Core Insights - Everus Construction Group operates in the U.S. engineering and construction sector, focusing on utility and industrial customers with complex infrastructure needs [1] - The company has seen a significant increase in its stock price, rising 31% over the past year, outperforming the S&P 500, which increased by about 17% in the same period [3] Company Overview - Everus Construction Group provides utility construction services, including electrical line and pipeline construction, inside electrical wiring, cabling, mechanical services, and automatic fire sprinkler systems [3] - The company generates revenue through project-based contracts for construction, installation, ongoing maintenance services, and sales of specialized equipment and systems [2] Financial Performance - In the third quarter, Everus reported a revenue increase of nearly 30% year over year, reaching $986.8 million, with EBITDA climbing 37% to $89 million [6] - The diluted EPS rose to $1.11, and the backlog reached $2.95 billion, with management raising full-year guidance to as much as $3.65 billion in revenue and $300 million in EBITDA [6] Investment Activity - Mountaineer Partners Management reduced its investment in Everus by 36,374 shares, resulting in a decrease in position value by $1.46 million [4][5] - Despite the reduction, Everus still represents about 5.5% of the fund's assets, indicating it remains one of the larger positions in the portfolio [7]

Core Insights - Toll Brothers, Inc. reported mixed results for Q4 fiscal 2025, with adjusted earnings missing estimates while total revenues exceeded expectations and increased year-over-year [1][10]. Financial Performance - Adjusted earnings per share (EPS) was $4.58, missing the Zacks Consensus Estimate of $4.87 by 5.9% and down 1.1% from the previous year [4]. - Total revenues reached $3.42 billion, surpassing the consensus mark of $3.32 billion and reflecting a 2.7% increase year-over-year [4]. - Home sales revenues increased by 4.6% to $3.41 billion, with home deliveries rising by 0.3% to 3,443 units [5]. - The average selling price (ASP) of homes delivered was $991,600, up 4.4% from $950,200 a year ago [5]. Market Conditions - The company continues to face soft demand across several markets, but maintains a resilient business model with a balance of build-to-order and spec homes [2]. - Elevated mortgage rates and a weak housing market are significant headwinds impacting performance [2]. Contracts and Backlog - Net-signed contracts decreased to 2,598 units, down from 2,658 units year-over-year, with a total value of $2.5 billion, down from $2.7 billion [6]. - The backlog at the end of Q4 was 4,647 homes, a decrease of 22.5% year-over-year, with potential revenues from backlog declining 15.4% to $5.5 billion [7]. Cost Management - Adjusted home sales gross margin was 25.5%, contracting by 50 basis points [8]. - Selling, general and administrative (SG&A) expenses as a percentage of home sales revenues remained flat at 8.3% [8]. Balance Sheet and Cash Flow - Cash and cash equivalents stood at $1.26 billion, down from $1.3 billion at the end of fiscal 2024 [11]. - The debt-to-capital ratio decreased to 26% from 26.7% [11]. - The company repurchased approximately 5.4 million shares for $651.6 million during fiscal 2025 [12]. Future Guidance - For Q1 fiscal 2026, home deliveries are expected to be between 1,800-1,900 units, with an average price of $985,000-$995,000 [13]. - For fiscal 2026, home deliveries are anticipated to be in the range of 10,300-10,700 units, reflecting a decline from fiscal 2025 [15]. - The company expects an adjusted home sales gross margin of 26%, down from 27.3% in fiscal 2025 [15].

Financial Data and Key Metrics Changes - The company's Q1 2025 revenue increased by 32% to $826.6 million compared to the same period last year, driven by a 47% increase in Electrical and Mechanical (E and M) revenue, partially offset by a 2% decline in Transmission and Distribution (T and D) revenue [20][21] - Total EBITDA for Q1 2025 was $61.8 million, also up 32% year-over-year, with an EBITDA margin of 7.5%, consistent with the prior year [20][21] - The total backlog at the end of Q1 2025 was $3.1 billion, up 10% from the end of 2024 and up 41% from the same period last year [21][10] Business Line Data and Key Metrics Changes - E and M segment revenue increased by 47% to $648.2 million, with EBITDA rising by 51% to $49.5 million, resulting in an EBITDA margin of 7.6%, up 20 basis points from last year [22][23] - T and D segment revenue was $185 million, down from $188.5 million, but T and D EBITDA increased by 5.8% to $20.1 million, with an EBITDA margin of 10.9%, up 80 basis points from last year [23][24] Market Data and Key Metrics Changes - The company reported strong demand trends in key markets, particularly in data centers, hospitality, and high-tech reshoring, with E and M backlog increasing by 46% year-over-year [10][11] - The company noted that while there are macroeconomic uncertainties, favorable trends in several key end markets position the company well for growth [11][12] Company Strategy and Development Direction - The company's "forever strategy" focuses on attracting and retaining talent, creating value for customers and shareholders, and maintaining strong customer relationships [14][16] - The company is increasing capital expenditures to support organic growth, including the purchase of a new prefabrication facility in Kansas City [17][25] - The company aims for organic revenue growth of 5% to 7% and EBITDA growth of 7% to 9% on a compound annual basis [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties and highlighted the importance of maintaining strong customer relationships and effective project execution [9][11] - The company remains optimistic about backlog growth based on demand trends and its diverse end market exposure [14][48] Other Important Information - The company is actively monitoring tariff impacts and has implemented strategies to mitigate risks associated with price increases [58][59] - The company has a net leverage ratio of approximately one times, indicating a strong balance sheet position [24] Q&A Session Summary Question: Outlook on larger projects and revenue timing - Management indicated that backlog could be bumpy due to the nature of larger projects, which may have longer lead times [30][31] Question: Transmission and Distribution segment outlook - Management noted strong demand in the T and D segment, particularly in undergrounding projects, and expressed confidence in building upon existing customer relationships [33][35] Question: Status of high-tech manufacturing market - Management confirmed ongoing strong relationships with semiconductor manufacturers and expressed confidence in continued support for these customers despite some cyclicality in capital allocation [37][38] Question: Non-backlog business outlook - Management emphasized the importance of non-backlog work and resource allocation to maintain a healthy balance between backlog and non-backlog projects [41][42] Question: Hospitality market status - Management reported an increase in backlog in Las Vegas and expressed confidence in capturing future opportunities in the hospitality sector [46][47] Question: Impact of weather delays on T and D business - Management believes that weather-related delays will not significantly impact the overall business for the year, as demand remains strong [48] Question: Guidance for 2025 in light of strong Q1 - Management acknowledged some revenue pull-forward in Q1 and emphasized the need to monitor macroeconomic uncertainties moving forward [55][56] Question: Tariff impacts on business - Management discussed proactive measures to mitigate tariff risks and secure pricing with suppliers [58][59] Question: Corporate costs outlook - Management indicated that corporate costs may increase slightly for the remainder of the year as the company stands up its departments [60][61]

Financial Data and Key Metrics Changes - The company's first quarter revenue increased by 32% year-over-year, reaching $826.6 million, driven primarily by a 47% increase in the Electrical and Mechanical (E and M) segment [18][7] - Total EBITDA for the first quarter was $61.8 million, also reflecting a 32% increase from the previous year, with an EBITDA margin of 7.5%, consistent with the prior year [18][19] - The total backlog at the end of the first quarter was $3.1 billion, up 10% from the end of the previous year and up 41% from the same period last year [19][9] Business Line Data and Key Metrics Changes - E and M revenue increased to $648.2 million, a 47% rise compared to $441 million in the prior year, with E and M EBITDA growing by 51% to $49.5 million [20][18] - Transmission and Distribution (T and D) revenue slightly declined by 2% to $185 million due to weather-related delays, but T and D EBITDA increased by 5.8% to $20.1 million [21][18] Market Data and Key Metrics Changes - The E and M backlog increased by 46% year-over-year, driven by growth in key submarkets such as data centers, manufacturing, government, and hospitality [9][19] - T and D backlog grew by 8% year-over-year, indicating solid demand despite the revenue decline [19] Company Strategy and Development Direction - The company is focused on its "forever strategy," which emphasizes attracting and retaining talent, delivering high-quality execution, and maintaining customer relationships [13][14] - A significant portion of the capital expenditure in the first quarter was allocated to purchasing a new prefabrication facility in Kansas City, expanding the total footprint by approximately 128,000 square feet [15][23] - The company aims for organic revenue growth of 5% to 7% and EBITDA growth of 7% to 9% on a compound annual basis [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties and highlighted strong demand trends in key markets, particularly in data centers and high-tech reshoring [10][11] - The company is optimistic about its ability to grow backlog based on favorable demand trends and strong customer relationships [13][12] Other Important Information - The company is actively monitoring tariff impacts and has implemented strategies to mitigate risks associated with price increases [58] - The first quarter's capital expenditures were $18.5 million, up from $9.2 million in the same period last year, reflecting a commitment to support organic growth [23][18] Q&A Session Summary Question: Outlook on larger projects and revenue timing - Management indicated that the backlog could be bumpy due to the nature of large projects, which often have longer lead times [30] Question: Transmission and Distribution segment outlook - Management noted strong demand for T and D services and highlighted expertise in undergrounding as a growth opportunity [33] Question: Status of high-tech manufacturing market - Management confirmed ongoing strong relationships with semiconductor manufacturers and expressed confidence in continued support for these customers [37] Question: Non-backlog business outlook - Management emphasized the importance of non-backlog work and resource allocation to ensure effective project execution [40][42] Question: Hospitality market status - Management reported an increase in backlog in Las Vegas and expressed confidence in capturing future opportunities in the hospitality sector [46] Question: Pharmaceutical manufacturing opportunities - Management acknowledged the potential for growth in the pharmaceutical manufacturing market and indicated plans for geographic expansion [50] Question: Impact of tariffs on business - Management discussed proactive measures to mitigate tariff risks and secure pricing with suppliers [58] Question: Corporate costs and future expectations - Management indicated that corporate costs may increase slightly as the company stands up departments, but overall costs remain in line with expectations [61]

Financial Performance - First quarter revenue grew by 32% year-over-year, driven by strong performance in the Electrical & Mechanical (E&M) segment[26, 32] - Total backlog increased by 41% year-over-year to $3.1 billion, with E&M backlog up 46% and Transmission & Distribution (T&D) backlog up 8%[10, 32] - First quarter EBITDA increased by 32% year-over-year, despite incremental stand-alone operating costs[10, 32] - EBITDA margin remained consistent year-over-year at 75%[10, 31] Segment Highlights - E&M revenue increased by 47% in the first quarter, driven by strength in key submarkets within commercial and institutional sectors; EBITDA increased by 51%[13, 33, 41] - T&D revenue decreased by 2% in the first quarter due to lower utility work and weather delays, partially offset by transportation growth; EBITDA increased by 6%[13, 34, 41] Balance Sheet and Liquidity - Net debt stood at $242 million in the first quarter of 2025[44, 49] - Total cash and availability amounted to $264 million, providing financial flexibility[13, 45, 49] - Net leverage was 10x at the end of the first quarter, below the long-term target range of 15x-20x[13, 48, 49] 2025 Financial Guidance - The company affirmed its 2025 revenue guidance of $30 billion - $31 billion and EBITDA guidance of $210 million - $225 million[50]