Financial Performance - Third quarter 2024 revenue was $720.1 million, a decrease of $54.8 million, or 7.1%, compared to the prior year period[11] - The company reported a net loss attributable to common stock of $3.7 million, with a diluted loss per share of $0.04[2] - Adjusted EBITDA for the third quarter was $78.8 million, resulting in an adjusted EBITDA margin of 10.9%[2] - Total revenue for the fiscal three months ended September 29, 2024, was $720.1 million, a decrease of 7.1% from $774.9 million for the same period in 2023[36] - Gross profit for the fiscal nine months ended September 29, 2024, was $149.6 million, down 31.7% from $219.5 million for the same period in 2023[36] - Net loss attributable to common stock for the fiscal three months ended September 29, 2024, was $(3.7) million, compared to net income of $16.2 million for the same period in 2023[36] - Adjusted diluted earnings per share for the fiscal three months ended September 29, 2024, was $0.06, down from $0.33 for the same period in 2023[34] Revenue Breakdown - The U.S. Gas segment revenue decreased by $29.7 million, or 7.5%, to $366.1 million, primarily due to reduced net volumes under existing customer MSAs[11] - Revenue from the Canadian Gas segment was $126.0 million, a decrease of $16.0 million or 11.3% year-over-year, with gross profit increasing to 21.2% from 15.5%[17] - Revenue from the Union Electric segment totaled $499.7 million, down $128.3 million or 20.4% compared to the prior year, with gross profit increasing to 7.8% from 7.0%[18] - Revenue from the Non-Union Electric segment was $346.0 million, reflecting a decrease of $34.9 million or 9.2%, with gross profit decreasing to 11.7% from 13.6%[19] - The Non-Union Electric segment revenue increased by $18.1 million, or 16.4%, to $128.8 million, driven by storm restoration services[14] - Storm restoration services revenue for the Union Electric segment was $20.3 million, down from $24.2 million in the prior year[18] Backlog and New Business - The backlog at the end of the third quarter totaled $4.3 billion, with 87% related to Master Service Agreement (MSA) revenue[2] - The company secured approximately $350 million in new business during the quarter, including new and renewed MSAs[6] - The company secured approximately $350 million in potential revenue from awards in the quarter[23] Cash and Debt Management - The company ended the quarter with $52.5 million in cash and cash equivalents, and improved its leverage ratio from June 2024[9] - Cash and cash equivalents increased to $52.5 million as of September 29, 2024, from $33.4 million at the end of 2023[38] - Total current liabilities decreased to $386.2 million as of September 29, 2024, from $420.6 million at the end of 2023[38] - Long-term debt, net of current portion, decreased to $762.1 million as of September 29, 2024, from $1.0 billion at the end of 2023[38] Operating Performance - Operating income for the fiscal nine months ended September 29, 2024, was $53.1 million, a decline of 55.0% from $117.9 million for the same period in 2023[36] - The company reported a net cash provided by operating activities of $97.2 million for the fiscal nine months ended September 29, 2024, compared to $61.8 million for the same period in 2023[40] - Interest expense for the fiscal three months ended September 29, 2024, was $23.9 million, down from $26.1 million in the prior year[32] Strategic Focus - The company is focused on diversifying its business mix by pursuing additional strategic bid opportunities aligned with its risk profile and core competencies[23] - Adjusted EBITDA margin percentage outlook for the full year is estimated to be between 9.0% and 9.6%[10] - The revenue outlook for the full year 2024 is projected to be between $2.5 billion and $2.7 billion[10]

IPO and Financial Position - Centuri Holdings completed its IPO on April 22, 2024, selling 14,260,000 shares at an initial price of $21.00 per share, resulting in net proceeds of approximately $328.0 million after expenses[107]. - As of June 30, 2024, cash and cash equivalents were $30.9 million, down from $33.4 million on December 31, 2023[160]. - Net cash used in operating activities for the six months ended June 30, 2024 was $76.4 million, a decrease of $56.9 million compared to $19.5 million for the same period in 2023[164]. - Net cash provided by financing activities increased by $92.3 million during the six months ended June 30, 2024, primarily due to net proceeds from the Centuri IPO and private placement totaling $330.3 million[166]. - The company has a senior secured revolving credit and term loan facility with a total capacity of $400 million, with $143.6 million outstanding on the revolving credit facility as of June 30, 2024[168]. - The maximum amount outstanding on the combined credit facility was $1.117 billion during the six months ended June 30, 2024[168]. - The company is required to maintain a net leverage ratio of less than 5.00 to 1.00 from April 18, 2024 through June 30, 2024, following the completion of the Qualified IPO[170]. - Contractually obligated principal payments on long-term debt total approximately $1.056 billion, with $831.4 million due in 2028[171]. Revenue and Segment Performance - Consolidated revenue for the three months ended June 30, 2024, was $672.1 million, a decrease of $133.7 million or 16.6% compared to $805.8 million in the prior year[130]. - U.S. Gas segment revenue totaled $340.7 million, a decrease of $51.2 million or 13.1% compared to the prior year, with gross profit margin dropping to 7.4% from 11.2%[130][131]. - Canadian Gas segment revenue was $41.0 million, down $7.1 million or 14.8%, but gross profit margin increased to 22.8% from 15.8%[131]. - Union Electric segment revenue decreased by $54.0 million or 24.8% to $164.2 million, with gross profit margin declining to 7.4% from 7.8%[132]. - Non-Union Electric segment revenue was $120.5 million, a decrease of $13.0 million or 9.8%, with gross profit margin dropping to 13.5% from 15.4%[133]. - Consolidated revenue dropped by $258.9 million, or 17.7%, to $1,200.1 million, with consolidated gross profit decreasing to $73.8 million[142]. Profitability and Expenses - Gross profit for the same period was $60.5 million, representing a gross margin of 9.0%, down from 11.2% in the prior year, reflecting a decrease of $29.5 million or 32.8%[130]. - Selling, general and administrative expenses decreased by $9.4 million or 31.2% compared to the prior year, primarily due to lower incentive compensation and reductions in corporate salary and benefit costs[135]. - Selling, general and administrative expenses decreased by $4.4 million, or 8.2%, primarily due to lower incentive compensation and corporate salary reductions[147]. - Interest expense decreased due to a reduction in average debt balance, with $156.0 million paid down under the revolving credit facility and $160.0 million under the term loan facility[137]. - The effective tax rate for the fiscal three months ended June 30, 2024, was (4.2%), significantly impacted by nondeductible expenses in relation to income before income taxes[138]. - The effective tax rate increased to 61.1% from 37.4%, significantly impacted by nondeductible expenses[150]. - Net income for the three months ended June 30, 2024, was $11.7 million, a decrease of $6.8 million or 36.9% compared to $18.5 million in the prior year[130]. - Adjusted Net Income for the fiscal six months ended June 30, 2024, was $2.6 million, compared to $23.1 million for the same period in the prior year[158]. Operational Challenges and Market Conditions - Rising fuel, labor, and material costs have negatively impacted operations, with the company unable to fully pass these costs to customers[112]. - Inflation and rising interest rates could negatively affect the company's financial condition and results of operations[123]. - Seasonal demand affects revenue, typically lowest in the first quarter due to winter conditions, with higher revenue expected in summer and fall[121]. - The company has taken steps to secure equipment availability and does not anticipate significant disruptions in the near term[114]. - The company is well-positioned to benefit from increased demand for utility infrastructure services due to aging infrastructure and regulatory requirements[111]. Strategic Initiatives - The company aims to support customers' environmental goals, including reducing methane emissions and enhancing renewable energy infrastructure[118]. - The company reported a reorganization of its reportable segments from two to four, now including U.S. Gas, Canadian Gas, Union Electric, and Non-Union Electric[109]. - The company expects separation-related costs to continue through at least fiscal year 2025 as it establishes itself as a standalone public entity[108].

Financial Performance - Centuri reported Q2 2024 revenue of $672.1 million, a decrease of $133.7 million or 16.6% compared to Q2 2023[3]. - Net income attributable to common stock was $11.7 million, with diluted earnings per share of $0.14; adjusted net income was $17.0 million, or adjusted diluted earnings per share of $0.20[3]. - Adjusted EBITDA for Q2 2024 was $68.6 million, with an adjusted EBITDA margin of 10.2%[3]. - Full year 2024 revenue guidance is projected between $2.5 billion and $2.7 billion, with an adjusted EBITDA margin of 9.0% to 9.6%[7]. - Adjusted EBITDA for the fiscal three months ended June 30, 2024, was $68.6 million, down from $92.9 million in the same period of the prior year[28]. - Free Cash Flow for the fiscal three months ended June 30, 2024, was $48.6 million, compared to $64.4 million in the same period of the prior year[29]. - Free Cash Flow Conversion was 70.8% for the fiscal three months ended June 30, 2024, compared to 69.3% in the same period of the prior year[29]. - Adjusted Net Income for the fiscal three months ended June 30, 2024, was $16.99 million, compared to $25.02 million in the same period of the prior year[30]. - Total revenue for the fiscal three months ended June 30, 2024, was $672,075,000, a decrease of 16.5% compared to $805,779,000 for the same period in 2023[33]. - Adjusted diluted earnings per share for the fiscal three months ended June 30, 2024, was $0.20, down from $0.35 in the same period last year, representing a decline of 42.9%[31]. - Net income for the fiscal three months ended June 30, 2024, was $11,697,000, compared to $18,527,000 for the same period in 2023, a decrease of 36.8%[33]. - Gross profit for the fiscal three months ended June 30, 2024, was $60,504,000, down 32.8% from $89,972,000 in the same period last year[33]. - Operating income for the fiscal three months ended June 30, 2024, was $33,145,000, a decrease of 37.7% compared to $53,202,000 in the same period last year[33]. Segment Performance - The U.S. Gas segment revenue decreased by $51.2 million, or 13.1%, to $340.7 million compared to the prior year[8]. - The Canadian Gas segment revenue decreased by $7.1 million, or 14.8%, totaling $41.0 million, while gross profit increased to 22.8%[9]. - The Union Electric segment revenue decreased by $54.0 million, or 24.8%, to $164.2 million, primarily due to a decline in offshore wind revenue[10]. - Revenue from the Union Electric segment totaled $328.1 million, a decrease of $95.8 million, or 22.6%, compared to the prior year period[14]. - Revenue from the Non-Union Electric segment totaled $217.1 million, reflecting a decrease of $53.0 million, or 19.6%, compared to the prior year period[15]. - Gross profit as a percentage of revenue decreased to 7.1% for the Union Electric segment and 8.8% for the Non-Union Electric segment, down from 7.6% and 14.5% respectively in the prior year[14][15]. Strategic Initiatives - The company secured multi-year customer awards with an estimated revenue potential exceeding $400 million, resulting in a backlog of $4.7 billion at the end of Q2 2024[3]. - Cost reduction initiatives are expected to generate approximately $29 million in annualized savings starting in 2025[3]. - The company expects annual savings of $29 million from its review of corporate and operating company overhead[18]. - The company is well positioned to implement cost-focused initiatives while growing the business under the leadership of the incoming Interim CEO[18]. Leadership Changes - The company initiated a national search for a permanent CEO following the resignation of Bill Fehrman, with Paul Caudill appointed as Interim President and CEO[3][4]. Cash Flow and Assets - The company reported a net cash used in operating activities of $76,411,000 for the fiscal six months ended June 30, 2024, compared to $19,487,000 for the same period in 2023[37]. - Total assets as of June 30, 2024, were $2,221,620,000, an increase from $2,189,908,000 as of December 31, 2023[35]. - Current liabilities decreased to $353,534,000 as of June 30, 2024, from $420,612,000 as of December 31, 2023, a reduction of 16%[35]. - Cash and cash equivalents at the end of the period were $30,919,000, down from $33,407,000 at the beginning of the period[37]. - The company raised $330,343,000 from its initial public offering and private placement, net of offering costs paid[37].

IPO and Financial Position - Centuri Group completed its IPO on April 22, 2024, selling 14,260,000 shares at an initial price of $21.00 per share, resulting in net proceeds of approximately $329.3 million after expenses[106]. - The company received total net proceeds of $329.3 million from the Centuri IPO, with $316.0 million used to pay down existing debt[154]. - As of March 31, 2024, the maximum amount outstanding on the combined credit facility was $1.117 billion, with $991.4 million on the term loan portion[162]. - The company amended its revolving credit facility to increase the maximum net leverage ratio to 5.75 to 1.00 through March 31, 2024[163]. Revenue and Segment Performance - Consolidated revenue for the first fiscal three months of 2024 was $528,023, a decrease of $125,270 or 19.2% compared to $653,293 in the same period of 2023[127]. - U.S. Gas segment revenue decreased by $32.8 million, or 12.6%, primarily due to unfavorable winter weather and the completion of a large project[129]. - Canadian Gas segment revenue decreased by $4.7 million, or 11.8%, attributed to a reduction in net volumes under existing MSAs[130]. - Union Electric segment revenue decreased by $41.8 million, or 20.3%, driven by a decline in offshore wind revenue and unfavorable winter weather conditions[131]. - Non-Union Electric segment revenue decreased by $40.0 million, or 29.3%, primarily due to a reduction in storm restoration services revenue[132]. - Revenue from Canadian operations accounted for approximately 8% of total revenue for both the fiscal three months ended March 31, 2024, and April 2, 2023[161]. Profitability and Expenses - Consolidated gross profit was $13,279, a decrease of $28,670 or 68.3% compared to $41,949 in the prior year[134]. - Selling, general and administrative expenses increased by $5.0 million, or 21.3%, due to higher strategic review and severance costs[138]. - Interest expense increased by $1,723, or 7.7%, primarily due to higher interest rates on variable-rate borrowings[140]. - Net loss attributable to common stock was $(25,058), an increase of $16,214 or 183.3% compared to $(8,844) in the prior year[127]. - For the fiscal three months ended March 31, 2024, the net loss was $25.2 million, compared to a net loss of $7.1 million for the same period in 2023, representing an increase in net loss of 254.8%[149]. - Adjusted EBITDA for the fiscal three months ended March 31, 2024, was $20.2 million, down from $49.2 million for the same period in 2023, reflecting a decrease of 58.9%[149]. - Adjusted EBITDA Margin as a percentage of revenue decreased to 3.8% for the fiscal three months ended March 31, 2024, compared to 7.5% for the same period in 2023[149]. Cash Flow and Capital Expenditures - Cash and cash equivalents decreased to $18.4 million as of March 31, 2024, from $33.4 million as of April 2, 2023[154]. - Net cash used in operating activities was $22.2 million for the fiscal three months ended March 31, 2024, compared to net cash provided of $51.9 million for the same period in 2023, a decrease of $74.1 million or 142.8%[158]. - Capital expenditures for the fiscal three months ended March 31, 2024, were $30.5 million, up from $23.2 million for the same period in 2023, an increase of 31.4%[159]. Operational Challenges and Market Position - Rising fuel, labor, and material costs have negatively impacted operations, with the company unable to fully pass these costs to customers[112]. - Inflationary pressures may impact operations, with the company attempting to recover costs through price adjustments in contracts[123]. - Seasonal demand fluctuations affect revenue, with typically lower revenue in the first quarter due to winter weather conditions[122]. - The company is positioned to benefit from increased demand for utility infrastructure services due to aging infrastructure and regulatory mandates[111]. - Centuri's services support environmental goals, including reducing methane emissions and enhancing electric infrastructure resilience[119]. - The company anticipates ongoing separation-related costs through at least fiscal year 2025 following its separation from Southwest Gas Holdings[108]. - The company has taken steps to secure equipment availability, mitigating potential disruptions in service delivery[115].

Financial Performance - Centuri reported first quarter 2024 consolidated revenue of $528.0 million, a decrease of 19.2% from $653.3 million in the first quarter of 2023[3]. - The net loss attributable to common stock for the first quarter of 2024 was $(25.1) million, compared to $(8.8) million in the prior year[2]. - Adjusted EBITDA for the first quarter of 2024 was $20.2 million, down from $49.2 million in the same period last year[2]. - Net loss for the fiscal three months ended March 31, 2024, was $25,233,000, compared to a net loss of $7,105,000 for the same period in 2023, representing an increase in loss of approximately 254%[17]. - Total revenue decreased to $528,023,000 for the fiscal three months ended March 31, 2024, down from $653,293,000 in the same period of 2023, reflecting a decline of about 19.2%[19]. - Adjusted EBITDA for the fiscal three months ended March 31, 2024, was $20,172,000, compared to $49,237,000 for the same period in 2023, indicating a decrease of approximately 59%[17]. - The adjusted EBITDA margin as a percentage of revenue was 3.8% for the fiscal three months ended March 31, 2024, down from 7.5% in the same period of 2023[17]. Segment Performance - The U.S. Gas segment revenue decreased by $32.8 million, or 12.6%, to $226.6 million due to unfavorable weather conditions[4]. - Revenue from the Union Electric segment fell by $41.8 million, or 20.3%, totaling $163.9 million, impacted by a decline in offshore wind revenue[6]. - The Non-Union Electric segment experienced a revenue drop of $40.0 million, or 29.3%, with revenue of $96.6 million, primarily due to reduced storm restoration services[7]. Cash Flow and Assets - Cash and cash equivalents decreased to $18,405,000 as of March 31, 2024, from $33,407,000 at the end of the previous period, representing a decline of approximately 44.9%[21]. - Net cash used in operating activities was $22,213,000 for the fiscal three months ended March 31, 2024, compared to net cash provided of $51,878,000 in the same period of 2023[23]. - Total assets decreased to $2,119,306,000 as of March 31, 2024, from $2,189,908,000 at the end of the previous period, indicating a reduction of about 3.2%[21]. Strategic Actions - Centuri completed an IPO on April 22, 2024, raising total net proceeds of $329.3 million, primarily used to pay down debt[2]. - The company paid $92.0 million to acquire the remaining 10% noncontrolling interest in Linetec Services, LLC in April 2024[2]. - Centuri received over $40 million in new awards from existing master service agreements customers during the quarter[2]. - The company reported strategic review costs of $3,877,000 for the fiscal three months ended March 31, 2024, compared to $91,000 in the same period of 2023, marking a significant increase[18]. - Capital expenditures for the fiscal three months ended March 31, 2024, were $30,499,000, an increase from $23,237,000 in the same period of 2023, reflecting a rise of approximately 31.2%[23]. Future Outlook - The company plans to hold its inaugural earnings conference call in August 2024, coinciding with the release of its second quarter 2024 financial results[8].