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
third-quarter and first nine-months 2024 financial results.
Highlights for
Third Quarter
2024
- Quarterly revenues of $888.0
million
- Quarterly net income of $10.6
million, or $0.65 per diluted share
- Quarterly EBITDA of $37.2
million
- Backlog of $2.60 billion
Management CommentsRick Swartz, MYR’s President
and CEO, said, “Our core markets remain active, and bidding
activity continued at a robust pace during the quarter.
Opportunities for long-term growth remain healthy as we continue to
strategically expand our strong customer relationships across our
business segments.” Mr. Swartz also said, “Our third quarter
performance showed improvement over the second quarter,
demonstrating strong project execution in core areas of our
business as we continue to resolve unfavorable impacts from a
relatively small group of projects expected to complete this
year.”
Third Quarter ResultsMYR
reported third-quarter 2024 revenues of $888.0 million, a decrease
of $51.5 million, or 5.5 percent, compared to the third quarter of
2023. Specifically, our Transmission and Distribution (“T&D”)
segment reported quarterly revenues of $481.9 million, a decrease
of $66.7 million, or 12.2 percent, from the third quarter of 2023,
due to a decrease of $81.0 million in revenue on transmission
projects and an increase of $14.3 million in revenue on
distribution projects. Our Commercial and Industrial (“C&I”)
segment reported quarterly revenues of $406.2 million, an increase
of $15.3 million, or 3.9 percent, from the third quarter of 2023,
which was primarily due to an increase in revenue on fixed priced
contracts and T&E contracts.
Consolidated gross profit decreased to $77.3 million for the
third quarter of 2024, compared to $92.4 million for the third
quarter of 2023. The decrease in gross profit was due to lower
margin and lower revenues. Gross margin decreased to 8.7 percent
for the third quarter of 2024 from 9.8 percent for the third
quarter of 2023. The decrease in gross margin was primarily related
to clean energy projects in T&D, the unfavorable impact of a
C&I project, as well as an increase in costs associated with
unfavorable job closeouts, and labor and project inefficiencies.
These margin decreases were partially offset by
better-than-anticipated productivity and a favorable change order.
Changes in estimates of gross profit on certain projects resulted
in gross margin decreases of 3.9 percent and 1.3 percent for the
third quarter of 2024 and 2023, respectively.
Selling, general and administrative expenses (“SG&A”)
decreased to $57.5 million for the third quarter of 2024, compared
to $59.9 million for the third quarter of 2023. The
period-over-period decrease was primarily due to a decrease in
employee incentive compensation costs and a decrease in contingent
compensation expense related to a prior acquisition, partially
offset by an increase in employee-related expenses to support
future growth.
Income tax expense was $7.9 million for the third quarter of
2024, with an effective tax rate of 42.5 percent, compared to
income tax expense of $9.3 million for the third quarter of 2023,
with an effective tax rate of 30.3 percent. The period-over-period
change in tax rate was primarily due to higher permanent difference
items mostly related to deductibility limits of contingent
compensation, associated with a prior acquisition, which was
successfully achieved during the third quarter of 2024, as well as
higher U.S. taxes on Canadian income.
For the third quarter of 2024, net income was $10.6 million, or
$0.65 per diluted share, compared to $21.5 million, or $1.28 per
diluted share, for the same period of 2023. Third-quarter 2024
EBITDA, a non-GAAP financial measure, was $37.2 million, compared
to $47.0 million in the third quarter of 2023.
First Nine-Months ResultsMYR
reported first nine-months 2024 revenues of $2.53 billion, a
decrease of $107.2 million, or 4.1 percent, compared to the first
nine months of 2023. Specifically, our T&D segment reported
revenues of $1.43 billion, a decrease of $67.2 million, from the
first nine months of 2023, due to a decrease of $105.0 million in
revenue on transmission projects, offset by an increase of $37.8
million in revenue on distribution projects. Our C&I segment
reported revenues of $1.10 billion, a decrease of $40.1 million, or
3.5 percent from the first nine months of 2023, which was primarily
due to the delayed start of certain projects in 2024.
Consolidated gross profit decreased to $204.4 million in the
first nine months of 2024, compared to $266.9 million in the first
nine months of 2023. The decrease in gross profit was due to lower
margin and lower revenues. Gross margin decreased to 8.1 percent
for the first nine months of 2024 from 10.1 percent for the first
nine months of 2023. The decrease in gross margin was primarily
related to clean energy projects in T&D, the unfavorable impact
of a C&I project, labor and project inefficiencies, an increase
in costs associated with schedule compression on certain projects,
an unfavorable change order and an unfavorable job closeout. These
margin decreases were partially offset by better-than-anticipated
productivity, favorable change orders, favorable job closeouts and
favorable joint venture results. Changes in estimates of gross
profit on certain projects resulted in a gross margin decreases of
4.4 percent and 1.2 percent for the first nine months of 2024 and
2023, respectively.
SG&A increased to $181.5 million in the first nine months of
2024, compared to $174.6 million for the first nine months of 2023.
The period-over-period increase was primarily due to an increase in
contingent compensation expense related to a prior acquisition and
an increase in employee-related expenses to support future growth,
partially offset by a decrease in employee incentive compensation
costs.
Interest expense increased to $4.3 million in the first nine
months of 2024, compared to $3.1 million for the first nine months
of 2023. The period-over-period increase was primarily due to
higher average debt balances during the first nine months of 2024
as compared to the first nine months of 2023.
Income tax expense was $5.2 million for the first nine months of
2024, with an effective tax rate of 26.6 percent, compared to
income tax expense of $22.6 million for the first nine months of
2023, with an effective tax rate of 25.2 percent. The
period-over-period change in tax rate was primarily due to lower
pretax income and higher other permanent difference items, offset
by lower stock compensation excess tax benefits. The increase in
permanent difference items primarily related to deductibility
limits of contingent compensation, associated with a prior
acquisition, as well as higher U.S. taxes on Canadian income.
For the first nine months of 2024, net income was $14.3 million,
or $0.86 per diluted share, compared to $66.9 million, or $3.98 per
diluted share, for the same period of 2023.
BacklogAs of September 30, 2024, MYR's
backlog was $2.60 billion, compared to $2.54 billion as of
June 30, 2024. As of September 30, 2024, T&D backlog
was $798.7 million, and C&I backlog was $1.80 billion. Total
backlog at September 30, 2024 decreased $19.7 million, or 0.8
percent, from the $2.62 billion reported at September 30,
2023.
Balance SheetAs of September 30, 2024, MYR
had $375.5 million of borrowing availability under its $490 million
revolving credit facility.
Non-GAAP Financial MeasuresTo 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 CallMYR will host a conference call
to discuss its third-quarter 2024 results on Thursday,
October 31, 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/BIcf56e5d4dfbd47ab90fa168c7ef8653c.
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 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 StatementsVarious 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's
business, particularly those mentioned in the risk factors and
cautionary statements in Item 1A. of MYR'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'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 SheetsAs
of September 30, 2024
and December 31, 2023
(in thousands, except
share and per share data) |
September 30,2024 |
|
December 31,2023 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
7,569 |
|
|
$ |
24,899 |
|
Accounts receivable, net of allowances of $977 and $1,987,
respectively |
|
571,342 |
|
|
|
521,893 |
|
Contract assets, net of allowances of $582 and $610,
respectively |
|
411,843 |
|
|
|
420,616 |
|
Current portion of receivable for insurance claims in excess of
deductibles |
|
9,056 |
|
|
|
8,267 |
|
Refundable income taxes |
|
6,280 |
|
|
|
4,034 |
|
Prepaid expenses and other current assets |
|
25,532 |
|
|
|
46,535 |
|
Total current assets |
|
1,031,622 |
|
|
|
1,026,244 |
|
Property and equipment, net of
accumulated depreciation of $388,180 and $380,465,
respectively |
|
279,634 |
|
|
|
268,978 |
|
Operating lease right-of-use
assets |
|
40,665 |
|
|
|
35,012 |
|
Goodwill |
|
115,970 |
|
|
|
116,953 |
|
Intangible assets, net of
accumulated amortization of $34,036 and $30,534, respectively |
|
79,077 |
|
|
|
83,516 |
|
Receivable for insurance
claims in excess of deductibles |
|
34,925 |
|
|
|
33,739 |
|
Investment in joint
ventures |
|
5,835 |
|
|
|
8,707 |
|
Other assets |
|
5,331 |
|
|
|
5,597 |
|
Total assets |
$ |
1,593,059 |
|
|
$ |
1,578,746 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current portion of long-term debt |
$ |
4,364 |
|
|
$ |
7,053 |
|
Current portion of operating lease obligations |
|
11,136 |
|
|
|
9,237 |
|
Current portion of finance lease obligations |
|
1,168 |
|
|
|
2,039 |
|
Accounts payable |
|
329,971 |
|
|
|
359,363 |
|
Contract liabilities |
|
262,557 |
|
|
|
240,411 |
|
Current portion of accrued self-insurance |
|
25,394 |
|
|
|
28,269 |
|
Accrued income taxes |
|
— |
|
|
|
237 |
|
Other current liabilities |
|
127,846 |
|
|
|
100,593 |
|
Total current liabilities |
|
762,436 |
|
|
|
747,202 |
|
Deferred income tax
liabilities |
|
47,722 |
|
|
|
48,230 |
|
Long-term debt |
|
88,822 |
|
|
|
29,188 |
|
Accrued self-insurance |
|
54,262 |
|
|
|
51,796 |
|
Operating lease obligations,
net of current maturities |
|
29,529 |
|
|
|
25,775 |
|
Finance lease obligations, net
of current maturities |
|
2,312 |
|
|
|
314 |
|
Other liabilities |
|
19,467 |
|
|
|
25,039 |
|
Total liabilities |
|
1,004,550 |
|
|
|
927,544 |
|
Commitments and
contingencies |
|
|
|
Shareholders’ equity: |
|
|
|
Preferred stock—$0.01 par value per share; 4,000,000 authorized
shares; none issued and outstanding at September 30, 2024 and
December 31, 2023 |
|
— |
|
|
|
— |
|
Common stock—$0.01 par value per share; 100,000,000 authorized
shares; 16,121,901 and 16,684,492 shares issued and outstanding at
September 30, 2024 and December 31, 2023,
respectively |
|
161 |
|
|
|
167 |
|
Additional paid-in capital |
|
156,799 |
|
|
|
162,386 |
|
Accumulated other comprehensive loss |
|
(6,216) |
|
|
|
(3,880) |
|
Retained earnings |
|
437,765 |
|
|
|
492,529 |
|
Total shareholders’ equity |
|
588,509 |
|
|
|
651,202 |
|
Total liabilities and shareholders’ equity |
$ |
1,593,059 |
|
|
$ |
1,578,746 |
|
MYR GROUP INC.Unaudited
Consolidated Statements of OperationsThree and
Nine Months Ended
September 30, 2024 and
2023
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
(in thousands, except per share data) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Contract revenues |
$ |
888,043 |
|
|
$ |
939,476 |
|
|
$ |
2,532,495 |
|
|
$ |
2,639,708 |
|
Contract costs |
|
810,755 |
|
|
|
847,093 |
|
|
|
2,328,121 |
|
|
|
2,372,806 |
|
Gross profit |
|
77,288 |
|
|
|
92,383 |
|
|
|
204,374 |
|
|
|
266,902 |
|
Selling, general and
administrative expenses |
|
57,456 |
|
|
|
59,879 |
|
|
|
181,528 |
|
|
|
174,618 |
|
Amortization of intangible
assets |
|
1,221 |
|
|
|
1,231 |
|
|
|
3,666 |
|
|
|
3,686 |
|
Gain on sale of property and
equipment |
|
(1,750) |
|
|
|
(754) |
|
|
|
(4,745) |
|
|
|
(3,293) |
|
Income from operations |
|
20,361 |
|
|
|
32,027 |
|
|
|
23,925 |
|
|
|
91,891 |
|
Other income (expense): |
|
|
|
|
|
|
|
Interest income |
|
73 |
|
|
|
226 |
|
|
|
296 |
|
|
|
740 |
|
Interest expense |
|
(2,016) |
|
|
|
(1,319) |
|
|
|
(4,311) |
|
|
|
(3,059) |
|
Other income (expense), net |
|
112 |
|
|
|
(91) |
|
|
|
(421) |
|
|
|
(61) |
|
Income before provision for income taxes |
|
18,530 |
|
|
|
30,843 |
|
|
|
19,489 |
|
|
|
89,511 |
|
Income tax expense |
|
7,881 |
|
|
|
9,331 |
|
|
|
5,178 |
|
|
|
22,563 |
|
Net income |
$ |
10,649 |
|
|
$ |
21,512 |
|
|
$ |
14,311 |
|
|
$ |
66,948 |
|
Income per common share: |
|
|
|
|
|
|
|
—Basic |
$ |
0.65 |
|
|
$ |
1.29 |
|
|
$ |
0.86 |
|
|
$ |
4.01 |
|
—Diluted |
$ |
0.65 |
|
|
$ |
1.28 |
|
|
$ |
0.86 |
|
|
$ |
3.98 |
|
Weighted average number of
common shares and potential common shares outstanding: |
|
|
|
|
|
|
|
—Basic |
|
16,283 |
|
|
|
16,710 |
|
|
|
16,582 |
|
|
|
16,678 |
|
—Diluted |
|
16,324 |
|
|
|
16,829 |
|
|
|
16,647 |
|
|
|
16,821 |
|
MYR GROUP INC.Unaudited
Consolidated Statements of Cash FlowsNine Months
Ended September 30, 2024
and 2023
|
Nine months endedSeptember
30, |
(in thousands) |
|
2024 |
|
|
|
2023 |
|
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
14,311 |
|
|
$ |
66,948 |
|
Adjustments to reconcile net income to net cash flows provided by
operating activities: |
|
|
|
Depreciation and amortization of property and equipment |
|
45,131 |
|
|
|
39,848 |
|
Amortization of intangible assets |
|
3,666 |
|
|
|
3,686 |
|
Stock-based compensation expense |
|
6,198 |
|
|
|
6,562 |
|
Deferred income taxes |
|
(144) |
|
|
|
— |
|
Gain on sale of property and equipment |
|
(4,745) |
|
|
|
(3,293) |
|
Other non-cash items |
|
1,044 |
|
|
|
564 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable, net |
|
(50,193) |
|
|
|
(76,349) |
|
Contract assets, net |
|
8,212 |
|
|
|
(109,803) |
|
Receivable for insurance claims in excess of deductibles |
|
(1,975) |
|
|
|
1,558 |
|
Other assets |
|
21,687 |
|
|
|
21,503 |
|
Accounts payable |
|
(20,607) |
|
|
|
62,276 |
|
Contract liabilities |
|
22,294 |
|
|
|
3,941 |
|
Accrued self-insurance |
|
(402) |
|
|
|
(1,119) |
|
Other liabilities |
|
21,519 |
|
|
|
12,070 |
|
Net cash flows provided by operating activities |
|
65,996 |
|
|
|
28,392 |
|
Cash flows from
investing activities: |
|
|
|
Proceeds from sale of property and equipment |
|
6,815 |
|
|
|
3,998 |
|
Purchases of property and equipment |
|
(63,634) |
|
|
|
(63,791) |
|
Net cash flows used in investing activities |
|
(56,819) |
|
|
|
(59,793) |
|
Cash flows from
financing activities: |
|
|
|
Borrowings under revolving lines of credit |
|
584,070 |
|
|
|
354,467 |
|
Repayments under revolving lines of credit |
|
(520,076) |
|
|
|
(328,085) |
|
Payment of principal obligations under equipment notes |
|
(7,049) |
|
|
|
(4,597) |
|
Payment of principal obligations under finance leases |
|
(2,083) |
|
|
|
(872) |
|
Proceeds from exercise of stock options |
|
— |
|
|
|
20 |
|
Repurchase of common stock |
|
(75,000) |
|
|
|
— |
|
Debt refinancing costs |
|
(34) |
|
|
|
(2,129) |
|
Payments related to tax withholding for stock-based
compensation |
|
(5,866) |
|
|
|
(7,936) |
|
Net cash flows provided by (used in) financing activities |
|
(26,038) |
|
|
|
10,868 |
|
Effect of exchange rate changes on cash |
|
(469) |
|
|
|
(36) |
|
Net decrease in cash and cash equivalents |
|
(17,330) |
|
|
|
(20,569) |
|
Cash and cash
equivalents: |
|
|
|
Beginning of period |
|
24,899 |
|
|
|
51,040 |
|
End of period |
$ |
7,569 |
|
|
$ |
30,471 |
|
MYR GROUP INC.Unaudited
Consolidated Selected Data,Unaudited Performance
Measure and Reconciliation of Non-GAAP MeasureFor
the Three, Nine and Twelve Months
Ended September 30, 2024
and 2023
andAs of
September 30, 2024,
December 31, 2023,
September 30, 2023 and
September 30, 2022
|
Three months endedSeptember
30, |
|
Last twelve months ended September
30, |
|
(dollars in thousands, except share and per share
data) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Summary Statement of
Operations Data: |
|
|
|
|
|
|
|
|
Contract revenues |
$ |
888,043 |
|
|
$ |
939,476 |
|
|
$ |
3,536,692 |
|
|
$ |
3,503,664 |
|
|
Gross profit |
$ |
77,288 |
|
|
$ |
92,383 |
|
|
$ |
301,869 |
|
|
$ |
363,171 |
|
|
Income from operations |
$ |
20,361 |
|
|
$ |
32,027 |
|
|
$ |
61,127 |
|
|
$ |
128,676 |
|
|
Income before provision for
income taxes |
$ |
18,530 |
|
|
$ |
30,843 |
|
|
$ |
54,982 |
|
|
$ |
125,285 |
|
|
Income tax expense |
$ |
7,881 |
|
|
$ |
9,331 |
|
|
$ |
16,629 |
|
|
$ |
33,764 |
|
|
Net income |
$ |
10,649 |
|
|
$ |
21,512 |
|
|
$ |
38,353 |
|
|
$ |
91,521 |
|
|
Tax rate |
|
42.5% |
|
|
|
30.3% |
|
|
|
30.2% |
|
|
|
26.9% |
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data: |
|
|
|
|
|
|
|
|
Income per common share: |
|
|
|
|
|
|
|
|
- Basic |
$ |
0.65 |
|
|
$ |
1.29 |
|
|
$ |
2.31 |
|
(1) |
|
$ |
5.49 |
|
(1) |
|
- Diluted |
$ |
0.65 |
|
|
$ |
1.28 |
|
|
$ |
2.29 |
|
(1) |
|
$ |
5.45 |
|
(1) |
|
Weighted average number of common shares and potential
common shares outstanding: |
|
|
|
|
|
|
|
|
- Basic |
|
16,283 |
|
|
|
16,710 |
|
|
|
16,611 |
|
(2) |
|
|
16,653 |
|
(2) |
|
- Diluted |
|
16,324 |
|
|
|
16,829 |
|
|
|
16,702 |
|
(2) |
|
|
16,812 |
|
(2) |
|
(in
thousands) |
September 30,2024 |
|
December 31,2023 |
|
September 30,2023 |
|
September 30,2022 |
Summary Balance Sheet
Data: |
|
|
|
|
|
|
|
Total assets |
$ |
1,593,059 |
|
$ |
1,578,746 |
|
$ |
1,560,733 |
|
$ |
1,329,956 |
Total shareholders’
equity |
$ |
588,509 |
|
$ |
651,202 |
|
$ |
625,459 |
|
$ |
535,877 |
Goodwill and intangible
assets |
$ |
195,047 |
|
$ |
200,469 |
|
$ |
199,518 |
|
$ |
204,275 |
Total funded debt (3) |
$ |
93,186 |
|
$ |
36,241 |
|
$ |
62,338 |
|
$ |
85,912 |
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
(dollars in
thousands) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Segment
Results: |
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
Contract revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transmission & Distribution |
$ |
481,876 |
|
|
54.3% |
|
|
$ |
548,595 |
|
|
58.4% |
|
|
$ |
1,430,480 |
|
|
56.5% |
|
|
$ |
1,497,655 |
|
|
56.7% |
|
Commercial &
Industrial |
|
406,167 |
|
|
45.7% |
|
|
|
390,881 |
|
|
41.6% |
|
|
|
1,102,015 |
|
|
43.5% |
|
|
|
1,142,053 |
|
|
43.3% |
|
Total |
$ |
888,043 |
|
|
100.0% |
|
|
$ |
939,476 |
|
|
100.0% |
|
|
$ |
2,532,495 |
|
|
100.0% |
|
|
$ |
2,639,708 |
|
|
100.0% |
|
Operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transmission &
Distribution |
$ |
17,568 |
|
|
3.6% |
|
|
$ |
36,262 |
|
|
6.6% |
|
|
$ |
39,104 |
|
|
2.7% |
|
|
$ |
106,817 |
|
|
7.1% |
|
Commercial &
Industrial |
|
20,309 |
|
|
5.0% |
|
|
|
13,932 |
|
|
3.6% |
|
|
|
33,340 |
|
|
3.0% |
|
|
|
37,182 |
|
|
3.3% |
|
Total |
$ |
37,877 |
|
|
4.3% |
|
|
$ |
50,194 |
|
|
5.3% |
|
|
$ |
72,444 |
|
|
2.9% |
|
|
$ |
143,999 |
|
|
5.5% |
|
Corporate |
|
(17,516) |
|
|
(2.0)% |
|
|
|
(18,167) |
|
|
(1.9)% |
|
|
|
(48,519) |
|
|
(1.9)% |
|
|
|
(52,108) |
|
|
(2.0)% |
|
Consolidated |
$ |
20,361 |
|
|
2.3% |
|
|
$ |
32,027 |
|
|
3.4% |
|
|
$ |
23,925 |
|
|
1.0% |
|
|
$ |
91,891 |
|
|
3.5% |
|
See notes at the end of this earnings release
MYR GROUP INC.Unaudited
Performance Measures and Reconciliation of Non-GAAP
MeasuresThree and Twelve Months Ended
September 30, 2024 and
2023
|
Three months endedSeptember
30, |
|
Last twelve months ended September
30, |
(in thousands, except share, per share data, ratios and
percentages) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
Financial Performance
Measures (4): |
|
|
|
|
|
|
|
EBITDA
(5) |
$ |
37,166 |
|
|
$ |
46,975 |
|
|
$ |
125,130 |
|
|
$ |
187,343 |
|
EBITDA per Diluted
Share (6) |
$ |
2.27 |
|
|
$ |
2.79 |
|
|
$ |
7.49 |
|
|
$ |
11.14 |
|
EBIA, net of taxes
(7) |
$ |
12,468 |
|
|
$ |
23,132 |
|
|
$ |
45,776 |
|
|
$ |
98,368 |
|
Free Cash Flow
(8) |
$ |
17,952 |
|
|
$ |
(9,513) |
|
|
$ |
24,041 |
|
|
$ |
29,825 |
|
Book Value per Period
End Share (9) |
$ |
36.41 |
|
|
$ |
37.17 |
|
|
|
|
|
Tangible Book Value
(10) |
$ |
393,462 |
|
|
$ |
425,941 |
|
|
|
|
|
Tangible Book Value
per Period End Share (11) |
$ |
24.34 |
|
|
$ |
25.31 |
|
|
|
|
|
Funded Debt to Equity
Ratio (12) |
|
0.16 |
|
|
|
0.10 |
|
|
|
|
|
Asset Turnover
(13) |
|
|
|
|
|
2.27 |
|
|
|
2.63 |
|
Return on Assets
(14) |
|
|
|
|
|
2.5% |
|
|
|
6.9% |
|
Return on Equity
(15) |
|
|
|
|
|
6.1% |
|
|
|
17.1% |
|
Return on Invested
Capital (16) |
|
|
|
|
|
6.9% |
|
|
|
15.8% |
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Measures: |
|
|
|
|
|
|
|
Reconciliation of Net
Income to EBITDA: |
|
|
|
|
|
|
|
Net income |
$ |
10,649 |
|
|
$ |
21,512 |
|
|
$ |
38,353 |
|
|
$ |
91,521 |
|
Interest expense, net |
|
1,943 |
|
|
|
1,093 |
|
|
|
5,747 |
|
|
|
3,518 |
|
Income tax expense |
|
7,881 |
|
|
|
9,331 |
|
|
|
16,629 |
|
|
|
33,764 |
|
Depreciation and amortization |
|
16,693 |
|
|
|
15,039 |
|
|
|
64,401 |
|
|
|
58,540 |
|
EBITDA
(5) |
$ |
37,166 |
|
|
$ |
46,975 |
|
|
$ |
125,130 |
|
|
$ |
187,343 |
|
|
|
|
|
|
|
|
|
Reconciliation of Net
Income per Diluted Share to EBITDA per Diluted Share: |
|
|
|
|
|
|
|
Net income per share |
$ |
0.65 |
|
|
$ |
1.28 |
|
|
$ |
2.29 |
|
|
$ |
5.45 |
|
Interest expense, net, per share |
|
0.12 |
|
|
|
0.07 |
|
|
|
0.34 |
|
|
|
0.21 |
|
Income tax expense per share |
|
0.48 |
|
|
|
0.55 |
|
|
|
1.00 |
|
|
|
2.00 |
|
Depreciation and amortization per share |
|
1.02 |
|
|
|
0.89 |
|
|
|
3.86 |
|
|
|
3.48 |
|
EBITDA per Diluted
Share (6) |
$ |
2.27 |
|
|
$ |
2.79 |
|
|
$ |
7.49 |
|
|
$ |
11.14 |
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP measure: |
|
|
|
|
|
|
|
Net income |
$ |
10,649 |
|
|
$ |
21,512 |
|
|
$ |
38,353 |
|
|
$ |
91,521 |
|
Interest expense, net |
|
1,943 |
|
|
|
1,093 |
|
|
|
5,747 |
|
|
|
3,518 |
|
Amortization of intangible assets |
|
1,221 |
|
|
|
1,231 |
|
|
|
4,887 |
|
|
|
5,848 |
|
Tax impact of interest and amortization of intangible assets |
|
(1,345) |
|
|
|
(704) |
|
|
|
(3,211) |
|
|
|
(2,519) |
|
EBIA, net of taxes
(7) |
$ |
12,468 |
|
|
$ |
23,132 |
|
|
$ |
45,776 |
|
|
$ |
98,368 |
|
|
|
|
|
|
|
|
|
Calculation of Free
Cash Flow: |
|
|
|
|
|
|
|
Net cash flow from operating
activities |
$ |
35,625 |
|
|
$ |
12,548 |
|
|
$ |
108,620 |
|
|
$ |
122,150 |
|
Less: cash used in purchasing property and equipment |
|
(17,673) |
|
|
|
(22,061) |
|
|
|
(84,579) |
|
|
|
(92,325) |
|
Free Cash Flow
(8) |
$ |
17,952 |
|
|
$ |
(9,513) |
|
|
$ |
24,041 |
|
|
$ |
29,825 |
|
|
|
|
|
|
|
|
|
See notes at the end of this earnings
release.MYR GROUP INC.Unaudited
Performance Measures and Reconciliation of Non-GAAP
MeasuresAs of September 30,
2024, 2023
and 2022
(in thousands, except
per share amounts) |
September 30, 2024 |
|
September 30, 2023 |
Reconciliation of Book
Value to Tangible Book Value: |
|
|
|
Book value (total shareholders' equity) |
$ |
588,509 |
|
|
$ |
625,459 |
|
Goodwill and intangible assets |
|
(195,047) |
|
|
|
(199,518) |
|
Tangible Book Value
(10) |
$ |
393,462 |
|
|
$ |
425,941 |
|
|
|
|
|
Reconciliation of Book
Value per Period End Share to Tangible Book Value per Period End
Share: |
|
|
|
Book value per period end share |
$ |
36.41 |
|
|
$ |
37.17 |
|
Goodwill and intangible assets per period end share |
|
(12.07) |
|
|
|
(11.86) |
|
Tangible Book Value
per Period End Share (11) |
$ |
24.34 |
|
|
$ |
25.31 |
|
|
|
|
|
Calculation of Period
End Shares: |
|
|
|
Shares outstanding |
|
16,122 |
|
|
|
16,710 |
|
Plus: common equivalents |
|
41 |
|
|
|
119 |
|
Period End Shares
(17) |
|
16,163 |
|
|
|
16,829 |
|
(in
thousands) |
September 30, 2024 |
|
September 30, 2023 |
|
September 30, 2022 |
Reconciliation of
Invested Capital to Shareholders Equity: |
|
|
|
|
|
Book value (total shareholders' equity) |
$ |
588,509 |
|
|
$ |
625,459 |
|
|
$ |
535,877 |
|
Plus: total funded debt |
|
93,186 |
|
|
|
62,338 |
|
|
|
85,912 |
|
Less: cash and cash equivalents |
|
(7,569) |
|
|
|
(30,471) |
|
|
|
(35,767) |
|
Invested Capital |
$ |
674,126 |
|
|
$ |
657,326 |
|
|
$ |
586,022 |
|
Average Invested
Capital (18) |
$ |
665,726 |
|
|
$ |
621,674 |
|
|
|
See notes at the end of this earnings
release.
(1) Last-twelve-months earnings per share is the sum of earnings
per share reported in the last four quarters.(2) Last-twelve-months
weighted average basic and diluted shares were determined by adding
the weighted average shares reported for the last four quarters and
dividing by four.(3) Funded debt includes outstanding borrowings
under our revolving credit facility and our outstanding equipment
notes.(4) 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.(5)
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 our
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 our
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.(6) 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.(7) 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.(8) 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.(9) 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.(10) Tangible book
value is calculated by subtracting goodwill and intangible assets
outstanding at the end of the period from shareholders’ equity.
Tangible book value is not recognized under GAAP and does not
purport to be an alternative to book value or shareholders’
equity.(11) 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.(12) 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.(13) Asset turnover is calculated by dividing the
current period revenue by total assets at the beginning of the
period.(14) Return on assets is calculated by dividing net income
for the period by total assets at the beginning of the period.(15)
Return on equity is calculated by dividing net income for the
period by total shareholders’ equity at the beginning of the
period.(16) 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.(17) Period end shares is calculated by adding average
common stock equivalents for the quarter to the period end balance
of common stock 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.(18) 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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