Primoris(US:PRIM)2023-02-28 19:02Financial Data and Key Metrics Changes - The company achieved record revenue of $4.4 billion in 2022, up more than 26% from 2021, with 15% being organic growth [39] - Net income increased by 15% to $133 million, and GAAP EPS rose to $2.47 per fully diluted share, marking six consecutive years of EPS growth [40] - Gross profit for Q4 improved to $153 million, an increase of $57 million or almost 60%, with gross margins at 11.5% [8] - Operating cash flows for Q4 were $185 million, with full-year cash flows at $83 million, driven by improvements in working capital [84] Business Line Data and Key Metrics Changes - Utilities segment revenue increased by $133.6 million in Q4, driven by acquisitions, with gross profit up 34% to approximately $70 million [99] - Energy Renewables segment achieved 41% organic revenue growth in 2022, with gross margins at 12.4% [4][8] - Pipeline Services segment finished the year with a negative gross profit of $6.7 million, primarily due to lower revenues and project losses [82] Market Data and Key Metrics Changes - The company has over $1 billion in projects in the award or contracting stage, with bids valued at over $3.6 billion expected to extend backlog through 2026 [5] - Backlog increased to a record $5.5 billion, up 37% from the previous year, with $570 million of the increase from acquisitions [105] Company Strategy and Development Direction - The company is transitioning to focus on specialty contracting for smaller projects and MSA contracts, reducing revenue lumpiness [6] - Effective January 1, 2023, the company merged its Pipeline Services segment into the new Energy segment to better reflect its operational scope [14][97] - The company aims to achieve near 2x leverage by the end of 2024 through EBITDA growth and debt paydown [13][124] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing strong employee performance and strategic priorities to execute on backlog [44][130] - The company anticipates continued supply chain improvements for solar projects, with confidence in module availability through 2023 [20][95] - Management identified execution on project work as a key risk but noted strong leadership teams in place to manage this [21] Other Important Information - SG&A expenses for Q4 were $91 million, up from $57 million in the prior year, attributed to acquisitions [11] - Capital expenditures for the full year were $95 million, down from $134 million in 2021, with expectations of $80 million to $100 million in 2023 [12] Q&A Session Summary Question: What is the outlook for solar growth in 2023? - Management expects solar revenue to grow between $300 million to $500 million annually, with a focus on disciplined execution [133] Question: How is the company managing supply chain risks? - The company has secured supply for 2023 projects and is seeing improvements in module imports [20][95] Question: What are the expectations for operating cash flow in 2023? - Operating cash flow is expected to be in the $100 million to $150 million range, with seasonal fluctuations similar to 2022 [117] Question: What is the company's strategy for the Pipeline Services segment? - The company is optimistic about emerging from the trough in the Pipeline Services segment, with a focus on disciplined execution [74] Question: How does the company view its backlog and project pipeline? - The company has approximately $9 billion in projects at various stages, with a strong backlog expected to support growth through 2026 [149]