Revenue and Income - Total operating revenues for the three months ended September 30, 2025, were $986.8 million, a 29.6% increase from $760.9 million in the same period of 2024[84][88] - Total contract revenues for the nine months ended September 30, 2025, reached $2.75 billion, up 30.6% from $2.11 billion in the same period of 2024[86][87] - The company recognized a net increase in revenues of $12.7 million for the three months ended September 30, 2025, related to previously recognized deferred revenues[95] - For the three months ended September 30, 2025, consolidated total operating revenues were $990.724 million, an increase from $765.399 million in the same period of 2024, representing a growth of approximately 29.5%[158] - Net income for the three months ended September 30, 2025, was $56,977,000, compared to $41,767,000 in 2024, reflecting a 36.4% increase[137] - Basic EPS for the three months ended September 30, 2025, was $1.12, up from $0.82 in 2024, marking a 36.6% increase[137] - For the nine months ended September 30, 2025, total consolidated income before income taxes was $188.513 million, compared to $138.762 million for the same period in 2024, marking a growth of approximately 35.8%[159] Costs and Expenses - Costs incurred on uncompleted contracts totaled $7.46 billion as of September 30, 2025, compared to $7.03 billion as of December 31, 2024[90] - Selling, general and administrative expenses for the three months ended September 30, 2025, were $51.8 million, an increase of $15.6 million, or 43.1%, from $36.2 million for the same period in 2024[212] - Interest expense for the three months ended September 30, 2025, was $5.4 million, an increase of $2.6 million, or 92.9%, from $2.8 million for the same period in 2024[215] - Total stock-based compensation expense for the nine months ended September 30, 2025, was $4.8 million, compared to $1.0 million for the same period in 2024[140] - Interest expense for the nine months ended September 30, 2025, was $16.4 million, an increase of $7.6 million, or 86.4%, from $8.8 million for the same period in 2024[229] Assets and Liabilities - The company reported a net contract liability of $19.4 million as of September 30, 2025, compared to $40.3 million as of December 31, 2024, indicating improved cash flow management[90][93] - Remaining performance obligations amounted to $2.69 billion as of September 30, 2025, with $2.23 billion expected to be recognized within 12 months[97] - Contract assets increased to $250.5 million as of September 30, 2025, from $167.0 million as of December 31, 2024[93][94] - The company has a total long-term debt of $270.1 million as of September 30, 2025, down from $280.6 million as of December 31, 2024[114] - Working capital increased to $523.5 million as of September 30, 2025, up from $403.9 million as of December 31, 2024[284] Financial Ratios and Covenants - The Credit Agreement requires the company to maintain a maximum consolidated total net leverage ratio of 3.00 to 1.00 and a minimum interest coverage ratio of 3.00 to 1.00[125] - As of September 30, 2025, the consolidated total net leverage ratio was 3.00:1.00, with an option to increase to 3.50:1.00 for qualifying acquisitions[280] - Compliance with financial covenants was maintained as of both September 30, 2025, and December 31, 2024[283] Backlog and Project Opportunities - Backlog as of September 30, 2025, was estimated at $2,382.5 million, a decrease from $2,946.2 million as of December 31, 2024[264] - E&M backlog increased to $2,087.5 million as of September 30, 2025, compared to $2,570.4 million as of December 31, 2024, reflecting growth in the commercial end market[265] - The Company reported strong project opportunities in specialty contracting markets, particularly in data center, undergrounding, and hospitality work, contributing to a robust backlog[195] Customer Concentration and Risks - Revenue from a single customer accounted for approximately 17% of total operating revenues for the three months ended September 30, 2025, indicating a significant customer concentration risk[161] - For the E&M segment, two customers accounted for approximately 22% and 11% of total E&M segment revenues for the three months ended September 30, 2025, highlighting reliance on key customers[162] - Trade receivables from a single customer accounted for approximately 17% of total trade receivables as of September 30, 2025, indicating potential credit risk exposure[164] Legal and Regulatory Matters - The company accrued estimated litigation-related contingent liabilities of $3.7 million as of September 30, 2025, indicating potential financial exposure from ongoing legal matters[171] Market Conditions and Future Outlook - The Company anticipates continued increases in insurance costs due to economic inflation and rising losses in the insurance industry, impacting future project budgets and profitability[191] - The U.S. construction services industry is highly fragmented, with competition influenced by technical expertise, service pricing, and operational resources[193] - The company is focused on growing total revenues, expanding margins, managing costs, and generating cash to increase operating income despite rising costs[192]
Everus Construction Group, Inc.(ECG) - 2025 Q3 - Quarterly Report