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 western Canada, today announced
its second-quarter and first-half 2018 financial results.
Highlights
- Second quarter revenues of $339.7 million
- Second quarter net income of $6.8 million
- Backlog of $1.01 billion, an all-time high
- Acquired the Huen Companies on July 2, 2018 for approximately
$47.1 million
Management CommentsRick Swartz, MYR’s President
and CEO, said, “Our second-quarter 2018 financial results included
increases in gross profit, earnings per share, net income and
EBITDA as compared to the second quarter of 2017. Our backlog in
the second quarter reached a new record high of $1.01 billion
consisting of short and long-term projects in both our T&D and
C&I segments. As we continue to expect future strength in both
markets, we believe our strong position and active bidding climates
should continue to support efficiencies in our operations and drive
further growth.” Mr. Swartz added, “On July 2nd we completed the
acquisition of the Huen Companies which will expand our C&I
services and geographic reach for delivering cost effective
solutions to both new and existing customers. I am pleased to
welcome these strong performing companies to the MYR Group.”
Second Quarter ResultsMYR reported
second-quarter 2018 revenues of $339.7 million, a decrease of $16.5
million, or 4.6 percent, compared to the second quarter of 2017.
Specifically, the T&D segment reported revenues of $196.9
million, a decrease of $42.9 million, or 17.9 percent, from the
second quarter of 2017, primarily due to lower revenue from large
transmission projects. The C&I segment reported second-quarter
2018 revenues of $142.8 million, an increase of $26.4 million, or
22.6 percent, from the second quarter of 2017, primarily due to
increased spending from new and existing customers and increased
volume at certain organic expansion locations.
Consolidated gross profit increased to $38.6 million in the
second quarter of 2018, compared to $27.5 million in the second
quarter of 2017. The increase in gross profit was primarily due to
increased margins. Gross margin increased to 11.4 percent for the
second quarter of 2018 from 7.7 percent for the second quarter of
2017. The increase in gross margin was largely due to improvements
in efficiency compared to the second quarter of 2017, which was
significantly impacted by write-downs on three projects, and also
to a favorable claim settlement during the second quarter of 2018.
These margin improvements were partially offset by a write-down on
a project due to inclement weather, lower productivity and ongoing
negotiations relating to a contract termination. Changes in
estimates of gross profit on certain projects, including those
discussed above, resulted in a gross margin increase of 0.1 percent
for the second quarter of 2018. Gross margin decreased 2.1 percent
due to changes in estimates of gross profit on certain projects for
the second quarter of 2017.
Selling, general and administrative expenses (“SG&A”)
increased to $29.2 million in the second quarter of 2018, compared
to $25.0 million in the second quarter of 2017. The
period-over-period increase was primarily due to higher bonus and
profit sharing costs. As a percentage of revenues, SG&A
increased to 8.6 percent for the second quarter of 2018 from 7.0
percent for the second quarter of 2017.
Income tax expense was $2.8 million for the second quarter of
2018, with an effective tax rate of 28.8 percent, compared to a
provision of $2.5 million for the second quarter of 2017, with an
effective tax rate of 67.3 percent. The effective tax rate for the
second quarter of 2018 benefited from the enactment of the United
States Tax Cuts and Jobs Act in 2017. Our inability to utilize
losses experienced in certain Canadian operations negatively
impacted the effective tax rate in the second quarter of both 2018
and 2017.
For the second quarter of 2018, net income was $6.8 million, or
$0.41 per diluted share, compared to $1.2 million, or $0.07 per
diluted share, for the same period of 2017. Second-quarter 2018
EBITDA, a non-GAAP financial measure, was $19.8 million, or 5.8
percent of revenues, compared to $14.1 million, or 3.9 percent of
revenues, in the second quarter of 2017.
First-Half ResultsMYR reported first-half 2018
revenues of $685.3 million, an increase of $29.0 million, or 4.4
percent, compared to first-half 2017. Specifically, the T&D
segment reported revenues of $413.3 million, a decrease of $22.2
million, or 5.1 percent, from the first half of 2017, due primarily
to lower revenue from large transmission projects partially offset
by an increase in distribution revenues. The C&I segment
reported first-half 2018 revenues of $272.0 million, an increase of
$51.2 million, or 23.2 percent, from first-half 2017, due primarily
to increased spending from new and existing customers and increased
volume at certain organic expansion locations.
Consolidated gross profit increased to $74.4 million in the
first half of 2018, compared to $53.3 million in the first half of
2017. The increase in gross profit was primarily due to higher
revenues and increased margins. Gross margin increased to 10.9
percent for the first half of 2018 from 8.1 percent for the first
half of 2017. The increase in gross margin was largely due to
improvements in efficiency compared to the first half of 2017,
which was significantly impacted by write-downs on three projects,
and also to a favorable claim settlement during the second quarter
of 2018. These margin improvements were partially offset by a
write-down on a project due to inclement weather, lower
productivity and ongoing negotiations relating to a contract
termination. Changes in estimates of gross profit on certain
projects, including those discussed above, resulted in a gross
margin increase of 0.1 percent for the first half of 2018. Gross
margin decreased 1.0 percent due to changes in estimates of gross
profit on certain projects for the first half of 2017.
SG&A increased to $57.4 million in the first half of 2018,
compared to $50.8 million in the first half of 2017. The
year-over-year increase was primarily due to higher bonus and
profit sharing costs. As a percentage of revenues, SG&A
increased to 8.4 percent for the first half of 2018 from 7.7
percent for the first half of 2017.
Other income was $0.3 million for the first half of 2018
compared to $1.6 million in the first half of 2017. The change was
primarily attributable to contingent consideration related to
margin guarantees on certain contracts associated with the
acquisition of Western Pacific Enterprises Ltd. recognized in the
first half of 2017.
The income tax provision was $5.1 million for the first half of
2018, with an effective tax rate of 28.8 percent, compared to a
provision of $2.2 million for the first half of 2017, with an
effective tax rate of 47.2 percent. The decrease in the tax rate in
the first half of 2018 was primarily caused by the enactment of the
United States Tax Cuts and Jobs Act in 2017. Our inability to
utilize losses experienced in certain Canadian operations
negatively impacted the effective tax rate in the first half of
both 2018 and 2017. The tax rate in the first half of 2017
benefited from excess tax benefits pertaining to the vesting of
stock awards and the exercise of stock options.
For the first half of 2018, net income was $12.5 million, or
$0.75 per diluted share, compared to $2.4 million, or $0.15 per
diluted share, for the same period of 2017. First-half 2018 EBITDA,
a non-GAAP financial measure, was $37.9 million, or 5.5 percent of
revenues, compared to $25.2 million, or 3.8 percent of revenues, in
the first half of 2017.
Acquisition of the Huen CompaniesOn July 2,
2018, the Company completed the acquisition of substantially all of
the assets of Huen Electric, Inc., Huen Electric New Jersey Inc.
and Huen New York, Inc. (collectively, the “Huen Companies”). The
Huen Companies are leading electrical construction firms with
offices in Illinois, New Jersey and New York. The transaction
closed on July 2, 2018 and was valued at approximately $47.1
million, subject to working capital and net asset adjustments.
Additionally, there could also be contingent payments based on the
successful achievement of certain performance targets.
Share Repurchase Program MYR’s current share
repurchase program will expire on August 15, 2018. On July 26,
2018, the Board of Directors approved a new $20 million share
repurchase program that will begin when our current program
expires. The new share repurchase program will continue in effect
through August 15, 2019 or until the authorized funds are
exhausted.
Backlog As of June 30, 2018, MYR's backlog was
$1.013 billion, which represented an increase of $54.9 million, or
5.7 percent, compared to March 31, 2018. Specifically, in the same
period, T&D backlog increased $48.6 million, or 11.2 percent,
to $482.9 million, while C&I backlog increased $6.3 million, or
1.2 percent, to $530.5. Total backlog at June 30, 2018 increased
$380.9 million, or 60.2 percent, from the $632.5 million reported
at June 30, 2017.
Balance Sheet As of June 30, 2018, MYR had
$171.5 million of borrowing availability under its credit
facility.
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 second-quarter 2018 results on Thursday, August 2,
2018, at 9:00 a.m. Central time. To participate in the conference
call via telephone, please dial (877) 561-2750 (domestic) or (763)
416-8565 (international) at least five minutes prior to the start
of the event. A replay of the conference call will be available
through Thursday, August 9, 2018, at 11:59 p.m. Eastern time, by
dialing (855) 859-2056 or (404) 537-3406, and entering conference
ID 6167708. MYR will also broadcast the conference call live via
the internet. Interested parties may access the webcast through the
Investor Relations section of MYR's website at www.myrgroup.com.
Please access the website at least 15 minutes prior to the start of
the call to register, download and install any necessary audio
software. The webcast will be available until Thursday, August 9,
2018, at 11:59 P.M. Eastern time.
About MYRMYR is a holding company of leading
specialty contractors serving the electric utility infrastructure,
commercial and industrial construction markets throughout the
United States and western Canada who have the experience and
expertise to complete electrical installations of any type and
size. Their comprehensive services on electric transmission and
distribution networks and substation facilities include design,
engineering, procurement, construction, upgrade, maintenance and
repair services. Transmission and distribution customers include
investor-owned utilities, cooperatives, private developers,
government-funded utilities, independent power producers,
independent transmission companies, industrial facility owners and
other contractors. Commercial and industrial electrical contracting
services are provided to general contractors, commercial and
industrial facility owners, local governments and developers
generally throughout the western and northeastern United States and
western Canada. 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 for the fiscal year ended
December 31, 2017, 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:Betty R. Johnson, Chief
Financial Officer, 847-290-1891, investorinfo@myrgroup.com
Investor Contact: Steve Carr, Dresner Corporate
Services, 312-780-7211, scarr@dresnerco.com
Financial tables follow...
|
MYR GROUP INC. |
Consolidated Balance
Sheets |
As of June 30, 2018
and December 31, 2017 |
|
|
|
|
|
June 30, |
|
December 31, |
(In thousands,
except share and per share data) |
2018 |
|
2017 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
4,203 |
|
|
$ |
5,343 |
|
Accounts receivable, net of allowances of $568 and $605,
respectively |
|
280,018 |
|
|
|
283,008 |
|
Costs and estimated earnings in excess of billings on
uncompleted contracts |
|
87,356 |
|
|
|
78,260 |
|
Current portion of receivable for insurance claims in excess
of deductibles |
|
4,380 |
|
|
|
4,221 |
|
Refundable income taxes, net |
|
— |
|
|
|
391 |
|
Other current assets |
|
7,565 |
|
|
|
8,513 |
|
Total current assets |
|
383,522 |
|
|
|
379,736 |
|
Property and equipment, net of accumulated depreciation of
$242,985 and $231,391, respectively |
|
155,571 |
|
|
|
148,084 |
|
Goodwill |
|
46,984 |
|
|
|
46,994 |
|
Intangible assets, net of accumulated amortization of $5,423
and $5,183, respectively |
|
10,592 |
|
|
|
10,852 |
|
Receivable for insurance claims in excess of
deductibles |
|
14,466 |
|
|
|
14,295 |
|
Investment in joint ventures |
|
908 |
|
|
|
168 |
|
Other assets |
|
3,551 |
|
|
|
3,659 |
|
Total assets |
$ |
615,594 |
|
|
$ |
603,788 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current portion of capital lease obligations |
$ |
1,102 |
|
|
$ |
1,086 |
|
Accounts payable |
|
98,804 |
|
|
|
110,383 |
|
Billings in excess of costs and estimated earnings on
uncompleted contracts |
|
48,407 |
|
|
|
28,919 |
|
Current portion of accrued self-insurance |
|
13,016 |
|
|
|
13,138 |
|
Income taxes payable, net |
|
1,857 |
|
|
|
— |
|
Other current liabilities |
|
43,536 |
|
|
|
35,038 |
|
Total current liabilities |
|
206,722 |
|
|
|
188,564 |
|
Deferred income tax liabilities |
|
13,818 |
|
|
|
13,452 |
|
Long-term debt |
|
57,804 |
|
|
|
78,960 |
|
Accrued self-insurance |
|
32,093 |
|
|
|
32,225 |
|
Capital lease obligations, net of current maturities |
|
2,068 |
|
|
|
2,629 |
|
Other liabilities |
|
464 |
|
|
|
919 |
|
Total liabilities |
|
312,969 |
|
|
|
316,749 |
|
Commitments and contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred
stock—$0.01 par value per share; 4,000,000 authorized shares; |
|
|
|
none issued and outstanding at June 30, 2018 and December 31,
2017 |
|
— |
|
|
|
— |
|
Common
stock—$0.01 par value per share; 100,000,000 authorized
shares; |
|
|
|
16,565,333 and 16,464,757 shares issued and outstanding at
June 30, 2018 and December 31, 2017, respectively |
|
165 |
|
|
|
163 |
|
Additional paid-in capital |
|
146,610 |
|
|
|
143,934 |
|
Accumulated other comprehensive loss |
|
(300 |
) |
|
|
(299 |
) |
Retained earnings |
|
156,150 |
|
|
|
143,241 |
|
Total stockholders’ equity |
|
302,625 |
|
|
|
287,039 |
|
Total liabilities and stockholders’ equity |
$ |
615,594 |
|
|
$ |
603,788 |
|
|
|
|
|
|
MYR GROUP INC. |
Unaudited Consolidated Statements
of Operations and Comprehensive Income |
Three and Six Months Ended June
30, 2018 and 2017 |
|
|
|
|
|
Three months ended |
|
Six months ended |
June
30, |
|
June
30, |
(In thousands, except per share data) |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
Contract revenues |
$ |
339,676 |
|
|
$ |
356,185 |
|
|
$ |
685,287 |
|
|
$ |
656,314 |
|
Contract costs |
|
301,046 |
|
|
|
328,668 |
|
|
|
610,904 |
|
|
|
603,057 |
|
Gross profit |
|
38,630 |
|
|
|
27,517 |
|
|
|
74,383 |
|
|
|
53,257 |
|
Selling, general and administrative expenses |
|
29,168 |
|
|
|
25,024 |
|
|
|
57,448 |
|
|
|
50,803 |
|
Amortization of intangible assets |
|
119 |
|
|
|
210 |
|
|
|
236 |
|
|
|
398 |
|
Gain on sale of property and equipment |
|
(1,014 |
) |
|
|
(1,319 |
) |
|
|
(2,065 |
) |
|
|
(2,026 |
) |
Income from operations |
|
10,357 |
|
|
|
3,602 |
|
|
|
18,764 |
|
|
|
4,082 |
|
Other income (expense) |
|
|
|
|
|
|
|
Interest income |
|
— |
|
|
|
3 |
|
|
|
— |
|
|
|
4 |
|
Interest expense |
|
(783 |
) |
|
|
(594 |
) |
|
|
(1,504 |
) |
|
|
(1,108 |
) |
Other, net |
|
25 |
|
|
|
751 |
|
|
|
274 |
|
|
|
1,625 |
|
Income before provision for income taxes |
|
9,599 |
|
|
|
3,762 |
|
|
|
17,534 |
|
|
|
4,603 |
|
Income tax expense |
|
2,764 |
|
|
|
2,532 |
|
|
|
5,055 |
|
|
|
2,173 |
|
Net income |
$ |
6,835 |
|
|
$ |
1,230 |
|
|
$ |
12,479 |
|
|
$ |
2,430 |
|
Income per common share: |
|
|
|
|
|
|
|
—Basic |
$ |
0.42 |
|
|
$ |
0.08 |
|
|
$ |
0.76 |
|
|
$ |
0.15 |
|
—Diluted |
$ |
0.41 |
|
|
$ |
0.07 |
|
|
$ |
0.75 |
|
|
$ |
0.15 |
|
Weighted average number of common shares and potential common
shares outstanding: |
|
|
|
|
|
|
|
—Basic |
|
16,455 |
|
|
|
16,312 |
|
|
|
16,388 |
|
|
|
16,237 |
|
—Diluted |
|
16,592 |
|
|
|
16,503 |
|
|
|
16,555 |
|
|
|
16,476 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
6,835 |
|
|
$ |
1,230 |
|
|
$ |
12,479 |
|
|
$ |
2,430 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
16 |
|
|
|
59 |
|
|
|
(1 |
) |
|
|
10 |
|
Other comprehensive income (loss) |
|
16 |
|
|
|
59 |
|
|
|
(1 |
) |
|
|
10 |
|
Total comprehensive income |
$ |
6,851 |
|
|
$ |
1,289 |
|
|
$ |
12,478 |
|
|
$ |
2,440 |
|
|
|
|
|
|
|
|
|
|
MYR GROUP INC. |
Unaudited Consolidated Statements
of Cash Flows |
Six Months Ended June 30, 2018 and
2017 |
|
|
Six months ended |
June
30, |
(In thousands) |
|
2018 |
|
|
|
2017 |
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
Net income |
$ |
12,479 |
|
|
$ |
2,430 |
|
Adjustments to reconcile net income to net cash flows
provided by operating activities: |
|
|
|
Depreciation and amortization of property and equipment |
|
18,590 |
|
|
|
19,055 |
|
Amortization of intangible assets |
|
236 |
|
|
|
398 |
|
Stock-based compensation expense |
|
1,478 |
|
|
|
2,560 |
|
Deferred income taxes |
|
323 |
|
|
|
(209 |
) |
Gain on sale of property and equipment |
|
(2,065 |
) |
|
|
(2,026 |
) |
Other non-cash items |
|
354 |
|
|
|
(289 |
) |
Changes in operating assets and liabilities |
|
|
|
Accounts receivable, net |
|
1,950 |
|
|
|
13,346 |
|
Costs and estimated earnings in excess of billings on |
|
|
|
uncompleted contracts |
|
(9,350 |
) |
|
|
(22,707 |
) |
Receivable for insurance claims in excess of
deductibles |
|
(330 |
) |
|
|
(99 |
) |
Other assets |
|
2,144 |
|
|
|
(626 |
) |
Accounts payable |
|
(9,845 |
) |
|
|
15,357 |
|
Billings in excess of costs and estimated earnings on |
|
|
|
uncompleted contracts |
|
19,564 |
|
|
|
(445 |
) |
Accrued self insurance |
|
(239 |
) |
|
|
2,745 |
|
Other liabilities |
|
9,977 |
|
|
|
(10,310 |
) |
Net cash flows provided by operating activities |
|
45,266 |
|
|
|
19,180 |
|
Cash flows from investing
activities: |
|
|
|
Proceeds from sale of property and equipment |
|
2,426 |
|
|
|
2,466 |
|
Purchases of property and equipment |
|
(28,019 |
) |
|
|
(20,598 |
) |
Net cash flows used in investing activities |
|
(25,593 |
) |
|
|
(18,132 |
) |
Cash flows from financing
activities: |
|
|
|
Net repayments under revolving lines of credit |
|
(21,156 |
) |
|
|
(14,193 |
) |
Payment of principal obligations under capital leases |
|
(545 |
) |
|
|
(516 |
) |
Proceeds from exercise of stock options |
|
1,887 |
|
|
|
1,134 |
|
Repurchase of common shares |
|
(951 |
) |
|
|
(2,208 |
) |
Other financing activities |
|
10 |
|
|
|
28 |
|
Net cash flows used in financing activities |
|
(20,755 |
) |
|
|
(15,755 |
) |
Effect of exchange rate changes on cash |
|
(58 |
) |
|
|
887 |
|
Net decrease in cash and cash equivalents |
|
(1,140 |
) |
|
|
(13,820 |
) |
Cash and cash
equivalents: |
|
|
|
Beginning of period |
|
5,343 |
|
|
|
23,846 |
|
End of period |
$ |
4,203 |
|
|
$ |
10,026 |
|
|
|
|
|
|
MYR GROUP INC. |
Unaudited Consolidated Selected Data and Net
Income Per Share |
Three and Twelve Months Ended June 30, 2018
and 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Last twelve months
ended |
|
|
|
|
|
|
|
June
30, |
|
June
30, |
|
(in thousands,
except share and per share
data) |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Statement of Operations Data: |
|
|
|
|
|
|
|
|
Contract
revenues |
$ |
339,676 |
|
|
$ |
356,185 |
|
|
$ |
1,432,290 |
|
|
|
$ |
1,283,233 |
|
|
Gross profit |
$ |
38,630 |
|
|
$ |
27,517 |
|
|
$ |
146,130 |
|
|
|
$ |
129,264 |
|
|
Income from
operations |
$ |
10,357 |
|
|
$ |
3,602 |
|
|
$ |
44,240 |
|
|
|
$ |
30,387 |
|
|
Income
before provision for income taxes |
$ |
9,599 |
|
|
$ |
3,762 |
|
|
$ |
37,571 |
|
|
|
$ |
30,863 |
|
|
Income Tax Expense |
$ |
2,764 |
|
|
$ |
2,532 |
|
|
$ |
6,368 |
|
|
|
$ |
14,489 |
|
|
Net
income |
$ |
6,835 |
|
|
$ |
1,230 |
|
|
$ |
31,203 |
|
|
|
$ |
16,374 |
|
|
Tax rate |
|
|
|
28.8 |
% |
|
|
67.3 |
% |
|
|
16.9 |
% |
|
|
|
46.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per
Share Data: |
|
|
|
|
|
|
|
|
Income per common
share: |
|
|
|
|
|
|
|
|
- Basic |
|
|
$ |
0.42 |
|
|
$ |
0.08 |
|
|
$ |
1.92 |
|
(1 |
) |
|
$ |
1.03 |
|
(1 |
) |
- Diluted |
|
|
$ |
0.41 |
|
|
$ |
0.07 |
|
|
$ |
1.88 |
|
(1 |
) |
|
$ |
1.00 |
|
(1 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of common
shares and potential common
shares outstanding : |
|
|
|
|
|
|
|
|
- Basic |
|
|
|
16,455 |
|
|
|
16,312 |
|
|
|
16,348 |
|
(2 |
) |
|
|
16,063 |
|
(2 |
) |
- Basic |
|
|
|
16,592 |
|
|
|
16,503 |
|
|
|
16,529 |
|
(2 |
) |
|
|
16,369 |
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30, |
|
December
31, |
|
June
30, |
|
June
30, |
|
(in
thousands) |
2018 |
|
2017 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Balance Sheet
Data: |
|
|
|
|
|
|
|
|
Total assets |
$ |
615,594 |
|
|
$ |
603,788 |
|
|
$ |
569,857 |
|
|
|
$ |
471,675 |
|
|
Total
stockholders' equity (book value) |
$ |
302,625 |
|
|
$ |
287,039 |
|
|
$ |
267,128 |
|
|
|
$ |
245,687 |
|
|
Goodwill
and intangible assets |
$ |
57,576 |
|
|
$ |
57,846 |
|
|
$ |
57,971 |
|
|
|
$ |
57,986 |
|
|
Total funded debt |
$ |
57,804 |
|
|
$ |
78,960 |
|
|
$ |
44,878 |
|
|
|
$ |
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Last twelve months
ended |
|
|
|
|
|
|
|
|
|
|
|
June
30, |
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
|
2017 |
|
|
Financial Performance Measures
(3): |
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP
measures: |
|
|
|
|
|
|
|
|
Net
income |
|
|
|
|
$ |
31,203 |
|
|
|
$ |
16,374 |
|
|
Interest expense, net |
|
|
|
|
|
2,999 |
|
|
|
|
1,978 |
|
|
Tax impact of interest |
|
|
|
|
|
(507 |
) |
|
|
|
(928 |
) |
|
EBIT, net of taxes
(4) |
|
|
|
|
$ |
33,695 |
|
|
|
$ |
17,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 June 30, 2018
and 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Last twelve months
ended |
|
|
|
|
|
|
|
June
30, |
|
June
30, |
|
(in thousands, except share, per share data, ratios and
percentages) |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Performance Measures
(3): |
|
|
|
|
|
|
|
|
EBITDA (5) |
$ |
19,816 |
|
|
$ |
14,060 |
|
|
$ |
78,519 |
|
|
|
$ |
71,726 |
|
|
EBITDA per Diluted Share
(6) |
$ |
1.19 |
|
|
$ |
0.85 |
|
|
$ |
4.75 |
|
|
|
$ |
4.39 |
|
|
Free Cash Flow (7) |
$ |
9,711 |
|
|
$ |
(4,476 |
) |
|
$ |
(21,376 |
) |
|
|
$ |
(6,524 |
) |
|
Book Value per Period End Share
(8) |
$ |
18.12 |
|
|
$ |
16.01 |
|
|
|
|
|
|
Tangible Book Value
(9) |
$ |
245,049 |
|
|
$ |
209,157 |
|
|
|
|
|
|
Tangible Book Value per Period End Share
(10) |
$ |
14.67 |
|
|
$ |
12.54 |
|
|
|
|
|
|
Funded Debt to Equity
Ratio
(11) |
|
0.19 |
|
|
|
0.17 |
|
|
|
|
|
|
Asset Turnover
(12) |
|
|
|
|
|
2.51 |
|
|
|
|
2.72 |
|
|
Return on Assets
(13) |
|
|
|
|
|
5.5 |
% |
|
|
|
3.5 |
% |
|
Return on Equity
(14) |
|
|
|
|
|
11.7 |
% |
|
|
|
6.7 |
% |
|
Return on Invested Capital
(17) |
|
|
|
|
|
11.2 |
% |
|
|
|
6.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP
Measures: |
|
|
|
|
|
|
|
|
Reconciliation of Net Income to
EBITDA: |
|
|
|
|
|
|
|
|
Net
income |
$ |
6,835 |
|
|
$ |
1,230 |
|
|
$ |
31,203 |
|
|
|
$ |
16,374 |
|
|
Interest expense, net |
|
783 |
|
|
|
591 |
|
|
|
2,999 |
|
|
|
|
1,978 |
|
|
Provision for income taxes |
|
2,764 |
|
|
|
2,532 |
|
|
|
6,368 |
|
|
|
|
14,489 |
|
|
Depreciation and amortization |
|
9,434 |
|
|
|
9,707 |
|
|
|
37,949 |
|
|
|
|
38,885 |
|
|
EBITDA (5) |
$ |
19,816 |
|
|
$ |
14,060 |
|
|
$ |
78,519 |
|
|
|
$ |
71,726 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income per Diluted
Share to EBITDA per Diluted
Share: |
|
|
|
|
|
|
|
|
Net Income
per share: |
$ |
0.41 |
|
|
$ |
0.07 |
|
|
$ |
1.88 |
|
|
|
$ |
1.00 |
|
|
Interest expense, net, per share |
|
0.05 |
|
|
|
0.04 |
|
|
|
0.18 |
|
|
|
|
0.12 |
|
|
Provision for income taxes per share |
|
0.17 |
|
|
|
0.15 |
|
|
|
0.39 |
|
|
|
|
0.89 |
|
|
Depreciation and amortization per share |
|
0.56 |
|
|
|
0.59 |
|
|
|
2.30 |
|
|
|
|
2.38 |
|
|
EBITDA per Diluted Share (6) |
$ |
1.19 |
|
|
$ |
0.85 |
|
|
$ |
4.75 |
|
|
|
$ |
4.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Free Cash
Flow: |
|
|
|
|
|
|
|
|
Net cash
flow from operating activities |
$ |
23,233 |
|
|
$ |
6,120 |
|
|
$ |
16,888 |
|
|
|
$ |
27,208 |
|
|
Less: cash used in purchasing property and equipment |
|
(13,522 |
) |
|
|
(10,596 |
) |
|
|
(38,264 |
) |
|
|
|
(33,732 |
) |
|
Free Cash Flow (7) |
$ |
9,711 |
|
|
$ |
(4,476 |
) |
|
$ |
(21,376 |
) |
|
|
$ |
(6,524 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Book Value to Tangible Book
Value: |
|
|
|
|
|
|
|
|
Book value
(total stockholders' equity) |
$ |
302,625 |
|
|
$ |
267,128 |
|
|
|
|
|
|
Goodwill and intangible assets |
|
(57,576 |
) |
|
|
(57,971 |
) |
|
|
|
|
|
Tangible Book Value
(9) |
$ |
245,049 |
|
|
$ |
209,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Book Value per Period End
Share to Tangible Book Value per Period End
Share: |
|
|
|
|
|
|
|
|
Book value per period end share |
$ |
18.12 |
|
|
$ |
16.01 |
|
|
|
|
|
|
Goodwill and intangible assets per period end share |
|
(3.45 |
) |
|
|
(3.47 |
) |
|
|
|
|
|
Tangible Book Value per Period End Share
(10) |
$ |
14.67 |
|
|
$ |
12.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Period End
Shares: |
|
|
|
|
|
|
|
|
Shares
Outstanding |
|
16,565 |
|
|
|
16,492 |
|
|
|
|
|
|
Plus: Common Equivalents |
|
137 |
|
|
|
191 |
|
|
|
|
|
|
Period End Shares
(15) |
|
16,702 |
|
|
|
16,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30, |
|
June
30, |
|
June
30, |
|
|
|
|
|
|
|
|
|
2018 |
|
2017 |
|
2016 |
|
Reconciliation of Invested Capital to Shareholders
Equity: |
|
|
|
|
|
|
|
|
Book value (total stockholders' equity) |
|
|
$ |
302,625 |
|
|
$ |
267,128 |
|
|
|
$ |
245,687 |
|
|
Plus: Total Funded Debt |
|
|
|
57,804 |
|
|
|
44,878 |
|
|
|
|
20,000 |
|
|
Less: Cash and cash equivalents |
|
|
|
(4,203 |
) |
|
|
(10,026 |
) |
|
|
|
(3,363 |
) |
|
Invested Capital
(16) |
|
|
$ |
356,226 |
|
|
$ |
301,980 |
|
|
|
$ |
262,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 average basic and diluted shares were determined
by adding the average shares reported for the last four quarters
and dividing by four. |
(3) |
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. |
(4) |
EBIT, net
of taxes is defined as net income plus net interest, less the tax
impact of net interest. The tax impact of net interest is computed
by multiplying net interest by the effective tax rate. Management
uses EBIT, net of taxes, to measure our results exclusive of the
impact of financing costs. |
(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. EBITDA is a component of the
debt to EBITDA covenant, as defined in our credit agreement, 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 eliminates differences which are caused by different
capital structures as well as different tax rates and depreciation
schedules when comparing our measures to our peers’
measures. |
(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) |
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. |
(8) |
Book value
per period end share is calculated by dividing total stockholders’
equity at the end of the period by the period end shares
outstanding. |
(9) |
Tangible
book value is calculated by subtracting goodwill and intangible
assets outstanding at the end of the period from stockholders’
equity outstanding 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 stockholders’ equity. |
(10) |
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. |
(11) |
The funded
debt to equity ratio is calculated by dividing total funded debt at
the end of the period by total stockholders’ equity at the end of
the period. |
(12) |
Asset
turnover is calculated by dividing the current period revenue by
total assets at the beginning of the period. |
(13) |
Return on
assets is calculated by dividing net income for the period by total
assets at the beginning of the period. |
(14) |
Return on
equity is calculated by dividing net income for the period by total
stockholders’ equity at the beginning of the period. |
(15) |
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. |
(16) |
Invested
capital is calculated by adding net funded debt (total funded debt
less cash and marketable securities) to total stockholders’
equity. |
(17) |
Return on
invested capital is calculated by dividing EBIT, net of taxes, less
any dividends, by invested capital at the beginning of the period.
Return on invested capital is not recognized under GAAP, and is a
key metric used by management to determine our executive
compensation. |
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