ROLLING MEADOWS, Ill., March 8, 2011 (GLOBE NEWSWIRE) -- MYR Group Inc. ("MYR") (Nasdaq:MYRG), a leading specialty contractor serving the electrical infrastructure market in the United States, today announced its fourth-quarter and full-year 2010 financial results.
Highlights
- Q4 2010 revenues of $155.1 million compared to Q4 2009 revenues of $173.3 million.
- Q4 2010 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), a non-GAAP financial measure, of $14.0 million compared to $10.5 million in Q4 2009.
- Q4 2010 diluted earnings per share (EPS) of $0.29 compared to $0.21 in Q4 2009.
- Full-year 2010 revenues of $597.1 million compared to full-year 2009 revenues of $631.2 million.
- Full-year 2010 EBITDA of $42.7 million compared to full-year 2009 EBITDA of $40.8 million.
- Full-year 2010 diluted EPS of $0.78 compared to full-year 2009 diluted EPS of $0.83.
- Year-end 2010 backlog of $520.9 million compared to year-end 2009 backlog of $204.4 million.
Management Comments
Bill Koertner, MYR Group's President and CEO, said, "Although we experienced a decrease in 2010 revenues and gross margin over 2009, we are proud of our overall performance given the market conditions over the past few years. Revenues decreased in the 2010 fourth quarter compared to the 2009 fourth quarter, but our gross margins and profitability improved period over period. We also experienced a substantial increase in bidding activity in the second half of 2010 on large transmission projects. We were awarded two major contracts at the end of the year, as we previously announced, and were selected as one of the two contractors for the CAPX2020 work in Minnesota in early 2011. These projects will contribute to our work load over the next several years. While we see improvements in the economy, we believe there will be continuing challenges ahead, particularly in our C&I markets and utility distribution business. We also see the first half of 2011 as a transition period of winding down existing large projects while at the same time we begin to ramp up new multi-year large transmission projects. Over the last several years, we have made significant investments in recruiting and developing management and craft personnel and procuring the specialty equipment and tooling required to support the industry's anticipated growth. It appears the long-awaited transmission build-out is at hand, and we expect to execute on our plan and put those assets to work."
Fourth-Quarter Results
MYR reported fourth-quarter 2010 revenues of $155.1 million, a decrease of $18.2 million, or 10.5 percent, compared to the fourth quarter of 2009. Specifically, the Transmission and Distribution (T&D) segment reported revenues of $118.6 million, a decrease of 5.2 percent over the fourth quarter of 2009. The Commercial and Industrial (C&I) segment reported revenues of $36.5 million, a decrease of $11.6 million, or 24.2 percent, over the fourth quarter of 2009. The majority of the decrease in revenues was the result of a decrease in revenues from a few large T&D projects (greater than $10.0 million in contract value) coupled with an overall decrease in revenues from the C&I segment. This decrease in revenues was partially offset by an increase in T&D projects that were less than $10.0 million in contract value.
Consolidated gross profit increased to $21.8 million, or 14.1 percent of revenues in the fourth quarter of 2010, compared to $19.4 million, or 11.2 percent of revenues in the fourth quarter of 2009. As a percentage of revenues, the gross profit margin increased period over period mostly as a result of margin increases on a few large transmission projects of approximately $4.4 million, partially offset by a reduction in margins on smaller C&I projects (less than $3.0 million in contract value) of approximately $0.7 million. The margin increases on the large transmission projects were due to increased productivity levels, cost efficiencies, added work and effective contract management.
Selling, general and administrative expenses (SG&A) decreased approximately $0.5 million, or 4.4 percent, to $12.0 million in the fourth quarter of 2010 compared to $12.5 million in the fourth quarter of 2009. The decrease was primarily due to a net decrease in profit sharing and other employee-related compensation and benefit costs.
For the fourth quarter of 2010, net income was $6.1 million, or $0.29 per diluted share, compared to $4.3 million, or $0.21 per diluted share, for the same period of 2009. Fourth-quarter 2010 EBITDA was $14.0 million, or 9.1 percent of revenues, compared to $10.5 million, or 6.0 percent of revenues, in the fourth quarter of 2009. The increase in EBITDA as a percentage of revenues was mainly due to an increase in gross profit margin, as discussed above, as well as an increase in depreciation expense.
Full-Year Results
MYR reported revenues of $597.1 million for the full year of 2010, a decrease of $34.1 million, or 5.4 percent, compared with the full year of 2009. The majority of the decrease in revenues was the result of a decrease in revenues from a few large transmission projects (greater than $10.0 million in contract value) which was partially offset by an increase in revenues from several medium-sized transmission projects (between $3.0 million and $10.0 million in contract value). In addition, the C&I segment had an overall decrease in revenues from contracts valued at less than $10.0 million. The T&D segment reported revenues of $447.5 million in the full year of 2010, a decrease of 4.5 percent over 2009. The decrease in T&D segment revenues was the result of a decrease in revenues from both small and large transmission projects, partially offset by an increase in revenues generated from distribution projects and medium-sized transmission projects (between $3.0 million and $10.0 million in contract value). The C&I segment reported full-year 2010 revenues of $149.6 million, a decrease of 7.9 percent over 2009.
Consolidated gross profit decreased to $70.7 million, or 11.8 percent of revenues, for the full year of 2010, compared to $75.9 million, or 12.0 percent of revenues, for the full year of 2009. The slight decrease in gross profit as a percentage of revenues for the full year of 2010 compared to the same period of 2009 was mainly attributed to an overall reduction in contract margins on smaller T&D and C&I projects of approximately $8.5 million, which was mostly due to margin pressure from increased competition. This decrease in margins on smaller contracts in both segments was mostly offset by a net increase in margins on large projects in the T&D segment of approximately $7.4 million. The margin increases on large projects were due to increased productivity levels, cost efficiencies, added work and effective contract management.
Selling, general and administrative expenses (SG&A) decreased approximately $3.9 million, or 7.9 percent, to $44.6 million in the full year of 2010 compared to $48.5 million in the full year of 2009. The decrease was primarily due to the elimination of a $1.6 million severance liability as a result of the amended employment agreements of the Company's six executive officers, and an overall reduction in profit sharing and other employee‑related compensation and benefit costs. As a percentage of revenues, these expenses decreased to 7.5 percent for the full year of 2010, from 7.7 percent for the full year of 2009.
For the full year of 2010, net income was $16.1 million, or $0.78 per diluted share, compared to $17.2 million, or $0.83 per diluted share, for the same period of 2009. EBITDA for the full year of 2010 was $42.7 million, or 7.1 percent of revenues, compared to $40.8 million, or 6.5 percent of revenues, for the full year of 2009. The increase in EBITDA as a percentage of revenues was mainly due to an increase in depreciation expense, partially offset by a reduction in gross profit margins as discussed above.
Backlog
As of December 31, 2010, MYR's backlog was approximately $520.9 million, consisting of $429.0 million in the T&D segment and $91.9 million in the C&I segment. Total backlog increased $316.5 million, or 154.9 percent, from $204.4 million reported at December 31, 2009. The increase at the end of 2010 compared to the end of 2009 was primarily related to several large contracts that were awarded in the Company's T&D segment at the end of 2010.
Total backlog at December 31, 2010 was $325.8 million higher as compared to the $195.1 million backlog reported at September 30, 2010. T&D backlog increased $313.4 million, or 271.2 percent, while C&I backlog increased $12.4 million, or 15.6 percent, compared to backlog at September 30, 2010.
MYR's method of calculating 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 at any point in time and may not accurately represent the revenues that MYR expects to realize during any period, therefore, it should not be viewed or relied upon as a stand-alone indicator of future results.
Balance Sheet
As of December 31, 2010, MYR had cash and cash equivalents of $62.6 million and total long-term debt of $30.0 million under a term loan. Subsequent to year end, MYR made a $10 million prepayment on the term loan reducing the long-term debt balance to $20 million. As of December 31, 2010, MYR also had a $75 million revolving credit facility, which had a $15.0 million letter of credit outstanding against the total credit available. MYR's long-term credit agreement, which encompasses the term loan and the revolving credit facility, expires on August 31, 2012.
Non-GAAP Financial Measures
To assist investors' understanding of the Company's financial results, MYR has provided EBITDA in this press release. EBITDA is a measure not recognized by 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 MYR's results. A reconciliation of EBITDA to its GAAP counterpart (net income) is provided at the end of this release.
Conference Call
MYR will host a conference call to discuss its fourth-quarter and full-year 2010 results on Wednesday, March 9, 2011, at 10:00 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 Tuesday, March 15, 2011 at 11:59 p.m. Eastern time, by dialing (800) 642-1687 or (706) 645-9291, and entering conference ID 41886299. MYR will also broadcast the conference call live via the internet. Interested parties may access the webcast through the Investor Relations section of the Company's Web site at . Please access the Web site 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 March 15, 2011.
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, private developers, cooperatives, municipalities and other transmission owners. MYR also provides Commercial and Industrial electrical contracting services to facility owners and general contractors in the Western United States. Our comprehensive services include turnkey 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, capital spending and investments. Our forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "potential," "plan," "goal," "appears" 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 press 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, 2010, and in any risk factors or cautionary statements contained in MYR's periodic reports on Form 10-Q or current reports on Form 8-K.
CONTACT: MYR Group Inc. Contact: Marco A. Martinez, Chief Financial Officer 847-290-1891, investorinfo@myrgroup.com Investor Contact: Philip Kranz, Dresner Corporate Services 312-780-7240, pkranz@dresnerco.com