MYR Group Inc. Announces First-Quarter 2009 Results
ROLLING MEADOWS, Ill., May 14, 2009 (GlobeNewswire via COMTEX News Network) -- MYR Group Inc. ("MYR") (Nasdaq:MYRG), a leading specialty contractor serving the electrical infrastructure market in the United States, issued first-quarter 2009 financial results.
Highlights
* Q1 2009 diluted earnings per share (EPS) of $0.14 compared to $0.23 for the same period of 2008. * Q1 2009 EBITDA (a non-GAAP measure) decreased to $8.2 million compared to EBITDA of $11.0 million in Q1 2008. * Q1 2009 backlog increased 27.6 percent over Q1 2008 to $294.6 million.
Management Comments
Bill Koertner, MYR's president and CEO, said, "As we reported in March, two thousand and nine (2009) is turning out to be a challenging year for our nation, our customers and for contractors like MYR serving the utility, commercial and industrial markets. Our customers are reacting to the current recession by adjusting their capital and maintenance spending plans in the near term. Most economic indicators show continued weakness in our markets this year, however, there are a few signs that the recession is reaching a bottom. We remain very optimistic about our long-term growth prospects despite our lower quarter-over-quarter results. Our strong balance sheet and customer relationships, coupled with a solid backlog, position us well to weather the slow down and to grow once the Federal Stimulus Package begins to have an effect."
First Quarter Results
MYR reported revenues for the first quarter of 2009 of $132.9 million, a decrease of $3.8 million, or 2.8 percent, compared with the first quarter of 2008. The majority of the decrease in revenues was the result of reduced revenues in MYR's Commercial and Industrial (C&I) segment, which was partially offset by an increase in revenues in the Transmission and Distribution (T&D) segment. MYR's T&D segment reported revenues of $99.7 million, an increase of 1.1 percent over the same period of 2008, while our C&I segment reported revenues of $33.3 million, a decrease of 12.9 percent over the first quarter of 2008. The decrease in the C&I segment was largely due to less available work and increased competition for those projects which were bid upon, both due to the current weak economy.
Consolidated gross profit decreased to $17.0 million or 12.8 percent of revenues in the first quarter of 2009 compared to $20.2 million or 14.8 percent of revenues for the first quarter of 2008. The decrease in gross profit in the first quarter of 2009 compared to the first quarter of 2008 was primarily attributed to strong performance and increased margins on a few large contracts that resulted in approximately $2.1 million in incremental gross profit during the first quarter of 2008. MYR also experienced reduced margins during the first quarter of this year due to higher cost-to-complete estimates on certain contracts. This resulted in a gross profit reduction in our T&D segment of approximately $1.0 million during the first quarter of 2009.
For the first quarter of 2009, net income was $2.9 million, or $0.14 per diluted share, compared to net income of $4.8 million, or $0.23 per diluted share, for the same period of 2008. Earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter of 2009 was $8.2 million, or 6.2 percent of revenues, compared to EBITDA of $11.0 million, or 8.0 percent of revenues, in the first quarter of 2008. The decrease in net income and EBITDA were due predominantly to a decrease in the gross profit margins discussed above as selling, general and administrative expenses (SG&A) remained relatively constant period over period.
Backlog
As of March 31, 2009, MYR's backlog was approximately $294.6 million, consisting of $214.2 million in the T&D segment and $80.4 million in the C&I segment. Total backlog increased $63.8 million, or 27.6 percent, from $230.8 million reported at March 31, 2008. T&D backlog increased $63.7 million, or 42.3 percent, while C&I backlog at March 31, 2009 was consistent with the level of backlog reported at March 31, 2008. Total backlog as of March 31, 2009, compared to December 31, 2008, decreased $21.4 million or 6.8 percent.
MYR's method of tracking and reporting backlog may differ from methods used by other companies. The timing of contract awards and the duration of large projects can significantly affect MYR's backlog, and therefore, should not be viewed or relied upon as a stand-alone indicator of future results.
Balance Sheet
As of March 31, 2009, MYR had cash and cash equivalents of $34.1 million and total debt of $30.0 million under its term loan. MYR also had a $75 million revolving credit facility, which has one $15.0 million letter of credit outstanding against the total credit availability at March 31, 2009.
Non-GAAP Results
In an effort to better assist investors in understanding our financial results, we have provided in this release EBITDA, which is a measure not defined under generally accepted accounting principles in the United States (GAAP). Management believes this information is useful to investors in understanding results of operations because it illustrates the impact that interest, taxes, depreciation and amortization had on results. A reconciliation of this financial measure to its GAAP counterparts is provided at the end of this release.
Conference Call
MYR will host its first-quarter 2009 earnings conference call on Friday, May 15, 2009 at 10 a.m. central time. To participate in the conference call via telephone, please dial (877) 874-1569 (domestic) or (719) 325-4802 (international) at least five minutes prior to the start of the event. A replay of the conference call will be available through Friday, May 22, 2009, at 11:59 p.m. eastern time, by dialing (888) 203-1112 or (719) 457-0820, and entering conference code: 6917124. MYR Group will also broadcast the conference call live via the internet. Interested parties may access the webcast through the Investor Relations section of MYR's Web site at www.myrgroup.com. Please access the Web site at least 15 minutes prior to the start of the call to register and to download and install any necessary audio software. The webcast will be archived on our Web site for seven days.
About MYR Group Inc.
MYR is a holding company of specialty construction service providers. Through subsidiaries dating back to 1891, MYR is one of the largest national contractors serving the transmission and distribution sector of the United States electric utility industry. Transmission and Distribution customers include electric utilities, cooperatives and municipalities. MYR also provides Commercial and Industrial electrical contracting services to facility owners and general contractors in the Western United States. Our comprehensive services include turn-key construction and maintenance services for the nation's electrical infrastructure.
Forward-Looking Statements
Various statements in this announcement, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenue, income and capital spending. Our forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "potential," "plan," "goal" or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this announcement speak only as of the date of this announcement; we disclaim any obligation to update these statements (unless required by securities laws), and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These and other important factors, including those discussed on form 10-Q and 10-K under ''Risk Factors'' in our Annual Report on Form 10-K, and in other current or periodic reports which we file with the Securities and Exchange Commission, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.
These risks, contingencies and uncertainties include, but are not limited to, significant variations in our operating results from quarter to quarter, the competitive and cyclical nature of our industry, our ability to realize and profit from our backlog, the implementation of the Energy Policy Act of 2005 by our customers, the implementation of the American Recovery and Reinvestment Act, our ability to obtain new contracts and/or replace completed or cancelled contracts, our ability to obtain adequate bonding for our projects, our ability to hire and retain key personnel and subcontractors, limitations on our internal infrastructure, the downturn in the U.S. economy and credit markets and its impact on our customers and our sources of liquidity.
MYR GROUP
Consolidated Balance Sheets
As of December 31, 2008 and March 31, 2009
(in thousands, except share data)
Dec. 31, March 31,
2008 2009
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 42,076 $ 34,074
Accounts receivable, net of allowances
of $1,845 and $1,688, respectively 94,048 85,832
Costs and estimated earnings in excess of
billings on uncompleted contracts 25,821 23,760
Deferred income tax assets 10,621 10,621
Receivable for insurance claims in excess
of deductibles 8,968 8,926
Refundable income taxes 145 --
Other current assets 3,731 4,153
----------- -----------
Total current assets 185,410 167,366
Property and equipment, net of accumulated
depreciation of $21,158 and $24,195,
respectively 75,873 76,230
Goodwill 46,599 46,599
Intangible assets, net of accumulated
amortization of $1,218 and $1,302,
respectively 11,874 11,790
Other assets 2,307 1,958
----------- -----------
Total assets $322,063 $303,943
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 30,187 $ 20,818
Billings in excess of costs and estimated
earnings on uncompleted contracts 32,698 25,328
Accrued self insurance 32,881 32,406
Accrued income taxes -- 1,511
Other current liabilities 27,571 22,055
----------- -----------
Total current liabilities 123,337 102,118
Long-term debt, net of current maturities 30,000 30,000
Deferred income tax liabilities 12,429 12,429
Other liabilities 938 923
----------- -----------
Total liabilities 166,704 145,470
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred stock--$0.01 par value per share;
4,000,000 authorized shares; none issued
and outstanding at December 31, 2008 and
March 31, 2009 -- --
Common stock--$0.01 par value per share;
100,000,000 authorized shares; 19,712,811
shares issued and outstanding at December
31, 2008 and March 31, 2009 197 197
Additional paid-in capital 141,159 141,390
Retained earnings 14,003 16,886
----------- -----------
Total stockholders' equity 155,359 158,473
----------- -----------
Total liabilities and stockholders' equity $322,063 $303,943
=========== ===========
MYR GROUP INC.
Unaudited Consolidated Statements of Operations
Three Months Ended March 31, 2008 and 2009
(in thousands, except share and
per share data)
Three months ended
March 31,
-------------------------
2008 2009
------------ ------------
Contract revenues $ 136,763 $ 132,935
Contract costs 116,563 115,902
------------ ------------
Gross profit 20,200 17,033
Selling, general and administrative
expenses 11,918 11,974
Amortization of intangible assets 83 84
Gain on sale of property and equipment (148) (57)
------------ ------------
Income from operations 8,347 5,032
Other income (expense)
Interest income 420 122
Interest expense (542) (222)
Other, net (57) (60)
------------ ------------
Income before provision for income taxes 8,168 4,872
Income tax expense 3,349 1,989
------------ ------------
Net income $ 4,819 $ 2,883
============ ============
Income per common share:
--Basic $ 0.24 $ 0.15
--Diluted $ 0.23 $ 0.14
Weighted average number of common shares
and potential common shares outstanding:
--Basic 19,712,811 19,712,811
--Diluted 20,711,409 20,716,255
MYR GROUP INC.
Unaudited Consolidated Statements of Cash Flows
Three Months Ended March 31, 2008 and 2009
(in thousands)
Three Months Ended
March 31,
-------------------
2008 2009
--------- ---------
Cash flows from operating activities:
Net income $ 4,819 $ 2,883
Adjustments to reconcile net income to net
cash flows provided by (used in) operating
activities --
Depreciation 2,617 3,165
Amortization of intangible assets 83 84
Stock-based compensation expense related
to awards 230 231
Gain on sale of property and equipment (148) (57)
Other non-cash items 21 21
Changes in operating assets and liabilities
Accounts receivable, net 20,914 8,216
Costs and estimated earnings in excess of
billings on uncompleted contracts 2,433 2,061
Construction materials inventory (440) --
Receivable for insurance claims in excess
of deductibles 277 42
Other assets 2,709 51
Accounts payable (11,162) (5,393)
Billings in excess of costs and estimated
earnings on uncompleted contracts (2,696) (7,370)
Accrued self insurance 497 (475)
Other liabilities (9,025) (4,047)
--------- ---------
Net cash flows provided by (used in)
operating activities 11,129 (588)
--------- ---------
Cash flows from investing activities:
Proceeds from sale of property and equipment 1,161 125
Purchases of property and equipment (10,946) (7,521)
--------- ---------
Net cash flows used in investing activities (9,785) (7,396)
--------- ---------
Cash flows from financing activities:
Payments of capital lease obligations -- (8)
Equity financing costs (1,753) (10)
Notes receivable from purchase of common stock 2 --
--------- ---------
Net cash flows used in financing activities (1,751) (18)
--------- ---------
Net decrease in cash and cash equivalents (407) (8,002)
Cash and cash equivalents:
Beginning of period 34,547 42,076
--------- ---------
End of period $ 34,140 $ 34,074
========= =========
MYR GROUP INC.
Unaudited Consolidated Selected Data, Net Income Per Share
And EBITDA Reconciliation
Three Months Ended March 31, 2008 and 2009
(in thousands, except share and per share data)
Three months ended
March 31,
------------------------
2008 2009
----------- -----------
Summary Data:
Contract revenues $ 136,763 $ 132,935
=========== ===========
Gross profit $ 20,200 $ 17,033
=========== ===========
Income from operations $ 8,347 $ 5,032
=========== ===========
Net income $ 4,819 $ 2,883
=========== ===========
Income per common share (1):
- Basic $ 0.24 $ 0.15
- Diluted $ 0.23 $ 0.14
Weighted average number of common shares and
potential common shares outstanding(1):
- Basic 19,712,811 19,712,811
- Diluted 20,711,409 20,716,255
Reconciliation of Net Income to EBITDA:
Net income $ 4,819 $ 2,883
Interest expense (income), net 122 100
Provision for income taxes 3,349 1,989
Depreciation and amortization 2,700 3,249
----------- -----------
EBITDA(2) $ 10,990 $ 8,221
=========== ===========
(1) The Company calculates net income per common share in accordance
with SFAS No. 128, Earnings per Share. Basic earnings per share
is calculated by dividing net income by the weighted average
number of shares outstanding for the reporting period. Diluted
earnings per share is computed similarly, except that it reflects
the potential dilutive impact that would occur if dilutive
securities were exercised into common shares. Potential common
shares are not included in the denominator of the diluted
earnings per share calculation when inclusion of such shares
would be anti-dilutive or included performance conditions that
were not met.
(2) EBITDA is not defined under GAAP and does not purport to be an
alternative to net income as a measure of operating performance
or to net cash flows provided by operating activities as a
measure of liquidity.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: MYR Group Inc.
MYR Group Inc.
Marco A. Martinez, Chief Financial Officer
847-290-1891
investorinfo@myrgroup.com
Dresner Corporate Services
Investor Contact:
Philip Kranz
312-780-7240
pkranz@dresnerco.com
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