33.9%, suggests operational leverage and efficiency gains that could be attractive to investors seeking companies with strong cash flow generation capabilities.
The growth in Primoris's backlog, particularly in the solar project awards, indicates a shift in market demand towards renewable energy sources. This trend aligns with broader industry movements towards sustainability and could position Primoris favorably within the sector. The company's optimistic outlook for 2024, presumably based on the current project pipeline and market conditions, may have positive implications for investor sentiment and the stock's future performance.
It is also noteworthy that the company has exceeded several financial goals while achieving its best safety performance, which speaks to the operational excellence and corporate responsibility investors often seek. This balance of financial achievement and commitment to safety could enhance the company's reputation and appeal, potentially leading to new business opportunities and partnerships that drive further growth.
An increase in revenue and backlog during a period of economic uncertainty can signal a company's resilience and market demand for its services. Primoris's performance may reflect underlying economic conditions, such as increased infrastructure spending or a rise in energy sector investment, particularly in renewables. The ability to generate cash from operations and reduce debt is commendable in the current economic climate, as it indicates a strategic approach to capital management and a buffer against potential downturns.
However, investors should be aware of macroeconomic factors such as interest rate fluctuations and tax policy changes that could affect the company's interest expenses and tax liabilities. The interplay between these factors and the company's financial performance will be crucial in assessing the company's ability to maintain its growth trajectory and manage costs effectively.
For the full year 2023, Primoris reported the following highlights (1):
-
Revenue of
$5.7 billion $1.3 billion -
Net income of
$126.1 million $2.33 -
Adjusted net income of
$154.7 million $2.85 -
Record total backlog of
$10.9 billion $5.7 billion $5.5 billion -
Adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”) of
$379.5 million -
Full year net cash provided by operating activities of
$198.6 million $115.2 million
For the fourth quarter 2023, Primoris reported the following highlights(1):
-
Revenue of
$1.5 billion $186.4 million -
Net income of
$37.7 million $0.69 -
Adjusted net income of
$46.4 million $0.85 -
Adjusted EBITDA of
$104.2 million -
Fourth quarter net cash provided by operating activities of
$205.7 million
(1) |
Please refer to “Non-GAAP Measures” and Schedules 1, 2, 3 and 4 for the definitions and reconciliations of our Non-GAAP financial measures, including “Adjusted Net Income,” “Adjusted EPS” and “Adjusted EBITDA.” |
“Our 2023 results mark another record year for Primoris and demonstrate the successful execution of our strategy and the strength of our end markets. Revenue reached a new high of
“We also saw a very strong year in terms of generating cash from operations, which is a key priority for the company. This allowed us to pay down
“Looking ahead into 2024, we are optimistic about our continued success across many of our end markets. We are focused on improving our margins in the Utilities segment through increasing our mix of project work in power delivery and executing at a higher level of productivity on contracts that have been updated to current market rates beginning in 2024. We are also well-positioned to grow revenue and remain a leader in utility-scale solar construction by leveraging our strong customer relationships and continuing our track record of successful execution. I am confident that our commitment to margin improvement, cash flow generation and allocating capital to our businesses that offer higher returns will benefit Primoris, our employees and our shareholders in 2024 and beyond.”
Fourth Quarter 2023 Results Overview
Revenue was
This press release includes Non-GAAP financial measures. The Company believes these measures enable investors, analysts and management to evaluate Primoris’ performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods. In addition, management believes these measures are useful in comparing the Company’s operating results with those of its peers. Please refer to “Non-GAAP Measures” and Schedules 1, 2, 3, and 4 for the definitions and reconciliations of the Company’s Non-GAAP financial measures, including “Adjusted Net Income,” “Adjusted EPS” and “Adjusted EBITDA.”
During the fourth quarter of 2023, net income was
The Company reports in two segments: Utilities and Energy. Revenue and gross profit for the segments for the three months ended December 31, 2023 and 2022 were as follows:
Segment Revenue
|
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|
For the three months ended December 31, |
||||||||||
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|
2023 |
|
2022 |
||||||||
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|
|
|
|
% of |
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|
|
|
% of |
||
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|
|
|
|
Total |
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|
|
|
Total |
||
Segment |
|
Revenue |
|
Revenue |
|
Revenue |
|
Revenue |
||||
Utilities |
|
$ |
566,463 |
|
37.4 |
% |
|
$ |
576,450 |
|
43.4 |
% |
Energy |
|
|
949,087 |
|
62.6 |
% |
|
|
752,688 |
|
56.6 |
% |
Total |
|
$ |
1,515,550 |
|
100.0 |
% |
|
$ |
1,329,138 |
|
100.0 |
% |
Segment Gross Profit
|
||||||||||||
|
|
For the three months ended December 31, |
||||||||||
|
|
2023 |
|
2022 |
||||||||
|
|
|
|
|
% of |
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|
|
|
% of |
||
|
|
|
|
|
Segment |
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|
|
|
Segment |
||
Segment |
|
Gross Profit |
|
Revenue |
|
Gross Profit |
|
Revenue |
||||
Utilities |
|
$ |
42,748 |
|
7.5 |
% |
|
$ |
69,917 |
|
12.1 |
% |
Energy |
|
|
113,852 |
|
12.0 |
% |
|
|
83,467 |
|
11.1 |
% |
Total |
|
$ |
156,600 |
|
10.3 |
% |
|
$ |
153,384 |
|
11.5 |
% |
Utilities Segment (“Utilities”): Revenue decreased by
Energy Segment (“Energy”): Revenue increased by
Full Year 2023 Results Overview
Revenue for the year ended December 31, 2023, increased by
For the year ended December 31, 2023, gross profit increased by
For the full year 2023, net income was
Revenue and gross profit for the Utilities and Energy segments for the years ended December 31, 2023 and 2022 were as follows:
Segment Revenue
|
||||||||||||
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|
For the year ended December 31, |
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|
|
2023 |
|
2022 |
||||||||
|
|
|
|
|
% of |
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|
|
|
% of |
||
|
|
|
|
|
Total |
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|
|
|
Total |
||
Segment |
|
Revenue |
|
Revenue |
|
Revenue |
|
Revenue |
||||
Utilities |
|
$ |
2,380,230 |
|
41.6 |
% |
|
$ |
2,024,307 |
|
45.8 |
% |
Energy |
|
|
3,335,079 |
|
58.4 |
% |
|
|
2,396,292 |
|
54.2 |
% |
Total |
|
$ |
5,715,309 |
|
100.0 |
% |
|
$ |
4,420,599 |
|
100.0 |
% |
Segment Gross Profit
|
||||||||||||
|
|
For the year ended December 31, |
||||||||||
|
|
2023 |
|
2022 |
||||||||
|
|
|
|
|
% of |
|
|
|
|
% of |
||
|
|
|
|
|
Segment |
|
|
|
|
Segment |
||
Segment |
|
Gross Profit |
|
Revenue |
|
Gross Profit |
|
Revenue |
||||
Utilities |
|
$ |
206,992 |
|
8.7 |
% |
|
$ |
210,672 |
|
10.4 |
% |
Energy |
|
|
380,499 |
|
11.4 |
% |
|
|
246,213 |
|
10.3 |
% |
Total |
|
$ |
587,491 |
|
10.3 |
% |
|
$ |
456,885 |
|
10.3 |
% |
Utilities: Revenue increased by
Energy: Revenue increased by
Other Income Statement Information
Selling, general and administrative (“SG&A”) expenses were
Interest expense, net for the year ended December 31, 2023, was
The effective tax rate was 29.0 percent for the year ended December 31, 2023. The increase from 16.5 percent for the year ended December 31, 2022, was primarily due the release of valuation allowances on capital losses in 2022 and the expiration of a temporary law in 2023 which allowed for the full deductibility of per diem expenses in 2021 and 2022.
Outlook
The Company is providing its estimates for the year ending December 31, 2024. Earnings per Share (“EPS”) is expected to be between
The Company is targeting SG&A expense as a percentage of revenue in the low six percent range for full year 2024. The Company estimates capital expenditures for 2024 in the range of
Adjusted EPS and Adjusted EBITDA are non-GAAP financial measures. Please refer to “Non-GAAP Measures” and Schedules 1-4 below for the definitions and reconciliations. The guidance provided above constitutes forward-looking statements, which are based on current economic conditions and estimates, and the Company does not include other potential impacts, such as changes in accounting or unusual items. Supplemental information relating to the Company’s financial outlook is posted in the Investor Relations section of the Company’s website at www.prim.com.
Backlog
|
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|
December 31, 2023 |
|
December 31, 2022 |
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|
|
Next 12 Months |
|
Total |
|
Next 12 Months |
|
Total |
||||
Utilities |
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Backlog |
|
$ |
96.3 |
|
$ |
96.3 |
|
$ |
183.3 |
|
$ |
183.3 |
MSA Backlog |
|
|
1,776.5 |
|
|
5,093.6 |
|
|
1,649.9 |
|
|
4,967.1 |
Backlog |
|
$ |
1,872.8 |
|
$ |
5,189.9 |
|
$ |
1,833.2 |
|
$ |
5,150.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy |
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Backlog |
|
$ |
2,599.0 |
|
$ |
5,102.6 |
|
$ |
1,920.8 |
|
$ |
3,391.8 |
MSA Backlog |
|
|
308.2 |
|
|
602.4 |
|
|
258.5 |
|
|
552.8 |
Backlog |
|
$ |
2,907.2 |
|
$ |
5,705.0 |
|
$ |
2,179.3 |
|
$ |
3,944.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Backlog |
|
$ |
2,695.3 |
|
$ |
5,198.9 |
|
$ |
2,104.1 |
|
$ |
3,575.1 |
MSA Backlog |
|
|
2,084.7 |
|
|
5,696.0 |
|
|
1,908.4 |
|
|
5,519.9 |
Backlog |
|
$ |
4,780.0 |
|
$ |
10,894.9 |
|
$ |
4,012.5 |
|
$ |
9,095.0 |
At December 31, 2023, total Fixed Backlog was
Backlog, including estimated MSA revenue, should not be considered a comprehensive indicator of future revenue. Revenue from certain projects where scope, and therefore contract value, is not adequately defined, is not included in Fixed Backlog. At any time, any project may be cancelled at the convenience of the Company’s customers.
Balance Sheet and Capital Allocation
At December 31, 2023, the Company had
The Company also announced that on February 21, 2024, its Board of Directors declared a
Conference Call and Webcast
As previously announced, management will host a conference call and webcast on Tuesday, February 27, 2024, at 9:00 a.m.
Investors and analysts are invited to participate in the call by phone at 1-888-330-3428, or internationally at 1-646-960-0679 (access code: 7581464) or via the Internet at www.prim.com. A replay of the call will be available on the Company’s website or by phone at 1-800-770-2030, or internationally at 1-647-362-9199 (access code: 7581464), for a seven-day period following the call.
Presentation slides to accompany the conference call are available for download under “Events & Presentations” in the “Investors” section of the Company’s website at www.prim.com.
Non-GAAP Measures
This press release contains certain financial measures that are not recognized under generally accepted accounting principles in
About Primoris
Primoris Services Corporation is a leading provider of critical infrastructure services to the utility, energy, and renewables markets throughout
Forward Looking Statements
This press release contains certain forward-looking statements, including the Company’s outlook, that reflect, when made, the Company’s expectations or beliefs concerning future events that involve risks and uncertainties, including with regard to the Company’s future performance. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “targets,” “will,” “would” or similar expressions. Forward-looking statements include information concerning the possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of regulation and the economy, generally. Forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results may differ materially as a result of a number of factors, including, among other things, customer timing, project duration, weather, and general economic conditions; changes in the mix of customers, projects, contracts and business; regional or national and/or general economic conditions and demand for the Company’s services; price, volatility, and expectations of future prices of oil, natural gas, and natural gas liquids; variations and changes in the margins of projects performed during any particular quarter; increases in the costs to perform services caused by changing conditions; the termination, or expiration of existing agreements or contracts; the budgetary spending patterns of customers; inflation and other increases in construction costs that the Company may be unable to pass through to customers; cost or schedule overruns on fixed-price contracts; availability of qualified labor for specific projects; changes in bonding requirements and bonding availability for existing and new agreements; the need and availability of letters of credit; increases in interest rates and slowing economic growth or recession; the instability in the banking system; costs incurred to support growth, whether organic or through acquisitions; the timing and volume of work under contract; losses experienced in the Company’s operations; the results of the review of prior period accounting on certain projects and the impact of adjustments to accounting estimates; developments in governmental investigations and/or inquiries; intense competition in the industries in which the Company operates; failure to obtain favorable results in existing or future litigation or regulatory proceedings, dispute resolution proceedings or claims, including claims for additional costs; failure of partners, suppliers or subcontractors to perform their obligations; cyber-security breaches; failure to maintain safe worksites; risks or uncertainties associated with events outside of the Company’s control, including conflicts in the
PRIMORIS SERVICES CORPORATION
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Three Months Ended |
|
Year Ended |
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|
|
December 31, |
|
December 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue |
|
$ |
1,515,550 |
|
|
$ |
1,329,138 |
|
|
$ |
5,715,309 |
|
|
$ |
4,420,599 |
|
Cost of revenue |
|
|
1,358,950 |
|
|
|
1,175,754 |
|
|
|
5,127,818 |
|
|
|
3,963,714 |
|
Gross profit |
|
|
156,600 |
|
|
|
153,384 |
|
|
|
587,491 |
|
|
|
456,885 |
|
Selling, general and administrative expenses |
|
|
80,749 |
|
|
|
90,672 |
|
|
|
328,733 |
|
|
|
281,577 |
|
Transaction and related costs |
|
|
1,008 |
|
|
|
1,826 |
|
|
|
5,685 |
|
|
|
20,054 |
|
Gain on sale and leaseback transaction |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(40,084 |
) |
Operating income |
|
|
74,843 |
|
|
|
60,886 |
|
|
|
253,073 |
|
|
|
195,338 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange (loss) gain, net |
|
|
(138 |
) |
|
|
1,327 |
|
|
|
1,163 |
|
|
|
1,088 |
|
Other income, net |
|
|
64 |
|
|
|
1,798 |
|
|
|
1,604 |
|
|
|
2,072 |
|
Interest expense, net |
|
|
(21,728 |
) |
|
|
(18,556 |
) |
|
|
(78,171 |
) |
|
|
(39,212 |
) |
Income before provision for income taxes |
|
|
53,041 |
|
|
|
45,455 |
|
|
|
177,669 |
|
|
|
159,286 |
|
Provision for income taxes |
|
|
(15,382 |
) |
|
|
(3,954 |
) |
|
|
(51,524 |
) |
|
|
(26,265 |
) |
Net income |
|
|
37,659 |
|
|
|
41,501 |
|
|
|
126,145 |
|
|
|
133,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dividends per common share |
|
$ |
0.06 |
|
|
$ |
0.06 |
|
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.71 |
|
|
$ |
0.78 |
|
|
$ |
2.37 |
|
|
$ |
2.50 |
|
Diluted |
|
$ |
0.69 |
|
|
$ |
0.77 |
|
|
$ |
2.33 |
|
|
$ |
2.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
53,360 |
|
|
|
53,120 |
|
|
|
53,297 |
|
|
|
53,200 |
|
Diluted |
|
|
54,385 |
|
|
|
53,711 |
|
|
|
54,223 |
|
|
|
53,759 |
|
PRIMORIS SERVICES CORPORATION
|
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December 31, |
|
December 31, |
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|
|
2023 |
|
2022 |
||||
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|||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
217,778 |
|
|
$ |
248,692 |
|
Accounts receivable, net |
|
|
685,439 |
|
|
|
663,119 |
|
Contract assets |
|
|
846,176 |
|
|
|
616,224 |
|
Prepaid expenses and other current assets |
|
|
135,840 |
|
|
|
176,350 |
|
Total current assets |
|
|
1,885,233 |
|
|
|
1,704,385 |
|
Property and equipment, net |
|
|
475,929 |
|
|
|
493,859 |
|
Operating lease assets |
|
|
360,507 |
|
|
|
202,801 |
|
Intangible assets, net |
|
|
227,561 |
|
|
|
249,381 |
|
Goodwill |
|
|
857,650 |
|
|
|
871,808 |
|
Other long-term assets |
|
|
20,547 |
|
|
|
21,786 |
|
Total assets |
|
$ |
3,827,427 |
|
|
$ |
3,544,020 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
628,962 |
|
|
$ |
534,956 |
|
Contract liabilities |
|
|
366,476 |
|
|
|
275,947 |
|
Accrued liabilities |
|
|
263,492 |
|
|
|
245,837 |
|
Dividends payable |
|
|
3,202 |
|
|
|
3,187 |
|
Current portion of long-term debt |
|
|
72,903 |
|
|
|
78,137 |
|
Total current liabilities |
|
|
1,335,035 |
|
|
|
1,138,064 |
|
Long-term debt, net of current portion |
|
|
885,369 |
|
|
|
1,065,315 |
|
Noncurrent operating lease liabilities, net of current portion |
|
|
263,454 |
|
|
|
130,787 |
|
Deferred tax liabilities |
|
|
59,565 |
|
|
|
57,101 |
|
Other long-term liabilities |
|
|
47,912 |
|
|
|
43,915 |
|
Total liabilities |
|
|
2,591,335 |
|
|
|
2,435,182 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Stockholders’ equity |
|
|
|
|
|
|
||
Common stock |
|
|
6 |
|
|
|
6 |
|
Additional paid-in capital |
|
|
275,846 |
|
|
|
263,771 |
|
Retained earnings |
|
|
961,028 |
|
|
|
847,681 |
|
Accumulated other comprehensive income |
|
|
(788 |
) |
|
|
(2,620 |
) |
Total stockholders’ equity |
|
|
1,236,092 |
|
|
|
1,108,838 |
|
Total liabilities and stockholders’ equity |
|
$ |
3,827,427 |
|
|
$ |
3,544,020 |
|
PRIMORIS SERVICES CORPORATION
|
||||||||
|
|
Year Ended |
||||||
|
|
December 31, |
||||||
|
|
2023 |
|
2022 |
||||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
126,145 |
|
|
$ |
133,021 |
|
Adjustments to reconcile net income to net cash provided by operating activities (net of effect of acquisitions): |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
107,041 |
|
|
|
99,157 |
|
Stock-based compensation expense |
|
|
11,833 |
|
|
|
7,441 |
|
Gain on sale of property and equipment |
|
|
(48,104 |
) |
|
|
(31,890 |
) |
Gain on sale and leaseback transaction |
|
|
— |
|
|
|
(40,084 |
) |
Unrealized gain on interest rate swap |
|
|
(397 |
) |
|
|
(5,581 |
) |
Other non-cash items |
|
|
2,181 |
|
|
|
277 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(16,885 |
) |
|
|
(98,724 |
) |
Contract assets |
|
|
(229,826 |
) |
|
|
(118,806 |
) |
Other current assets |
|
|
45,578 |
|
|
|
(70,275 |
) |
Net deferred tax liabilities |
|
|
29,429 |
|
|
|
14,695 |
|
Other long-term assets |
|
|
459 |
|
|
|
932 |
|
Accounts payable |
|
|
93,433 |
|
|
|
191,532 |
|
Contract liabilities |
|
|
84,745 |
|
|
|
(7,869 |
) |
Operating lease assets and liabilities, net |
|
|
(1,194 |
) |
|
|
(505 |
) |
Accrued liabilities |
|
|
(6,832 |
) |
|
|
5,707 |
|
Other long-term liabilities |
|
|
946 |
|
|
|
4,318 |
|
Net cash provided by operating activities |
|
|
198,552 |
|
|
|
83,346 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchase of property and equipment |
|
|
(103,005 |
) |
|
|
(94,690 |
) |
Proceeds from sale of assets |
|
|
63,695 |
|
|
|
41,302 |
|
Proceeds from sale and leaseback transaction, net of related expenses |
|
|
— |
|
|
|
49,887 |
|
Cash paid for acquisitions, net of cash and restricted cash acquired |
|
|
9,300 |
|
|
|
(478,438 |
) |
Net cash used in investing activities |
|
|
(30,010 |
) |
|
|
(481,939 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Borrowings under revolving lines of credit |
|
|
440,223 |
|
|
|
188,560 |
|
Payments on revolving lines of credit |
|
|
(540,223 |
) |
|
|
(88,560 |
) |
Proceeds from issuance of long-term debt |
|
|
10,000 |
|
|
|
469,531 |
|
Payments on long-term debt |
|
|
(96,987 |
) |
|
|
(86,769 |
) |
Proceeds from issuance of common stock |
|
|
681 |
|
|
|
585 |
|
Debt issuance costs |
|
|
— |
|
|
|
(6,643 |
) |
Dividends paid |
|
|
(12,783 |
) |
|
|
(12,778 |
) |
Purchase of common stock |
|
|
— |
|
|
|
(5,990 |
) |
Other |
|
|
(6,190 |
) |
|
|
(5,893 |
) |
Net cash (used in) provided by financing activities |
|
|
(205,279 |
) |
|
|
452,043 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
1,288 |
|
|
|
(102 |
) |
Net change in cash, cash equivalents and restricted cash |
|
|
(35,449 |
) |
|
|
53,348 |
|
Cash, cash equivalents and restricted cash at beginning of the year |
|
|
258,991 |
|
|
|
205,643 |
|
Cash, cash equivalents and restricted cash at end of the year |
|
$ |
223,542 |
|
|
$ |
258,991 |
|
Non-GAAP Measures |
||||||||||||||||
Schedule 1
|
||||||||||||||||
Adjusted Net Income and Adjusted EPS |
||||||||||||||||
Primoris defines Adjusted Net Income as net income (loss) adjusted for certain items including, (i) non‐cash stock‐based compensation expense; (ii) transaction/integration and related costs; (iii) asset impairment charges; (iv) changes in fair value of the Company’s interest rate swap; (v) change in fair value of contingent consideration liabilities; (vi) amortization of intangible assets; (vii) amortization of debt discounts and debt issuance costs; (viii) losses on extinguishment of debt; (ix) severance and restructuring changes; (x) selected (gains) charges that are unusual or non-recurring; and (xi) impact of changes in statutory tax rates. The Company defines Adjusted EPS as Adjusted Net Income divided by the diluted weighted average shares outstanding. Management believes these adjustments are helpful for comparing the Company’s operating performance with prior periods. Because Adjusted Net Income and Adjusted EPS, as defined, exclude some, but not all, items that affect net income and diluted earnings per share, they may not be comparable to similarly titled measures of other companies. The most comparable GAAP financial measures, net income and diluted earnings per share, and information reconciling the GAAP and non‐GAAP financial measures, are included in the table below. |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income as reported (GAAP) |
|
$ |
37,659 |
|
|
$ |
41,501 |
|
|
$ |
126,145 |
|
|
$ |
133,021 |
|
Non-cash stock based compensation |
|
|
2,878 |
|
|
|
1,693 |
|
|
|
11,833 |
|
|
|
7,441 |
|
Transaction/integration and related costs |
|
|
1,008 |
|
|
|
1,826 |
|
|
|
5,685 |
|
|
|
20,054 |
|
Amortization of intangible assets |
|
|
5,190 |
|
|
|
7,154 |
|
|
|
21,820 |
|
|
|
20,938 |
|
Amortization of debt issuance costs |
|
|
636 |
|
|
|
491 |
|
|
|
2,181 |
|
|
|
1,479 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
759 |
|
Unrealized loss (gain) on interest rate swap |
|
|
2,604 |
|
|
|
35 |
|
|
|
(397 |
) |
|
|
(5,581 |
) |
Change in fair value of contingent consideration |
|
|
(61 |
) |
|
|
(1,705 |
) |
|
|
(936 |
) |
|
|
(1,705 |
) |
Gain on sale and leaseback transaction |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(40,084 |
) |
Income tax impact of adjustments (1) |
|
|
(3,554 |
) |
|
|
(797 |
) |
|
|
(11,654 |
) |
|
|
(545 |
) |
Adjusted net income |
|
$ |
46,360 |
|
|
$ |
50,198 |
|
|
$ |
154,677 |
|
|
$ |
135,777 |
|
Weighted average shares (diluted) |
|
|
54,385 |
|
|
|
53,711 |
|
|
|
54,223 |
|
|
|
53,759 |
|
Diluted earnings per share |
|
$ |
0.69 |
|
|
$ |
0.77 |
|
|
$ |
2.33 |
|
|
$ |
2.47 |
|
Adjusted diluted earnings per share |
|
$ |
0.85 |
|
|
$ |
0.93 |
|
|
$ |
2.85 |
|
|
$ |
2.53 |
|
(1) |
Adjustments above are reported on a pre-tax basis before the income tax impact of adjustments. The income tax impact for each adjustment is determined by calculating the tax impact of the adjustment on the Company's quarterly and annual effective tax rate, as applicable, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment. |
Schedule 2
|
|||||||||||||||
EBITDA and Adjusted EBITDA |
|||||||||||||||
Primoris defines EBITDA as net income (loss) before interest, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for certain items including, (i) non‐cash stock‐based compensation expense; (ii) transaction/integration and related costs; (iii) asset impairment charges; (iv) severance and restructuring changes; (v) change in fair value of contingent consideration liabilities; and (vi) selected (gains) charges that are unusual or non-recurring. The Company believes the EBITDA and Adjusted EBITDA financial measures assist in providing a more complete understanding of the Company’s underlying operational measures to manage its business, to evaluate its performance compared to prior periods and the marketplace, and to establish operational goals. EBITDA and Adjusted EBITDA are non‐GAAP financial measures and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. These non‐GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. The most comparable GAAP financial measure, net income, and information reconciling the GAAP and non‐GAAP financial measures are included in the table below. |
|||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income as reported (GAAP) |
$ |
37,659 |
|
|
$ |
41,501 |
|
|
$ |
126,145 |
|
|
$ |
133,021 |
|
Interest expense, net |
|
21,728 |
|
|
|
18,556 |
|
|
|
78,171 |
|
|
|
39,212 |
|
Provision for income taxes |
|
15,382 |
|
|
|
3,954 |
|
|
|
51,524 |
|
|
|
26,265 |
|
Depreciation and amortization |
|
25,587 |
|
|
|
29,809 |
|
|
|
107,041 |
|
|
|
99,157 |
|
EBITDA |
|
100,356 |
|
|
|
93,820 |
|
|
|
362,881 |
|
|
|
297,655 |
|
Non-cash stock based compensation |
|
2,878 |
|
|
|
1,693 |
|
|
|
11,833 |
|
|
|
7,441 |
|
Transaction/integration and related costs |
|
1,008 |
|
|
|
1,826 |
|
|
|
5,685 |
|
|
|
20,054 |
|
Change in fair value of contingent consideration |
|
(61 |
) |
|
|
(1,705 |
) |
|
|
(936 |
) |
|
|
(1,705 |
) |
Gain on sale and leaseback transaction |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(40,084 |
) |
Adjusted EBITDA |
$ |
104,181 |
|
|
$ |
95,634 |
|
|
$ |
379,463 |
|
|
$ |
283,361 |
|
Schedule 3
|
||||||||
The following table sets forth a reconciliation of the forecasted GAAP net income to Adjusted Net Income and EPS to Adjusted EPS for the year ending December 31, 2024. |
||||||||
|
|
Estimated Range |
||||||
|
|
Full Year Ending |
||||||
|
|
December 31, 2024 |
||||||
Net income as defined (GAAP) |
|
$ |
137,500 |
|
|
$ |
148,500 |
|
Non-cash stock based compensation |
|
|
15,500 |
|
|
|
15,500 |
|
Amortization of intangible assets |
|
|
19,400 |
|
|
|
19,400 |
|
Amortization of debt issuance costs |
|
|
2,200 |
|
|
|
2,200 |
|
Transaction/integration and related costs |
|
|
4,500 |
|
|
|
4,500 |
|
Income tax impact of adjustments (1) |
|
|
(11,400 |
) |
|
|
(11,400 |
) |
Adjusted net income |
|
$ |
167,700 |
|
|
$ |
178,700 |
|
Weighted average shares (diluted) |
|
|
55,000 |
|
|
|
55,000 |
|
Diluted earnings per share |
|
$ |
2.50 |
|
|
$ |
2.70 |
|
Adjusted diluted earnings per share |
|
$ |
3.05 |
|
|
$ |
3.25 |
|
(1) |
Adjustments above are reported on a pre-tax basis before the income tax impact of adjustments. The income tax impact for each adjustment is determined by calculating the tax impact of the adjustment on the Company's quarterly and annual effective tax rate, as applicable, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment. |
Schedule 4
|
||||||
The following table sets forth a reconciliation of the forecasted GAAP net income to Adjusted EBITDA for the year ending December 31, 2024. |
||||||
|
||||||
|
|
Estimated Range |
||||
|
|
Full Year Ending |
||||
|
|
December 31, 2024 |
||||
Net income as defined (GAAP) |
|
$ |
137,500 |
|
$ |
148,500 |
Interest expense, net |
|
|
77,000 |
|
|
82,000 |
Provision for income taxes |
|
|
57,000 |
|
|
61,000 |
Depreciation and amortization |
|
|
103,500 |
|
|
103,500 |
EBITDA |
|
$ |
375,000 |
|
$ |
395,000 |
Non-cash stock based compensation |
|
|
15,500 |
|
|
15,500 |
Transaction/integration and related costs |
|
|
4,500 |
|
|
4,500 |
Adjusted EBITDA |
|
$ |
395,000 |
|
$ |
415,000 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240226481075/en/
Ken Dodgen
Executive Vice President, Chief Financial Officer
(214) 740-5608
kdodgen@prim.com
Blake Holcomb
Vice President, Investor Relations
(214) 545-6773
bholcomb@prim.com
Source: Primoris Services Corporation
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