Financial Performance - In 2024, the Electrical & Mechanical (E&M) segment generated approximately 71% of total contract revenues with an operating income of 6.7% of segment contract revenues, while the Transmission & Distribution (T&D) segment accounted for 29% of total contract revenues with an operating income of 10.2%[39]. - In 2024, the company served approximately 3,900 customers across more than 43,000 projects, with total operating revenues of 2.05 billion in original face amount of bonds outstanding for projects, with 1.75 billion for E&M and 296.3 million for T&D[67]. - As of December 31, 2024, the company had $300.0 million outstanding under the Term Loan with an interest rate of 6.84%[365]. Company Structure and Operations - The company operates through two reportable segments: E&M and T&D, with a total of 15 wholly-owned operating companies[32]. - Everus Construction was spun off from MDU Resources on October 31, 2024, becoming an independent publicly traded company listed on the New York Stock Exchange under the ticker symbol "ECG"[31]. - The company has expanded its capabilities significantly since its establishment in 1997 through targeted entry into new geographies and over 25 acquisitions[32]. - Approximately 83% of the company's employees were represented by labor unions as of December 31, 2024, providing flexibility to scale workforce according to project needs[76]. Market and Industry Trends - The U.S. construction services industry is highly fragmented, with competition influenced by technical expertise, service pricing, and operational resources[41]. - The T&D services industry is expected to grow due to factors such as grid modernization, additional renewable power sources, and increased government support for infrastructure[46]. - Regulatory initiatives supporting renewable energy and infrastructure investment are expected to drive long-term demand for the company's services[71]. - The hospitality industry has seen growth due to increased domestic travel and higher disposable incomes, renewing demand for hospitality construction[48]. Risk Factors - Supply chain interruptions have become common, leading to longer lead times for certain components, which may result in project inefficiencies[53]. - The T&D segment's operations can be affected by seasonal weather conditions, impacting revenue and profitability[55]. - The company is exposed to fluctuations in commodity prices, which can increase transportation and construction costs due to higher fuel or material prices[366]. - Labor costs may also rise due to inflation and other economic factors, potentially impacting the company's financial results[367]. - The company is exposed to interest rate volatility related to its long-term debt obligations, which bear interest at variable rates[365]. - The company continues to monitor market risks, including interest rate changes and inflation, to mitigate potential impacts on its financial condition[367]. Employee and Corporate Culture - The company emphasizes a full-service project approach supported by experienced project managers and a skilled workforce, focusing on safety, quality, and operational excellence[35]. - Employee development and training are prioritized, focusing on a safety-first culture and ethical leadership[79]. - The company maintains a 401(k) plan with a matching contribution policy for eligible employees[78]. - The company emphasizes pay-for-performance in its compensation programs to align employee incentives with market practices and performance[77]. - The company has a code of conduct and ethics, known as the Leading With Integrity Guide, to ensure compliance with laws and ethical standards[80]. Recognition and Rankings - The company was ranked 9th on Engineering News-Record magazine's 2024 Top 600 Specialty Contractors list and 5th on Electrical Construction & Maintenance magazine's 2024 Top 50 Electrical Contractors list[32].
Everus Construction Group, Inc.(ECG) - 2024 Q4 - Annual Report