Revenue and Customer Concentration - Revenue from projects performed under Master Service Agreements (MSAs) was 36.8% in 2024, 36.7% in 2023, and 45.8% in 2022 of total revenue[25] - The top ten customers contributed 41.3% of total revenue in 2024, 41.1% in 2023, and 46.1% in 2022, indicating a slight decrease in revenue concentration[27] - The company selectively bids on projects that align with profitability objectives and aims to minimize concentration of work with any one customer[23] Workforce and Employee Development - The company maintains a stable workforce of skilled professionals, emphasizing self-performance of a significant portion of its work[23] - As of December 31, 2024, approximately 22.9% of hourly employees were covered by collective bargaining agreements[56] - The company has 3,074 salaried employees and 12,642 hourly employees as of December 31, 2024[57] - The company maintains a strong focus on employee development through various training programs, including leadership development[61] - The company emphasizes diversity and inclusion, prohibiting discrimination based on various factors[60] - The company offers a competitive compensation program, including stock-based compensation for management and key personnel[63] Financial Structure and Capital Management - The company has a conservative capital structure, maintaining a strong balance sheet to support operations and access to debt financing[23] - The company has $300.0 million of variable rate debt outstanding as of December 31, 2024, which was economically hedged[328] - A 1.0% increase or decrease in interest rates would change annual interest expense by approximately $3.8 million[328] - The company is exposed to risks related to market conditions, including fluctuations in foreign currency exchange rates, interest rates, and commodity prices[326] Safety and Incident Rates - The Lost Time Injury Rate (LTIR) for the year ended December 31, 2024, was 0.08, significantly lower than the industry average of 1.0[62] - The Total Recordable Incident Rate (TRIR) for the year ended December 31, 2024, was 0.50, compared to the industry average of 2.3[62] Market Focus and Growth Strategy - The company focuses on higher growth end markets such as renewable energy, utilities, and communications, evaluating acquisitions for growth opportunities[23] - The average project size is less than $3.0 million, with project values ranging from several hundred dollars to several hundred million dollars[31] - Seasonal impacts can affect revenue and profitability, with typically higher earnings in the second, third, and fourth quarters compared to the first quarter[30] - The company has longstanding relationships with major energy and utility companies, ensuring a diverse customer base[24] - The company’s services are primarily provided under renewable MSAs on a "unit-price" basis, with a history of high renewal rates[38]

Revenue and Income Growth - Primoris reported full year 2024 revenue of almost $6.4 billion, an increase of $0.7 billion or 11.4% compared to 2023, driven primarily by strong growth in the Energy segment[6]. - Net income for 2024 was $180.9 million, or $3.31 per diluted share, up 43.4% from 2023 due to higher operating income and lower interest expense[6]. - Fourth quarter 2024 revenue was $1.7 billion, up $225.8 million or 14.9% compared to Q4 2023, driven by growth in the Energy and Utilities segments[6]. - In the fourth quarter, net income was $54.0 million, or $0.99 per diluted share, up 43.3% from $37.7 million in Q4 2023[10]. - Net income for the year ended December 31, 2024, was $180,888, up 43.3% from $126,145 in 2023[44]. - Basic earnings per share for the year ended December 31, 2024, increased to $3.37 from $2.37 in 2023, reflecting a growth of 42.3%[39]. Segment Performance - Utilities segment revenue increased by $87.6 million, or 15.2%, for Q4 2024 compared to Q4 2023, primarily due to increased activity across communications, gas operations, and power delivery[12]. - Energy segment revenue increased by $148.1 million, or 15.6%, for Q4 2024 compared to Q4 2023, primarily due to increased renewables activity[13]. - Utilities segment revenue increased by $28.9 million, or 1.2%, to $2,439.0 million in 2024 compared to 2023, with operating income rising by $50.5 million, or 56.6%[17]. - Energy segment revenue increased by $685.8 million, or 20.5%, to $4,032.0 million in 2024 compared to 2023, with operating income increasing by $47.2 million, or 19.0%[18]. Backlog and Future Outlook - Record total backlog reached $11.9 billion, up $1.0 billion or 8.9% from year end 2023, including $5.8 billion in Master Service Agreements[6]. - Total backlog as of December 31, 2024, was $11.9 billion, an increase of $1.1 billion, or 9.9%, compared to $10.9 billion at December 31, 2023[27]. - Fixed backlog increased by $0.9 billion, or 17.2%, to $6.1 billion in 2024 compared to 2023[27]. - The company expects net income for 2025 to be between $203.3 million and $214.3 million, with EPS projected between $3.70 and $3.90[24]. - For the full year 2025, the forecasted net income is estimated to be between $203,250,000 and $214,250,000[54]. Expenses and Financial Metrics - Total SG&A expenses were $383.4 million in 2024, an increase of $54.6 million, or 16.6%, compared to 2023, with SG&A as a percentage of revenue rising to 6.0%[19][20]. - Interest expense decreased to $65.3 million in 2024 from $78.2 million in 2023, with a projected interest expense for 2025 expected to be between $44 million and $48 million[22]. - The provision for income taxes increased by $22.5 million to $74.0 million in 2024, with an effective tax rate of 29.0%[23]. - Net cash provided by operating activities for the year ended December 31, 2024, was $508,313, compared to $198,552 in 2023, indicating a substantial increase of 156.1%[44]. Capital Expenditures and Dividends - Capital expenditures for 2024 totaled $126.6 million, with $81.9 million allocated to facilities and $36.6 million for construction equipment[29]. - The company declared a cash dividend of $0.08 per share, payable on approximately April 15, 2025[30]. - The company declared dividends per common share of $0.26 for the year ended December 31, 2024, compared to $0.24 in 2023, reflecting an 8.3% increase[39]. Assets and Liabilities - Total assets as of December 31, 2024, were $4,195,868, compared to $3,827,427 as of December 31, 2023, indicating a growth of 9.6%[41]. - Cash and cash equivalents increased significantly to $455,825 as of December 31, 2024, from $217,778 in 2023, marking a growth of 109.5%[41]. - Total current liabilities increased to $1,670,686 as of December 31, 2024, from $1,335,035 in 2023, representing a rise of 25.1%[41]. EBITDA and Adjusted Metrics - Adjusted EBITDA for 2024 was $435.2 million, an increase of 14.7% from $379.5 million in 2023[16]. - EBITDA for Q4 2024 was $111,058,000, representing a 10.7% increase from $100,356,000 in Q4 2023[51]. - Adjusted EBITDA for Q4 2024 was $116,611,000, up 12.0% from $104,181,000 in Q4 2023[51]. - The forecasted EBITDA for 2025 is estimated to range from $420,000,000 to $440,000,000[57]. - The forecasted adjusted EBITDA for 2025 is projected to be between $440,000,000 and $460,000,000[57].

Core Insights - Primoris Services (PRIM) reported quarterly earnings of $1.22 per share, exceeding the Zacks Consensus Estimate of $0.95 per share, and up from $1.02 per share a year ago, representing an earnings surprise of 28.42% [1] - The company achieved revenues of $1.65 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 3.94% and increasing from $1.53 billion year-over-year [2] - Primoris Services has outperformed the S&P 500 with a stock price increase of approximately 91.5% since the beginning of the year, compared to the S&P 500's gain of 20.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.86 on revenues of $1.5 billion, and for the current fiscal year, it is $3.33 on revenues of $6.07 billion [7] - The estimate revisions trend for Primoris Services is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Building Products - Heavy Construction industry, to which Primoris Services belongs, is currently ranked in the top 20% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8] - Another company in the same industry, Tutor Perini (TPC), is expected to report a quarterly loss of $1.78 per share, reflecting a year-over-year change of -150.7%, with revenues anticipated to be $1.13 billion, up 7% from the previous year [9][10]

Revenue Performance - Revenue for Q3 2024 was $1,649.1 million, an increase of $119.6 million, or 7.8%, compared to Q3 2023, driven by growth in both Energy and Utilities segments [143]. - Revenue for the nine months ended September 30, 2024, was $4,625.5 million, an increase of $425.7 million, or 10.1%, compared to the same period in 2023, primarily due to growth in the Energy segment [144]. - Revenue for the Utilities segment for the three months ended September 30, 2024, was $666.2 million, a 2.4% increase from $650.7 million in 2023, with gross profit rising by $22.4 million, or 34.6% [156][158]. - Energy segment revenue increased by $123.1 million, or 13.9%, for the three months ended September 30, 2024, compared to the same period in 2023, driven by increased renewable energy activity [159]. - Total revenue for the nine months ended September 30, 2024, was $4.63 billion, an increase from $4.20 billion in 2023, with gross profit rising to $518.6 million from $430.9 million [161]. Gross Profit - Gross profit for Q3 2024 was $198.6 million, an increase of $24.7 million, or 14.2%, compared to Q3 2023, with gross profit as a percentage of revenue increasing to 12.0% [145]. - Gross profit for the nine months ended September 30, 2024, was $518.6 million, an increase of $87.8 million, or 20.4%, compared to the same period in 2023, with gross profit as a percentage of revenue increasing to 11.2% [146]. - Gross profit for the nine months ended September 30, 2024, in the Energy segment increased by $74.3 million, or 27.9%, compared to the same period in 2023, with gross profit as a percentage of revenue rising to 11.6% [165]. Expenses - Selling, general and administrative (SG&A) expenses for Q3 2024 were $98.1 million, an increase of $13.7 million, or 16.2%, compared to Q3 2023, with SG&A as a percentage of revenue increasing to 5.9% [147]. - SG&A expenses for the nine months ended September 30, 2024, were $286.8 million, an increase of $38.8 million, or 15.7%, compared to 2023, with SG&A as a percentage of revenue rising to 6.2% from 5.9% [148]. Cost and Inflation - The company anticipates elevated levels of cost inflation could persist in 2024, impacting operations and profitability [134]. - The company has experienced increased fuel and labor costs, which may continue to affect profitability [134]. - The company has successfully renegotiated some major contracts to address increased costs on future work [134]. Debt and Interest - As of September 30, 2024, $300.0 million of the company's variable rate debt was economically hedged, with a 1.0% change in interest rates potentially affecting annual interest expense by approximately $5.4 million [137]. - Interest expense, net for the three months ended September 30, 2024, decreased by $3.2 million to $17.9 million compared to the same period in 2023, primarily due to lower average debt balances [150]. - A 1.0% increase or decrease in interest rates would change annual interest expense by approximately $5.4 million based on variable rate debt outstanding as of September 30, 2024 [196]. Taxation - The effective tax rate for the nine months ended September 30, 2024, was 29.0%, up from the U.S. federal statutory rate of 21.0%, primarily due to state income taxes and nondeductible expenses [153]. - The company recorded an income tax expense of $51.8 million for the nine months ended September 30, 2024, compared to $36.1 million in 2023, driven by a $54.1 million increase in pretax income [154]. Cash Flow and Capital Expenditures - As of September 30, 2024, cash and cash equivalents totaled $352.7 million, an increase from $217.8 million as of December 31, 2023 [175]. - Net cash provided by operating activities for the nine months ended September 30, 2024 was $210.1 million, compared to a cash usage of $7.1 million for the same period in 2023 [179]. - Capital expenditures for the nine months ended September 30, 2024 amounted to approximately $98.3 million, with an expected additional $10.0 million to $20.0 million for the remaining three months of 2024 [176]. Backlog and Contract Liabilities - Fixed backlog for the Utilities segment as of September 30, 2024, was $57.6 million, unchanged from December 31, 2023, while MSA backlog was $1.89 billion, up from $1.78 billion [169]. - Energy segment fixed backlog increased to $3.05 billion as of September 30, 2024, from $2.60 billion at the end of 2023, with MSA backlog at $199.4 million [169]. - Contract liabilities increased by $290.6 million due to higher deferred revenue from favorable billing terms on new projects for the nine months ended September 30, 2024 [181]. Financing Activities - Financing activities used cash of $74.0 million for the nine months ended September 30, 2024, primarily due to long-term debt payments of $55.9 million [186]. - The company had letters of credit outstanding totaling $53.5 million as of September 30, 2024, which reduce borrowing availability under credit agreements [192]. - The company anticipates sufficient funds from cash, investments, and future cash flows to meet operating needs and planned capital expenditures for the next twelve months [175]. Asset Sales - The company received proceeds from the sale of assets totaling $97.4 million during the nine months ended September 30, 2024, compared to $47.6 million in the prior year [185].

Revenue and Income - Revenue for Q3 2024 was $1,649.1 million, an increase of $119.6 million, or 7.8% compared to Q3 2023, driven by growth in Energy and Utilities segments[1] - Net income for Q3 2024 was $58.4 million, or $1.07 per diluted share, up from $48.1 million, or $0.89 per diluted share in Q3 2023[3] - Net income for Q3 2024 was $58.4 million, representing a 21.4% increase compared to $48.1 million in Q3 2023[27] - Net income for the nine months ended September 30, 2024, was $126,922, a 43.4% increase compared to $88,486 for the same period in 2023[29] - Adjusted net income was $66.7 million for Q3 2024, compared to $55.2 million in Q3 2023, with adjusted diluted EPS rising to $1.22 from $1.02[4] - Adjusted net income for the nine months ended September 30, 2024, was $149,517, up 38.2% from $108,317 in the prior year[31] Backlog and Growth - Record backlog reached $11.3 billion, with Utilities backlog of approximately $5.3 billion and Energy backlog of $6.0 billion, reflecting strong renewables bookings[15] - Total Fixed Backlog increased by $0.7 billion compared to June 30, 2024, and by $0.4 billion, or 7.3%, compared to December 31, 2023[15] Expenses and Costs - SG&A expenses increased to $98.1 million, a rise of $13.7 million, or 16.2% compared to Q3 2023, reflecting higher personnel costs[9] - Capital expenditures for Q3 2024 totaled $63.7 million, with expectations of $10.0 million to $20.0 million for the remaining three months of 2024[17] Earnings Per Share - Basic earnings per share for Q3 2024 were $1.09, up from $0.90 in Q3 2023[27] - The company raised its EPS guidance for 2024 to a range of $2.85 to $3.00 per diluted share[12] - Adjusted diluted earnings per share for the nine months ended September 30, 2024, was $2.74, a 37% increase from $2.00 in the prior year[31] - Forecasted diluted earnings per share for 2024 is projected to be between $2.85 and $3.00, while adjusted diluted earnings per share is expected to range from $3.40 to $3.55[36] Cash and Assets - As of September 30, 2024, the Company had $352.7 million in unrestricted cash and cash equivalents[17] - Cash and cash equivalents at the end of the period were $358,283, compared to $166,546 at the end of the same period last year, reflecting a significant increase[29] - Total current assets increased to $2,222,552, up 17.9% from $1,885,233 as of December 31, 2023[28] Tax and Liabilities - The effective tax rate for the nine months ended September 30, 2024, was 29.0%, influenced by state income taxes and nondeductible expenses[11] - Total liabilities rose to $2,882,298, an increase of 11.2% from $2,591,335 as of December 31, 2023[28] Stockholder Equity and Dividends - Total stockholders' equity increased to $1,357,995, up 9.8% from $1,236,092 as of December 31, 2023[28] - The Company declared a cash dividend of $0.08 per share, an increase from the previous $0.06 per share[18] Operational Performance - The Company reported an operating income of $99.6 million for Q3 2024, compared to $88.4 million in Q3 2023, reflecting a 12.3% increase[27] - The company reported a net cash provided by operating activities of $210,054, compared to a net cash used of $(7,147) in the same period last year[29] Future Projections - Adjusted EBITDA for Q3 2024 was $127.7 million, an increase of $7.7 million, or 6.4% from Q3 2023[1] - Adjusted EBITDA for the full year 2024 is expected to range from $405 million to $420 million[12] - Estimated EBITDA for the full year 2024 is projected to be between $385,500 thousand and $400,500 thousand[39] - Interest expense for the full year 2024 is estimated to be between $68,000 thousand and $71,000 thousand[39] - Provision for income taxes for the full year 2024 is expected to be between $64,500 thousand and $68,500 thousand[39] - Non-cash stock-based compensation for the full year 2024 is forecasted at $14,500 thousand[39] - Transaction/integration and related costs for the full year 2024 are estimated to be $3,500 thousand[39] - Impairment of fixed assets for the full year 2024 is projected to be $1,500 thousand[39] Conference Call - Management will discuss the Company's results and business outlook in a conference call on November 5, 2024[19]

Core Insights - The individual has retired after over 43 years in investment research, now operating independently to provide actionable investment insights [1] - The focus is on rules and factor-based equity investing strategies, emphasizing the use of numbers to inspire human intelligence-driven investment stories rather than solely relying on statistical studies [1] - The individual combines quantitative analysis with classic fundamental analysis to uncover the true story of companies and their stocks, aiming to predict future performance [1] Experience and Background - The individual has extensive experience covering a wide range of stocks, including large cap, small cap, micro cap, value, growth, and income [1] - Previous roles include managing a high-yield fixed-income fund and conducting research on quantitative asset allocation strategies, contributing to the development of Robo Advising [1] - The individual has authored two books on stock selection and analysis and has a passion for investor education, having conducted numerous seminars [1]

Group 1 - Primoris Services (PRIM) has shown a year-to-date return of 74.8%, significantly outperforming the Construction sector's average return of 22.8% [4] - The Zacks Consensus Estimate for PRIM's full-year earnings has increased by 5.6% over the past quarter, indicating improved analyst sentiment and a stronger earnings outlook [4] - Primoris Services holds a Zacks Rank of 2 (Buy), suggesting it has characteristics that may lead to outperformance in the market over the next one to three months [3] Group 2 - Primoris Services is part of the Building Products - Heavy Construction industry, which has an average year-to-date return of 78.6%, indicating that PRIM is slightly underperforming its industry [6] - Construction Partners (ROAD) has also outperformed the sector with a year-to-date return of 61.8% and holds a Zacks Rank of 2 (Buy) [5] - The Building Products - Miscellaneous industry, which includes Construction Partners, has returned 21.3% since the beginning of the year, ranking 90 among 27 stocks [7]

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Company Performance - Primoris Services (PRIM) shares have increased by 7.3% over the past month and reached a new 52-week high of $59.16, with a year-to-date gain of 71.9% compared to 21.2% for the Zacks Construction sector and 70% for the Zacks Building Products - Heavy Construction industry [1] - The company has consistently exceeded earnings expectations, reporting EPS of $1.04 against a consensus estimate of $0.65 in its last earnings report on August 5, 2024 [2] Valuation Metrics - Primoris Services has a Value Score of B, a Growth Score of A, and a Momentum Score of D, resulting in a combined VGM Score of A [5] - The stock trades at 20.2X current fiscal year EPS estimates, slightly below the peer industry average of 20.6X, and at 11.6X trailing cash flow compared to the peer group's average of 12.3X [6] Zacks Rank - Primoris Services holds a Zacks Rank of 2 (Buy) due to rising earnings estimates, indicating potential for further gains [7] Industry Comparison - The Building Products - Heavy Construction industry is performing well, ranking in the top 4% of all industries, suggesting favorable conditions for both Primoris Services and its peer, MasTec, Inc. [10]

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