Everus Construction Group (NYSE: ECG) today reported financial
results for the quarter ended Sept. 30, 2024.
Third Quarter 2024 Summary (all comparisons versus the
prior-year period unless otherwise noted)
- Revenues of $761.0 million, +6.1%.
- Net income of $41.8 million, +16.1%; net income margin of 5.5%,
+50 basis points.
- Earnings of 82 cents per share, +15.5%.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) of $65.0 million, +12.1%; EBITDA margin of 8.5%, +40 basis
points.
- Backlog of $2.88 billion, +43.5% from prior year-end.
- Reiterated 2024 full-year guidance.
- Completed spinoff from MDU Resources Group, Inc. on Oct. 31,
2024.
Management Commentary
“This has been a transformative period in our company’s
evolution, highlighted by our successful tax-free spinoff from MDU
Resources on Oct. 31,” said Jeffrey S. Thiede, president and CEO of
Everus. “I want to thank our team members for their continued
efforts and dedication that enabled us to successfully transition
to being an independent, public company, which better positions us
to effectively allocate capital and drive profitable growth while
generating long-term value for our shareholders.
“Our third quarter results demonstrate the strength of our
scaled national platform and market-leading local brands that are
benefiting from strong secular tailwinds, including data center
work,” Thiede said. “Third quarter revenue increased 6% with
balanced growth across both our segments. With our all-time record
backlog of $2.88 billion at the end of the quarter, which is up
$873.9 million since the start of the year, and our disciplined
focus on our 4EVER strategy, we are well-positioned to deliver on
our long-term targets of 5% to 7% organic revenue growth and 7% to
9% EBITDA growth.”
Thiede said, “Based on our results through the first nine months
of the year, continued strong momentum in our end markets and our
disciplined focus on execution, we are reiterating our 2024
financial guidance that calls for revenues in the range of $2.65
billion to $2.85 billion and EBITDA in the range of $220 million to
$240 million, with EBITDA margins expected to be higher than in
2023. We are encouraged by the opportunities in our key markets,
where we are strategically positioned to take advantage of powerful
megatrends driving data center growth, grid modernization and
re-shoring of high-tech manufacturing. We are excited about our
trajectory and are fully focused on delivering long-term value to
our shareholders.”
Third Quarter 2024 Consolidated
Results
Everus reported revenues increased to $761.0 million in the
third quarter of 2024, compared to $717.4 million in the third
quarter of 2023. Electrical and mechanical revenues grew $20.0
million, or 3.9%, and transmission and distribution revenues rose
$24.0 million, or 11.7%.
The company's gross profit increased to $89.9 million in the
third quarter of 2024, compared to $84.9 million in the third
quarter of 2023. Higher revenues and consistent gross profit margin
of 11.8% drove the increase.
Everus' net income increased to $41.8 million, or 82 cents per
share, in the third quarter of 2024, compared to $36.0 million, or
71 cents per share, in the third quarter of 2023. The increase was
primarily from higher revenues and income from joint venture
activity and lower interest expense, partially offset by higher
selling, general and administrative expenses and increased income
taxes due to higher income before taxes. Net income margin was 5.5%
in the third quarter of 2024, up 50 basis points compared to 5.0%
in the third quarter of 2023.
The company's EBITDA increased to $65.0 million in the third
quarter of 2024, compared to $58.0 million in the third quarter of
2023. The increase was primarily from higher revenues and income
from joint ventures, partially offset by higher selling, general
and administrative expenses. EBITDA margin was 8.5% in the third
quarter of 2024, up 40 basis points compared to 8.1% in the third
quarter of 2023. See the Non-GAAP Measures sections of this news
release for definitions and reconciliations of EBITDA and EBITDA
margin.
Everus' backlog increased to $2.88 billion at Sept. 30, 2024,
compared to $1.85 billion at Sept. 30, 2023. E&M backlog was
$2.57 billion, up from $1.53 billion, and T&D backlog was
$316.9 million, down from $324.0 million.
Third Quarter 2024 Segment
Results
Electrical and Mechanical
The company's E&M segment revenues increased to $536.9
million in the third quarter of 2024, compared to $516.9 million in
the third quarter of 2023. The increase was driven by higher
workloads in the commercial and institutional end markets,
particularly in the data center submarket, partially offset by
decreased workloads in the industrial, service and renewables end
markets.
E&M segment net income increased to $29.4 million in the
third quarter of 2024, compared to $23.1 million in the third
quarter of 2023. EBITDA increased to $40.8 million in the third
quarter of 2024, compared to $33.6 million in the third quarter of
2023. These increases were driven by higher revenues, strong
project execution and project efficiencies. As a result, net income
margin was 5.5% in the third quarter of 2024, up 100 basis points
from 4.5% in the third quarter of 2023. EBITDA margin was 7.6% in
the third quarter of 2024, up 110 basis points from 6.5% in the
third quarter of 2023.
Transmission and Distribution
Everus' T&D segment revenues were $228.5 million during the
third quarter of 2024, compared to $204.5 million in the third
quarter of 2023. The increase was driven by higher workloads in
both the utility and transportation end markets. The utility market
had higher workloads in the transmission, underground,
telecommunication and substation submarkets, and the transportation
market had higher workloads in the traffic signalization and street
lighting submarkets. These increases were partially offset by lower
workloads in the distribution submarket.
T&D segment net income increased to $18.5 million in the
third quarter of 2024, compared to $16.9 million in the third
quarter of 2023. EBITDA increased to $30.4 million in the third
quarter of 2024, compared to $28.2 million in the third quarter of
2023. These increases were primarily from higher utility and
transportation end-market revenues. Net income margin was 8.1% in
the third quarter of 2024, down 20 basis points from 8.3% in the
third quarter of 2023. EBITDA margin was 13.3% in the third quarter
of 2024, down 50 basis points from 13.8% in the third quarter of
2023.
Balance Sheet and Cash Flow
Commentary
Balance Sheet
On Oct. 31, 2024, Everus entered into a five-year senior secured
credit agreement, whereby it has the capacity to incur indebtedness
of up to $525.0 million, consisting of $300.0 million in aggregate
principal amount of term loans and a $225.0 million revolving
credit facility. Letters of credit are available under the credit
agreement in an aggregate amount of up to $50.0 million. Everus
drew $40.0 million under the credit facility on the spinoff date to
meet projected working capital needs. Everus used a portion of the
net proceeds to repay its outstanding indebtedness to CEHI, LLC
(Centennial), as well as a dividend to MDU Resources. The remaining
amount of net proceeds was retained by Everus.
Everus' working capital, defined as current assets minus current
liabilities, was $327.0 million at Sept. 30, 2024, compared to
$313.9 million at Dec. 31, 2023.
Everus previously reported that its near-term priorities
following the spinoff from MDU Resources will be organic growth
investments, value-enhancing mergers and acquisitions, and balance
sheet optimization.
Cash Flow
The company's operating cash flows were $82.7 million for the
nine months ended Sept. 30, 2024, compared to $61.4 million for the
nine months ended Sept. 30, 2023. The increase was driven by
project timing, workload activity and billing fluctuations, with
increases in accounts payable, net contract liabilities and other
current liabilities, partially offset by an increase in accounts
receivable.
The company's capital expenditures were $34.5 million for the
nine months ended Sept. 30, 2024, compared to $28.1 million for the
nine months ended Sept. 30, 2023. The increase was primarily from
vehicle and equipment investments to support the company's
growth.
Everus had free cash flow of $57.8 million for the nine months
ended Sept. 30, 2024, compared to $45.5 million for the nine months
ended Sept. 30, 2023. The increase was primarily from higher
operating cash flows, partially offset by higher net capital
expenditures. See the Non-GAAP Financial Measures sections of this
news release for the definition and reconciliation of free cash
flow.
Forecast for Full Year
2024
Everus is reaffirming previously provided guidance for 2024:
- Revenue is expected to be in the range of $2.65 billion to
$2.85 billion.
- EBITDA is expected to be in the range $220 million to $240
million, with EBITDA margins expected to be higher than 2023. See
the Non-GAAP Financial Measures sections of this news release for
further information and reconciliation.
The company's expected results for 2024 are based on these
assumptions:
- Normal operating conditions.
- Normal economic conditions.
- Continued availability of labor, necessary equipment and
materials.
Basis of Presentation
Prior to the spinoff from MDU Resources on Oct. 31, 2024, Everus
Construction, Inc., including its subsidiaries, operated as a
wholly owned subsidiary of Centennial and an indirect, wholly owned
subsidiary of MDU Resources and not as a stand-alone company.
Following the separation, Everus Construction is now a wholly owned
subsidiary of Everus. As a result, third quarter 2024 results of
operations, financial condition, cash flow and the accompanying
unaudited condensed consolidated financial statements were prepared
on a “carve-out” basis in connection with the spinoff and were
derived from the unaudited condensed consolidated financial
statements of MDU Resources as if Everus operated on a stand-alone
basis during the periods presented. The calculation of basic and
diluted earnings per share for the periods presented have been
retrospectively adjusted to the number of shares outstanding on
Oct. 31, 2024, the separation and distribution date. It is assumed
that there were no dilutive or anti-dilutive equity instruments
because there were no Everus stock-based awards outstanding during
those periods.
Non-GAAP Financial
Measures
Throughout this news release, Everus presents financial
information prepared in accordance with U.S. GAAP (GAAP), as well
as non-GAAP financial measures, including organic revenue, organic
revenue growth, EBITDA, EBITDA margin and free cash flow, including
applicable measures by segment. The use of these non-GAAP financial
measures should not be construed as alternatives to revenues,
earnings, earnings margin or operating cash flows. Everus believes
the use of these non-GAAP financial measures are beneficial in
evaluating the company's financial performance. Please refer to the
"Non-GAAP Financial Measures" section contained in this news
release for additional information.
Conference Call
Management will discuss Everus' third quarter results on a
webcast at 8:30 a.m. EST Nov. 7, 2024. The webcast and accompanying
presentation materials can be accessed at investors.everus.com by
selecting “Events & Presentations” and “Everus Q3 Earnings
Call.” After the conclusion of the webcast, a replay will be
available at the same location.
Participants also can listen to the webcast by phone at
646-307-1963 for toll-based U.S. and international callers or at
800-715-9871 for toll-free U.S. callers, with conference ID
1034822.
About Everus Construction
Group
Everus Construction Group, Inc., a member of the S&P
SmallCap 600® index, is Building America's Future™ by providing a
full spectrum of construction services through its electrical and
mechanical, and transmission and distribution specialty contracting
services across the United States. These specialty contracting
services are provided to utility, transportation, commercial,
industrial, institutional, renewable and other customers. Its
E&M contracting services include construction and maintenance
of electrical and communication wiring and infrastructure, fire
suppression systems, and mechanical piping and services. Its
T&D contracting services include construction and maintenance
of overhead and underground electrical, gas and communication
infrastructure, as well as manufacturing and distribution of
transmission line construction equipment and tools. For more
information about Everus, visit everus.com or email
investors@everus.com.
Forward-Looking
Statements
Information in this news release includes certain
"forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act of 1934. The forward-looking statements
in this news release, including statements about future
performance, financial guidance and long-term targets and
statements made by the CEO, are expressed in good faith and are
believed by the company to have a reasonable basis. This news
release highlights key growth strategies, projections and certain
assumptions for the company and its subsidiaries and other matters
for each of the company’s businesses. Many of these highlighted
statements and other statements not historical in nature are
“forward-looking statements.” Although the company believes that
its expectations are based on reasonable assumptions as of the date
they are made, there is no assurance the company’s projections,
including estimates for growth, shareholder value creation and
financial guidance, will be achieved. Please refer to assumptions
contained in this news release, as well as the various important
factors listed in Part I, Item 1A - Risk Factors in the company's
recent Form 10 filing and subsequent filings with the Securities
and Exchange Commission.
Changes in such assumptions and factors could cause actual
future results to differ materially from growth and financial
guidance. All forward-looking statements in this news release are
expressly qualified by such cautionary statements and by reference
to the underlying assumptions. Undue reliance should not be placed
on forward-looking statements, which speak only as of the date they
are made. Except as required by law, the company does not undertake
any obligation to update or revise any forward-looking or
cautionary statements to reflect changes in assumptions, the
occurrence of events, unanticipated or otherwise, and changes in
future operating results over time or otherwise.
Everus Construction Group,
Inc.
Condensed Consolidated
Statements of Income
(Unaudited)
Three months ended September
30,
Nine months ended September
30,
2024
2023
2024
2023
(In thousands, except per
share amounts)
Operating revenues
$
760,985
$
717,406
$
2,090,047
$
2,218,672
Cost of sales
671,085
632,499
1,836,853
1,976,534
Gross profit
89,900
84,907
253,194
242,138
Selling, general and administrative
expenses
36,191
34,816
109,292
102,519
Operating income
53,709
50,091
143,902
139,619
Interest expense
2,851
4,596
8,823
13,483
Other income
1,071
1,208
3,683
2,705
Income before income taxes and income from
equity method investments
51,929
46,703
138,762
128,841
Income taxes
13,995
11,423
37,606
32,822
Income from equity method investments
3,833
734
7,797
4,718
Net income
$
41,767
$
36,014
$
108,953
$
100,737
Earnings per share:
Basic
$
0.82
$
0.71
$
2.14
$
1.98
Diluted
$
0.82
$
0.71
$
2.14
$
1.98
Weighted average common shares
outstanding:
Basic
50,972
50,972
50,972
50,972
Diluted
50,972
50,972
50,972
50,972
Everus Construction Group,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
September 30, 2024
December 31, 2023
(In thousands, except share
and per share amounts)
Assets
Current assets:
Cash and cash equivalents
$
553
$
1,567
Receivables, net of allowances of $7,300
and $7,967, respectively)
632,131
534,100
Costs and estimated earnings in excess of
billings
174,102
158,529
Due from related-party
12,270
11,507
Inventories
46,923
42,709
Prepayments and other current assets
20,553
17,651
Total current assets
886,532
766,063
Noncurrent assets:
Property, plant and equipment
282,633
259,849
Less: accumulated depreciation
153,272
143,831
Net property, plant and equipment
129,361
116,018
Goodwill
143,224
143,224
Other intangible assets, net of
accumulated amortization of $9,984 and $8,738, respectively
466
2,004
Operating lease right-of-use assets
68,852
53,233
Noncurrent retention receivable
32,849
21,355
Investments
17,648
8,413
Other
360
272
Total noncurrent assets
392,760
344,519
Total assets
$
1,279,292
$
1,110,582
Liabilities and Stockholder’s
Equity
Current liabilities:
Billings in excess of costs and estimated
earnings
$
221,662
$
198,231
Accounts payable
160,873
116,573
Taxes payable
14,006
8,557
Due to related-party
15,870
14,615
Accrued compensation
66,960
44,721
Operating lease liabilities due within one
year
26,110
21,143
Accrued payroll-related liabilities
37,292
35,342
Other accrued liabilities
16,788
13,001
Total current liabilities
559,561
452,183
Noncurrent liabilities:
Related-party notes payable
214,525
168,531
Deferred income taxes
965
6,535
Operating lease liabilities
43,247
32,504
Other
7,691
1,979
Total noncurrent liabilities
266,428
209,549
Total liabilities
$
825,989
$
661,732
Commitments and contingencies
Common stockholder’s equity:
Common Stock, stated value $1, no par
value; 1,000 shares authorized, issued and outstanding
$
1
$
1
Other paid-in capital
137,947
136,184
Retained earnings
315,355
312,665
Total stockholder’s equity
453,303
448,850
Total liabilities and stockholder’s
equity
$
1,279,292
$
1,110,582
Everus Construction Group,
Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Nine months ended September
30,
2024
2023
(in thousands)
Operating activities:
Net income
$
108,953
$
100,737
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
16,961
15,658
Amortization
1,538
1,575
Deferred income taxes
(5,570
)
(734
)
Provision for credit losses
(51
)
4,385
Employee stock-based compensation
costs
1,034
517
Unrealized gain on investments
(531
)
—
Gain on sale of assets
(5,513
)
(6,297
)
Equity in earnings of unconsolidated
affiliates, net of distributions
(4,788
)
(4,718
)
Changes in current assets and liabilities,
net of acquisitions:
Receivables
(97,980
)
(5,828
)
Due from related-party
(763
)
1,381
Costs and estimated earnings in excess of
billings
(15,573
)
(44,802
)
Inventories
(4,214
)
(8,984
)
Other current assets
(2,303
)
(2,512
)
Accounts payable
44,265
(11,125
)
Due to related-party
10
356
Billings in excess of costs and estimated
earnings
23,431
12,566
Other current liabilities
32,760
6,540
Other noncurrent changes
(8,984
)
2,647
Net cash provided by operating
activities
82,682
61,362
Investing activities:
Capital expenditures
(34,506
)
(28,134
)
Net proceeds from sale or disposition of
property
9,587
12,247
Investments
(570
)
(535
)
Net cash used in investing activities
(25,489
)
(16,422
)
Financing activities:
Repayment of related-party notes
payable
—
(45,000
)
Repayment of related-party short-term
notes payable
—
(27,000
)
Net amounts received from related-party
cash management program
45,994
62,527
Transfers to Centennial
(104,201
)
(37,026
)
Net cash used in financing activities
(58,207
)
(46,499
)
Decrease in cash and cash equivalents
(1,014
)
(1,559
)
Cash and cash equivalents - beginning of
period
1,567
2,112
Cash and cash equivalents - end of
period
$
553
$
553
Everus Construction Group, Inc.
Segment and Other Financial Information
(Unaudited)
Revenues
The following table sets forth segment revenues for the periods
indicated, as well as the percentage change from the prior
period:
Three months ended September
30,
Nine months ended September
30,
2024
2023
% Change
2024
2023
% Change
(In millions, except
percentages)
Operating revenues:
Electrical & Mechanical
$
536.9
$
516.9
3.9
%
$
1,481.7
$
1,680.2
(11.8
)%
Transmission & Distribution
228.5
204.5
11.7
%
623.8
549.5
13.5
%
Eliminations
(4.4
)
(4.0
)
10.0
%
(15.5
)
(11.0
)
40.9
%
Total operating revenues
$
761.0
$
717.4
6.1
%
$
2,090.0
$
2,218.7
(5.8
)%
Backlog
Backlog is a common measurement in the construction services
industry. Everus' determination of backlog consists of the
uncompleted portion of services to be performed under job-specific
contracts. Contracts are subject to delays, defaults or
cancellations; changes in scope of services to be provided; and
adjustments to costs. Backlog also may be affected by project
delays or cancellations resulting from weather conditions, external
market factors and economic factors beyond Everus' control, among
other things. Accordingly, there is no assurance that backlog will
be realized. For the periods presented in the backlog table below,
Everus did not experience any material impacts related to delays or
cancellations of planned projects included in backlog. The timing
of contract awards, duration of large new contracts and the mix of
services can significantly affect backlog. Backlog at any point in
time may not accurately represent revenue or net income realized in
any period, and backlog as of the end of the year may not be
indicative of revenue or net income expected to be realized in the
following year. Backlog should not be relied upon as a stand-alone
indicator of future results.
The following table provides estimated backlog as of the dates
indicated and backlog that Everus reasonably estimates will be
recognized within the next 12 months following Sept. 30, 2024:
Total backlog as of September
30, 2024
Total backlog as of December
31, 2023
Total backlog as of September
30, 2023
(In millions)
Backlog:
Electrical & Mechanical
$
2,567.9
$
1,685.6
$
1,526.0
Transmission & Distribution
316.9
325.3
324.0
Total backlog
$
2,884.8
$
2,010.9
$
1,850.0
Capital Expenditures
2024 Estimated
(In millions)
Total capital expenditures
$
52
Note: Total capital expenditures is
presented on a gross basis.
Everus Construction Group, Inc.
Non-GAAP Financial Measures
In addition to information prepared in accordance with GAAP, the
company evaluates operating performance using the non-GAAP
financial measures of organic revenue, organic revenue growth,
EBITDA and EBITDA margin, including applicable measures by segment,
and evaluates its liquidity using the non-GAAP financial measure of
free cash flow. These non-GAAP financial measures have limitations
as an analytical tool and should not be considered in isolation or
as a substitute for an analysis of the company's results as
reported under GAAP. Because of these limitations, organic revenue,
organic revenue growth, EBITDA, EBITDA margin and free cash flow
should not be considered as replacements for revenues, net income,
net income margin and cash provided by (used in) operating
activities, the most comparable GAAP measures, respectively.
Non-GAAP financial measures are not standardized; therefore, it may
not be possible to compare them with other companies’ organic
revenue, organic revenue growth, EBITDA, EBITDA margin and free
cash flow having the same or similar names.
Organic Revenue and Organic Revenue Growth
Everus uses organic revenue and organic revenue growth to
measure its revenue performance on a consistent basis compared to
prior years. The company believes these non-GAAP financial
measures, in addition to the corresponding GAAP measures of revenue
and revenue growth, are useful to investors as they provide a basis
for consistently comparing revenue with prior years as well as
comparing to other peer companies. Organic revenue is defined as
the difference between current year and prior year revenues less
the impact of acquired and divested companies in the past 12
months. Organic revenue growth is calculated by dividing organic
revenue by prior year revenues.
EBITDA and EBITDA Margin
Everus utilizes EBITDA and EBITDA margin to consistently assess
its operating performance and as a basis for strategic planning and
forecasting since the company believes EBITDA closely correlates to
long-term enterprise value. Everus believes that measuring
performance on an EBITDA basis is useful to investors because it
enables a more consistent evaluation of its operational performance
period to period. Everus also believes these non-GAAP financial
measures, in addition to the corresponding GAAP measures of net
income and net income margin, are useful to investors and provide
meaningful information about operational efficiency by excluding
the impacts of differences in tax jurisdictions and structures,
debt levels and capital investment. Investors also may use EBITDA
to calculate leverage as a multiple of EBITDA. Management uses
EBITDA and EBITDA margin, in addition to GAAP metrics, to evaluate
the company's operating results, calculate compensation packages
and determine leverage as a multiple of EBITDA to establish the
appropriate funding of operations.
EBITDA is calculated by adding back interest expense, income
taxes, and depreciation and amortization to net income. EBITDA
margin is calculated by dividing EBITDA by operating revenues.
EBITDA and EBITDA margin are considered non-GAAP financial measures
and are comparable to the corresponding GAAP measures of net income
and net income margin, respectively.
The following table reconciles net income to EBITDA and provides
the calculation of EBITDA margin.
Three months ended September
30,
Nine months ended September
30,
2024
2023
% Change
2024
2023
% Change
(In millions, except
percentages)
Net income
$
41.8
$
36.0
16.1
%
$
109.0
$
100.8
8.1
%
Interest expense
2.8
4.7
(40.4
)%
8.8
13.5
(34.8
)%
Income taxes
14.0
11.4
22.8
%
37.6
32.8
14.6
%
Depreciation and amortization
6.4
5.9
8.5
%
18.5
17.3
6.9
%
EBITDA
$
65.0
$
58.0
12.1
%
$
173.9
$
164.4
5.8
%
Operating revenues
$
761.0
$
717.4
6.1
%
$
2,090.0
$
2,218.7
(5.8
)%
Net income margin
5.5
%
5.0
%
10.0
%
5.2
%
4.5
%
15.6
%
EBITDA margin
8.5
%
8.1
%
4.9
%
8.3
%
7.4
%
12.2
%
The following tables reconcile net income to EBITDA by
segment.
Three months ended September
30, 2024
Nine months ended September
30, 2024
E&M
T&D
Corporate and Other
Total
E&M
T&D
Corporate and Other
Total
(In millions)
Net income
$
29.4
$
18.5
$
(6.1
)
$
41.8
$
81.7
$
43.5
$
(16.2
)
$
109.0
Interest expense
—
0.9
1.9
2.8
0.1
3.0
5.7
8.8
Income taxes
9.8
6.2
(2.0
)
14.0
28.5
14.6
(5.5
)
37.6
Depreciation and amortization
1.6
4.8
—
6.4
4.8
13.8
(0.1
)
18.5
EBITDA
$
40.8
$
30.4
$
(6.2
)
$
65.0
$
115.1
$
74.9
$
(16.1
)
$
173.9
Three months ended September
30, 2023
Nine months ended September
30, 2023
E&M
T&D
Corporate and Other
Total
E&M
T&D
Corporate and Other
Total
(In millions)
Net income
$
23.1
$
16.9
$
(4.0
)
$
36.0
$
75.8
$
37.9
$
(12.9
)
$
100.8
Interest expense
1.4
1.4
1.9
4.7
4.7
3.2
5.6
13.5
Income taxes
7.5
5.6
(1.7
)
11.4
25.2
12.0
(4.4
)
32.8
Depreciation and amortization
1.6
4.3
—
5.9
4.6
12.7
—
17.3
EBITDA
$
33.6
$
28.2
$
(3.8
)
$
58.0
$
110.3
$
65.8
$
(11.7
)
$
164.4
The following table provides EBITDA and the calculation of
EBITDA margin by segment.
Three months ended September
30,
Nine months ended September
30,
2024
2023
% Change
2024
2023
% Change
(In millions, except
percentages)
Operating revenues:
Electrical & Mechanical
$
536.9
$
516.9
3.9
%
$
1,481.7
$
1,680.2
(11.8
)%
Transmission & Distribution
228.5
204.5
11.7
%
623.8
549.5
13.5
%
Eliminations
(4.4
)
(4.0
)
(10.0
)%
(15.5
)
(11.0
)
(40.9
)%
Total operating revenues
$
761.0
$
717.4
6.1
%
$
2,090.0
$
2,218.7
(5.8
)%
Net income:
Electrical & Mechanical
$
29.4
$
23.1
27.3
%
$
81.7
$
75.8
7.8
%
Transmission & Distribution
18.5
16.9
9.5
%
43.5
37.9
14.8
%
Corporate and other
(6.1
)
(4.0
)
(52.5
)%
(16.2
)
(12.9
)
(25.6
)%
Total net income
$
41.8
$
36.0
16.1
%
$
109.0
$
100.8
8.1
%
EBITDA:
Electrical & Mechanical
$
40.8
$
33.6
21.4
%
$
115.1
$
110.3
4.4
%
Transmission & Distribution
30.4
28.2
7.8
%
74.9
65.8
13.8
%
Corporate and other
(6.2
)
(3.8
)
63.2
%
(16.1
)
(11.7
)
37.6
%
Total EBITDA
$
65.0
$
58.0
12.1
%
$
173.9
$
164.4
5.8
%
Net income margin:
Electrical & Mechanical
5.5
%
4.5
%
22.2
%
5.5
%
4.5
%
22.2
%
Transmission & Distribution
8.1
%
8.3
%
(2.4
)%
7.0
%
6.9
%
1.4
%
Total net income margin
5.5
%
5.0
%
10.0
%
5.2
%
4.5
%
15.6
%
EBITDA margin:
Electrical & Mechanical
7.6
%
6.5
%
16.9
%
7.8
%
6.6
%
18.2
%
Transmission & Distribution
13.3
%
13.8
%
(3.6
)%
12.0
%
12.0
%
—
%
Total EBITDA margin
8.5
%
8.1
%
4.9
%
8.3
%
7.4
%
12.2
%
The following table provides EBITDA guidance reconciliation for
the full year 2024.
Low
High
(In millions)
Net income
$
140.0
$
150.0
Interest expense
10.0
15.0
Income taxes
45.0
50.0
Depreciation and amortization
25.0
25.0
EBITDA
$
220.0
$
240.0
Free Cash Flow
Everus uses free cash flow as a measure of liquidity that
indicates how much cash the company can produce after taking cash
outflows from operations and assets into consideration. The company
believes this non-GAAP financial measure, in addition to the
corresponding GAAP measure of cash provided by (used in) operating
activities, is useful to investors because it provides meaningful
information about the company’s financial health and ability to
generate cash, support additional debt obligations, pay future
dividends and fund growth. Free cash flow does not represent
residual cash flow available for discretionary purposes.
Free cash flow is defined as net cash provided by (used in)
operating activities less net capital expenditures.
The following table reconciles net cash provided by operating
activities to free cash flow.
Nine months ended September
30,
2024
2023
(In millions)
Net cash provided by operating
activities
$
82.7
$
61.4
Purchases of property, plant and
equipment
(34.5
)
(28.1
)
Cash proceeds from sale of property, plant
and equipment
9.6
12.2
Free cash flow
$
57.8
$
45.5
Non-GAAP Financial Guidance
The company is unable to reconcile forward-looking non-GAAP
financial guidance relating 2024 EBITDA margin and long-term
targets of organic revenue, organic revenue growth, and EBITDA to
their nearest GAAP measure because the company is unable to predict
the timing of these adjustments with a reasonable degree of
certainty. By their very nature, non-GAAP adjustments are difficult
to anticipate with precision because they are generally associated
with unexpected and unplanned events that impact the company and
its financial results. Therefore, the company is unable to provide
a reconciliation of 2024 EBITDA margin guidance, and
reconciliations of long-term organic revenue, organic revenue
growth and EBITDA guidance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106298553/en/
Media Contact Laura Lueder,
director of communications, 701-221-6444 Investor Contact Paul Bartolai, Vallum
Advisors, 773-489-5692, investors@everus.com
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