Financial Data and Key Metrics Changes - The company reported a fourth quarter revenue increase of 20%, reaching $760 million, driven by balanced growth across diversified end markets [10][32] - Fourth quarter EBITDA remained relatively flat at $58 million, primarily due to public company stand-up costs of $6.3 million [11][33] - The total backlog at the end of the fourth quarter was $2.8 billion, reflecting a 38% increase year-over-year [11][37] - For the full year 2024, net revenue was $2.85 billion, consistent with the previous year, while total EBITDA increased to $232 million from $223 million [34][36] Business Line Data and Key Metrics Changes - Electrical and Mechanical (E&M) revenues increased by 21% in the fourth quarter, while Transmission and Distribution (T&D) revenues grew by 15% [10][32] - E&M segment revenue for the fourth quarter was approximately $550 million, with EBITDA of $42.7 million, up 17% year-over-year [39] - T&D segment revenue for the fourth quarter was $213.3 million, with EBITDA of $30.6 million, reflecting a 15% increase [40] Market Data and Key Metrics Changes - The demand outlook for the T&D business remains favorable, driven by significant investments needed to modernize existing infrastructure [24][25] - The company noted strong demand in commercial markets, particularly in data centers and hospitality, contributing to a robust project pipeline [60] Company Strategy and Development Direction - The company is focused on its 4EVER strategy, which emphasizes employee development, customer value creation, and operational excellence [14][15] - A key aspect of the growth strategy includes geographic expansion through satellite projects and strategic M&A opportunities [16][20] - The company aims for compound annual revenue growth of 5% to 7% and EBITDA growth of 7% to 9% [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the favorable demand drivers in key end markets, despite potential headwinds from tariffs and inflation [29][30] - The company is well-positioned financially, with net leverage at approximately 1.0 times, allowing for flexibility in executing growth strategies [21][42] Other Important Information - The company does not currently have a dividend policy or share repurchase authorization, focusing instead on reinvesting in growth opportunities [22] - Full year 2024 CapEx increased to $48.3 million, reflecting a commitment to organic growth investments [43] Q&A Session Summary Question: How do you approach revenue guidance for 2025? - Management indicated that larger, complex projects are taking longer to complete, impacting backlog conversion [52][54] Question: What is the latest on project pipeline and backlog trends? - Management noted strong demand in commercial areas, particularly data centers, and emphasized that backlog trends are primarily a matter of timing [59][64] Question: What are the expectations for corporate expenses going forward? - Management clarified that corporate expenses are primarily related to building corporate teams and are not expected to decrease significantly in the near term [65][66] Question: What is the outlook for M&A activity? - Management expressed excitement about M&A opportunities, focusing on companies with strong leadership and safety cultures [83][84] Question: How is the company addressing potential impacts from the new administration? - Management is monitoring the situation closely, noting that the administration's pro-business strategy could be beneficial for the industry [29][110]

Company Overview - Everus Construction Group operates under two segments: Electrical & Mechanical and Transmission & Distribution, focusing on diverse end markets across the U.S.[171] - The Separation from MDU Resources was completed on October 31, 2024, resulting in Everus becoming an independent publicly traded company listed under the symbol "ECG" on the NYSE[190]. - The Distribution involved transferring 50,972,059 shares of Everus common stock to MDU Resources stockholders at a ratio of one share of Everus for every four shares of MDU Resources[189]. Financial Performance - Operating revenues for Q3 2024 were $761.0 million, a 6.1% increase from $717.4 million in Q3 2023[200]. - E&M revenues grew by $20.0 million, or 3.9%, while T&D revenues increased by $24.0 million, or 11.7%[200]. - Operating income for Q3 2024 was $53.7 million, a 7.2% increase from $50.1 million in Q3 2023[210]. - Net income for Q3 2024 was $41.8 million, a 16.1% increase from $36.0 million in Q3 2023[199]. - Operating revenues for the nine months ended September 30, 2024, were $2,090.0 million, a decrease of 5.8% from $2,218.7 million in the same period of 2023[215]. - Selling, general and administrative expenses for the nine months ended September 30, 2024, were $109.3 million, an increase of 6.6% from $102.5 million in the same period of 2023[220]. - Income from equity method investments for the nine months ended September 30, 2024, was $7.8 million, a 62.5% increase from $4.8 million in the same period of 2023[226]. - Income taxes for the nine months ended September 30, 2024, were $37.6 million, a 14.6% increase from $32.8 million in the same period of 2023[225]. - EBITDA for the nine months ended September 30, 2024, was $173.9 million, up from $164.4 million in the same period of 2023, reflecting an increase of 5.7%[255]. - Free cash flow for the nine months ended September 30, 2024, was $57.8 million, compared to $45.5 million for the same period in 2023, an increase of 27.0%[260]. - Cash provided by operating activities totaled $82.7 million for the nine months ended September 30, 2024, an increase of $21.3 million from $61.4 million in the same period of 2023[272]. - Cash used in investing activities increased to $25.5 million for the nine months ended September 30, 2024, from $16.4 million in the same period of 2023, a rise of 55.5%[274]. - Cash used in financing activities totaled $58.2 million for the nine months ended September 30, 2024, compared to $46.5 million in the same period of 2023, an increase of 25.0%[275]. Segment Performance - Electrical & Mechanical (E&M) segment revenues for Q3 2024 were $536.9 million, a 3.9% increase from $516.9 million in Q3 2023[228]. - Transmission & Distribution (T&D) segment revenues for Q3 2024 were $228.5 million, an 11.7% increase from $204.5 million in Q3 2023[231]. - E&M segment operating income for Q3 2024 was $34.9 million, a 12.2% increase from $31.1 million in Q3 2023[233]. - T&D segment operating income for Q3 2024 was $25.3 million, a 10.0% increase from $23.0 million in Q3 2023[234]. - E&M segment revenues for the nine months ended September 30, 2024, were $1,481.7 million, an 11.8% decrease from $1,680.2 million in the same period of 2023[237]. - T&D segment revenues for the nine months ended September 30, 2024, were $623.8 million, a 13.5% increase from $549.5 million in the same period of 2023[240]. - E&M segment operating income for the nine months ended September 30, 2024, was $100.8 million, a slight increase of 0.5% from $100.3 million in the same period of 2023[242]. - T&D segment operating income for the nine months ended September 30, 2024, was $60.1 million, an increase of 17.2% from $51.3 million in the same period of 2023[243]. Market Conditions and Opportunities - The U.S. construction services industry is highly fragmented, with competition influenced by technical expertise, service pricing, and operational resources[176]. - The American Rescue Plan provides $1.9 trillion in COVID-19 relief funding, which may positively impact infrastructure projects relevant to Everus[184]. - The Infrastructure Investment and Jobs Act and the Inflation Reduction Act are expected to provide long-term opportunities for investments in electric and grid infrastructure, benefiting Everus[184]. - Everus has a backlog indicating ongoing bidding opportunities in specialty contracting markets, despite competitive bidding conditions[185]. - The company is monitoring legislative initiatives that could impact its operations and market opportunities, particularly in renewable energy and electric vehicle infrastructure[184]. Cost and Risk Management - The company anticipates continued increases in insurance costs due to economic inflation and rising losses in the insurance industry, particularly related to wildfire risks[174]. - Everus is focused on growing total revenues, expanding margins, and managing costs to increase operating income despite rising insurance costs[175]. - Inflation has increased costs, particularly in labor and transportation, but the company has not seen a material effect on its financial results[296]. - Labor costs may increase due to competitive market pressures and union negotiations, potentially affecting financial results[297][298]. - The company has a capacity to incur indebtedness of up to $525.0 million under a new credit agreement, which includes $300.0 million in term loans and a $225.0 million revolving credit facility[263]. - As of September 30, 2024, the fixed maximum amounts guaranteed under certain contracts aggregated to $557.5 million, up from $341.4 million as of December 31, 2023[285]. - The fixed maximum amounts guaranteed under letters of credit were $2.2 million as of September 30, 2024, compared to $0.2 million as of December 31, 2023[286]. - The company has issued guarantees related to routine purchases and lease obligations, with no fixed maximum amounts specified[287]. - The company does not have any other material financial guarantees or off-balance sheet arrangements beyond those disclosed[288]. - The company is exposed to interest rate risk due to a five-year senior secured credit agreement, which includes term loans and a revolving credit facility[295].