Primoris Services Corporation (NYSE: PRIM) (“Primoris” or
the “Company”) today announced financial results for its first
quarter ended March 31, 2023 and provided comments on the Company’s
operational performance and outlook for 2023.
For the first quarter of 2023, Primoris reported the
following highlights (1):
- Revenue of $1,256.9 million, up $472.5 million, or 60.2
percent, compared to the first quarter of 2022 driven by strong
growth in both the Utilities and Energy segments and in part by the
PLH and B Comm acquisitions;
- Net income of $1.3 million, or $0.02 per diluted share, up $3.0
million, or $0.05 per diluted share, from the first quarter of
2022;
- Adjusted net income of $9.9 million, or $0.18 per diluted
share, an increase of $9.4 million, or $0.17 per diluted share,
from the first quarter of 2022;
- Backlog of $5.6 billion, up 38.1 percent from the first quarter
of 2022, including Master Service Agreements (“MSA”) backlog of
$2.0 billion;
- Adjusted earnings before interest, income taxes, depreciation
and amortization (“Adjusted EBITDA”) of $52.8 million, up $30.2
million, or 133.5 percent, from the first quarter of 2022.
(1)
Please refer to “Non-GAAP Measures” and
Schedules 1, 2, 3 and 4 for the definitions and reconciliations of
our Non-GAAP financial measures, including “Adjusted Net Income,”
“Adjusted EPS” and “Adjusted EBITDA.”
“Primoris started 2023 with solid results in the first quarter,
surpassing our goals in revenue, gross profit and earnings per
share, marking a significant improvement from the first quarter of
2022,” said Tom McCormick, President and Chief Executive Officer of
Primoris. “I want to recognize and congratulate our employees for
their dedication to achieving these results through prioritizing
safety, quality and productivity.”
“In the face of a challenging economic environment, we continue
to see resilience across our key growth markets of renewables,
power delivery and communications. We are also seeing steady
contributions from other markets where we participate and are
optimistic about further improvements in our pipeline businesses
from the cyclical trough in 2022.”
“Our backlog remains at record levels due to our ability to win
work and successfully execute on behalf of our clients. This
includes recent awards for a carbon capture utilization and storage
pipeline project and a utility-scale solar project in the
Southwest,” he added. “While some uncertainty remains as to the
economic conditions over the coming quarters, we are confident that
we will be able to build on our first quarter to reach our full
year 2023 objectives.”
First Quarter 2023 Results
Overview
Revenue was $1,256.9 million for the three months ended March
31, 2023, an increase of $472.5 million, compared to the same
period in 2022. The increase was primarily due to strong growth
across our renewables, industrial and pipeline businesses, as well
as contributions from the PLH and B Comm acquisitions. Gross profit
was $99.7 million for the three months ended March 31, 2023, an
increase of $43.2 million, or 76.6 percent, compared to the same
period in 2022. The increase was primarily due to an increase in
revenue and margins. Gross profit as a percentage of revenue
increased to 7.9 percent for the three months ended March 31, 2023,
compared to 7.2 percent for the same period in 2022, primarily as a
result of improved margins in the renewables business and positive
margins in the pipeline services business.
This press release includes Non-GAAP financial measures. The
Company believes these measures enable investors, analysts and
management to evaluate Primoris’ performance excluding the effects
of certain items that management believes impact the comparability
of operating results between reporting periods. In addition,
management believes these measures are useful in comparing the
Company’s operating results with those of its competitors. Please
refer to “Non-GAAP Measures” and Schedules 1, 2 and 3 for the
definitions and reconciliations of the Company’s Non-GAAP financial
measures, including “Adjusted Net Income,” “Adjusted EPS” and
“Adjusted EBITDA”.
During the first quarter of 2023, net income was $1.3 million
compared to a net loss of $1.7 million in the prior year. Adjusted
Net Income was $9.9 million for the first quarter, compared to $0.4
million for the same period in 2022. Diluted earnings per share
(“EPS”) was $0.02 for the first quarter of 2023 compared to ($0.03)
for the same period in 2022. Adjusted EPS was $0.18 for the first
quarter of 2023, compared to $0.01 for the first quarter of 2022.
Adjusted EBITDA was $52.8 million for the first quarter of 2023,
compared to $22.6 million for the same period in 2022.
In the first quarter of 2023, we changed our reportable segments
in connection with the realignment of our internal organization and
management structure, and now we report in two segments: Utilities
and Energy. Revenue and gross profit for the segments for the three
months ended March 31, 2023 and 2022 were as follows:
Segment
Revenue
(in thousands,
except %)
(unaudited)
For the three months ended
March 31,
2023
2022
% of
% of
Total
Total
Segment
Revenue
Revenue
Revenue
Revenue
Utilities
$
528,892
42.1
%
$
358,728
45.7
%
Energy
728,004
57.9
%
425,656
54.3
%
Total
$
1,256,896
100.0
%
$
784,384
100.0
%
Segment Gross
Profit
(in thousands,
except %)
(unaudited)
For the three months ended
March 31,
2023
2022
% of
% of
Segment
Segment
Segment
Gross Profit
Revenue
Gross Profit
Revenue
Utilities
$
33,569
6.3
%
$
22,354
6.2
%
Energy
66,163
9.1
%
34,132
8.0
%
Total
$
99,732
7.9
%
$
56,486
7.2
%
Utilities Segment (“Utilities”): Revenue increased by
$170.2 million, or 47.4 percent, for the three months ended March
31, 2023, compared to the same period in 2022, primarily due to the
acquisitions of PLH and B Comm and increased activity in our legacy
power delivery and communications markets. Gross profit for the
three months ended March 31, 2023 increased by $11.2 million, or
50.2 percent, compared to the same period in 2022. The increase is
primarily attributable to the higher revenue and impact of improved
rates on power delivery services to offset inflation pressures.
Gross profit as a percentage of revenue increased slightly to 6.3
percent during the three months ended March 31, 2023 compared to
6.2 percent for the same period in 2022.
Energy Segment (“Energy”): Revenue increased by $302.3
million, or 71.0 percent, for the three months ended March 31,
2023, compared to the same period in 2022. The increase
year-over-year was primarily due to increased renewable energy
activity, increased pipeline project work, increased industrial
activity in the Gulf Coast and contributions from the PLH
acquisition. Gross profit for the three months ended March 31,
2023, increased by $32.0 million, or 93.8 percent, compared to the
same period in 2022, primarily due to higher revenue and margins.
Gross profit as a percentage of revenue increased to 9.1 percent
during the three months ended March 31, 2023, compared to 8.0
percent in the same period in 2022, primarily due to increased
revenue on higher margin renewable energy projects in 2023 and
higher costs on a pipeline project in the Mid-Atlantic from
unfavorable weather conditions experienced in 2022.
Other Income Statement
Information
Selling, general and administrative (“SG&A”) expenses were
$78.0 million during the quarter ended March 31, 2023, an increase
of $22.6 million, or 40.7 percent, compared to 2022, primarily due
to the acquisitions of PLH and B Comm and increased costs to
support our strong organic growth. SG&A expense as a percentage
of revenue decreased to 6.2 percent in the first quarter of 2023,
compared to 7.1 percent in the first quarter 2022 primarily due to
improved operating leverage on increased revenue.
Interest expense, net for the quarter ended March 31, 2023 was
$18.5 million compared to $2.9 million for the quarter ended March
31, 2022. The increase of $15.6 million was due to higher average
debt balances from the borrowings incurred related to the PLH
acquisition, higher average interest rates, and a $0.5 million
unrealized loss on our interest rate swaps in 2023 compared to a
$2.9 million unrealized gain in 2022. Interest expense for the full
year 2023 is expected to increase to approximately $73 to $77
million due to higher debt balances and higher interest rates.
The effective tax rate for the three-month period ended March
31, 2023, of 28.0% differs from the U.S. federal statutory rate of
21.0% primarily due to state income taxes and nondeductible
components of per diem expenses. We recorded income tax expense for
the three months ended March 31, 2023, of $0.5 million compared to
a tax benefit of $0.6 million for the three months ended March 31,
2022. The $1.1 million increase in income tax expense is primarily
driven by a $4.1 million increase in pretax income.
Outlook
The Company is maintaining its estimates for the year ending
December 31, 2023. Net income is expected to be between $2.10 and
$2.30 per fully diluted share. Adjusted EPS is estimated in the
range of $2.50 to $2.70 for 2023. Adjusted EBITDA for the full year
2023 is expected to range from $350 million to $370 million.
The Company is targeting SG&A expense as a percentage of
revenue in the low six percent range for full year 2023. The
Company’s targeted gross margins by segment are as follows:
Utilities in the range of 9 to 11 percent and Energy in the range
of 10 to 12 percent. The Company expects its effective tax rate for
2023 to be approximately 28 percent, but it may vary depending on
the mix of states in which the Company operates.
Adjusted EPS and Adjusted EBITDA are non-GAAP financial
measures. Please refer to “Non-GAAP Measures” and Schedules below
for the definitions and reconciliations. The guidance provided
above constitutes forward-looking statements, which are based on
current economic conditions and estimates, and the Company does not
include other potential impacts, such as changes in accounting or
unusual items. Supplemental information relating to the Company’s
financial outlook is posted in the Investor Relations section of
the Company’s website at www.prim.com.
Backlog
(in
millions)
Backlog at March 31,
2023
Segment
Fixed Backlog
MSA Backlog
Total Backlog
Utilities
$
189.8
$
1,767.3
$
1,957.1
Energy
3,357.1
245.1
3,602.2
Total
$
3,546.9
$
2,012.4
$
5,559.3
At March 31, 2023, Fixed Backlog was $3.5 billion consistent
with our backlog at December 31, 2022. MSA Backlog was $2.0
billion, up $0.1 billion compared to backlog on December 31, 2022.
MSA Backlog represents estimated MSA revenue for the next four
quarters. Total Backlog as of March 31, 2023 was $5.6 billion,
which represented a new record backlog for the Company. The Company
expects that during the next four quarters, the Company will
recognize as revenue approximately 74 percent of the total backlog
at March 31, 2023, comprised of backlog of approximately: 100
percent of the Utilities segment and 60 percent of the Energy
segment.
Backlog, including estimated MSA revenue, should not be
considered a comprehensive indicator of future revenue. Revenue
from certain projects where scope, and therefore contract value, is
not adequately defined, is not included in Fixed Backlog. At any
time, any project may be cancelled at the convenience of the
Company’s customers.
Balance Sheet and Capital
Allocation
At March 31, 2023, the Company had $94.8 million of unrestricted
cash and cash equivalents. In the first quarter of 2023, capital
expenditures were $13.8 million, including $4.4 million in
construction equipment purchases. The Company estimates capital
expenditures for the full year 2023 to total between $80 million
and $100 million, which includes $40 million to $60 million for
equipment. For the remaining nine months of 2023, capital
expenditures are expected to total between $70 million and $90
million, which includes $40 million to $60 million for
equipment.
The Company also announced that on May 3, 2023, its Board of
Directors declared a $0.06 per share cash dividend to stockholders
of record on June 30, 2023, payable on approximately July 14,
2023.
In November 2021, our Board of Directors authorized a $25.0
million share purchase program. Under the share purchase program,
we can, depending on market conditions, share price and other
factors, acquire shares of our common stock on the open market or
in privately negotiated transactions. In February 2022, our Board
of Directors replenished the limit to $25.0 million. During the
three months ended March 31, 2023 and 2022, we did not purchase any
shares of common stock. As of March 31, 2023, we had $19.0 million
remaining for purchase under the share purchase program. The share
purchase plan expires on December 31, 2023.
Conference Call and
Webcast
As previously announced, management will host a conference call
and webcast on Wednesday, May 10, 2023, at 9:00 a.m. U.S. Central
Time (10:00 a.m. U.S. Eastern Time). Tom McCormick, President and
Chief Executive Officer, and Ken Dodgen, Executive Vice President
and Chief Financial Officer, will discuss the Company’s results and
business outlook.
Investors and analysts are invited to participate in the call by
phone at 1-888-330-3428, or internationally at 1-646-960-0679
(access code: 7581464) or via the Internet at www.prim.com. A
replay of the call will be available on the Company’s website or by
phone at 1-800-770-2030, or internationally at 1-647-362-9199
(access code: 7581464), for a seven-day period following the
call.
Presentation slides to accompany the conference call are
available for download under “Events & Presentations” in the
“Investors” section of the Company’s website at www.prim.com.
Non-GAAP Measures
This press release contains certain financial measures that are
not recognized under generally accepted accounting principles in
the United States (“GAAP”). Primoris uses earnings before interest,
income taxes, depreciation and amortization (“EBITDA”), Adjusted
EBITDA, Adjusted Net Income, and Adjusted EPS as important
supplemental measures of the Company’s operating performance. The
Company believes these measures enable investors, analysts, and
management to evaluate Primoris’ performance excluding the effects
of certain items that management believes impact the comparability
of operating results between reporting periods. In addition,
management believes these measures are useful in comparing the
Company’s operating results with those of its competitors. The
non-GAAP measures presented in this press release are not intended
to be considered in isolation or as a substitute for, or superior
to, the financial information prepared and presented in accordance
with GAAP. In addition, Primoris’ method of calculating these
measures may be different from methods used by other companies,
and, accordingly, may not be comparable to similarly titled
measures as calculated by other companies that do not use the same
methodology as Primoris. Please see the accompanying tables to this
press release for reconciliations of the following non‐GAAP
financial measures for Primoris’ current and historical results:
EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS.
About Primoris
Primoris Services Corporation is a premier specialty contractor
providing critical infrastructure services to the utility, energy,
and renewables markets throughout the United States and Canada.
Built on a foundation of trust, we deliver a range of engineering,
construction, and maintenance services that power, connect, and
enhance society. On projects spanning utility-scale solar,
renewables, power delivery, communications, and transportation
infrastructure, we offer unmatched value to our clients, a safe and
entrepreneurial culture to our employees, and innovation and
excellence to our communities. To learn more, visit www.prim.com
and follow us on social media at @PrimorisServicesCorporation.
Forward Looking
Statements
This press release contains certain forward-looking statements,
including the Company’s outlook, that reflect, when made, the
Company’s expectations or beliefs concerning future events that
involve risks and uncertainties, including with regard to the
Company’s future performance. Forward-looking statements include
all statements that are not historical facts and can be identified
by terms such as “anticipates”, “believes”, “could”, “estimates”,
“expects”, “intends”, “may”, “plans”, “potential”, “predicts”,
“projects”, “should”, “will”, “would” or similar expressions.
Forward-looking statements include information concerning the
possible or assumed future results of operations, business
strategies, financing plans, competitive position, industry
environment, potential growth opportunities, the effects of
regulation and the economy, generally. Forward-looking statements
involve known and unknown risks, uncertainties, and other factors,
which may cause actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Actual results may differ materially as a result of a
number of factors, including, among other things, customer timing,
project duration, weather, and general economic conditions; changes
in the mix of customers, projects, contracts and business; regional
or national and/or general economic conditions and demand for the
Company’s services; price, volatility, and expectations of future
prices of oil, natural gas, and natural gas liquids; variations and
changes in the margins of projects performed during any particular
quarter; increases in the costs to perform services caused by
changing conditions; the termination, or expiration of existing
agreements or contracts; the budgetary spending patterns of
customers; inflation and other increases in construction costs that
the Company may be unable to pass through to customers; cost or
schedule overruns on fixed-price contracts; availability of
qualified labor for specific projects; changes in bonding
requirements and bonding availability for existing and new
agreements; the need and availability of letters of credit;
increases in interest rates and slowing economic growth or
recession; the instability in the banking system as a result of
recent bank failures; costs incurred to support growth, whether
organic or through acquisitions; the timing and volume of work
under contract; losses experienced in the Company’s operations; the
results of the review of prior period accounting on certain
projects and the impact of adjustments to accounting estimates;
developments in governmental investigations and/or inquiries;
intense competition in the industries in which the Company
operates; failure to obtain favorable results in existing or future
litigation or regulatory proceedings, dispute resolution
proceedings or claims, including claims for additional costs;
failure of partners, suppliers or subcontractors to perform their
obligations; cyber-security breaches; failure to maintain safe
worksites; risks or uncertainties associated with events outside of
the Company’s control, including severe weather conditions, public
health crises and pandemics, political crises or other catastrophic
events; client delays or defaults in making payments; the
availability of credit and restrictions imposed by credit
facilities; failure to implement strategic and operational
initiatives; risks or uncertainties associated with acquisitions,
dispositions and investments; possible information technology
interruptions or inability to protect intellectual property; the
Company’s failure, or the failure of the Company’s agents or
partners, to comply with laws; the Company's ability to secure
appropriate insurance; new or changing legal requirements,
including those relating to environmental, health and safety
matters; the loss of one or a few clients that account for a
significant portion of the Company's revenues; asset impairments;
and risks arising from the inability to successfully integrate
acquired businesses. In addition to information included in this
press release, additional information about these and other risks
can be found in Part I, Item 1A “Risk Factors” of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2022,
and the Company’s other filings with the U.S. Securities and
Exchange Commission (“SEC”). Such filings are available on the
SEC’s website at www.sec.gov. Given these risks and uncertainties,
you should not place undue reliance on forward-looking statements.
Primoris does not undertake any obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
under applicable securities laws.
PRIMORIS SERVICES
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(In Thousands, Except Per
Share Amounts)
(Unaudited)
Three Months Ended
March 31,
2023
2022
Revenue
$
1,256,896
$
784,384
Cost of revenue
1,157,164
727,898
Gross profit
99,732
56,486
Selling, general and administrative
expenses
78,009
55,455
Transaction and related costs
2,695
323
Operating income
19,028
708
Other income (expense):
Foreign exchange gain (loss), net
926
(116
)
Other income (expense), net
331
(9
)
Interest expense, net
(18,465
)
(2,876
)
Income (loss) before provision for income
taxes
1,820
(2,293
)
(Provision) benefit for income taxes
(510
)
619
Net income (loss)
1,310
(1,674
)
Dividends per common share
$
0.06
$
0.06
Earnings (loss) per share:
Basic
$
0.02
$
(0.03
)
Diluted
$
0.02
$
(0.03
)
Weighted average common shares
outstanding:
Basic
53,184
53,240
Diluted
53,944
53,240
PRIMORIS SERVICES
CORPORATION
CONSOLIDATED BALANCE
SHEETS
(In Thousands)
March
31,
December
31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
94,756
$
248,692
Accounts receivable, net
746,493
663,119
Contract assets
721,905
616,224
Prepaid expenses and other current
assets
118,585
176,350
Total current assets
1,681,739
1,704,385
Property and equipment, net
483,612
493,859
Operating lease assets
219,150
202,801
Intangible assets, net
243,307
249,381
Goodwill
871,712
871,808
Other long-term assets
23,200
21,786
Total assets
$
3,522,720
$
3,544,020
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
561,277
$
534,956
Contract liabilities
268,070
275,947
Accrued liabilities
224,083
245,837
Dividends payable
3,196
3,187
Current portion of long-term debt
77,538
78,137
Total current liabilities
1,134,164
1,138,064
Long-term debt, net of current portion
1,034,855
1,065,315
Noncurrent operating lease liabilities,
net of current portion
142,876
130,787
Deferred tax liabilities
54,766
57,101
Other long-term liabilities
46,946
43,915
Total liabilities
2,413,607
2,435,182
Commitments and contingencies
Stockholders’ equity
Common stock
6
6
Additional paid-in capital
265,817
263,771
Retained earnings
845,795
847,681
Accumulated other comprehensive income
(2,505
)
(2,620
)
Total stockholders’ equity
1,109,113
1,108,838
Total liabilities and stockholders’
equity
$
3,522,720
$
3,544,020
PRIMORIS SERVICES
CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In Thousands)
Three Months Ended
March 31,
2023
2022
Cash flows from operating activities:
Net income (loss)
$
1,310
$
(1,674
)
Adjustments to reconcile net income (loss)
to net cash (used in) provided by operating activities (net of
effect of acquisitions):
Depreciation and amortization
27,733
20,172
Stock-based compensation expense
2,379
1,553
Gain on sale of property and equipment
(5,798
)
(4,538
)
Unrealized loss (gain) on interest rate
swap
469
(2,896
)
Other non-cash items
491
345
Changes in assets and liabilities:
Accounts receivable
(71,939
)
25,691
Contract assets
(82,783
)
(45,972
)
Other current assets
29,836
(32,570
)
Other long-term assets
148
(12,826
)
Accounts payable
26,282
12,114
Contract liabilities
(12,000
)
51,969
Operating lease assets and liabilities,
net
(1,263
)
(255
)
Accrued liabilities
(30,565
)
(4,524
)
Other long-term liabilities
363
(12
)
Net cash (used in) provided by operating
activities
(115,337
)
6,577
Cash flows from investing activities:
Purchase of property and equipment
(13,847
)
(33,165
)
Proceeds from sale of assets
7,377
4,354
Cash paid for acquisitions, net of cash
and restricted cash acquired
—
(4,063
)
Net cash used in investing activities
(6,470
)
(32,874
)
Cash flows from financing activities:
Borrowings under revolving lines of
credit
75,000
—
Payments on revolving lines of credit
(75,000
)
—
Proceeds from issuance of long-term
debt
—
30,000
Payments on long-term debt
(31,511
)
(26,462
)
Proceeds from issuance of common stock
489
422
Dividends paid
(3,187
)
(3,192
)
Other
(2,392
)
(1,994
)
Net cash used in financing activities
(36,601
)
(1,226
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(79
)
502
Net change in cash, cash equivalents and
restricted cash
(158,487
)
(27,021
)
Cash, cash equivalents and restricted cash
at beginning of the period
258,991
205,643
Cash, cash equivalents and restricted cash
at end of the period
$
100,504
$
178,622
Non-GAAP Measures
Schedule 1 Primoris Services
Corporation Reconciliation of Non-GAAP Financial
Measures Adjusted Net Income and Adjusted EPS (In
Thousands, Except Per Share Amounts) (Unaudited)
Adjusted Net Income and Adjusted EPS
Primoris defines Adjusted Net Income as net income (loss)
adjusted for certain items including, (i) non‐cash stock‐based
compensation expense; (ii) transaction/integration and related
costs; (iii) asset impairment charges; (iv) changes in fair value
of the Company’s interest rate swap; (v) change in fair value of
contingent consideration liabilities; (vi) amortization of
intangible assets; (vii) amortization of debt discounts and debt
issuance costs; (viii) losses on extinguishment of debt; (ix)
severance and restructuring changes; (x) selected (gains) charges
that are unusual or non-recurring; and (xi) impact of changes in
statutory tax rates. The Company defines Adjusted EPS as Adjusted
Net Income divided by the diluted weighted average shares
outstanding. Management believes these adjustments are helpful for
comparing the Company’s operating performance with prior periods.
Because Adjusted Net Income and Adjusted EPS, as defined, exclude
some, but not all, items that affect net income and diluted
earnings per share, they may not be comparable to similarly titled
measures of other companies. The most comparable GAAP financial
measures, net income and diluted earnings per share, and
information reconciling the GAAP and non‐GAAP financial measures,
are included in the table below.
Three Months Ended March
31,
2023
2022
Net income (loss) as reported (GAAP)
$
1,310
$
(1,674
)
Non-cash stock based compensation
2,379
1,553
Transaction/integration and related costs
(1)
2,695
323
Amortization of intangible assets
6,074
3,610
Amortization of debt issuance costs
491
283
Unrealized loss (gain) on interest rate
swap
469
(2,896
)
Change in fair value of contingent
consideration
(245
)
—
Income tax impact of adjustments
(3,322
)
(776
)
Adjusted net income
$
9,851
$
423
Weighted average shares (diluted) (1)
53,944
53,792
Diluted earnings (loss) per share
$
0.02
$
(0.03
)
Adjusted diluted earnings per share
$
0.18
$
0.01
(1)
Includes the dilutive effect of
stock based awards of 552 for the three months ended March 31,
2022. However, these amounts were excluded from the weighted
average diluted shares outstanding when calculating diluted
earnings per share for the three months ended March 31, 2022, as
their inclusion would be anti-dilutive.
Schedule 2 Primoris Services
Corporation Reconciliation of Non-GAAP Financial
Measures EBITDA and Adjusted EBITDA (In
Thousands) (Unaudited)
EBITDA and Adjusted EBITDA
Primoris defines EBITDA as net income (loss) before interest,
income taxes, depreciation and amortization. Adjusted EBITDA is
defined as EBITDA adjusted for certain items including, (i)
non‐cash stock‐based compensation expense; (ii)
transaction/integration and related costs; (iii) asset impairment
charges; (iv) severance and restructuring changes; (v) change in
fair value of contingent consideration liabilities; and (vi)
selected (gains) charges that are unusual or non-recurring. The
Company believes the EBITDA and Adjusted EBITDA financial measures
assist in providing a more complete understanding of the Company’s
underlying operational measures to manage its business, to evaluate
its performance compared to prior periods and the marketplace, and
to establish operational goals. EBITDA and Adjusted EBITDA are
non‐GAAP financial measures and should not be considered in
isolation or as a substitute for financial information provided in
accordance with GAAP. These non‐GAAP financial measures may not be
computed in the same manner as similarly titled measures used by
other companies. The most comparable GAAP financial measure, net
income, and information reconciling the GAAP and non‐GAAP financial
measures are included in the table below.
Three Months Ended March
31,
2023
2022
Net income (loss) as reported (GAAP)
$
1,310
$
(1,674
)
Interest expense, net
18,465
2,876
Provision (benefit) for income taxes
510
(619
)
Depreciation and amortization
27,733
20,172
EBITDA
48,018
20,755
Non-cash stock based compensation
2,379
1,553
Transaction/integration and related
costs
2,695
323
Change in fair value of contingent
consideration
(245
)
—
Adjusted EBITDA
$
52,847
$
22,631
Schedule 3 Primoris Services
Corporation Reconciliation of Non-GAAP Financial
Measures Forecasted Adjusted Net Income and Adjusted Diluted
Earnings Per Share for Full Year 2023 (In Thousands, Except
Per Share Amounts) (Unaudited)
The following table sets forth a reconciliation of the
forecasted GAAP net income to Adjusted Net Income and EPS to
Adjusted EPS for the year ending December 31, 2023.
Estimated Range
Full Year Ending
December 31, 2023
Net income as defined (GAAP)
$
113,550
$
124,400
Non-cash stock based compensation
7,500
7,500
Amortization of intangible assets
21,500
21,500
Amortization of debt issuance costs
1,900
1,900
Income tax impact of adjustments (1)
(8,700
)
(8,700
)
Adjusted net income
$
135,750
$
146,600
Weighted average shares (diluted)
54,200
54,200
Diluted earnings per share
$
2.10
$
2.30
Adjusted diluted earnings per share
$
2.50
$
2.70
(1)
Adjustments above are reported on
a pre-tax basis before the income tax impact of adjustments. The
income tax impact for each adjustment is determined by calculating
the tax impact of the adjustment on the Company's quarterly and
annual effective tax rate, as applicable, unless the nature of the
item and/or the tax jurisdiction in which the item has been
recorded requires application of a specific tax rate or tax
treatment, in which case the tax effect of such item is estimated
by applying such specific tax rate or tax treatment.
Schedule 4 Primoris Services
Corporation Reconciliation of Non-GAAP Financial
Measures Forecasted EBITDA and Adjusted EBITDA for Full Year
2023 (In Thousands, Except Per Share Amounts)
(Unaudited)
The following table sets forth a reconciliation of the
forecasted GAAP net income to Adjusted EBITDA for the year ending
December 31, 2023.
Estimated Range
Full Year Ending
December 31, 2023
Net income as defined (GAAP)
$
113,550
$
124,400
Interest expense, net
73,000
77,000
Provision for income taxes
43,650
48,800
Depreciation and amortization
112,300
112,300
EBITDA
$
342,500
$
362,500
Non-cash stock based compensation
7,500
7,500
Adjusted EBITDA
$
350,000
$
370,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509006057/en/
Ken Dodgen Executive Vice President, Chief Financial Officer
(214) 740-5608 kdodgen@prim.com
Blake Holcomb Vice President, Investor Relations (214) 545-6773
bholcomb@prim.com
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