Financial Data and Key Metrics Changes - Fourth quarter 2024 revenues were 830million,adecreaseof174 million or 17% compared to the same period last year, primarily due to clean energy projects reaching mechanical completion and a decrease in revenue on C&I fixed price contracts [16][18] - Gross margin increased to 10.4% from 9.7% year-over-year, driven by higher margins on completed projects and better-than-anticipated productivity [19][20] - Net income for the fourth quarter was 16million,downfrom24 million year-over-year, with diluted earnings per share at 0.99comparedto1.43 [27][28] - Operating cash flow decreased to 21millionfrom43 million year-over-year, while free cash flow was 9millioncomparedto22 million [28][29] Business Line Data and Key Metrics Changes - T&D revenues were 450million,adecreaseof24267 million from transmission and 183 million from distribution [17] - C&I revenues were 380 million, an 8% decrease year-over-year, primarily due to lower revenue on fixed price contracts [18] - T&D operating income margin was 6.7%, down from 7.2% year-over-year, impacted by losses on clean energy projects [21][22] - C&I operating income margin improved to 3.9% from 2.1% year-over-year, benefiting from higher margins on completed projects [23][24] Market Data and Key Metrics Changes - Total backlog as of December 31, 2024, was 2.6billion,a2.5818 million in T&D and 1.8 billion in C&I [28] - The 2025 North American electric transmission market forecast indicates over 170 hyperscale and colocation data centers planned, requiring more than 45 gigawatts of capacity [13][14] - Aggregate energy utility investments are projected to reach 202 billion in 2025, increasing to 211billionby2027[34]CompanyStrategyandDevelopmentDirection−Thecompanyaimstoexpandrelationshipsthroughmultiyearmasterserviceagreementsandpursuenewpartnershipstomeetgrowingelectricitydemand[11][12]−Focusoncoremarketssuchasdatacenters,transportation,pharmaceuticals,healthcare,andcleanenergy,withacommitmenttoreliablepowerdelivery[13][14]−Thecompanyplanstomaintainastrongbalancesheetandleveragefuturecashflowfororganicgrowth,acquisitions,andsharerepurchases[30]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthegrowthforecastforthemarketsserved,citingasteadypipelineofprojectopportunitiesandtheimportanceofcollaborationwithcustomers[44][45]−Thecompanyisselectiveinpursuingcleanenergyprojects,focusingonprofitabilityandprojectexecution[67]−Managementanticipatesstrongerfreecashflowgenerationin2025,drivenbyincreasedprofitabilityandreducedpendingchangeorders[61][63]OtherImportantInformation−Fourthquartereffectivetaxratewas40.975 million share repurchase program, expiring on September 5, 2025, or when funds are exhausted [30] Q&A Session Summary Question: Can you discuss the bidding environment in C&I and the impact of potential tariffs? - Management noted activity across all markets, particularly in data centers and hospitals, with tariffs being a common discussion point in new contracts [49][50] Question: What factors contributed to lower revenue in fixed price contracts? - Management indicated it was a mix of project types coming in during the quarter, not a long-term trend, with an increase in T&E contracts observed [51][52] Question: What is the outlook for free cash flow in 2025? - Management expects stronger free cash flow in 2025, driven by increased profitability and reduced pending change orders [61][63] Question: How much revenue contribution came from clean energy projects in T&D? - Clean energy projects contributed about 4% for the quarter and 10% year-to-date [65] Question: How does the new administration's focus on oil and gas affect the business? - Management stated that regardless of the energy source, the company remains focused on delivering lines and substations, with no significant shifts in utility discussions noted [81][83] Question: What is the status of discussions regarding prior challenging projects? - Conversations are ongoing, with some settled and others still in discussion, but management feels covered regarding reported impacts [90][92]
