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May 1, 2019

MYR Group Inc. Announces First-Quarter 2019 Results

ROLLING MEADOWS, Ill., May 01, 2019 (GLOBE NEWSWIRE) -- MYR Group Inc. (“MYR”) (NASDAQ: MYRG), a holding company of leading specialty contractors serving the electric utility infrastructure, commercial and industrial construction markets in the United States and western Canada, today announced its first-quarter 2019 financial results.

Highlights

  • Record first quarter revenues of $468.1 million
  • First quarter net income attributable to MYR of $7.4 million, or $0.44 per diluted share
  • Backlog of $1.14 billion

Management Comments
Rick Swartz, MYR’s President and CEO, said “Our first quarter 2019 financial results included $468.1 million of revenues, a 35.4% increase over the first quarter of 2018, marking another record-high revenue quarter for MYR. We had a solid start in 2019 due to our strong market position, diverse mix of project types, an active bidding climate, and a large array of opportunities.”

First Quarter Results
MYR reported first-quarter 2019 revenues of $468.1 million, an increase of $122.5 million, or 35.4 percent, compared to the first quarter of 2018. Specifically, the T&D segment reported record high revenues of $272.5 million, an increase of $56.1 million, or 26.0 percent, from the first quarter of 2018, primarily due to increased volume on transmission projects. The C&I segment reported record high revenues of $195.5 million, an increase of $66.3 million, or 51.3 percent, from the first quarter of 2018, primarily due to increases in volume across both our T&D and C&I segments and incremental revenues from the Huen Companies, which was acquired in the third quarter of 2018.

Consolidated gross profit increased to $42.9 million in the first quarter of 2019, a $7.1 million or 19.9 percent increase from the first quarter of 2018. The increase in gross profit was due to higher revenues, partially offset by lower margins. Gross margin was 9.2 percent for the first quarter of 2019 compared to 10.3 percent for the first quarter of 2018. The decrease in gross margin was primarily due to inclement weather on certain projects and inefficiencies related to unanticipated overtime and material delays associated with a joint venture project in which we own the majority controlling interest, which were partially offset by net loss attributable to noncontrolling interest. The joint venture project is subject to margin guarantees, for which an offset is recognized in other income. Gross margin was also negatively impacted by an increase in non-reimbursable cost on a project. These margin decreases were partially offset by better than anticipated productivity on a project. Changes in estimates of gross profit on certain projects resulted in a gross margin decreases of 0.8 percent and 0.1 percent for the first quarter of 2019 and 2018, respectively.

Selling, general and administrative expenses (“SG&A”) increased to $33.0 million in the first quarter of 2019, compared to $28.3 million for the first quarter of 2018. The period-over-period increase was primarily due to the acquisition of the Huen Companies and higher employee related expenses to support operations. As a percentage of revenues, SG&A decreased to 7.0 percent for the first quarter of 2019 from 8.2 percent for the first quarter of 2018.

Income tax expense was $2.5 million for the first quarter of 2019, with an effective tax rate of 27.8 percent, compared to tax expense of $2.3 million for the first quarter of 2018, with an effective tax rate of 28.9 percent. The decrease in the tax rate in the first quarter of 2019 was primarily due to state income taxes offset by the impact of our noncontrolling interest. Our inability to utilize losses experienced in certain Canadian operations negatively impacted the effective tax rate in the first quarter of 2018.

For the first quarter of 2019, net income attributable to MYR Group Inc. was $7.4 million, or $0.44 per diluted share attributable to MYR Group Inc., compared to $5.6 million, or $0.34 per diluted share, for the same period of 2018. First-quarter 2019 EBITDA, a non-GAAP financial measure, was $20.9 million, or 4.5 percent of revenues, compared to $18.0 million, or 5.2 percent of revenues, in the first quarter of 2018.

Backlog
As of March 31, 2019, MYR's backlog was $1.136 billion, compared to $1.147 billion as of December 31, 2018. As of March 31, 2019, T&D backlog was $473.6 million, and C&I backlog was $662.3 million. Total backlog at March 31, 2019 increased $177.4 million, or 18.5 percent, from the $958.5 million reported at March 31, 2018.

Balance Sheet
As of March 31, 2019, MYR had $148.9 million of borrowing availability under its revolving credit facility.

Non-GAAP Financial Measures
To supplement MYR’s financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), MYR uses certain non-GAAP measures. Reconciliation to the nearest GAAP measures of all non-GAAP measures included in this press release can be found at the end of this release. MYR’s definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.

MYR believes that these non-GAAP measures are useful because they (i) provide both management and investors meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results, (ii) permit investors to view MYR’s performance using the same tools that management uses to evaluate MYR’s past performance, reportable business segments and prospects for future performance, (iii) publicly disclose results that are relevant to financial covenants included in MYR’s credit facility and (iv) otherwise provide supplemental information that may be useful to investors in evaluating MYR.

Conference Call
MYR will host a conference call to discuss its first-quarter 2019 results on Thursday, May 2, 2019, at 9:00 a.m. Central time. To participate in the conference call via telephone, please dial (877) 561-2750 (domestic) or (763) 416-8565 (international) at least five minutes prior to the start of the event. A replay of the conference call will be available through Thursday, May 9, 2019, at 1:00 P.M. Eastern time, by dialing (855) 859-2056 or (404) 537-3406, and entering conference ID 5690388. MYR will also broadcast the conference call live via the internet. Interested parties may access the webcast through the Investor Relations section of MYR's website at www.myrgroup.com. Please access the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. The webcast will be available until Thursday, May 9, 2019, at 1:00 P.M. Eastern time.

About MYR
MYR is a holding company of leading specialty contractors serving the electric utility infrastructure, commercial and industrial construction markets throughout the United States and western Canada who have the experience and expertise to complete electrical installations of any type and size. Their comprehensive services on electric transmission and distribution networks and substation facilities include design, engineering, procurement, construction, upgrade, maintenance and repair services. Transmission and distribution customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. Commercial and industrial electrical contracting services are provided to general contractors, commercial and industrial facility owners, local governments and developers generally throughout the United States and western Canada. For more information, visit myrgroup.com.

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, capital spending, segment improvements and investments. Forward-looking statements are generally accompanied by words such as “anticipate,” “believe,” “encouraged,” “estimate,” “expect,” “intend,” “likely,” “may,” “objective,” “outlook,” “plan,” “possible,” “potential,” “project,” “remain confident,” “should” “unlikely,” 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. No forward-looking statement can be guaranteed and actual results may differ materially from those projected. Forward-looking statements in this announcement should be evaluated together with the many uncertainties that affect MYR's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of MYR's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and in any risk factors or cautionary statements contained in MYR's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

MYR Group Inc. Contact:
Betty R. Johnson, Chief Financial Officer, 847-290-1891, investorinfo@myrgroup.com

Investor Contact:
Steve Carr, Dresner Corporate Services, 312-780-7211, scarr@dresnerco.com

Financial tables follow…

   
MYR GROUP INC.
Consolidated Balance Sheets
As of March 31, 2019and December 31, 2018
 
         
  March 31,   December 31,  
(In thousands, except share and per share data)    2019       2018    
  (unaudited)      
ASSETS        
Current assets:        
Cash and cash equivalents $   1,338     $   7,507    
Accounts receivable, net of allowances of $2,020 and $1,331, respectively     297,967         288,427    
Contract assets     188,069         160,281    
Current portion of receivable for insurance claims in excess of deductibles      10,003         10,572    
Other current assets      8,379         8,847    
Total current assets      505,756         475,634    
Property and equipment, net of accumulated depreciation of $260,743 and $253,495, respectively     162,565         161,892    
Operating lease right-of-use assets     16,266         —    
Goodwill      56,592         56,588    
Intangible assets, net of accumulated amortization of $7,765 and $7,031, respectively     32,542         33,266    
Receivable for insurance claims in excess of deductibles      16,564         17,173    
Investment in joint ventures     2,342         1,324    
Other assets      2,591         2,878    
Total assets  $   795,218     $   748,755    
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
Current portion of long-term debt $   3,742     $   3,681    
Current portion of operating lease obligations     4,401         —    
Current portion of finance lease obligations     1,127         1,119    
Accounts payable      170,352         139,480    
Contract liabilities     28,519         58,534    
Current portion of accrued self-insurance     20,901         19,633    
Income taxes payable, net      3,109         —    
Other current liabilities      61,409         61,358    
Total current liabilities      293,560         283,805    
Deferred income tax liabilities      17,052         17,398    
Long-term debt     106,204         86,111    
Accrued self-insurance     32,561         34,406    
Operating lease obligations, net of current maturities     11,600         —    
Finance lease obligations, net of current maturities     1,275         1,514    
Other liabilities      1,492         1,057    
Total liabilities      463,744         424,291    
Commitments and contingencies        
Stockholders’ equity:        
Preferred stock—$0.01 par value per share; 4,000,000 authorized shares;        
none issued and outstanding at March 31, 2019 and December 31, 2018     —         —    
Common stock—$0.01 par value per share; 100,000,000 authorized shares;        
16,610,032 and 16,564,961 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively     177         165    
Additional paid-in capital      148,938         148,276    
Accumulated other comprehensive loss     (270 )       (193 )  
Retained earnings     181,882         174,736    
Total stockholders' equity attributable to MYR Group Inc.     330,727         322,984    
Noncontrolling interest     747         1,480    
Total stockholders’ equity      331,474         324,464    
Total liabilities and stockholders’ equity  $   795,218     $   748,755    
         
         


 
MYR GROUP INC.
Unaudited Consolidated Statements of Operations and Comprehensive Income
Three Months Ended March 31, 2019 and 2018
 
    Three months ended
   March 31, 
(In thousands, except per share data)     2019       2018  
         
Contract revenues    $   468,094     $   345,611  
Contract costs        425,218         309,858  
Gross profit        42,876         35,753  
Selling, general and administrative expenses        32,987         28,280  
Amortization of intangible assets        734         117  
Gain on sale of property and equipment        (471 )       (1,051 )
Income from operations        9,626         8,407  
Other income (expense):        
Interest expense        (1,205 )       (721 )
Other income, net       746         249  
Income before provision for income taxes        9,167         7,935  
Income tax expense       2,547         2,291  
Net income       6,620         5,644  
Less: net loss attributable to noncontrolling interest       (733 )       —  
Net income attributable to MYR Group Inc.   $   7,353     $   5,644  
Income per common share attributable to MYR Group Inc.:        
—Basic    $   0.45     $   0.35  
—Diluted    $   0.44     $   0.34  
Weighted average number of common shares and potential common shares outstanding:        
—Basic        16,514         16,321  
—Diluted        16,658         16,520  
         
Net income   $   6,620     $   5,644  
Other comprehensive loss:        
Foreign currency translation adjustment       (77 )       (17 )
Other comprehensive loss       (77 )       (17 )
Total comprehensive income       6,543         5,627  
Less: net loss attributable to noncontrolling interest       (733 )       —  
Total comprehensive income attributable to MYR Group Inc.   $   7,276     $   5,627  
         



 
MYR GROUP INC.
Unaudited Consolidated Statements of Cash Flows
Three Months Ended March 31, 2019 and 2018
 
  Three months ended
 March 31, 
(In thousands)    2019         2018   
       
 Cash flows from operating activities:       
Net income $   6,620     $   5,644  
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities:      
Depreciation and amortization of property and equipment     9,815         9,275  
Amortization of intangible assets      734         117  
Stock-based compensation expense     951         420  
Deferred income taxes      (315 )       48  
Gain on sale of property and equipment      (471 )       (1,051 )
Other non-cash items      (56 )       702  
Changes in operating assets and liabilities:      
Accounts receivable, net      (9,380 )       23,663  
Contract assets     (27,615 )       (12,753 )
Receivable for insurance claims in excess of deductibles      1,178         (290 )
Other assets      (849 )       1,405  
Accounts payable      38,220         (3,765 )
Contract liabilities      (30,033 )       (12,333 )
Accrued self insurance     (580 )       (857 )
Other liabilities      3,576         11,808  
Net cash flows provided by (used in) operating activities     (8,205 )       22,033  
 Cash flows from investing activities:       
Proceeds from sale of property and equipment      832         1,074  
Purchases of property and equipment      (9,911 )       (14,497 )
Net cash flows used in investing activities     (9,079 )       (13,423 )
 Cash flows from financing activities:       
Net borrowings (repayments) under revolving lines of credit     21,609         (11,578 )
Payment of principal obligations under equipment notes     (1,455 )       —  
Payment of principal obligations under capital leases     (230 )       (272 )
Proceeds from exercise of stock options     282         581  
Repurchase of common shares     (778 )       (934 )
Other financing activities     (8,364 )       —  
Net cash flows provided by (used in) financing activities     11,064         (12,203 )
Effect of exchange rate changes on cash     51         (31 )
Net decrease in cash and cash equivalents     (6,169 )       (3,624 )
 Cash and cash equivalents:       
Beginning of period      7,507         5,343  
End of period  $   1,338     $   1,719  
       


   
MYR GROUP INC.
Unaudited Consolidated Selected Data,
 Unaudited Performance Measure and Reconciliation of Non-GAAP Measure
Three and Twelve Months Ended March 31, 2019 and 2018
 
   
              Three months ended   Last twelve months ended    
               March 31,     March 31,     
 (in thousands, except share and per share data)     2019         2018         2019         2018       
                               
 Summary Statement of Operations Data:                     
 Contract revenues    $   468,094     $   345,611     $   1,653,652     $   1,448,799      
 Gross profit    $   42,876     $   35,753     $   174,183     $   135,017      
 Income from operations    $   9,626     $   8,407     $   51,531     $   37,485      
 Income before provision for income taxes    $   9,167     $   7,935     $   44,300     $   31,734      
 Income tax expense    $   2,547     $   2,291     $   12,030     $   6,136      
 Net income attributable to MYR Group Inc.    $   7,353     $   5,644     $   32,796     $   25,598      
 Tax rate          27.8 %     28.9 %     27.2 %     19.3 %    
                               
 Per Share Data:                     
 Income per common share attributable to MYR Group Inc.:                   
 - Basic    $   0.45     $   0.35     $   2.00   (1 ) $   1.58   (1 )  
 - Diluted    $   0.44     $   0.34     $   1.97   (1 ) $   1.54   (1 )  
 Weighted average number of common shares                   
  and potential common shares outstanding: 
                   
 - Basic        16,514         16,321         16,489   (2 )     16,312   (2 )  
 - Diluted        16,658         16,520         16,628   (2 )     16,507   (2 )  
                               
               March 31,     December 31,     March 31,     March 31,     
 (in thousands)       2019       2018       2018       2017      
                               
 Summary Balance Sheet Data:                     
 Total assets    $   795,218     $   748,755     $   591,591     $   548,708      
 Total stockholders’ equity attributable to MYR Group Inc.  $   330,727     $   322,984     $   293,428     $   263,894      
 Goodwill and intangible assets    $   89,134     $   89,854     $   57,708     $   58,166      
 Total funded debt    $   109,946     $   89,792     $   67,381     $   39,580      
                               
                      Last twelve months ended    
                       March 31,     
                         2019         2018       
 Financial Performance Measure (3):                     
 Reconciliation of Non-GAAP measure:                             
 Net income attributable to MYR Group Inc.            $   32,796     $   25,598      
 Interest expense, net                4,112         2,807      
 Tax impact of interest                (1,118 )       (542 )    
 EBIT, net of taxes (4)            $   35,790     $   27,863      
                               
 See notes at the end of this earnings release.    
     
     
 MYR GROUP INC.
Unaudited Performance Measures and Reconciliation of Non-GAAP Measures
Three and Twelve Months Ended March 31, 2019 and 2018
   
     
              Three months ended   Last twelve months ended    
               March 31,     March 31,     
 (in thousands, except share, per share data, ratios and percentages)     2019         2018         2019         2018       
                               
 Financial Performance Measures (3):                     
 EBITDA (5)    $   20,921     $   18,048     $   89,482     $   72,763      
 EBITDA per Diluted Share (6)    $   1.26     $   1.09     $   5.38     $   4.41      
 Free Cash Flow (7)    $   (18,116 )   $   7,536     $   8,433     $   (35,563 )    
 Book Value per Period End Share (8)    $   19.74     $   17.58              
 Tangible Book Value (9)    $   241,593     $   235,720              
 Tangible Book Value per Period End Share (10)  $   14.42     $   14.12              
 Funded Debt to Equity Ratio  (11)      0.33       0.23              
 Asset Turnover (12)              2.80       2.64      
 Return on Assets (13)              5.5 %     4.7 %    
 Return on Equity  (14)              11.2 %     9.7 %    
 Return on Invested Capital (17)              10.0 %     9.4 %    
                               
 Reconciliation of Non-GAAP Measures:                     
 Reconciliation of Net Income attributable to MYR Group Inc. to EBITDA:                     
 Net income attributable to MYR Group Inc.    $   7,353     $   5,644     $   32,796     $   25,598      
 Net income - noncontrolling interests        (733 )       —         (526 )       —      
 Net income        6,620         5,644         32,270         25,598      
 Interest expense, net        1,205         721         4,112         2,807      
 Provision for income taxes        2,547         2,291         12,030         6,136      
 Depreciation and amortization        10,549         9,392         41,070         38,222      
 EBITDA (5)    $   20,921     $   18,048     $   89,482     $   72,763      
                               
 Reconciliation of Net Income attributable to MYR Group Inc. per Diluted Share                 
   to EBITDA per Diluted Share: 
                   
 Net income attributable to MYR Group Inc. per share  $   0.44     $   0.34     $   1.97     $   1.54      
 Net income - noncontrolling interests per share      (0.04 )       —         (0.03 )       —      
 Net income per share        0.40         0.34         1.94         1.54      
 Interest expense, net, per share        0.07         0.04         0.25         0.17      
 Provision for income taxes per share        0.15         0.14         0.72         0.37      
 Depreciation and amortization per share        0.64         0.57         2.47         2.33      
 EBITDA per Diluted Share (6)    $   1.26     $   1.09     $   5.38     $   4.41      
                               
 Calculation of Free Cash Flow:                     
 Net cash flow from operating activities    $   (8,205 )   $   22,033     $   54,551     $   (225 )    
 Less: cash used in purchasing property and equipment      (9,911 )       (14,497 )       (46,118 )       (35,338 )    
 Free Cash Flow (7)    $   (18,116 )   $   7,536     $   8,433     $   (35,563 )    
                               
 Reconciliation of Book Value to Tangible Book Value:                   
 Book value (total stockholders' equity attributable to MYR Group Inc.)  $   330,727     $   293,428              
 Goodwill and intangible assets        (89,134 )       (57,708 )            
 Tangible Book Value (9)    $   241,593     $   235,720              
                               
 Reconciliation of Book Value per Period End Share                   
  to Tangible Book Value per Period End Share: 
                 
 Book value per period end share    $   19.74     $   17.58              
 Goodwill and intangible assets per period end share    (5.32 )     (3.46 )            
 Tangible Book Value per Period End Share (10)  $   14.42     $   14.12              
                               
 Calculation of Period End Shares:                     
 Shares outstanding        16,610         16,492              
 Plus: Common equivalents        144         199              
 Period End Shares (15)        16,754         16,691              
                               
                   March 31,     March 31,     March 31,     
                    2019       2018       2017      
 Reconciliation of Invested Capital to Shareholders Equity:                   
 Book value (total stockholders' equity attributable to MYR Group Inc.)      $   330,727     $   293,428     $   263,894      
          Plus: Total Funded Debt            109,946         67,381         39,580      
          Less: Cash and cash equivalents            (1,338 )       (1,719 )       (6,939 )    
 Invested Capital (16)        $   439,335     $   359,090     $   296,535      
                               


See notes at the end of this earnings release.

  1. Last-twelve-months earnings per share is the sum of earnings per share attributable to MYR Group Inc. reported in the last four quarters.
  2. Last-twelve-months average basic and diluted shares attributable to MYR Group Inc. were determined by adding the average shares reported for the last four quarters and dividing by four.
  3. These financial performance measures are provided as supplemental information to the financial statements. These measures are used by management to evaluate our past performance, our prospects for future performance and our ability to comply with certain material covenants as defined within our credit agreement, and to compare our results with those of our peers. In addition, we believe that certain of the measures, such as book value, tangible book value, free cash flow, asset turnover, return on equity, and debt leverage are measures that are monitored by sureties, lenders, lessors, suppliers and certain investors. Our calculation of each measure is described in the following notes; our calculation may not be the same as the calculations made by other companies.
  4. EBIT, net of taxes is defined as net income attributable to MYR Group Inc. plus net interest, less the tax impact of net interest. The tax impact of net interest is computed by multiplying net interest by the effective tax rate. Management uses EBIT, net of taxes, to measure our results exclusive of the impact of financing costs.
  5. EBITDA is defined as earnings before interest, taxes, depreciation and amortization.  EBITDA is not recognized 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. EBITDA is a component of the debt to EBITDA covenant, as defined in our credit agreement, which we must comply with to avoid potential immediate repayment of amounts borrowed or additional fees to seek relief from our lenders. In addition, management considers EBITDA a useful measure because it eliminates differences which are caused by different capital structures as well as different tax rates and depreciation schedules when comparing our measures to our peers’ measures.
  6. EBITDA per diluted share is calculated by dividing EBITDA by the weighted average number of diluted shares attributable to MYR Group Inc. outstanding for the period. EBITDA per diluted share is not recognized under GAAP and does not purport to be an alternative to income per diluted share.
  7. Free cash flow, which is defined as cash flow provided by operating activities minus cash flow used in purchasing property and equipment, is not recognized under GAAP and does not purport to be an alternative to net income attributable to MYR Group Inc., cash flow from operations or the change in cash on the balance sheet. Management views free cash flow as a measure of operational performance, liquidity and financial health. 
  8. Book value per period end share is calculated by dividing total stockholders’ equity attributable to MYR Group Inc. at the end of the period by the period end shares outstanding.
  9. Tangible book value is calculated by subtracting goodwill and intangible assets outstanding at the end of the period from stockholders’ equity attributable to MYR Group Inc. Tangible book value is not recognized under GAAP and does not purport to be an alternative to book value or stockholders’ equity attributable to MYR Group Inc.
  10. Tangible book value per period end share is calculated by dividing tangible book value at the end of the period by the period end number of shares outstanding. Tangible book value per period end share is not recognized under GAAP and does not purport to be an alternative to income per diluted share.
  11. The funded debt to equity ratio is calculated by dividing total funded debt at the end of the period by total stockholders’ equity attributable to MYR Group Inc. at the end of the period.
  12. Asset turnover is calculated by dividing the current period revenue by total assets at the beginning of the period.
  13. Return on assets is calculated by dividing net income attributable to MYR Group Inc. for the period by total assets at the beginning of the period.
  14. Return on equity is calculated by dividing net income attributable to MYR Group Inc. for the period by total stockholders’ equity attributable to MYR Group Inc. at the beginning of the period.
  15. Period end shares is calculated by adding average common stock equivalents for the quarter to the period end balance of common stock outstanding. Period end shares is not recognized under GAAP and does not purport to be an alternative to diluted shares. Management views period end shares as a better measure of shares outstanding as of the end of the period.
  16. Invested capital is calculated by adding net funded debt (total funded debt less cash and marketable securities) to total stockholders’ equity attributable to MYR Group Inc.
  17. Return on invested capital is calculated by dividing EBIT, net of taxes, less any dividends, by invested capital at the beginning of the period. Return on invested capital is not recognized under GAAP, and is a key metric used by management to determine our executive compensation.

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Source: MYR Group, Inc.