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Company Overview - MYR Group Inc. is a holding company of leading specialty electrical contractors serving the electric utility infrastructure, commercial, and industrial construction markets in the United States and Canada [2] - The company operates through two business segments: Transmission & Distribution (T&D) and Commercial & Industrial (C&I) [2] - MYR Group's T&D segment provides services related to electric transmission, distribution networks, substation facilities, clean energy projects, and electric vehicle charging infrastructure [2] - The C&I segment offers a wide range of services including design, installation, maintenance, and repair of commercial and industrial wiring for various facilities [2] Upcoming Events - MYR Group will attend the 2026 Goldman Sachs Energy, CleanTech & Utilities conference [1] - CEO Rick Swartz and CFO Kelly Huntington will meet with institutional investors during the conference on January 7, 2026, in Aventura, Florida [1] - The event is exclusive to Goldman Sachs clients [1]

Core Viewpoint - MYR Group Inc. will participate in the Oppenheimer Winter Industrial Summit investor conference, where its CEO and CFO will engage with institutional investors virtually on December 11, 2025 [1] Company Overview - MYR Group Inc. is a holding company specializing in electrical contracting services across the United States and Canada, operating through two main segments: Transmission & Distribution (T&D) and Commercial & Industrial (C&I) [2] - The T&D segment offers services related to electric transmission, distribution networks, substations, clean energy projects, and electric vehicle charging infrastructure, catering to a diverse clientele including utilities, private developers, and government-funded entities [2] - The C&I segment provides a wide range of services such as design, installation, maintenance, and repair of commercial and industrial wiring, serving clients like general contractors, facility owners, and government agencies [2]

Core Insights - 1060 Capital Management has sold its entire stake in MYR Group, amounting to a net change of $5.9 million, during the third quarter [1][2] - MYR Group's stock has increased by 52.6% over the past year, significantly outperforming the S&P 500, which rose about 13% in the same period [3] Company Overview - MYR Group is a leading provider of electrical construction services, focusing on transmission, distribution, and commercial/industrial projects [5] - The company serves a diverse customer base, including investor-owned utilities, cooperatives, independent power producers, government agencies, and general contractors in the U.S. and Canada [5] - As of the latest market close, MYR Group's stock price is $229.44, with a market capitalization of $3.6 billion, trailing twelve months (TTM) revenue of $3.5 billion, and TTM net income of $97.8 million [4] Financial Performance - MYR Group reported third-quarter revenue of $950.4 million, reflecting a 7% year-over-year increase [8] - Gross margins expanded to 11.8% from 8.7%, and EBITDA nearly doubled to $62.7 million, with net income reaching a record $32.1 million [8] - Free cash flow has also strengthened materially, indicating robust financial health [8] Investment Context - The decision by 1060 Capital to divest from MYR Group aligns with its strategy of cycling out of investments where original catalysts have played out [6] - MYR Group's stock price nearing an all-time high suggests fewer immediate opportunities for gains compared to other potential investments [6][9]

Core Insights - MYR Group Inc. will participate in the Bernstein Insights: 4th Annual Industrials Forum investor conference on December 10, 2025, in New York City, where the CEO and CFO will meet with institutional investors [1] Company Overview - MYR Group Inc. is a holding company of leading specialty electrical contractors operating in the United States and Canada, divided into two business segments: Transmission & Distribution (T&D) and Commercial & Industrial (C&I) [2] - The T&D segment provides services related to electric transmission, distribution networks, substation facilities, clean energy projects, and electric vehicle charging infrastructure, catering to a diverse customer base including utilities and independent power producers [2] - The C&I segment offers a wide range of services including design, installation, maintenance, and repair of commercial and industrial wiring for various facilities such as data centers, hospitals, and manufacturing plants, serving general contractors and government agencies [2]

Core Insights - The artificial intelligence sector is highlighted as a strong area for equities with significant earnings growth [1] - MYR Group has established a bullish base due to its involvement in data center construction and electrical infrastructure, which are essential for the AI revolution [1] Summary by Category Company Performance - MYR Group's IBD SmartSelect Composite Rating improved from 94 to 96, indicating strong market performance [2][4] - The company also achieved a Relative Strength Rating of 91, showcasing its market leadership [4] Industry Trends - The construction of data centers and the necessary electrical infrastructure is critical for supporting the growth of AI technologies [1] - The overall sentiment in the AI space remains positive, with companies like MYR Group benefiting from this trend [1]

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Financial Data and Key Metrics Changes - Third quarter 2025 revenues were $950 million, an increase of $62 million or 7% compared to the same period last year [9] - Gross margin improved to 11.8% from 8.7% year-over-year, primarily due to better productivity and favorable job closeouts [10] - Net income reached a record $32 million, up from $11 million in the same period last year, with net income per diluted share increasing 215% to $2.05 [12] - Operating cash flow was a record $96 million compared to $36 million for the same period last year [13] - Total backlog as of September 30, 2025, was $2.66 billion, a 2.5% increase from a year ago [13] Business Line Data and Key Metrics Changes - Transmission and Distribution (T&D) revenues were $503 million, a 4% increase year-over-year, with $293 million from transmission and $210 million from distribution [9] - Commercial and Industrial (C&I) revenues were $447 million, a 10% increase compared to the same period last year, driven by fixed-price contracts [9] - T&D operating income margin improved to 8.2% from 3.6% year-over-year, while C&I operating income margin increased to 6.4% from 5.0% [11] Market Data and Key Metrics Changes - The Edison Electric Institute projects U.S. investor-owned utilities will exceed $1.1 trillion in capital investments from 2025 to 2029, with $123 billion earmarked for transmission in the first three years [6] - The FMI's 2025 North American Engineering and Construction Outlook indicates healthy growth in key markets for the C&I segment, including data centers, transportation, healthcare, education, and wastewater construction [7] Company Strategy and Development Direction - The company aims to strengthen long-term customer relationships and expand existing client relationships through Master Service Agreements and Alliance Agreements [5] - There is a focus on pursuing new opportunities in a healthy bidding environment, with expectations of consistent success driven by electrification demand and grid modernization [6][8] - The company is committed to maintaining a diversified strategy across core markets while leveraging expertise in data centers and other sectors [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities presented by increased utility investments and a strong backlog of work [18] - The company anticipates a 10% revenue growth for 2026, with expectations of continued strong performance in both C&I and T&D segments [62] - Management noted that while there are challenges related to labor and material availability, positive conversations with clients indicate a strong future pipeline [46] Other Important Information - The effective tax rate for the third quarter was 28.3%, down from 42.5% in the prior year, primarily due to lower permanent difference items [12] - The company has approximately $267 million in working capital and $400 million in borrowing availability under its credit facility as of September 30, 2025 [14] Q&A Session Summary Question: C&I margins were considerably stronger than in recent quarters despite a negative change order. What are the expectations for C&I margins going forward? - Management indicated that margins were slightly higher than projected, with expectations for next year to be in the mid-range of 5% to 7.5% [25][27] Question: How is the company approaching the data center opportunity? - Management sees potential for data centers to increase but emphasizes that other core markets remain strong and are not being neglected [34] Question: What is the outlook for M&A activity given the current market conditions? - Management noted that while multiples are up, they continue to evaluate opportunities that fit strategically and culturally, targeting acquisitions in the $50 million to $600 million revenue range [36] Question: How should we think about the current Master Service Agreements with increased CapEx revisions from utility customers? - Management confirmed that increased spending on Master Service Agreements is a component of the anticipated growth in the T&D segment [68]

Core Insights - MYR Group (MYRG) reported quarterly earnings of $2.05 per share, exceeding the Zacks Consensus Estimate of $1.82 per share, and showing significant growth from $0.65 per share a year ago, resulting in an earnings surprise of +12.64% [1] - The company achieved revenues of $950.4 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.84% and increasing from $888.04 million year-over-year [2] - MYR shares have increased approximately 46.7% year-to-date, outperforming the S&P 500's gain of 17.2% [3] Earnings Outlook - The future performance of MYR's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $1.76 on revenues of $880.67 million, and for the current fiscal year, it is $6.72 on revenues of $3.53 billion [7] Industry Context - The Electric Construction industry, to which MYR belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Performance - Contract revenues for Q3 2025 reached $950.4 million, a 7.0% increase from $888.0 million in Q3 2024[13] - Gross profit for Q3 2025 was $111.9 million, up 44.7% from $77.3 million in Q3 2024[13] - Net income for Q3 2025 was $32.1 million, compared to $10.6 million in Q3 2024, representing a 201.5% increase[13] - Basic earnings per share for Q3 2025 were $2.07, significantly higher than $0.65 in Q3 2024[13] - The company reported a comprehensive income of $30.3 million for Q3 2025, compared to $12.0 million in Q3 2024[13] - For the nine months ended September 30, 2025, net income increased significantly to $81.9 million from $14.3 million in the same period of 2024, representing a growth of 472%[22] - Net cash flows provided by operating activities for the nine months ended September 30, 2025, were $211.7 million, compared to $66.0 million for the same period in 2024, indicating a substantial increase of 219%[22] - For the nine months ended September 30, 2025, total revenue was $2.68 billion, up from $2.53 billion in the same period of 2024[63] - Consolidated revenues for the nine months ended September 30, 2025, were $2.68 billion, a 5.9% increase from $2.53 billion in the same period of 2024[107] - Net income for the nine months ended September 30, 2025, was $81.9 million, compared to $14.3 million for the same period in 2024, representing a significant increase of 474%[107] - EBITDA for the nine months ended September 30, 2025, was $168.5 million, up from $72.3 million in 2024, indicating a growth of 133%[107] Assets and Liabilities - Total assets as of September 30, 2025, were $1.645 billion, an increase from $1.574 billion at the end of 2024[11] - Total current assets increased to $1.068 billion as of September 30, 2025, compared to $1.015 billion at the end of 2024[11] - Total liabilities rose to $1.028 billion as of September 30, 2025, up from $973.7 million at the end of 2024[11] - Shareholders' equity increased to $617.6 million as of September 30, 2025, compared to $600.4 million at the end of 2024[11] - Contract assets increased to $353.5 million as of September 30, 2025, up from $301.9 million at the end of 2024, reflecting a growth of 17.1%[39] - Contract liabilities decreased to $302.5 million as of September 30, 2025, down from $322.0 million at the end of 2024, showing a reduction of 6.0%[40] - The allowance for doubtful accounts associated with contract assets was $0.5 million as of September 30, 2025, compared to $0.4 million as of December 31, 2024[38] - Net contract assets improved to $50.9 million as of September 30, 2025, compared to a net liability of $(20.0) million as of December 31, 2024, reflecting a positive change of $70.9 million[41] - Total lease obligations increased to $46.99 million as of September 30, 2025, compared to $45.61 million as of December 31, 2024[44] - Total debt stood at $71.98 million as of September 30, 2025, down from $74.38 million as of December 31, 2024[50] Revenue Segments - The Company reported a fixed-price contract revenue of $541.8 million for the three months ended September 30, 2025, accounting for 57.0% of total revenue[62] - The T&D segment generated contract revenues of $503.4 million for the three months ended September 30, 2025, compared to $481.9 million in the same period of 2024, reflecting an increase of about 4.0%[93] - The C&I segment reported contract revenues of $447.0 million for the three months ended September 30, 2025, up from $406.2 million in the same period of 2024, marking an increase of approximately 10.1%[93] - Transmission & Distribution segment revenues increased by $41.0 million, or 2.9%, to $1.47 billion for the nine months ended September 30, 2025, compared to $1.43 billion in 2024[140] - Commercial & Industrial segment revenues grew by $110.9 million, or 10.1%, to $1.21 billion for the nine months ended September 30, 2025, compared to $1.10 billion in 2024[142] Operating Costs and Expenses - The company incurred operating costs of $2.56 billion for the nine months ended September 30, 2025, compared to $2.51 billion for the same period in 2024, reflecting an increase of approximately 2.0%[94] - Selling, general and administrative expenses (SG&A) for the three months ended September 30, 2025, were $65.9 million, up from $57.5 million in the same period in 2024, primarily due to increased employee compensation costs[122] Shareholder Actions - The company repurchased 639,207 shares of its common stock at a weighted-average price of $117.33 per share during the nine months ended September 30, 2025[101] - The company announced a new $75.0 million share repurchase program, which will expire on February 4, 2026, or when the authorized funds are exhausted[101] - The Company had $75.0 million available for share repurchases under its new program, reflecting a commitment to returning value to shareholders[183] Market and Operational Outlook - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[13] - The company continues to see strong activity in electric distribution markets, driven by increased storm activity and the need for system upgrades[108] Risk Factors - The company is exposed to market risks including fluctuations in interest rates, foreign exchange rates, and commodity prices, which could adversely affect its financial condition[174] - The company faces risks associated with climate change, including financial and physical risks from extreme weather events, which could disrupt operations and profitability[181] - The company is subject to potential liabilities related to warranty claims and faulty engineering, which may reduce profitability[181] Compliance and Controls - The company has effective disclosure controls and procedures as of September 30, 2025, ensuring the accuracy of financial reporting[177] - There were no changes in internal control over financial reporting that materially affected the company during the reporting period[178]