Part I — Financial Information Item 1. Financial Statements The company reported significant year-over-year growth in revenues and net income for the three and six months ended June 30, 2025. Total assets increased to $1.48 billion from $1.29 billion at year-end 2024, driven by higher receivables and contract assets. Net cash provided by operating activities improved substantially to $32.5 million for the first six months of 2025, compared to $3.7 million in the prior year period, reflecting higher net income Condensed Consolidated Statements of Income (Unaudited) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | | (In thousands, except per share amounts) | 2025 | 2024 | 2025 | 2024 | | Operating revenues | $921,466 | $703,373 | $1,748,095 | $1,329,062 | | Gross profit | $119,869 | $88,577 | $212,362 | $163,294 | | Operating income | $72,507 | $51,309 | $123,491 | $90,193 | | Net income | $52,843 | $38,972 | $89,515 | $67,186 | | Diluted EPS | $1.03 | $0.76 | $1.75 | $1.32 | Condensed Consolidated Balance Sheet Highlights (Unaudited) | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,089,026 | $917,229 | | Total assets | $1,481,377 | $1,288,463 | | Total current liabilities | $614,314 | $513,370 | | Total liabilities | $966,968 | $865,851 | | Total stockholders' equity | $514,409 | $422,612 | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | (In thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $32,470 | $3,751 | | Net cash used in investing activities | ($25,686) | ($11,496) | | Net cash provided by (used in) financing activities | ($8,088) | $6,500 | | Decrease in cash, cash equivalents and restricted cash | ($1,304) | ($1,245) | Notes to Condensed Consolidated Financial Statements The notes detail the company's operations, its recent separation from MDU Resources, and key accounting policies. Revenue is primarily driven by the Electrical & Mechanical (E&M) and Transmission & Distribution (T&D) segments, with significant growth in the E&M segment's commercial customer base. The company has a $300 million term loan and a $225 million revolving credit facility established post-separation. As of June 30, 2025, remaining performance obligations (backlog) stood at $2.68 billion. The company also discloses significant off-balance sheet arrangements, including surety bonds and performance guarantees - The company operates through two reportable segments: Electrical & Mechanical (E&M) and Transmission & Distribution (T&D)2930 - The company completed its separation from MDU Resources on October 31, 2024, and is now an independent publicly traded company under the ticker 'ECG'. Financials for periods prior to the separation were prepared on a 'carve-out' basis323335 Remaining Performance Obligations (Backlog) as of June 30, 2025 | (In thousands) | Within 12 months | Greater than 12 months | | :--- | :--- | :--- | | Electrical & Mechanical | $1,944,794 | $392,232 | | Transmission & Distribution | $266,529 | $73,500 | | Total | $2,211,323 | $465,732 | - As of June 30, 2025, the company had $292.5 million outstanding on its term loan and a borrowing capacity of $209.4 million under its revolving credit facility106108 - The company has significant off-balance sheet commitments, including potential maximum payments under surety bonds of approximately $739.2 million and job performance guarantees of $659.8 million as of June 30, 2025165166 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the strong Q2 2025 performance to significant growth in the Electrical & Mechanical (E&M) segment, driven by data center and hospitality projects. Operating revenues increased 31.0% to $921.5 million, and net income rose 35.4% to $52.8 million year-over-year for the quarter. The company's backlog grew to $2.98 billion. Liquidity remains strong with $209.4 million available under the revolving credit facility. Management expects full-year 2025 capital expenditures to be between $65.0 million and $70.0 million - The company sees strong project opportunities, particularly for data center, underground, and hospitality work, driven by high tech reshoring and utility infrastructure investments189 Consolidated Results of Operations - Q2 Comparison | (In millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Operating revenues | $921.5 | $703.3 | 31.0% | | Gross profit | $119.9 | $88.5 | 35.5% | | Operating income | $72.5 | $51.3 | 41.3% | | Net income | $52.8 | $39.0 | 35.4% | - The E&M segment was the primary growth driver, with revenues increasing 41.6% in Q2 2025, largely due to higher activity in the commercial end market (data centers, hospitality)202203 Backlog Trend | (In millions) | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total Backlog | $2,978.2 | $2,780.6 | $2,403.4 | - Working capital increased to $474.7 million as of June 30, 2025, from $403.9 million at year-end 2024, supporting project growth263 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks from interest rate changes, commodity price fluctuations, and inflation. The primary interest rate risk stems from its $292.5 million variable-rate term loan; a 1% increase in the rate would raise annual interest expense by approximately $2.9 million. Commodity price volatility for materials like copper, aluminum, and steel, along with rising labor costs, could impact project profitability, though the company aims to mitigate these through pricing and efficiency strategies - The company has $292.5 million in variable-rate debt outstanding. A hypothetical 1% increase in the interest rate would increase annual interest expense by approximately $2.9 million284 - Operations are affected by fluctuations in commodity prices for materials such as copper, aluminum, and steel, as well as potential increases in labor costs due to inflation285286 Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2025. They concluded that these controls and procedures were effective at a reasonable assurance level. No material changes were made to the company's internal control over financial reporting during the second quarter of 2025 - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level287 - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls288 Part II — Other Information Item 1. Legal Proceedings The company reports no material changes to legal proceedings disclosed in its 2024 Annual Report. A previously filed securities class action lawsuit, Scofield v. Everus Construction Group, Inc., et al., which alleged false and misleading statements related to the company's backlog, was voluntarily dismissed on May 29, 2025 - A securities class action lawsuit filed on April 4, 2025, alleging misleading statements about the company's backlog, was voluntarily dismissed on May 29, 2025292 - As of June 30, 2025, there were no other material changes to the legal proceedings disclosed in the company's 2024 Annual Report291 Item 1A. Risk Factors & Other Items The company states there were no material changes to the risk factors previously disclosed in its 2024 Annual Report. Additionally, the report confirms no unregistered sales of equity securities, no defaults upon senior securities, and no new Rule 10b5-1 trading arrangements by directors or officers during the quarter - There were no material changes to the company's risk factors as of June 30, 2025, from those disclosed in the 2024 Annual Report293 - The company reported no unregistered sales of equity securities or defaults on senior securities294295
Everus Construction Group, Inc.(ECG) - 2025 Q2 - Quarterly Report