Financial Data and Key Metrics Changes - Consolidated revenues for Q1 2025 totaled $550.1 million, a 4.2% increase from Q1 2024 [22] - Consolidated gross profit was $20.3 million, reflecting a 53.1% increase year-over-year, with a gross profit margin of 3.7% compared to 2.5% in Q1 2024 [22] - Net loss attributable to common stock was $17.9 million, or a diluted loss per share of $0.20, improved from a net loss of $25.1 million or $0.35 per share in the same period last year [23] - Adjusted EBITDA for Q1 2025 was $24.2 million, approximately 20% higher than the prior year [23] Business Line Data and Key Metrics Changes - U.S. Gas segment revenue totaled $197.7 million, a year-over-year decrease of 12.7%, with a gross profit margin declining to -7.5% from -1.8% [24][25] - Canadian Gas segment revenue was $39.8 million, down 2.9% year-over-year, but the segment margin improved to 17.8% from 7.5% [26] - Union Electric segment revenue increased by 7.1% year-over-year to $175.5 million, with core Union Electric segment growth of 32.7% [26] - Nonunion Electric segment revenue rose by 41.9% to $137.1 million, with gross profit margin increasing to 11.9% from 2.9% [27] Market Data and Key Metrics Changes - The U.S. Gas segment faced adverse weather conditions early in the year but showed improvement in March [20] - The nonunion electrical segment benefited from strong market trends in the Sunbelt and Southeast regions [21] Company Strategy and Development Direction - The company is focused on implementing a unified business development strategy aimed at high growth pipeline development and securing new awards [12][14] - The sales pipeline is approaching $12 billion in revenue opportunities, with a record booking quarter of $1.2 billion in Q1 2025 [15] - The company aims to enhance capital efficiency and reduce working capital levels to improve free cash flow [29] Management's Comments on Operating Environment and Future Outlook - Management does not anticipate significant impacts from the global trade war or tariffs in 2025, citing a resilient business model [8][30] - The outlook for full-year 2025 remains unchanged, with expectations to deliver between $2.6 billion and $2.8 billion in revenues [29][30] - Management expressed confidence in maintaining a positive trajectory across segments and delivering strong growth in upcoming quarters [22] Other Important Information - The company has made significant progress in enhancing its pipeline management and sales strategies [31] - The first quarter is typically the slowest period due to seasonal winter weather, but the company expects to see improved performance in subsequent quarters [22] Q&A Session Summary Question: Can you discuss the trajectory for 2025 despite the weaker Q1 in U.S. Gas? - Management noted that the gas business faced weather-related challenges in January and February but recovered in March and April, with expectations to meet budgeted performance for the year [35][36] Question: What were the key findings of the strategic review? - Key findings included the need for a fully integrated sales pipeline, improved cross-selling capabilities, a cultural shift towards identifying more work for customers, and aligning KPIs with growth and profitability [38][39][40][41] Question: How does the U.S. Gas segment's loss compare to expectations? - Management acknowledged that weather impacts profitability, but efforts are being made to migrate the business to regions less affected by adverse weather [45][46] Question: What is the visibility on bookings moving forward? - Management indicated strong visibility on bookings for Q2 and expects to achieve the 1.1 times book-to-bill target for the full year [48][49] Question: Can you clarify guidance on adjusted EBITDA? - Management confirmed that while they are cautious, the strong bookings and backlog are pushing towards the upper end of revenue guidance, with no expected margin erosion [54][56] Question: What is the risk profile of new MSAs? - Management stated that the new work aligns with existing services and does not change the risk profile, focusing on maintaining the same type of contracts with established customers [58][60] Question: What is the outlook for margins based on the strategic review? - Management indicated that no radical changes are needed to achieve full-year EBITDA margin guidance, as the backlog and expected bookings are on track [65][66]

Financial Data and Key Metrics Changes - In Q1 2025, consolidated revenues totaled $550.1 million, a 4.2% increase from Q1 2024 [20] - Consolidated gross profit was $20.3 million, reflecting a 53.1% increase year-over-year, with a gross profit margin of 3.7% compared to 2.5% in Q1 2024 [20] - The net loss attributable to common stock improved to $17.9 million, or a diluted loss per share of $0.20, from a net loss of $25.1 million, or $0.35 per share, in the same period last year [21] - Adjusted EBITDA was $24.2 million, approximately 20% higher than the prior year, with an adjusted EBITDA margin of 4.4%, up from 3.8% [21] Business Line Data and Key Metrics Changes - The U.S. Gas segment revenue totaled $197.7 million, a year-over-year decrease of 12.7%, with a gross profit margin declining to -7.5% from -1.8% due to weather disruptions [22][23] - The Canadian Gas segment revenue was $39.8 million, down 2.9% year-over-year, but the segment margin improved to 17.8% from 7.5% [24] - Union Electric segment revenue increased by 7.1% to $175.5 million, with core Union Electric growth of 32.7% driven by increased bid project activity [25] - Nonunion Electric segment revenue rose by 41.9% to $137.1 million, with gross profit increasing to 11.9% from 2.9% due to higher crew counts and work hours [26] Market Data and Key Metrics Changes - The U.S. Gas segment faced adverse weather conditions impacting performance, but March showed significant improvement [18] - The nonunion electrical segment benefited from strong market trends in the Sunbelt and Southeast, driven by storm damage recovery efforts [19] Company Strategy and Development Direction - The company is focused on implementing a unified business development strategy aimed at high growth pipeline development and securing new awards [10][12] - There is an emphasis on enhancing capital efficiency and improving free cash flow through better management of capital equipment and working capital [28] - The company aims to grow its customer base and expand market presence, leveraging its scale and capabilities in utility services [9][10] Management's Comments on Operating Environment and Future Outlook - Management does not anticipate significant impacts from the global trade war or tariffs in 2025, citing a resilient business model [7][29] - The outlook for full-year 2025 remains unchanged, with expectations to deliver revenues between $2.6 billion and $2.8 billion [28][29] - Management expressed confidence in achieving a book-to-bill ratio exceeding 1.1 times for the year, supported by a strong sales pipeline [13][29] Other Important Information - The company reported a record booking quarter with new bookings totaling $1.2 billion in Q1 2025, significantly up from $221 million in Q4 2024 [13] - The backlog increased to $4.5 billion as of Q1 2025 from $3.7 billion at the end of 2024 [13] Q&A Session Summary Question: How will the company achieve the upper end of revenue guidance despite a weaker Q1 in U.S. Gas? - Management noted that the gas business experienced a slow start due to weather but recovered in March and April, with work under contract supporting the guidance [34][35] Question: What were the key findings from the strategic review? - The review highlighted the need for a fully integrated sales pipeline, improved cross-selling capabilities, cultural shifts towards growth, and alignment of KPIs with profitability goals [37][40] Question: How does the U.S. Gas segment's loss compare to expectations? - Management acknowledged that Q1 is typically slow for the gas segment due to weather, but they are working to mitigate impacts by expanding operations in warmer regions [44][45] Question: What is the expected cadence for bookings throughout the year? - Management anticipates some lumpiness in bookings, with Q2 and Q4 expected to be strong, while Q3 may be quieter [50][51] Question: Can you provide details on the new MSAs and their risk profile? - The new work involves familiar services and customers, maintaining the same risk profile as previous contracts [59][60] Question: What is the outlook for EBITDA margins? - Management expects to achieve full-year guidance without needing significant changes, as the business is on track to meet budget expectations [66][67]

Group 1 - Centuri Holdings reported a quarterly loss of $0.12 per share, better than the Zacks Consensus Estimate of a loss of $0.16, and a significant improvement from a loss of $137.53 per share a year ago, indicating a 25% earnings surprise [1] - The company posted revenues of $550.08 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 3.68%, and showing an increase from $528.02 million in the same quarter last year [2] - Centuri shares have increased approximately 10.5% since the beginning of the year, contrasting with a -3.8% decline in the S&P 500 [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $0.13 on revenues of $667.42 million, and for the current fiscal year, it is $0.57 on revenues of $2.67 billion [7] - The Zacks Industry Rank for Utility - Electric Power is in the top 22% of over 250 Zacks industries, suggesting a favorable outlook for the industry [8]

Financial Performance - Q1 2025 - Revenue reached $550.1 million[26], while adjusted EBITDA was $24.2 million[26], resulting in an adjusted EBITDA margin of 4.4%[26] - Gross profit amounted to $20.3 million[26] - Net loss attributable to common stock was $(17.9) million, or $(0.20) per diluted share[35] - Adjusted net loss was $(10.5) million, or $(0.12) per adjusted diluted share[35] Commercial Achievements - Total bookings reached $1.2 billion[31], with a book-to-bill ratio of 2.2x[31] - New awards totaled $505 million[31], and renewals amounted to $700 million[31] - The company has near-term opportunities valued at $1.4 billion[31] and an opportunity pipeline of approximately $12 billion[31] Segment Performance & Outlook - Non-union Electric revenues increased by 42% year-over-year[29], with segment gross margin rising to 11.9% compared to 2.9% in 1Q24[29] - The company affirms its FY 2025 outlook, projecting revenue between $2.6 billion and $2.8 billion[55], and adjusted EBITDA between $240 million and $275 million[55]

Revenue Performance - Centuri reported first quarter 2025 revenue of $550.1 million, an increase of $22.1 million or 4.2% year-over-year[6]. - Total revenue for the three months ended March 30, 2025, was $550,081,000, an increase of 4.1% from $528,023,000 in the same period last year[30]. Profitability Metrics - Adjusted EBITDA for the first quarter improved by $4.1 million, or 20.1%, reaching $24.2 million compared to $20.2 million in the first quarter of 2024[5]. - Adjusted EBITDA for the three months ended March 30, 2025, was $24,228,000, with an adjusted EBITDA margin of 4.4%, compared to $20,172,000 and 3.8% margin in the prior year[26]. - The company reported a gross profit of $20,328,000 for the three months ended March 30, 2025, compared to $13,279,000 in the same period in 2024, reflecting a significant increase in profitability[30]. Customer and Market Activity - The company secured record customer awards exceeding $1.2 billion, with a book-to-bill ratio of 2.2x, leading to a backlog increase to $4.5 billion[8]. - Centuri anticipates continued strength in capital spending by customers despite macroeconomic uncertainties[4]. Segment Performance - U.S. Gas segment revenue decreased by $28.9 million, or 12.7%, year-over-year, while Non-union Electric revenue grew by $40.5 million, or 41.9%[13]. - The Canadian Gas segment delivered solid margins, contributing to overall performance despite challenges in the U.S. Gas segment[7]. Financial Position - Centuri's net loss attributable to common stock was $17.9 million, a reduction from $25.1 million in the first quarter of 2024[6]. - Centuri Holdings reported a net loss of $17,924,000 for the three months ended March 30, 2025, compared to a net loss of $25,233,000 for the same period in 2024, representing a 29% improvement[30]. - The diluted loss per share attributable to common stock was $(0.20) for the three months ended March 30, 2025, compared to $(0.35) for the same period in 2024[28]. - Centuri's total debt as of March 30, 2025, was $873,168,000, a decrease from $898,221,000 as of December 29, 2024[28]. - The net debt to adjusted EBITDA ratio improved to 3.5 as of March 30, 2025, compared to 3.6 as of December 29, 2024[28]. - Cash and cash equivalents decreased to $15,255,000 as of March 30, 2025, from $49,019,000 at the end of the previous period[32]. - Net cash provided by operating activities was $16,676,000 for the three months ended March 30, 2025, compared to a net cash used of $(26,451,000) in the same period last year[34]. Strategic Initiatives - The company completed a comprehensive review to optimize its opportunity pipeline and business development functions[6]. - The company affirms a full year 2025 revenue outlook of $2.60 to $2.80 billion and adjusted EBITDA of $240 to $275 million[11]. - The company incurred $1,611,000 in separation-related costs during the three months ended March 30, 2025, which were not present in the same period last year[26].

Financial Performance - Total revenue for the fiscal year ended December 29, 2024, was $2,637,229,000, a decrease of 9.1% compared to $2,899,276,000 in the previous year[371]. - Gross profit for the fiscal year was $220,672,000, down from $273,442,000, reflecting a gross margin of 8.4% compared to 9.4% in the prior year[371]. - The net loss attributable to common stock for the fiscal year was $6,724,000, significantly improved from a net loss of $186,176,000 in the previous year[374]. - Basic loss per share attributable to common stock was $0.08, compared to a loss of $2.60 per share in the prior year[371]. - Cash flows from operating activities generated $158,230,000, a decrease from $167,465,000 in the previous year[377]. - Capital expenditures for the fiscal year were $99,333,000, down from $106,650,000 in the previous year[377]. - The company reported a comprehensive loss of $15,908,000 for the fiscal year, compared to a comprehensive loss of $183,707,000 in the previous year[374]. - Cash and cash equivalents at the end of the period increased to $49,019,000 from $33,407,000 at the beginning of the period[377]. - The company recognized a goodwill impairment of $213,992,000 in the previous fiscal year, which was not present in the current fiscal year[377]. Impairment and Liabilities - The company incurred impairment charges of approximately $214.0 million during the fiscal year ended December 31, 2023, related to the write-down of goodwill from the August 2021 acquisition of Riggs Distler[142]. - The company faces potential liability for warranty claims and faulty engineering, which may reduce profitability[160]. - Warranty claims have historically not been material, but there is a risk of increased claims that could adversely affect results of operations and cash flows[160]. - The company may be subject to contingent tax liabilities of Southwest Gas Holdings following a Distribution, which could be substantial[187]. - The Separation Agreement includes indemnification obligations that could result in substantial liabilities for the company[192]. Market and Economic Conditions - Increased inflation has led to higher operating expenses, particularly in fuel, labor, and materials, adversely impacting profitability and cash flows[145]. - The company has experienced pressures on construction costs due to inflation, which may continue to affect project completion and profitability[146]. - Unfavorable economic conditions, including inflation and supply chain disruptions, could reduce demand for the company's services[150]. - The natural gas market's volatility, influenced by global events and legislative changes, may affect customer investment decisions and project timelines[151]. - Climate change-related events and extreme weather conditions could significantly impact the company's operations and financial results[153]. Regulatory and Compliance Risks - The company is subject to numerous environmental laws, and failure to comply could result in significant liabilities and operational impacts[168]. - Compliance with OSHA regulations incurs significant costs, and non-compliance may lead to penalties and operational delays[166]. - Regulatory constraints and budgetary limitations of customers, primarily regulated utilities, could materially impact the volume of work awarded to the company[148]. - Regulatory changes affecting natural gas and electric transmission could impact demand for the company's services and profitability[162]. - Legislative actions regarding greenhouse gas emissions could increase operational costs and impact pricing strategies[172]. - Changes in renewable energy mandates could reduce project development and impact the company's growth potential[165]. Ownership and Corporate Governance - Southwest Gas Holdings owns approximately 81% of the company's outstanding common stock, controlling significant corporate decisions[174]. - The concentrated ownership by Southwest Gas Holdings may delay or prevent favorable acquisition attempts, affecting stock price[174]. - The company is classified as a "controlled company" under NYSE rules, allowing it to qualify for exemptions from certain corporate governance requirements[188]. - The company may face challenges in negotiating terms with Southwest Gas Holdings that are as favorable as those with unaffiliated third parties[178]. - The company is subject to restrictions on actions, including issuing additional equity, until a Distribution is implemented or abandoned to avoid significant tax-related liabilities[180]. Transition and Separation - The Separation is intended to allow the company to focus on its distinct operating priorities and strategies, enhancing long-term growth opportunities[194]. - The expected benefits of the Separation may not be fully realized, potentially affecting the company's financial condition and operating results[194]. - The company may incur higher costs for certain functions previously performed by Southwest Gas Holdings, which could decrease profitability[194]. - The transition to being a separate publicly traded company may incur significant costs, including accounting, tax, and legal expenses[199]. - The company may face challenges in achieving the anticipated benefits of the Separation from Southwest Gas Holdings[199]. Revenue and Contracts - Revenue from unit-priced contracts for the year ended December 29, 2024 was $1,508.7 million[363]. - Revenue from fixed-price contracts for the year ended December 29, 2024 was $539.5 million[363]. - Master services agreements revenue decreased to $2,121.1 million in 2024 from $2,388.7 million in 2023, representing a decline of 11.2%[453]. - The aggregate amount of transaction price allocated to unsatisfied performance obligations for fixed-price contracts was $251.9 million as of December 29, 2024[458]. - The Company utilizes master services agreements (MSAs) and bid contracts for revenue generation, with the majority of work performed under unit-price contracts[400][403]. Assets and Liabilities - Total assets as of December 29, 2024 were $2,074.4 million, a decrease from $2,189.9 million as of December 31, 2023[368]. - Total liabilities as of December 29, 2024 were $1,514.2 million, down from $1,864.7 million as of December 31, 2023[368]. - Total equity increased to $555.6 million as of December 29, 2024, compared to $226.0 million as of December 31, 2023[368]. - The current portion of long-term debt decreased to $30.0 million as of December 29, 2024, from $42.6 million as of December 31, 2023[368]. - Accounts receivable, net, decreased to $281.4 million as of December 29, 2024, from $347.5 million in 2023[459]. Employee and Organizational Changes - Approximately 59% of the Company's employees were covered by collective bargaining agreements as of December 29, 2024[445]. - The Company underwent a reorganization in January 2024, realigning its reportable segments from two to four[460].

Revenue Performance - Fourth quarter 2024 revenue reached $717.1 million, an increase of $51.8 million or 7.8% year-over-year[5] - Full year 2024 revenue totaled $2.64 billion, exceeding the $2.6 billion midpoint of guidance provided in July[10] - Total revenue for the fiscal year ended December 29, 2024, was $2,637,229, a decrease of 9.1% compared to $2,899,276 for the fiscal year ended December 31, 2023[39] Net Income and Earnings - Net income attributable to common stock for Q4 2024 was $10.3 million, with diluted earnings per share of $0.12[5] - Net income for the fiscal three months ended December 29, 2024, was $10,331, compared to a loss of $212,846 for the same period in the previous year[34] - Net income attributable to common stock for the fiscal year ended December 29, 2024, was a loss of $6,724, compared to a loss of $186,176 for the fiscal year ended December 31, 2023[39] - Adjusted Diluted Earnings per Share for the fiscal three months ended December 29, 2024, was $0.21, compared to $0.07 for the same period last year[37] EBITDA and Margins - Adjusted EBITDA for Q4 2024 was $70.7 million, resulting in an Adjusted EBITDA Margin of 9.9%[5] - Adjusted EBITDA for the fiscal year ended December 29, 2024, was $238,226, down from $291,182 in the previous year, with an Adjusted EBITDA Margin of 9.0% compared to 10.0%[34] - The company recognized $66,569 in EBITDA for the fiscal three months ended December 29, 2024, compared to a loss of $161,243 in the same period last year[34] Debt and Financial Ratios - Centuri's net debt to Adjusted EBITDA ratio improved to 3.6x as of December 2024, down from 4.0x in December 2023[11] - The company reported a net debt of $849,202 as of December 29, 2024, with a Net Debt to Adjusted EBITDA ratio of 3.6, improved from 4.0 in the previous year[37] - Total debt decreased to $898,221 as of December 29, 2024, from $1,186,551 in the previous year[37] Cash Flow and Assets - Cash and cash equivalents increased to $49,019 as of December 29, 2024, from $33,407 at the end of the previous fiscal year, marking a 46.7% increase[43] - Total assets decreased to $2,074,390 as of December 29, 2024, down from $2,189,908 as of December 31, 2023, reflecting a decline of 5.2%[41] - The company reported net cash provided by operating activities of $158,230 for the fiscal year ended December 29, 2024, compared to $167,465 in the previous year, a decrease of 5.4%[43] Strategic Developments - The company appointed Chris Brown as President and CEO, effective December 3, 2024, to drive earnings growth[5] - In Q4 2024, Centuri booked $221 million in new awards, with 45% from MSA renewals and 55% from new contracts[9] - The sales opportunity pipeline has grown by one-third, including $1.5 billion in late-stage bids and approximately 40 MSA renewals expected in the next 12 months[9] Costs and Expenses - The company incurred $1,827 in CEO transition costs during the fiscal three months ended December 29, 2024[34] - Non-cash stock-based compensation expense was $1,421 for the fiscal three months ended December 29, 2024, compared to a negative $298 in the same period last year[34] - Strategic review costs for the fiscal year ended December 29, 2024, totaled $2,010, down from $3,365 in the previous year[34] - Interest expense for the fiscal year ended December 29, 2024, was $90,515, slightly down from $97,476 in the previous year[34] Profitability Metrics - Gross profit for the fiscal year ended December 29, 2024, was $220,672, down from $273,442 in the previous year, representing a decline of 19.2%[39] - Operating income for the fiscal year ended December 29, 2024, was $86,783, a significant improvement from an operating loss of $77,564 in the previous year[39] Capital Expenditures - Capital expenditures for the fiscal year ended December 29, 2024, were $99,333, down from $106,650 in the previous year, indicating a reduction of 6.2%[43] Shareholder Information - The weighted average diluted shares outstanding increased to 88,609 for the fiscal quarter ended December 29, 2024, compared to 71,666 for the same period in the previous year[39]

Core Insights - Centuri Holdings, Inc. is under investigation for possible securities fraud, with a potential class action being considered for affected investors [1][2] - The company reported Q2 financial results that missed market expectations, with a Non-GAAP EPS of $0.20, falling short by $0.02, and quarterly revenue of $643.39 million, a 17.0% decline year-over-year, missing analyst estimates by $117.03 million [3] Financial Performance - Q2 2024 Non-GAAP EPS was $0.20, missing expectations by $0.02 [3] - Quarterly revenue was $643.39 million, representing a 17.0% decline compared to the same period last year [3] - Revenue missed analyst estimates by $117.03 million [3] IPO Information - Centuri went public on April 18, 2024, offering 12.4 million shares at $21 per share [3]

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].