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 fourth-quarter and full-year 2018 financial results.
Highlights for Fourth Quarter 2018
- Record fourth quarter revenues of $446.3 million
- Fourth quarter net income attributable to MYR Group Inc. of
$10.7 million, or $0.64 per diluted share attributable to MYR Group
Inc.
- Record backlog of $1.147 billion
Management Comments Rick Swartz, MYR's
President and CEO said, “After completing the year with a strong
fourth quarter, our full year 2018 revenues of $1.53 billion set
another record high for the fourth consecutive year, and we
achieved increases in gross profit, earnings per share, net income
and EBITDA, as compared to our full year of 2017. Along with
execution of our organic and acquisition growth strategies, we
experienced an increase in overall project activity and significant
bidding opportunities in both our Transmission & Distribution
and Commercial & Industrial segments. Total backlog for 2018
increased to $1.147 billion, a 68.8 percent increase over 2017,
demonstrating that our business model continues to be a sound
platform for sustainable growth. We expect active bidding to
continue throughout 2019 and beyond, and believe we are
well-positioned to capitalize on opportunities and deliver
long-term value for all of our stakeholders.”
Fourth-Quarter Results MYR reported
fourth-quarter 2018 revenues of $446.3 million, an increase of
$72.8 million, or 19.5 percent, compared to the fourth quarter of
2017. Specifically, our Transmission and Distribution (“T&D”)
segment reported revenues of $257.2 million, an increase of $29.4
million, or 12.9 percent, from the fourth quarter of 2017,
primarily due to an increase in revenue from large transmission
projects and the number of T&D projects worked. Our Commercial
and Industrial (“C&I”) segment reported fourth-quarter 2018
revenues of $189.1 million, an increase of $43.5 million, or 29.8
percent, from the fourth quarter of 2017, primarily due to the
acquisition of the Huen Companies, increased spending from new and
existing customers and increased volume at certain organic
expansion locations.
Consolidated gross profit increased to $47.4 million in the
fourth quarter of 2018, compared to $36.9 million in the fourth
quarter of 2017. Gross margin increased to 10.6 percent for the
fourth quarter of 2018 from 9.9 percent for the fourth quarter of
2017. The increase in gross margin was primarily due to
improvements in efficiency and organic expansion results, along
with fourth quarter of 2017 results being negatively impacted by
low margins on a large transmission project. The increase in gross
margin was partly due to $1.6 million in estimate changes on
certain contracts associated with the acquisition of the Huen
Companies. These changes in estimates are subject to margin
guarantees and represent potential contingent consideration for
which an offset is recognized in other expense. Changes in
estimates of gross profit on certain projects, excluding estimate
changes on our recent acquisition noted above, resulted in gross
margin decreases of 1.7 percent and 1.9 percent for the fourth
quarters of 2018 and 2017, respectively.
Selling, general and administrative expenses (“SG&A”)
increased to $30.1 million in the fourth quarter of 2018, compared
to $24.0 million in the fourth quarter of 2017. The
period-over-period increase was primarily due to SG&A expenses
related to the acquired Huen Companies, higher employee-related
expenses to support operations and higher bonus costs. As a
percentage of revenues, SG&A increased to 6.7 percent for the
fourth quarter of 2018 from 6.4 percent for the fourth quarter of
2017.
The income tax provision was $3.8 million for the fourth quarter
of 2018, with an effective tax rate of 26.1 percent, compared to an
income tax benefit of $2.9 million in fourth quarter of 2017, which
represented 26.7 percent of pretax income. The difference between
the effective tax rate for the fourth quarter of 2018 and the tax
benefit as a percentage of pretax income for fourth quarter of 2017
was primarily due to the revaluation of our net deferred tax
liabilities in the fourth quarter of 2017 to reflect the impact of
the change from 35% to 21% in the federal corporate tax rate as a
result of the enactment of the United States Tax Cuts and Jobs Act
(“Tax Act”).
For the fourth quarter of 2018, net income attributable to MYR
Group Inc. was $10.7 million, or $0.64 per diluted share
attributable to MYR Group Inc., compared to $13.6 million, or
$0.82, for the same period of 2017. Fourth quarter 2018 EBITDA, a
non-GAAP financial measure, was $26.6 million, or 6.0 percent of
revenues, compared to $20.6 million, or 5.5 percent of revenues, in
the fourth-quarter of 2017.
Full YearMYR reported record revenues of $1.531
billion for the full year of 2018, an increase of $127.9 million,
or 9.1 percent, compared to $1.403 billion for the full year of
2017. Specifically, the T&D segment reported revenues of $893.1
million, an increase of $13.7 million, or 1.6 percent, from the
full year of 2017, primarily due to an increase in distribution
revenues partially offset by lower revenue from large transmission
projects. The C&I segment reported full year of 2018 revenues
of $638.1 million, an increase of $114.2 million, or 21.8 percent,
from the full year of 2017, primarily due the acquisition of the
Huen Companies, increased spending from new and existing customers
and increased volume at certain organic expansion locations.
Consolidated gross profit was $167.1 million in the full year of
2018, compared to $125.0 million in the full year of 2017. The
increase in gross profit was due to increased margins and higher
revenues. Gross margin increased to 10.9 percent for the full year
of 2018 from 8.9 percent for the full year of 2017. The increase in
gross margin was primarily due to improvements in efficiency, fleet
utilization and organic expansion results. Our prior year gross
margin was significantly impacted by write-downs on three projects.
Gross margin also benefited from $3.9 million in estimate changes
on certain contracts associated with the acquisition of the Huen
Companies. These changes of estimates are subject to margin
guarantees and represent potential contingent consideration for
which an offset is recognized in other expense. These margin
improvements were partially offset by changes in estimates of gross
margin on certain projects. Excluding estimate changes on our
recent acquisition noted above, these changes in estimates of gross
margin on certain projects, including those discussed above,
resulted in gross margin decreases of 0.7 percent and 0.7 percent
for the full years of 2018 and 2017, respectively.
SG&A increased to $118.7 million for the full year of 2018,
from $98.6 million for the full year of 2017. The year-over-year
increase was primarily due to higher bonus and profit sharing
costs, SG&A related to the acquired Huen Companies and higher
employee-related expenses to support operations. As a percentage of
revenues, SG&A increased to 7.8 percent for the full year of
2018 from 7.0 percent for the full year of 2017.
The income tax provision was $11.8 million for the full year of
2018 with an effective tax rate of 27.3 percent, compared to a
provision of $3.5 million for the full year of 2017 with an
effective tax rate of 14.1 percent. The effective tax rate for 2017
was lower than 2018 largely because we revalued our net deferred
tax liability as of December 31, 2017, in conjunction with the
enactment of the Tax Act. Our inability to utilize losses
experienced in certain Canadian operations negatively impacted the
effective tax rate in 2018 and 2017, partially offset by excess tax
benefits pertaining to the vesting of stock awards and the exercise
of stock options.
For the full year of 2018, net income attributable to MYR Group
Inc. was $31.1 million, or $1.87 per diluted share attributable to
MYR Group Inc., compared to $21.2 million, or $1.28, for the same
period of 2017. Full-year 2018 EBITDA, a non-GAAP financial
measure, was $86.6 million, or 5.7 percent of revenues, compared to
$65.8 million, or 4.7 percent of revenues, for the full year of
2017.
Backlog As of December 31, 2018, MYR's backlog
was $1.147 billion, which consisted of $495.0 million in the
T&D segment and $651.7 million in the C&I segment, and was
$49.1 million, or 4.5 percent, higher than September 30, 2018.
T&D backlog increased $21.1 million, or 4.5 percent, from
September 30, 2018, while C&I backlog increased $28.0 million,
or 4.5 percent, over the same period. Total backlog at December 31,
2018 increased $467.5 million, or 68.8 percent, from the same
period last year. Our backlog as of December 31, 2018 included
$33.7 million, our proportionate share, of unconsolidated joint
venture backlog.
Balance Sheet As of December 31, 2018, MYR had
$170.5 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 fourth-quarter 2018 results on Thursday, March 7,
2019, 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, March 14, 2019, at 11:59 p.m. Eastern time, by
dialing (855) 859-2056 or (404) 537-3406, and entering conference
ID 7488347. 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, March 7,
2019, 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
throughout the 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, 2018, 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 SheetsAs
of December 31, 2018 and 2017
|
|
|
|
|
December
31, |
(in thousands, except share and per
share data) |
|
2018 |
|
|
|
2017 |
|
ASSETS |
|
|
|
Current
assets |
|
|
|
Cash and
cash equivalents |
$ |
7,507 |
|
|
$ |
5,343 |
|
Accounts
receivable, net of allowances of $1,331 and $605, respectively |
|
288,427 |
|
|
|
240,276 |
|
Contract
assets |
|
160,281 |
|
|
|
120,992 |
|
Current
portion of receivable for insurance claims in excess of
deductibles |
|
10,572 |
|
|
|
4,221 |
|
Refundable
income taxes |
|
— |
|
|
|
391 |
|
Other
current assets |
|
8,847 |
|
|
|
8,513 |
|
Total
current assets |
|
475,634 |
|
|
|
379,736 |
|
Property and
equipment, net of accumulated depreciation of $253,495 and
$231,391, respectively |
|
161,892 |
|
|
|
148,084 |
|
Goodwill |
|
56,588 |
|
|
|
46,994 |
|
Intangible
assets, net of accumulated amortization of $7,031 and $5,183,
respectively |
|
33,266 |
|
|
|
10,852 |
|
Receivable
for insurance claims in excess of deductibles |
|
17,173 |
|
|
|
14,295 |
|
Investment in joint venture |
|
1,324 |
|
|
|
168 |
|
Other
assets |
|
2,878 |
|
|
|
3,659 |
|
Total
assets |
$ |
748,755 |
|
|
$ |
603,788 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities |
|
|
|
Current
portion of long-term debt |
$ |
3,681 |
|
|
$ |
— |
|
Current
portion of capital lease obligations |
|
1,119 |
|
|
|
1,086 |
|
Accounts
payable |
|
139,480 |
|
|
|
110,383 |
|
Contract
liabilities |
|
58,534 |
|
|
|
30,224 |
|
Current
portion of accrued self-insurance |
|
19,633 |
|
|
|
13,138 |
|
Other
current liabilities |
|
61,358 |
|
|
|
33,733 |
|
Total
current liabilities |
|
283,805 |
|
|
|
188,564 |
|
Deferred
income tax liabilities |
|
17,398 |
|
|
|
13,452 |
|
Long-term
debt |
|
86,111 |
|
|
|
78,960 |
|
Accrued
self-insurance |
|
34,406 |
|
|
|
32,225 |
|
Capital
lease obligations, net of current maturities |
|
1,514 |
|
|
|
2,629 |
|
Other
liabilities |
|
1,057 |
|
|
|
919 |
|
Total
liabilities |
|
424,291 |
|
|
|
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 December 31, 2018 and December 31,
2017 |
|
— |
|
|
|
— |
|
Common
stock—$0.01 par value per share; 100,000,000 authorized
shares; |
|
|
|
16,564,961 and 16,464,757 shares issued and outstanding at December
31, 2018 and December 31, 2017, respectively |
|
165 |
|
|
|
163 |
|
Additional paid-in capital |
|
148,276 |
|
|
|
143,934 |
|
Accumulated other comprehensive income (loss) |
|
(193 |
) |
|
|
(299 |
) |
Retained
earnings |
|
174,736 |
|
|
|
143,241 |
|
Total
stockholders’ equity attributable to MYR Group Inc. |
|
322,984 |
|
|
|
287,039 |
|
Noncontrolling interest |
|
1,480 |
|
|
|
— |
|
Total
stockholders’ equity |
|
324,464 |
|
|
|
287,039 |
|
|
$ |
748,755 |
|
|
$ |
603,788 |
|
|
|
|
|
MYR GROUP
INC.Consolidated Statements of
OperationsThree Months and Twelve Months Ended
December 31, 2018 and 2017
|
|
|
|
|
|
|
|
|
Three months ended |
|
For the year ended |
|
December 31, |
|
December 31, |
(in thousands, except per share data) |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Contract
revenues |
$ |
446,345 |
|
|
$ |
373,501 |
|
|
$ |
1,531,169 |
|
|
$ |
1,403,317 |
|
Contract
costs |
|
398,954 |
|
|
|
336,607 |
|
|
|
1,364,109 |
|
|
|
1,278,313 |
|
Gross
profit |
|
47,391 |
|
|
|
36,894 |
|
|
|
167,060 |
|
|
|
125,004 |
|
Selling,
general and administrative expenses |
|
30,079 |
|
|
|
23,994 |
|
|
|
118,737 |
|
|
|
98,611 |
|
Amortization
of intangible assets |
|
864 |
|
|
|
(94 |
) |
|
|
1,843 |
|
|
|
499 |
|
Gain on sale
of property and equipment |
|
(963 |
) |
|
|
(1,062 |
) |
|
|
(3,832 |
) |
|
|
(3,664 |
) |
Income from
operations |
|
17,411 |
|
|
|
14,056 |
|
|
|
50,312 |
|
|
|
29,558 |
|
Other income
(expense): |
|
|
|
|
|
|
|
Interest
income |
|
11 |
|
|
|
— |
|
|
|
24 |
|
|
|
4 |
|
Interest
expense |
|
(1,134 |
) |
|
|
(810 |
) |
|
|
(3,652 |
) |
|
|
(2,603 |
) |
Other
income, net |
|
(1,596 |
) |
|
|
(2,531 |
) |
|
|
(3,616 |
) |
|
|
(2,319 |
) |
Income
before provision for income taxes |
|
14,692 |
|
|
|
10,715 |
|
|
|
43,068 |
|
|
|
24,640 |
|
Income tax
expense (benefit) |
|
3,834 |
|
|
|
(2,864 |
) |
|
|
11,774 |
|
|
|
3,486 |
|
Net
income |
|
10,858 |
|
|
|
13,579 |
|
|
|
31,294 |
|
|
|
21,154 |
|
Less: net
income - noncontrolling interests |
|
207 |
|
|
|
— |
|
|
|
207 |
|
|
|
— |
|
Net income
attributable to MYR Group Inc. |
$ |
10,651 |
|
|
$ |
13,579 |
|
|
$ |
31,087 |
|
|
$ |
21,154 |
|
Income per
common share attributable to MYR Group Inc.: |
|
|
|
|
|
|
|
—Basic |
$ |
0.65 |
|
|
$ |
0.83 |
|
|
$ |
1.89 |
|
|
$ |
1.30 |
|
—Diluted |
$ |
0.64 |
|
|
$ |
0.82 |
|
|
$ |
1.87 |
|
|
$ |
1.28 |
|
Weighted
average number of common shares and potential common shares
outstanding: |
|
|
|
|
|
|
|
—Basic |
|
16,496 |
|
|
|
16,301 |
|
|
|
16,441 |
|
|
|
16,273 |
|
—Diluted |
|
16,631 |
|
|
|
16,530 |
|
|
|
16,585 |
|
|
|
16,496 |
|
|
|
|
|
|
|
|
|
MYR GROUP
INC.Consolidated Statements of Cash
FlowsTwelve Months Ended December 31, 2018 and
2017
|
For the year ended December 31, |
(in thousands
of dollars) |
|
2018 |
|
|
|
2017 |
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
Net
income |
$ |
31,294 |
|
|
$ |
21,154 |
|
Adjustments to
reconcile net income to net cash flows provided by (used in)
operating activities — |
|
Depreciation
and amortization of property and equipment |
|
38,070 |
|
|
|
38,077 |
|
Amortization
of intangible assets |
|
1,843 |
|
|
|
499 |
|
Stock-based
compensation expense |
|
3,165 |
|
|
|
4,376 |
|
Deferred
income taxes |
|
3,649 |
|
|
|
(5,091 |
) |
Gain on sale
of property and equipment |
|
(3,832 |
) |
|
|
(3,664 |
) |
Other
non-cash items |
|
237 |
|
|
|
1,194 |
|
Changes in
operating assets and liabilities, net of acquisitions |
|
|
|
Accounts
receivable, net |
|
(15,871 |
) |
|
|
(35,944 |
) |
Contract
assets |
|
(28,141 |
) |
|
|
(17,857 |
) |
Receivable
for insurance claims in excess of deductibles |
|
(9,229 |
) |
|
|
(39 |
) |
Other
assets |
|
2,280 |
|
|
|
(2,213 |
) |
Accounts
payable |
|
19,953 |
|
|
|
8,149 |
|
Contract
liabilities |
|
22,551 |
|
|
|
(14,317 |
) |
Accrued
self-insurance |
|
8,701 |
|
|
|
2,765 |
|
Other
liabilities |
|
10,119 |
|
|
|
(6,287 |
) |
Net
cash flows provided by (used in) operating activities |
|
84,789 |
|
|
|
(9,198 |
) |
Cash flows from investing activities: |
|
|
|
Proceeds
from sale of property and equipment |
|
4,583 |
|
|
|
4,342 |
|
Cash paid
for acquisitions, net of cash acquired |
|
(47,082 |
) |
|
|
— |
|
Purchases of
property and equipment |
|
(50,704 |
) |
|
|
(30,843 |
) |
Net cash
flows used in investing activities |
|
(93,203 |
) |
|
|
(26,501 |
) |
Cash flows from financing activities: |
|
|
|
Net
borrowings under revolving lines of credit |
|
(20,655 |
) |
|
|
19,890 |
|
Payment of
principal obligations under capital leases |
|
(1,081 |
) |
|
|
(1,203 |
) |
Borrowings
under equipment notes |
|
31,486 |
|
|
|
— |
|
Proceeds
from exercise of stock options |
|
1,897 |
|
|
|
1,232 |
|
Repurchase
of common shares |
|
(1,043 |
) |
|
|
(3,058 |
) |
Other
financing activities |
|
38 |
|
|
|
28 |
|
Net cash
flows provided by financing activities |
|
10,642 |
|
|
|
16,889 |
|
Effect of
exchange rate changes on cash |
|
(64 |
) |
|
|
307 |
|
Net
increase in cash and cash equivalents |
|
2,164 |
|
|
|
(18,503 |
) |
Cash and cash equivalents: |
|
|
|
Beginning of period |
|
5,343 |
|
|
|
23,846 |
|
End of
period |
$ |
7,507 |
|
|
$ |
5,343 |
|
|
|
|
|
MYR GROUP INC.Unaudited
Consolidated Selected Data, Net Income Per Share,
Unaudited Performance Measures and Reconciliation of
Non-GAAP MeasuresThree Months and Twelve Months
Ended December 31, 2018 and 2017
|
Three months ended |
|
Twelve months ended |
|
December
31, |
|
December
31, |
(in thousands, except per share data and
percentages) |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
Summary
Statement of Operations Data: |
|
|
|
|
|
|
|
Contract
revenues |
$ |
446,345 |
|
|
$ |
373,501 |
|
|
$ |
1,531,169 |
|
|
$ |
1,403,317 |
|
Gross
profit |
$ |
47,391 |
|
|
$ |
36,894 |
|
|
$ |
167,060 |
|
|
$ |
125,004 |
|
Income from
operations |
$ |
17,411 |
|
|
$ |
14,056 |
|
|
$ |
50,312 |
|
|
$ |
29,558 |
|
Income before provision
for income taxes |
$ |
14,692 |
|
|
$ |
10,715 |
|
|
$ |
43,068 |
|
|
$ |
24,640 |
|
Income
tax expense (benefit) |
$ |
3,834 |
|
|
$ |
(2,864 |
) |
|
$ |
11,774 |
|
|
$ |
3,486 |
|
Net income attributable
to MYR Group Inc. |
$ |
10,651 |
|
|
$ |
13,579 |
|
|
$ |
31,087 |
|
|
$ |
21,154 |
|
Effective tax
rate |
|
26.1 |
% |
|
|
-26.7 |
% |
|
|
27.3 |
% |
|
|
14.1 |
% |
|
|
|
|
|
|
|
|
Per Share
Data: |
|
|
|
|
|
|
|
Income per common share attributable to MYR Group
Inc.: |
|
|
|
|
|
|
|
- Basic |
$ |
0.65 |
|
|
$ |
0.83 |
|
|
$ |
1.89 |
|
|
$ |
1.30 |
|
- Diluted |
$ |
0.64 |
|
|
$ |
0.82 |
|
|
$ |
1.87 |
|
|
$ |
1.28 |
|
Weighted
average number of common
shares |
|
|
|
|
|
|
|
and potential common shares
outstanding : |
|
|
|
|
|
|
|
- Basic |
|
16,496 |
|
|
|
16,301 |
|
|
|
16,441 |
|
|
|
16,273 |
|
- Diluted |
|
16,631 |
|
|
|
16,530 |
|
|
|
16,585 |
|
|
|
16,496 |
|
|
|
|
|
|
|
|
|
|
December
31, |
|
December
31, |
|
December
31, |
|
December
31, |
(in
thousands) |
|
2018 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Summary Balance
Sheet Data: |
|
|
|
|
|
|
|
Total
assets |
$ |
748,755 |
|
|
$ |
603,788 |
|
|
$ |
573,495 |
|
|
$ |
524,925 |
|
Total stockholders’
equity attributable to MYR Group Inc. |
$ |
322,984 |
|
|
$ |
287,039 |
|
|
$ |
263,174 |
|
|
$ |
329,880 |
|
Goodwill and intangible
assets |
$ |
89,854 |
|
|
$ |
57,846 |
|
|
$ |
58,347 |
|
|
$ |
58,486 |
|
Total
funded debt (1) |
$ |
89,792 |
|
|
$ |
78,960 |
|
|
$ |
59,070 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended |
|
|
|
|
|
December
31, |
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
Financial Performance Measures
(2): |
|
|
|
|
|
|
|
Reconciliation of Non-GAAP
measures: |
|
|
|
|
|
|
|
Net income attributable
to MYR Group Inc. |
|
|
|
|
$ |
31,087 |
|
|
$ |
21,154 |
|
Interest
expense, net |
|
|
|
|
|
3,628 |
|
|
|
2,599 |
|
Tax impact of
interest |
|
|
|
|
|
(990 |
) |
|
|
(366 |
) |
EBIT, net of taxes (3) |
|
|
|
|
$ |
33,725 |
|
|
$ |
23,387 |
|
See notes at the end of this earnings
release.
MYR GROUP INC.Unaudited
Performance Measures and Reconciliation of Non-GAAP
MeasuresThree Months and Twelve Months Ended
December 31, 2018 and 2017
|
|
|
|
|
|
|
Three months ended |
|
Twelve months ended |
|
|
|
|
|
|
|
|
December
31, |
|
December
31, |
|
(in thousands, except per share
data, ratios and percentages) |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Performance
Measures (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(4) |
|
$ |
26,598 |
|
|
$ |
20,602 |
|
|
$ |
86,609 |
|
|
$ |
65,815 |
|
|
EBITDA per Diluted Share
(5) |
|
$ |
1.60 |
|
|
$ |
1.25 |
|
|
$ |
5.22 |
|
|
$ |
3.99 |
|
|
Free Cash Flow
(6) |
|
$ |
15,139 |
|
|
$ |
6,658 |
|
|
$ |
34,085 |
|
|
$ |
(40,041 |
) |
|
Book Value per Period End Share
(7) |
|
|
|
|
|
$ |
19.33 |
|
|
$ |
17.20 |
|
|
Tangible Book Value
(8) |
|
|
|
|
|
$ |
233,130 |
|
|
$ |
229,193 |
|
|
Tangible Book Value per Period
End Share (9) |
|
|
|
|
$ |
13.95 |
|
|
$ |
13.73 |
|
|
Funded debt to Equity
Ratio
(10) |
|
|
|
|
|
|
0.3 |
|
|
|
0.3 |
|
|
Asset Turnover
(11) |
|
|
|
|
|
|
2.54 |
|
|
|
2.45 |
|
|
Return on Assets
(12) |
|
|
|
|
|
|
5.1 |
% |
|
|
3.7 |
% |
|
Return on
Equity
(13) |
|
|
|
|
|
|
10.8 |
% |
|
|
8.0 |
% |
|
Return on Invested Capital
(16) |
|
|
|
|
|
|
9.4 |
% |
|
|
7.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP measures: |
|
|
|
|
|
|
|
|
|
Reconciliation of Net income
attributable to MYR Group Inc. to
EBITDA: |
|
|
|
|
|
|
|
Net
income attributable to MYR Group Inc. |
$ |
10,651 |
|
|
$ |
13,579 |
|
|
$ |
31,087 |
|
|
$ |
21,154 |
|
|
|
Net
income - noncontrolling interests |
|
|
207 |
|
|
|
— |
|
|
|
207 |
|
|
|
— |
|
|
Net
income |
|
|
10,858 |
|
|
|
13,579 |
|
|
|
31,294 |
|
|
|
21,154 |
|
|
|
Interest expense, net |
|
|
1,123 |
|
|
|
810 |
|
|
|
3,628 |
|
|
|
2,599 |
|
|
|
Income tax expense (benefit) |
|
|
3,834 |
|
|
|
(2,864 |
) |
|
|
11,774 |
|
|
|
3,486 |
|
|
|
Depreciation and amortization |
|
|
10,783 |
|
|
|
9,077 |
|
|
|
39,913 |
|
|
|
38,576 |
|
|
EBITDA
(4) |
|
$ |
26,598 |
|
|
$ |
20,602 |
|
|
$ |
86,609 |
|
|
$ |
65,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income
attributable to MYR Group Inc. per Diluted
Share |
|
|
|
|
|
|
|
to EBITDA per Diluted
Share: |
|
|
|
|
|
|
|
|
|
Net
income attributable to MYR Group Inc. per share |
$ |
0.64 |
|
|
$ |
0.82 |
|
|
$ |
1.87 |
|
|
$ |
1.28 |
|
|
|
Net
income - noncontrolling interests per share |
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
Net
income per share |
|
|
0.65 |
|
|
|
0.82 |
|
|
|
1.88 |
|
|
|
1.28 |
|
|
|
Interest expense, net, per share |
|
|
0.07 |
|
|
|
0.05 |
|
|
|
0.22 |
|
|
|
0.16 |
|
|
|
Income tax expense (benefit) per share |
|
0.23 |
|
|
|
(0.17 |
) |
|
|
0.71 |
|
|
|
0.21 |
|
|
|
Depreciation and amortization per share |
|
0.65 |
|
|
|
0.55 |
|
|
|
2.41 |
|
|
|
2.34 |
|
|
EBITDA per Diluted Share
(5) |
|
$ |
1.60 |
|
|
$ |
1.25 |
|
|
$ |
5.22 |
|
|
$ |
3.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Free Cash
Flow: |
|
|
|
|
|
|
|
|
|
Net
cash flow from (used in) operating activities |
$ |
26,120 |
|
|
$ |
12,592 |
|
|
$ |
84,789 |
|
|
$ |
(9,198 |
) |
|
|
Less:
cash used in purchasing property and equipment |
|
(10,981 |
) |
|
|
(5,934 |
) |
|
|
(50,704 |
) |
|
|
(30,843 |
) |
|
Free Cash Flow
(6) |
|
$ |
15,139 |
|
|
$ |
6,658 |
|
|
$ |
34,085 |
|
|
$ |
(40,041 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Book Value to
Tangible Book Value: |
|
|
|
|
|
|
|
|
Book value (total stockholders' equity attributable to
MYR Group Inc.) |
|
|
|
$ |
322,984 |
|
|
$ |
287,039 |
|
|
|
Goodwill and intangible assets |
|
|
|
|
|
|
(89,854 |
) |
|
|
(57,846 |
) |
|
Tangible Book Value
(9) |
|
|
|
|
|
$ |
233,130 |
|
|
$ |
229,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Book Value per
Period End Share |
|
|
|
|
|
|
|
|
|
|
to Tangible Book Value per
Period End Share: |
|
|
|
|
|
|
|
|
Book value per period end share |
|
|
|
|
|
$ |
19.33 |
|
|
$ |
17.20 |
|
|
|
Goodwill and intangible assets per period end
share |
|
|
|
|
|
(5.38 |
) |
|
|
(3.47 |
) |
|
Tangible Book Value per Period
End Share (8) |
|
|
|
|
$ |
13.95 |
|
|
$ |
13.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Period End
Shares: |
|
|
|
|
|
|
|
|
|
Shares outstanding |
|
|
|
|
|
|
16,565 |
|
|
|
16,465 |
|
|
|
Plus: Common equivalents |
|
|
|
|
|
|
144 |
|
|
|
223 |
|
|
Period End Shares
(14) |
|
|
|
|
|
|
16,709 |
|
|
|
16,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, |
|
December
31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Reconciliation of Invested
Capital to Shareholders
Equity: |
|
|
|
|
|
|
|
|
Book value (total stockholders' equity attributable to
MYR Group Inc.) |
|
|
|
$ |
287,039 |
|
|
$ |
263,174 |
|
|
|
|
Plus:
Total funded debt |
|
|
|
|
|
|
78,960 |
|
|
|
59,070 |
|
|
|
|
Less: Cash and cash equivalents |
|
|
|
|
|
|
(5,343 |
) |
|
|
(23,846 |
) |
|
Invested Capital
(15) |
|
|
|
|
|
$ |
360,656 |
|
|
$ |
298,398 |
|
|
See notes at the end of this earnings
release.
(1) Funded debt includes borrowings under our revolving credit
facility and the outstanding balances of our outstanding equipment
notes.(2) These financial performance measures are provided as
supplemental information to the financial statements. These
measures are used by management to evaluate our past performance,
our prospects for future performance and our ability to comply with
certain material covenants as defined within our credit agreement,
and to compare our results with those of our peers. In addition, we
believe that certain of the measures, such as book value, tangible
book value, free cash flow, asset turnover, return on equity and
debt leverage are measures that are monitored by sureties, lenders,
lessors, suppliers and certain investors. Our calculation of each
measure is described in the following notes; our calculation may
not be the same as the calculations made by other companies. (3)
EBIT, net of taxes is defined as net income attributable to MYR
Group Inc. 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.(4) 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. (5) EBITDA per diluted share is calculated by dividing
EBITDA by the weighted average number of diluted shares
attributable to MYR Group Inc. 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. (6) Free cash
flow, which is defined as cash flow provided by operating
activities minus cash flow used in purchasing property and
equipment, is not recognized under GAAP and does not purport to be
an alternative to net income attributable to MYR Group Inc., cash
flow from operations or the change in cash on the balance sheet.
Management views free cash flow as a measure of operational
performance, liquidity and financial health. (7) Book value
per period end share is calculated by dividing total stockholders’
equity attributable to MYR Group Inc. at the end of the period by
the period end shares outstanding. (8) Tangible book value is
calculated by subtracting goodwill and intangible assets at the end
of the period from stockholders’ equity attributable to MYR Group
Inc. 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 attributable to MYR Group Inc.
(9) Tangible book value per period end share is calculated by
dividing tangible book value at the end of the period by the period
end number of shares outstanding. Tangible book value per period
end share is not recognized under GAAP and does not purport to be
an alternative to income per diluted share. (10) The funded debt to
equity ratio is calculated by dividing total funded debt at the end
of the period by total stockholders’ equity attributable to MYR
Group Inc. at the end of the period. (11) Asset turnover is
calculated by dividing the current period revenue by total assets
at the beginning of the period. (12) Return on assets is calculated
by dividing net income attributable to MYR Group Inc. for the
period by total assets at the beginning of the period. (13) Return
on equity is calculated by dividing net income attributable to MYR
Group Inc. for the period by total stockholders’ equity
attributable to MYR Group Inc. at the beginning of the period.(14)
Period end shares is calculated by adding average common stock
equivalents for the quarter to the period end balance of common
shares outstanding. Period end shares is not recognized under GAAP
and does not purport to be an alternative to diluted shares.
Management views period end shares as a better measure of shares
outstanding as of the end of the period.(15) Invested capital is
calculated by adding net funded debt (total funded debt less cash
and marketable securities) to total stockholders’ equity
attributable to MYR Group Inc.(16) 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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