Everus Construction Group, Inc.(ECG) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a fourth quarter revenue increase of 20%, reaching $760 million, driven by balanced growth across diversified end markets [10][32] - Fourth quarter EBITDA remained relatively flat at$ 58 million, primarily due to public company stand-up costs of $6.3 million [11][33] - The total backlog at the end of the fourth quarter was$ 2.8 billion, reflecting a 38% increase year-over-year [11][37] - For the full year 2024, net revenue was $2.85 billion, consistent with the previous year, while total EBITDA increased to$ 232 million from $223 million [34][36] Business Line Data and Key Metrics Changes - Electrical and Mechanical (E&M) revenues increased by 21% in the fourth quarter, while Transmission and Distribution (T&D) revenues grew by 15% [10][32] - E&M segment revenue for the fourth quarter was approximately$ 550 million, with EBITDA of $42.7 million, up 17% year-over-year [39] - T&D segment revenue for the fourth quarter was$ 213.3 million, with EBITDA of $30.6 million, reflecting a 15% increase [40] Market Data and Key Metrics Changes - The demand outlook for the T&D business remains favorable, driven by significant investments needed to modernize existing infrastructure [24][25] - The company noted strong demand in commercial markets, particularly in data centers and hospitality, contributing to a robust project pipeline [60] Company Strategy and Development Direction - The company is focused on its 4EVER strategy, which emphasizes employee development, customer value creation, and operational excellence [14][15] - A key aspect of the growth strategy includes geographic expansion through satellite projects and strategic M&A opportunities [16][20] - The company aims for compound annual revenue growth of 5% to 7% and EBITDA growth of 7% to 9% [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the favorable demand drivers in key end markets, despite potential headwinds from tariffs and inflation [29][30] - The company is well-positioned financially, with net leverage at approximately 1.0 times, allowing for flexibility in executing growth strategies [21][42] Other Important Information - The company does not currently have a dividend policy or share repurchase authorization, focusing instead on reinvesting in growth opportunities [22] - Full year 2024 CapEx increased to$ 48.3 million, reflecting a commitment to organic growth investments [43] Q&A Session Summary Question: How do you approach revenue guidance for 2025? - Management indicated that larger, complex projects are taking longer to complete, impacting backlog conversion [52][54] Question: What is the latest on project pipeline and backlog trends? - Management noted strong demand in commercial areas, particularly data centers, and emphasized that backlog trends are primarily a matter of timing [59][64] Question: What are the expectations for corporate expenses going forward? - Management clarified that corporate expenses are primarily related to building corporate teams and are not expected to decrease significantly in the near term [65][66] Question: What is the outlook for M&A activity? - Management expressed excitement about M&A opportunities, focusing on companies with strong leadership and safety cultures [83][84] Question: How is the company addressing potential impacts from the new administration? - Management is monitoring the situation closely, noting that the administration's pro-business strategy could be beneficial for the industry [29][110]