Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Mar. 16, 2015 | Jun. 30, 2014 |
Document and Entity Information | |||
Entity Registrant Name | Primoris Services Corp | ||
Entity Central Index Key | 1361538 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $1,157.70 | ||
Entity Common Stock, Shares Outstanding | 51,569,564 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $139,465 | $196,077 |
Short-term investments | 30,992 | 18,686 |
Customer retention deposits and restricted cash | 481 | 5,304 |
Accounts receivable, net | 337,382 | 304,955 |
Costs and estimated earnings in excess of billings | 68,654 | 57,146 |
Inventory and uninstalled contract materials | 58,116 | 51,829 |
Deferred tax assets | 13,555 | 13,133 |
Prepaid expenses and other current assets | 31,720 | 12,654 |
Total current assets | 680,365 | 659,784 |
Property and equipment, net | 271,431 | 226,512 |
Intangible assets, net | 39,581 | 45,303 |
Goodwill | 119,410 | 118,626 |
Other long-term assets | 400 | 468 |
Total assets | 1,111,187 | 1,050,693 |
Current liabilities: | ||
Accounts payable | 128,793 | 127,302 |
Billings in excess of costs and estimated earnings | 158,595 | 173,365 |
Accrued expenses and other current liabilities | 83,401 | 91,079 |
Dividends payable | 2,062 | 1,805 |
Current portion of capital leases | 1,650 | 3,288 |
Current portion of long-term debt | 38,909 | 28,475 |
Current portion of contingent earnout liabilities | 5,901 | 5,000 |
Total current liabilities | 419,311 | 430,314 |
Long-term capital leases, net of current portion | 657 | 2,295 |
Long-term debt, net of current portion | 204,029 | 191,051 |
Deferred tax liabilities | 19,484 | 10,092 |
Long-term contingent earnout liabilities, net of current portion | 1,021 | 4,233 |
Other long-term liabilities | 12,899 | 14,260 |
Total liabilities | 657,401 | 652,245 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock-$.0001 par value, 1,000,000 shares authorized, none issued and outstanding at December 31, 2014 and 2013 | ||
Common stock-$.0001 par value; 90,000,000 shares authorized, 51,561,396 and 51,571,394 issued and outstanding at December 30, 2014 and December 31, 2013 | 5 | 5 |
Additional paid-in capital | 160,186 | 159,196 |
Retained earnings | 293,628 | 238,216 |
Noncontrolling interests | -33 | 1,031 |
Total stockholders' equity | 453,786 | 398,448 |
Total liabilities and stockholders' equity | $1,111,187 | $1,050,693 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 51,561,396 | 51,571,394 |
Common stock, shares outstanding | 51,561,396 | 51,571,394 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF INCOME | |||
Revenues | $2,086,194 | $1,944,220 | $1,541,734 |
Cost of revenues | 1,850,154 | 1,688,205 | 1,349,024 |
Gross profit | 236,040 | 256,015 | 192,710 |
Selling, general and administrative expenses | 132,248 | 130,778 | 96,424 |
Operating income | 103,792 | 125,237 | 96,286 |
Other income (expense): | |||
Income (loss) from non-consolidated entities | 5,264 | -4,836 | 186 |
Foreign exchange gain (loss) | 374 | 153 | -36 |
Other income (expense) | -757 | 4,804 | -870 |
Interest income | 88 | 110 | 157 |
Interest expense | -6,433 | -5,892 | -3,619 |
Income before provision for income taxes | 102,328 | 119,576 | 92,104 |
Provision for income taxes | -38,646 | -44,896 | -33,837 |
Net income | 63,682 | 74,680 | 58,267 |
Less net income attributable to noncontrolling interests | -526 | -5,020 | -1,511 |
Net income attributable to Primoris | $63,156 | $69,660 | $56,756 |
Dividends per common share (in dollars per share) | $0.15 | $0.14 | $0.12 |
Earnings per share attributable to Primoris: | |||
Basic (in dollars per share) | $1.22 | $1.35 | $1.10 |
Diluted (in dollars per share) | $1.22 | $1.35 | $1.10 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 51,607 | 51,540 | 51,391 |
Diluted (in shares) | 51,747 | 51,610 | 51,406 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock | Additional Paid-in Capital | Retained Earnings | Non Controlling Interest | Total |
Balance at Dec. 31, 2011 | $5,000 | $150,003,000 | $124,924,000 | $274,932,000 | |
Balance (in shares) at Dec. 31, 2011 | 51,059,132 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | |||||
Net income | 56,756,000 | 1,511,000 | 58,267,000 | ||
Issuance of shares to employees and directors | 2,173,000 | 2,173,000 | |||
Issuance of shares to employees and directors (in shares) | 139,465 | ||||
Issuance of shares to sellers of Sprint | 980,000 | 980,000 | |||
Issuance of shares to sellers of Sprint (in shares) | 62,052 | ||||
Issuance of earnout shares to Rockford sellers | 3,450,000 | 3,450,000 | |||
Issuance of earnout shares to Rockford sellers (in shares) | 232,637 | ||||
Dividends | -6,163,000 | -6,163,000 | |||
Repurchase of stock | -1,001,000 | -1,001,000 | |||
Repurchase of stock (in shares) | -89,600 | ||||
Balance at Dec. 31, 2012 | 5,000 | 155,605,000 | 175,517,000 | 1,511,000 | 332,638,000 |
Balance (in shares) at Dec. 31, 2012 | 51,403,686 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | |||||
Net income | 69,660,000 | 5,020,000 | 74,680,000 | ||
Issuance of shares to employees and directors | 3,062,000 | 3,062,000 | |||
Issuance of shares to employees and directors (in shares) | 153,579 | ||||
Dividends | -6,961,000 | -6,961,000 | |||
Amortization of Restricted Stock Units | 366,000 | 366,000 | |||
Issuance of shares as part of Q3C acquisition | 463,000 | 463,000 | |||
Issuance of shares as part of Q3C acquisition (in shares) | 29,273 | ||||
Cancelled shares for redemption of note receivable | -300,000 | -300,000 | |||
Cancelled shares for redemption of note receivable (in shares) | -15,144 | ||||
Distribution of non-controlling entities | -5,500,000 | -5,500,000 | |||
Balance at Dec. 31, 2013 | 5,000 | 159,196,000 | 238,216,000 | 1,031,000 | 398,448,000 |
Balance (in shares) at Dec. 31, 2013 | 51,571,394 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | |||||
Net income | 63,156,000 | 526,000 | 63,682,000 | ||
Issuance of shares to employees and directors | 2,897,000 | 2,897,000 | |||
Issuance of shares to employees and directors (in shares) | 90,002 | ||||
Dividends | -7,741,000 | -7,741,000 | |||
Repurchase of stock | -2,844,000 | -2,844,000 | |||
Repurchase of stock (in shares) | -100,000 | ||||
Amortization of Restricted Stock Units | 934,000 | 934,000 | |||
Dividend equivalent Units accrued - Restricted Stock Units | 3,000 | -3,000 | |||
Distribution of non-controlling entities | -1,590,000 | -1,590,000 | |||
Balance at Dec. 31, 2014 | $5,000 | $160,186,000 | $293,628,000 | ($33,000) | $453,786,000 |
Balance (in shares) at Dec. 31, 2014 | 51,561,396 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | $63,682 | $74,680 | $58,267 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation | 50,918 | 42,421 | 29,080 |
Amortization of intangible assets | 7,504 | 7,467 | 6,543 |
Intangible asset impairment | 808 | ||
Stock-based compensation expense | 934 | 367 | |
Gain on sale of property and equipment | -1,895 | -1,406 | -2,752 |
(Income) from non-consolidated entities | -5,264 | -97 | -186 |
Impairment expense for non-consolidated entities | 4,932 | ||
Other than temporary basis difference for non-consolidated entities | 3,975 | ||
Distributions received from non-consolidated entities | 2,821 | 1,358 | |
Net deferred tax liabilities (assets) | 8,970 | -12,582 | -879 |
Changes in assets and liabilities: | |||
Customer retention deposits and restricted cash | 4,823 | 30,073 | -3,887 |
Accounts receivable | -29,659 | -36,860 | -52,092 |
Costs and estimated earnings in excess of billings | -11,508 | -15,445 | 5,426 |
Other current assets | -25,767 | -14,774 | -1,341 |
Other long-term assets | 72 | ||
Accounts payable | 921 | -25,131 | 34,338 |
Billings in excess of costs and estimated earnings | -14,770 | 14,473 | 20,639 |
Contingent earnout liabilities | -4,145 | -14,900 | -1,435 |
Accrued expenses and other current liabilities | -7,354 | 15,824 | 3,176 |
Other long-term liabilities | -1,361 | 1,107 | 2,138 |
Net cash provided by operating activities | 36,101 | 77,753 | 98,393 |
Cash flows from investing activities: | |||
Purchase of property and equipment | -87,954 | -87,050 | -37,395 |
Proceeds from sale of property and equipment | 5,814 | 7,865 | 9,035 |
Purchase of short-term investments | -33,770 | -23,110 | -6,869 |
Sale of short-term investments | 21,464 | 7,448 | 26,428 |
Cash received from the sale of equity method investments | 6,439 | ||
Cash paid for acquisitions | -14,596 | -2,273 | -86,207 |
Net cash used in investing activities | -102,603 | -97,120 | -95,008 |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 58,519 | 107,609 | 94,471 |
Repayment of capital leases | -3,276 | -4,618 | -9,021 |
Repayment of long-term debt | -35,107 | -35,896 | -26,633 |
Repayment of subordinated debt | -17,501 | ||
Proceeds from issuance of common stock purchased by management under a long-term incentive plan | 1,671 | 1,455 | 1,240 |
Cash distribution to non-controlling interest holder | -1,590 | -5,500 | |
Repurchase of common stock | -2,844 | -1,001 | |
Dividends paid | -7,483 | -5,157 | -7,695 |
Net cash provided by (used in) financing activities | 9,890 | 57,893 | 33,860 |
Net change in cash and cash equivalents | -56,612 | 38,526 | 37,245 |
Cash and cash equivalents at beginning of the period | 196,077 | 157,551 | 120,306 |
Cash and cash equivalents at end of the period | 139,465 | 196,077 | 157,551 |
Cash paid during the period for: | |||
Interest | 6,432 | 5,532 | 3,004 |
Income taxes, net of refunds received | 57,613 | 48,126 | 31,404 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||
Obligations incurred for the acquisition of property and equipment | 2,637 | 2,932 | |
Dividends declared and not yet paid | $2,062 | $1,805 |
Nature_of_Business
Nature of Business | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Nature of Business | |||||
Nature of Business | |||||
Note 1—Nature of Business | |||||
Organization and operations — Primoris Services Corporation is a holding company of various construction and product engineering subsidiaries. The Company’s underground and directional drilling operations install, replace and repair natural gas, petroleum, telecommunications and water pipeline systems, including large diameter pipeline systems. The Company’s industrial, civil and engineering operations build and provide maintenance services to industrial facilities including power plants, petrochemical facilities, and other processing plants; construct multi-level parking structures; and engage in the construction of highways, bridges and other environmental construction activities. The Company is incorporated in the State of Delaware, and its corporate headquarters are located at 2100 McKinney Avenue, Suite 1500, Dallas, Texas 75201. | |||||
Reportable Operating Segments — For a number of years and through the end of the second quarter 2014, the Company segregated its business into three operating segments: the East Construction Services segment, the West Construction Services segment and the Engineering segment. In the third quarter 2014, the Company reorganized its business segments to match the changes in the Company’s internal organization and management structure. The current operating segments include: the West Construction Services segment (“West segment”), which is unchanged from the previous segment, the East Construction Services segment (“East segment”), which is realigned from the previous East Construction Services segment, and the Energy segment, which included certain subsidiaries that were included as part of the prior year East Construction Services segment (“Energy segment”). All prior period amounts related to the segment change have been retrospectively reclassified throughout these quarterly financial statements to conform to the new presentation. See Note 15 — Reportable Operating Segments. | |||||
The following table lists the Company’s primary operating subsidiaries and their current and prior reportable operating segment: | |||||
Subsidiary | Operating Segment | Prior Operating Segment | |||
ARB, Inc., including Stellaris, LLC (“ARB”) | West | West | |||
ARB Structures, Inc. | West | West | |||
Q3 Contracting, Inc. (“Q3C”) | West | West | |||
Rockford Corporation (“Rockford”) | West | West | |||
Vadnais Trenchless Services, Inc. (“Vadnais”); acquired in 2014 | West | West | |||
Silva Group (“Silva”) | East | East | |||
Cardinal Contractors, Inc. | East | East | |||
BW Primoris, LLC (“BWP”) | East | East | |||
James Construction Group, LLC (“JCG”): | |||||
JCG Heavy Civil Division | East | East | |||
JCG Infrastructure and Maintenance Division | East | East | |||
JCG Industrial Division | Energy | East | |||
Primoris Energy Services Corporation (“PES”) | Energy | East | |||
OnQuest, Inc. | Energy | Engineering | |||
OnQuest, Canada, ULC (Born Heaters Canada, ULC prior to 2013) | Energy | Engineering | |||
In 2012, PES purchased Sprint Pipeline Services, L.P. which has operated using the Sprint name as a DBA from the acquisition through February 2015. In accordance with the purchase agreement, the name of the former Sprint operating entity was changed to “Primoris Pipeline Services” (“PPS”) in March 2015. In this Form 10-K, references to PPS are references to the Sprint operating entity. PES acquired two subsidiaries, The Saxon Group (“Saxon”) in 2012 and Force Specialty Services, Inc. (“FSSI”) in 2013. Effective January 1, 2014, Saxon and FSSI were merged into PES along with the Industrial division of JCG. Throughout this Form 10-K, references to PPS, FSSI, Saxon and James Industrial are to the divisions of PES for 2014, while the references for the years prior to 2014 are to the entities or divisions. | |||||
The Company owns 50% of the Blythe Power Constructors joint venture (“Blythe”) created for the installation of a parabolic trough solar field and steam generation system in California, and its operations are included as part of the West Construction Services segment. The Company determined that in accordance with FASB Topic 810, the Company was the primary beneficiary of a variable interest entity and has consolidated the results of Blythe in its financial statements. The project has been completed and the project warranty will expire in May 2015 at which time the Company anticipates terminating Blythe. Financial information is presented in “Note 13—Noncontrolling Interests.” | |||||
In January 2014, the Company created a wholly owned subsidiary, BW Primoris, LLC, a Texas limited liability company (“BWP”). BWP’s goal is to develop water projects, primarily in Texas, that will need the Company’s construction services. On January 22, 2014, BWP entered into an agreement to purchase the assets and business of Blaus Wasser, LLC, a Wyoming limited liability company, for approximately $5 million. During the first quarter of 2014, BWP entered into an intercompany construction contract with Cardinal Contractors, Inc. to build a small water treatment facility which will be owned by BWP. When the treatment facility is completed, the facility will generate revenues through a take-or-pay contract with a west Texas municipal entity. For 2014, all intercompany revenue and profit of the project was eliminated, and at December 31, 2014, a total of $12.9 million has been capitalized as property, plant and equipment. | |||||
In May 2014, the Company created a wholly owned subsidiary, Vadnais Trenchless Services, Inc., a California company (“Vadnais”), which on June 5, 2014, purchased the assets, of Vadnais Corporation for $6.4 million. a Vadnais Corporation was a general contractor specializing in micro-tunneling. The assets purchased were primarily equipment, building and land. The purchase included a contingent earnout on meeting certain operating targets. | |||||
During the third quarter 2014, the Company made three small purchases totaling $8.2 million acquiring the net assets of Surber Roustabout, LLC (“Surber”), Ram-Fab, LLC (“Ram-Fab”) and Williams Testing, LLC (“Williams”). Surber and Ram-Fab operate as divisions of PES, and Williams is a division of Cardinal Contractors, Inc. Surber provides general oil and gas related construction activities in Texas; Ram-Fab is a fabricator of custom piping systems located in Arkansas; and Williams provides construction services related to sewer pipeline maintenance, rehabilitation and integrity testing in the Florida market. The Surber and Ram-Fab purchases provided for a contingent earnout amounts as discussed in “Note 4—Business Combinations” | |||||
Unless specifically noted otherwise, as used throughout these consolidated financial statements, “Primoris”, “the Company”, “we”, “our”, “us” or “its” refers to the business, operations and financial results of the Company and its wholly-owned subsidiaries. | |||||
Seasonality—Primoris’ results of operations are subject to quarterly variations. Some of the variation is the result of winter weather, particularly rain and snow, which can impact the Company’s ability to perform construction services. The winter weather also limits our ability to perform pipeline integrity testing and routine maintenance for our utility customers’ underground systems since the systems are used for heating. In most years, utility owners obtain bids and award contracts for major maintenance, integrity and replacement work after the heating season, and the work must be completed by the following winter. In addition, demand for new projects can be lower during the early part of the year due to clients’ internal budget cycles. | |||||
Similarly, weather and budget cycles affect our major pipeline projects and our heavy civil work with more construction activity completed in the third and fourth quarters of most years as compared to the first two quarters. While the majority of our industrial construction is performed in relatively warm weather climates in California and the Gulf Coast, adverse winter weather or significant weather events, such as hurricanes, can have a significant impact on quarterly financial results. | |||||
Variability—In addition to seasonality, the Company is dependent on large construction projects, which tend not to be seasonal but fluctuate from year to year based on many factors including general economic conditions, general market conditions for the project and the Company’s ability to win contract awards. The award and notice to proceed and eventual completion of large projects can have a significant impact on the financial results for any period and may cause fluctuations from prior periods can cause our financial condition and operating results to vary from quarter-to-quarter. Accordingly, our operating results for any particular period may not be indicative of the results that can be expected for any other period. | |||||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Summary of Significant Accounting Policies | ||||||||||
Summary of Significant Accounting Policies | ||||||||||
Note 2—Summary of Significant Accounting Policies | ||||||||||
Basis of presentation—The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”). References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”). | ||||||||||
Certain reclassifications have been made to the prior year Consolidated Statements of Cash Flows and Notes to the Consolidated Financial Statements to conform to the current year presentation and had no impact on net income or earnings per share. These reclassifications include the new segment presentation. | ||||||||||
Principles of consolidation—The accompanying Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries and the noncontrolling interests of the Blythe joint venture, a variable interest entity for which the Company is the primary beneficiary as determined under the provisions of ASC Topic 810-10-45. All intercompany balances and transactions have been eliminated in consolidation. | ||||||||||
Use of estimates—The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. As a construction contractor, the Company uses significant estimates for costs to complete construction projects and the contract value of construction projects. These estimates have a direct effect on gross profit as reported in these consolidated financial statements. Actual results could materially differ from the Company’s estimates. | ||||||||||
Operating cycle— In the accompanying consolidated balance sheets, assets and liabilities relating to long-term construction contracts (e.g. costs and estimated earnings in excess of billings, billings in excess of costs and estimated earnings) are considered current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year. | ||||||||||
The Company has significant working capital invested in assets that may have a liquidation period extending beyond one year. The Company has claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation. | ||||||||||
Cash and cash equivalents—The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents. | ||||||||||
Short-term investments—The Company classifies as short-term investments all securities or other assets acquired which have ready marketability and can be liquidated, if necessary, within the current operating cycle and which have readily determinable fair values. Short-term investments are classified as available for sale and are recorded at fair value using the specific identification method. Currently, the majority of the Company’s short-term investments are in short-term dollar-denominated bank deposits and U.S. Treasury Bills in order to provide government backing of the investments. | ||||||||||
Customer retention deposits—Customer retention deposits consist of contract retention payments made by customers into escrow cash accounts with a bank as required in some state jurisdictions. Investments for these amounts are limited to highly graded U.S. and municipal government debt obligations, investment grade commercial paper and CDs, which limits credit risk on these balances. Escrow cash accounts are released to the Company by customers as projects are completed in accordance with contract terms. | ||||||||||
Inventory and uninstalled contract materials—Inventory consists of expendable construction materials and small tools that will be used in construction projects and is valued at the lower of cost, using first-in, first-out method, or market. Uninstalled contract materials are certain job specific materials not yet installed, primarily for highway construction projects, which are valued using the specific identification method relating the cost incurred to a specific project. In most cases, the Company is able to invoice a state agency for the materials, but title has not yet passed to the state agency. | ||||||||||
Business combinations—Business combinations are accounted for using the acquisition method of accounting. We use the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses. The determination of fair value requires estimates and judgments of future cash flow expectations to assign fair values to the identifiable tangible and intangible assets. GAAP provides a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business. Most estimates are preliminary until the end of the measurement period. During the measurement period, any material, newly discovered information that existed at the acquisition date would be reflected as an adjustment to the initial valuations and estimates. After the measurement date, any adjustments would be recorded as a current period income or expense. Changes in deferred tax asset valuation allowances and acquired tax uncertainties after the measurement period are also recognized in net income. Expenses incurred in connection with a business combination are expensed as incurred. | ||||||||||
Goodwill and other intangible assets—The Company accounts for goodwill in accordance with ASC Topic 350 “Intangibles — Goodwill and Other”. Under ASC Topic 350, goodwill is not amortized but is subject to an annual impairment test as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist. The impairment review is performed at the reporting unit level for those units with recorded goodwill. In December 2013, an expense of $808 was recorded relating to the FSSI intangible asset for customer relations reflecting the impairment of the asset. See Note 4 — “Business Combinations” for further information. Otherwise, there were no impairments of goodwill for the years ended December 31, 2014, 2013 and 2012. | ||||||||||
Goodwill was recorded at our reporting units as follows: | ||||||||||
Reporting Unit | Segment | December 31, | December 31, | |||||||
2014 | 2013 | |||||||||
Rockford | West | $ | 32,079 | $ | 32,079 | |||||
Q3C | West | 13,160 | 13,160 | |||||||
JCG (includes JCG Heavy Civil and Infrastructure and Maintenance divisions) | East | 42,866 | 42,866 | |||||||
Cardinal Contractors, Inc. | East | 401 | 401 | |||||||
PES (includes PPS, JCG Industrial, FSSI, Saxon and Surber divisions) | Energy | 28,463 | 27,679 | |||||||
OnQuest Canada, ULC | Energy | 2,441 | 2,441 | |||||||
Total Goodwill | $ | 119,410 | $ | 118,626 | ||||||
Income tax— Current income tax expense is the amount of income taxes expected to be paid for the financial results of the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. Further, the Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC Topic 740. The difference between a tax position taken or expected to be taken on the Company’s income tax returns and the benefit recognized on our financial statements is referred to as an unrecognized tax benefit. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. | ||||||||||
Comprehensive income—The Company accounts for comprehensive income in accordance with ASC Topic 220 “Comprehensive Income”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). During the reported periods, the Company had no material comprehensive income. | ||||||||||
Foreign operations—At December 31, 2014, the Company had operations in Canada with assets aggregating approximately $11,505, compared to $11,371 at December 31, 2013. The Canadian operations had revenues of $19,840 and income before tax of $3,183 for the year ending December 31, 2014; revenues of $15,993 and income before tax of $2,742 for the year ended December 31, 2013, and revenues of $10,915 and income before tax of $304 for the year ending December 31, 2012. | ||||||||||
Functional currencies and foreign currency translation—The Company uses the United States dollar as its functional currency in Canada for the Canadian operations of OnQuest Canada, as substantially all monetary transactions are made in dollars, and other significant economic facts and circumstances currently support that position. As these factors may change, the Company periodically assesses its position with respect to the functional currency of its foreign subsidiary. Non-monetary balance sheet items and related revenue, gain, expense and loss accounts are remeasured using historical rates. All other items are remeasured using the current exchange rate in effect at the balance sheet date. Foreign exchange gains of $374 in 2014, gains of $153 in 2013 and losses of $36 in 2012 are included in the “other income or expense” line of the Consolidated Statements of Income. | ||||||||||
Partnerships and joint ventures — As is normal in the construction industry, the Company is periodically a member of a partnership or a joint venture. These partnerships or joint ventures are used primarily for the execution of single contracts or projects. The Company’s ownership can vary from a small noncontrolling ownership to a significant ownership interest. The Company evaluates each partnership or joint venture to determine whether the entity is considered a variable interest entity (“VIE”) as defined in FASB ASC Topic 810, and if a VIE, whether the Company is the primary beneficiary of the VIE, which would require the Company to consolidate the VIE with the Company’s financial statements. When consolidation occurs, the Company accounts for the interests of the other parties as a noncontrolling interest and discloses the net income attributable to noncontrolling interests. | ||||||||||
Equity method of accounting— The Company accounts for its interest in an investment using the equity method of accounting per ASC Topic 323 if the Company is not the primary beneficiary of a VIE or does not have a controlling interest. The investment is recorded at cost and the carrying amount is adjusted periodically to recognize the Company’s proportionate share of income or loss, additional contributions made and dividends and capital distributions received. The Company records the effect of any impairment or an other than temporary decrease in the value of its investment. | ||||||||||
In the event a partially owned equity affiliate were to incur a loss and the Company’s cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and the Company’s proportionate share of further losses would not be recognized unless the Company committed to provide further financial support to the affiliate. The Company would resume application of the equity method once the affiliate became profitable and the Company’s proportionate share of the affiliate’s earnings equals the Company’s cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended. | ||||||||||
See Note 8 — “Equity Method Investments” regarding impairments of investments in partially owned affiliates. | ||||||||||
Cash concentration—The Company places its cash in short term U.S. Treasury bonds and certificates of deposit (“CDs”). At December 31, 2014 and 2013, the Company had cash balances of $139.5 million and $196.1 million, respectively. At December 31, 2014, the $139.5 million of cash consisted of $121.5 million in U.S. Treasury bill funds and the remaining $18.0 million was held with various financial institutions, some of which may not be backed by the federal government. At December 31, 2013, the $196.1 million consisted of $182.5 million held in U.S. Treasury bill funds and $13.6 million with various financial institutions that are backed by federal government guaranties. | ||||||||||
Collective bargaining agreements—Approximately 34% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2014. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 82 collective bargaining agreements to which the Company is a party to, 45 will require renegotiation during 2015. The Company has not had a work stoppage in more than 20 years. | ||||||||||
Multiemployer plans — Various subsidiaries in the West segment are signatories to collective bargaining agreements. These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. Federal law requires that if the Company were to withdraw from an agreement, it would incur a withdrawal obligation. The potential withdrawal obligation may be significant. Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP. In November 2011, the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan, as discussed in Note 14 — “Commitments and Contingencies.” The Company has no plans to withdraw from any other agreements. | ||||||||||
Worker’s compensation insurance—The Company self-insures worker’s compensation claims to a certain level. The Company maintained a self-insurance reserve totaling $22,270 and $20,551 at December 31, 2014 and 2013, respectively. The amount is included in “Accrued expenses and other current liabilities” on the accompanying Consolidated Balance Sheets. Claims administration expenses are charged to current operations as incurred. Future payments may materially differ from these reserves. | ||||||||||
Fair value of financial instruments—The consolidated financial statements include financial instruments for which the fair value may differ from amounts reflected on a historical basis. Financial instruments of the Company consist of cash, accounts receivable, short-term investments, accounts payable and certain accrued liabilities. These financial instruments generally approximate fair market value based on their short-term nature. The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities. | ||||||||||
The fair value of financial instruments is measured and disclosure is made in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures”. | ||||||||||
Revenue recognition | ||||||||||
Fixed-price contracts — Historically, a substantial portion of the Company’s revenue has been generated under fixed-price contracts. For fixed-price contracts, the Company recognizes revenues primarily using the percentage-of-completion method, which may result in uneven and irregular results. In the percentage-of-completion method, estimated revenues, estimated contract values and total costs incurred to date are used to calculate revenues earned. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. Total estimated costs, and thus contract revenues and income, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected. | ||||||||||
The Company considers unapproved change orders to be contract variations for which it has customer approval for a change in scope but for which it does not have an agreed upon price change. Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes revenue equal to costs incurred on unapproved change orders when realization of change order approval is probable. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers. | ||||||||||
The Company considers claims to be amounts it seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers on both scope and price changes. Claims are included in the calculation of revenues when realization is probable and amounts can be reliably determined. Revenues in excess of contract costs incurred on claims are recognized when the amounts have been agreed upon with the customer. Revenue in excess of contract costs from claims is recognized when an agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred. | ||||||||||
Other contract forms — The Company also uses unit-price, time and material, and cost reimbursable plus fee contracts. For these jobs, revenue is recognized primarily based on contractual terms. For example, time and material contract revenues are generally recognized on an input basis, based on labor hours incurred and on purchases made. Similarly, unit price contracts generally recognize revenue on an output based measurement such as the completion of specific units at a specified unit price. | ||||||||||
At any time during a fixed-price contract if an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at that time. The loss amount is recognized as an “accrued loss provision” and is included in the accrued expenses and other liabilities amount on the balance sheet. As the percentage-of-completion method is used to calculate revenues, the accrued loss provision is changed so that the gross profit for the contract remains zero in future periods. If we anticipate that there will be a loss for unit price or cost reimbursable contracts, the projected loss is recognized in full at that time. | ||||||||||
Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are identified. | ||||||||||
In all forms of contracts, the Company estimates its collectability of contract amounts at the same time that it estimates project costs. If the Company anticipates that there may be issues associated with the collectability of the full amount calculated as revenues, the Company may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection. For example, when a cost reimbursable project exceeds the client’s expected budget amount, the client frequently requests an adjustment to the final amount. Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work. In these situations, the Company may choose to defer recognition of revenue up to the time that the client pays for the services. | ||||||||||
The caption “Costs and estimated earnings in excess of billings” in the Consolidated Balance Sheet represents unbilled receivables, which arise when revenues have been recorded but the amount will not be billed until a later date. Balances represent: (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting which may not be billed under the terms of the contract until a later date, (b) incurred costs to be billed under cost reimbursement type contracts, (c) amounts arising from routine lags in billing, or (d) the revenue associated with unapproved change orders or claims when realization is probable and amounts can be reliably determined. For those contracts in which billings exceed contract revenues recognized to date, the excess amounts are included in the caption “Billings in excess of costs and estimated earnings”. | ||||||||||
In accordance with applicable terms of certain construction contracts, retainage amounts may be withheld by customers until completion and acceptance of the project. Some payments of the retainage may not be received for a significant period after completion of our portion of a project. In some jurisdictions, retainage amounts are deposited into an escrow account. | ||||||||||
Accounts receivable—Accounts receivable and contract receivables are primarily with public and private companies and governmental agencies located in the United States. Credit terms for payment of products and services are extended to customers in the normal course of business and no interest is charged. Contract receivables are generally progress billings on projects, and as a result, are short term in nature. The Company requires no collateral from its customers, but generally files statutory liens or stop notices on all construction projects when collection problems are anticipated. While a project is underway, the Company estimates its collectability of contract amounts at the same time that it estimates project costs. As discussed in the “Revenue recognition” section above, realization of the eventual cash collection may be recognized as adjustments to revenues on a contract, otherwise, the Company uses the allowance method of accounting for losses from uncollectible accounts. Under this method an allowance is provided based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2014 and 2013 was $540 and $692, respectively. | ||||||||||
Significant revision in contract estimate — Revenue recognition is based on the percentage-of-completion method for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate revenue. Total estimated costs, and thus contract revenues and margin, are impacted by many factors, which can cause significant changes in estimates during the life cycle of a project. | ||||||||||
For projects that were in process in at the end of the prior year, there can be a difference in revenues and profits that would have been recognized in the prior year, had current year estimates of costs to complete been known at the end of the prior year. | ||||||||||
During the year ended December 31, 2014, certain contracts had revisions in cost estimates from those projected at December 31, 2013. If the revised estimates had been applied in the prior year, the gross profit earned on these contracts would have resulted in an increase of approximately $17,266 in gross profit in 2013. Similarly, had the revised estimates as of December 31, 2013 been applied in the prior year; the gross profit earned on these contracts would have resulted in an increase of approximately $10,867 in gross profit in 2012. The revised estimates for the year ended December 31, 2012 would have resulted in a gross profit increase of approximately $8,185 in the year 2011. | ||||||||||
The following table presents the financial impact of the changes in estimates that would have been reflected in the years 2013 and 2012 had the revised estimates been applied to the particular year. | ||||||||||
Estimated net impact of change in | ||||||||||
estimate for year the year ended | ||||||||||
2013 | 2012 | |||||||||
Revised estimates in 2014 that impact 2013 | $ | 17,266 | $ | — | ||||||
Revised estimates in 2013 that impact 2012 | (10,867 | ) | 10,867 | |||||||
Revised estimates in 2012 that impact 2011 | — | (8,185 | ) | |||||||
Net impact to gross margin | $ | 6,399 | $ | 2,682 | ||||||
EPS impact to year | $ | 0.077 | $ | 0.032 | ||||||
Customer concentration — The Company operates in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues; however, the group that comprise the top ten customers varies from year to year. See “Note 16 — Customer Concentrations” for further discussion. | ||||||||||
Property and equipment—Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations. | ||||||||||
The Company assesses the recoverability of property and equipment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. We perform an undiscounted operation cash flow analysis to determine if impairment exists. The amount of property and equipment impairment, if any, is measured based on fair value and is charged to operations in the period in which property and equipment impairment is determined by management. As of December 31, 2014 and 2013, the Company’s management has not identified any material impairment of its property and equipment. | ||||||||||
Taxes collected from customers—Taxes collected from the Company’s customers are recorded on a net basis. | ||||||||||
Share-based payments and stock-based compensation—In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”) after approval of the shareholders and adoption by the Company on May 3, 2013. Detailed discussion of shares issued under the Equity Plan are included in “Note 19. — Deferred Compensation Agreements and Stock-Based Compensation.” | ||||||||||
The Company issued 77,455 shares of stock in 2014 and 131,989 shares of stock in 2013 under the Equity Plan to certain senior managers and executives, who, as part of the 2011 Primoris Long-Term Retention Plan (“LTR Plan”), may elect at the end of each year to purchase Company common stock at a discounted amount using a portion of their annual bonuses. For 2014 and 2013, the plan provided for a discount of 25% from the average daily closing price for the previous December. The amount of the discount is treated as compensation to the participant. The shares were fully vested upon issuance and have a six-month restriction on any trades. | ||||||||||
As part of the quarterly compensation of the non-employee members of the Board of Directors, the Company issued 12,547 shares of common stock during 2014 and 21,590 shares of common stock during 2013 under the Equity Plan. The shares were fully vested upon issuance and have a one-year restriction on any trades. | ||||||||||
On May 3, 2013, the Board of Directors granted 100,000 Restricted Stock Units (“Units”) to an executive under the Equity Plan. Commencing annually on May 10, 2014 and ending April 30, 2017, the Units will vest in four equal installments subject to continuing employment of the executive. On May 10, 2014, 25,000 of these Units vested. On March 24, 2014, the Board of Directors granted 48,512 Units to another executive under the Equity Plan. The Units will vest 50% on September 23, 2015 and the remaining 50% on March 23, 2017 subject to continuing employment of the executive. Vesting in both grants is also subject to earlier acceleration, termination, cancellation or forfeiture as provided in the underlying Primoris Restricted Stock Unit agreement (“RSU Award Agreement”). Each Unit represents the right to receive one share of the Company’s common stock when vested. | ||||||||||
Under guidance of ASC Topic 718 “Compensation — Stock Compensation”, stock-based compensation cost is measured at the date of grant (utilizing the prior-day closing price), based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award). | ||||||||||
The fair value of the Units was based on the closing market price of our common stock on the day prior to the date of the grant. Stock compensation expense for the Units is being amortized using the straight-line method over the service period. For the twelve months ended December 31, 2014, the Company recognized $934 in compensation expense. At December 31, 2014, approximately $2.4 million of unrecognized compensation expense remains for the Units, which will be recognized over the next 2.3 years through April 30, 2017. | ||||||||||
Vested Units accrue “Dividend Equivalents” (as defined in the Equity Plan) which will be accrued as additional Units. At December 31, 2014, there were 110 Dividend Equivalent Units that were accrued based on 25,000 Units that vested on May 10, 2014. The number of Dividend Equivalent Units are calculated based on the amount of dividends that would have been paid on the vested Units divided by the fair value of the Company’s stock on the record date each quarter end. | ||||||||||
At December 31, 2014, there were 2,278,651 shares of common stock reserved to provide for the grant and exercise of all future stock option grants, stock appreciation rights (“SARS”), Units and grants of restricted shares under the Equity Plan. Other than the Units discussed above, there were no stock options, SARS or restricted shares of stock issued or outstanding at December 31, 2014. | ||||||||||
Contingent Earnout Liabilities—As part of recent acquisitions, the Company has agreed to pay cash to the sellers upon meeting certain operating performance targets for specified periods subsequent to the acquisition date. Each quarter, the Company evaluates the fair value of the estimated contingency and records a non-operating charge for the change in the fair value. Upon meeting the target, the Company reflects the full liability on the balance sheet and records as a charge to “Selling, general and administration expense” for the change in the fair value of the liability from the prior period. | ||||||||||
Recently Issued Accounting Pronouncements | ||||||||||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus of the FASB Emerging Issues Task Force)” (“ASU 2013-04”). ASU 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. This ASU is an update to FASB ASC Topic 405, “Liabilities”. The Company adopted this guidance as of January 1, 2014 which did not have a material impact on the Company’s consolidated financial statements. | ||||||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The new standard is effective for reporting periods beginning after December 15, 2016 and early adoption is not permitted. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption would require new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. For the Company, the new standard will be effective January 1, 2017 and the Company is currently evaluating the potential impact of adoption and the implementation approach to be used. | ||||||||||
In April 2014, the FASB issued ASU 2014-08 “Presentation of Financial Statements (Topic 205)) and Property, Plant, and Equipment (Topic 360)” which changes the requirement for reporting discontinued operations. A disposal of a component of an entity or a group of components of an entity will be required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the entity or group of components of an entity meets the criteria to be classified as held for sale or when it is disposed of by sale or other than by sale. The update also requires additional disclosures about discontinued operations, a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements, and an entity’s significant continuing involvement with a discontinued operation. The update is effective prospectively for fiscal years beginning on or after December 15, 2014, including interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in previously issued financial statements. The Company adopted this guidance effective January 1, 2015. This guidance will impact the disclosure and presentation of how we report any future disposals of components or groups of components of our business. | ||||||||||
In August 2014, the FASB issued ASU 2014-15 “Presentation of Financial Statements — Going Concern (Subtopic 205-40)” to address the diversity in practice in determining when there is substantial doubt about an entity’s ability to continue as a going concern and when and how an entity must disclose certain relevant conditions and events. This update requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued). If such conditions or events exist, an entity should disclose that there is substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued), along with the principal conditions or events that raise substantial doubt, management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations and management’s plans that are intended to mitigate those conditions or events. The guidance is effective for annual and interim periods ending after December 15, 2016. This guidance will impact the disclosure and presentation of how we report any substantial doubt about our ability to continue as a going concern, if such substantial doubt were to exist. The Company will adopt this guidance effective January 1, 2017. | ||||||||||
In February 2015, the FASB issued ASU 2015-02 “Consolidation (Topic 810): Amendment to the Consolidation Analysis” which amends existing consolidation guidance, including amending the guidance related to determining whether an entity is a variable interest entity. The update is effective for interim and annual periods beginning after December 15, 2015, although early adoption is permitted. The guidance may be applied using a modified retrospective approach whereby the entity records a cumulative effect of adoption at the beginning of the fiscal year of initial application. A reporting entity may also apply the amendments on a full retrospective basis. The Company is currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements. | ||||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Fair Value Measurements | |||||||||||||
Fair Value Measurements | |||||||||||||
Note 3—Fair Value Measurements | |||||||||||||
ASC Topic 820, “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements. ASC Topic 820 addresses fair value GAAP for financial assets and financial liabilities that are re-measured and reported at fair value at each reporting period and for non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis. | |||||||||||||
In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are “unobservable data points” for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. | |||||||||||||
The following table presents, for each of the fair value hierarchy levels identified under ASC Topic 820, the Company’s financial assets and certain liabilities that are required to be measured at fair value at December 31, 2014 and 2013: | |||||||||||||
Fair Value Measurements at Reporting Date | |||||||||||||
Amount | Quoted Prices | Significant | Significant | ||||||||||
Recorded | in Active Markets | Other | Unobservable | ||||||||||
on Balance | for Identical Assets | Observable | Inputs | ||||||||||
Sheet | (Level 1) | Inputs | (Level 3) | ||||||||||
(Level 2) | |||||||||||||
Assets as of December 31, 2014: | |||||||||||||
Cash and cash equivalents | $ | 139,465 | $ | 139,465 | — | — | |||||||
Short-term investments | $ | 30,992 | $ | 30,992 | — | — | |||||||
Liabilities as of December 31, 2014: | |||||||||||||
Contingent consideration | $ | 6,922 | — | — | $ | 6,922 | |||||||
Assets as of December 31, 2013: | |||||||||||||
Cash and cash equivalents | $ | 196,077 | $ | 196,077 | — | — | |||||||
Short-term investments | $ | 18,686 | $ | 18,686 | — | — | |||||||
Liabilities as of December 31, 2013: | |||||||||||||
Contingent consideration | $ | 9,233 | — | — | $ | 9,233 | |||||||
Short-term investments consist primarily of U.S. Treasury bills with various financial institutions that are backed by the federal government. | |||||||||||||
Other financial instruments of the Company not listed in the table consist of accounts receivable, accounts payable and certain accrued liabilities. These financial instruments generally approximate fair value based on their short-term nature. The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities. | |||||||||||||
The following table provides changes to the Company’s contingent consideration liability Level 3 fair value measurements during the years ended December 31, 2014 and 2013: | |||||||||||||
Significant Unobservable Inputs | |||||||||||||
(Level 3) | |||||||||||||
2014 | 2013 | ||||||||||||
Contingent Consideration Liability | |||||||||||||
Beginning balance | $ | 9,233 | $ | 23,431 | |||||||||
Additions to contingent consideration liability: | |||||||||||||
FSSI acquisition | — | 702 | |||||||||||
Vadnais acquisition | 679 | — | |||||||||||
Surber and Ram-Fab acquisitions | 1,154 | — | |||||||||||
Change in fair value of contingent consideration liability | 856 | 2,500 | |||||||||||
Reductions in the contingent consideration liability: | |||||||||||||
Payment to Rockford sellers for meeting performance targets | — | (6,900 | ) | ||||||||||
Payment to Sprint sellers for meeting performance targets | — | (4,000 | ) | ||||||||||
Payment to Q3C sellers for meeting performance targets | (5,000 | ) | — | ||||||||||
Reduction due to non-attainment of performance targets | — | (6,500 | ) | ||||||||||
Ending balance | $ | 6,922 | $ | 9,233 | |||||||||
On a quarterly basis, the Company assesses the estimated fair value of the contractual obligation to pay the contingent consideration and any changes in estimated fair value are recorded as other non-operating expense or income in the Company’s statement of income. Fluctuations in the fair value of contingent consideration are impacted by two unobservable inputs, management’s estimate of the probability (which has ranged from 33% to 100%) of the acquired company meeting the contractual operating performance target and the estimated discount rate (a rate that approximates the Company’s cost of capital). Significant changes in either of those inputs in isolation would result in a different fair value measurement. Generally, a change in the assumption of the probability of meeting the performance target is accompanied by a directionally similar change in the fair value of contingent consideration liability, whereas a change in assumption used of the estimated discount rate is accompanied by a directionally opposite change in the fair value of contingent consideration liability. | |||||||||||||
Business_Combinations
Business Combinations | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Business Combinations | |||||||||||||
Business Combinations | |||||||||||||
Note 4—Business Combinations | |||||||||||||
2014 Acquisitions | |||||||||||||
In May 2014, the Company created a wholly-owned subsidiary, Vadnais Trenchless Services, Inc., a California corporation (“Vadnais”) and on June 5, 2014, the Company purchased certain assets from Vadnais Corporation, a general contractor specializing in micro-tunneling. The assets were purchased for their estimated fair value of $6,355 in cash and included equipment, building and land. In addition, upon meeting certain operating targets, the sellers will receive a contingent earnout of $900. In the fourth quarter of 2014, the purchase agreement was amended to adjust the earn-out period from a one-year period to a two-year period ending September 30, 2016 with a potential earnout of $450 in each year. The estimated fair value of the amended agreement of the potential contingent consideration on the acquisition date was $679. Though the Company initially indicated that it had finalized its estimate of fair value for the contingent consideration and intangible assets as of the third quarter 2014, due to the amended purchase agreement, the Company adjusted the fair value of the contingent consideration on the acquisition date from $729 to $679. The purchase was accounted for using the acquisition method of accounting. | |||||||||||||
During the third quarter 2014, the Company made three small acquisitions totaling $8,244 acquiring the net assets of Surber, Ram-Fab, and Williams. Surber and Ram-Fab operate as divisions of PES in the Energy segment, and Williams is a division of Cardinal Contractors, Inc. in the East segment (the “Third Quarter Acquisitions”). Surber provides general oil and gas related construction activities in Texas; Ram-Fab is a fabricator of custom piping systems located in Arkansas; and Williams provides construction services related to sewer pipeline maintenance, rehabilitation and integrity testing in the Florida market. The Surber purchase provided for a contingent earnout amount of up to $1,800 over a 3-year period, based on meeting certain operating targets, which had an estimated fair value of $955 on the acquisition date. The Ram-Fab purchase included a $200 contingent earnout based on estimated earnings of a six-month operating project, which had an estimated fair value of $200 on the acquisition date. All of the purchases were accounted for using the acquisition method of accounting. For Surber and Williams the Company has finalized its estimate of fair value for the contingent consideration and intangible assets, which resulted in no material change from the estimated values recorded at September 30, 2014. The amounts for Ram-Fab are preliminary pending completion of an appraisal. | |||||||||||||
Since the acquisition dates for the acquisitions through December 31, 2014, they contributed revenues of $9,300 and gross loss of $45.0. Acquisition costs related to these acquisitions of $355 were expensed in 2014. | |||||||||||||
The fair value of the assets acquired and the liabilities assumed for the 2014 acquisitions is detailed in the section below “Schedule of Assets Acquired and Liabilities Assumed for 2014 and 2013 Acquisitions”. | |||||||||||||
2013 Acquisition - FSSI | |||||||||||||
On March 11, 2013, PES purchased the assets of FSSI, which specialized in turn-around work at refineries and chemical plants in the Gulf Coast area. Based in the greater Houston, Texas area, FSSI’s location provided a presence and convenient access to refineries in south Texas, the Houston ship channel and Louisiana. | |||||||||||||
The acquisition of FSSI was accounted for using the acquisition method of accounting. The fair value of the consideration for the acquisition was $2,377. Consideration consisted of $1,675 in cash, of which $1,025 was paid at closing and $650 was paid in the second quarter 2013. The agreement provided for three future potential payments, contingent upon FSSI meeting certain performance targets for the remainder of calendar year 2013 and calendar years 2014 and 2015. The estimated fair value of the potential contingent consideration on the acquisition date was $702. At December 31, 2013, it was determined that the operations of FSSI did not meet the performance targets. Because the measurement date of the acquisition had passed, the contingent consideration balance of $760 was credited to non-operating income at December 31, 2013. | |||||||||||||
The purchase agreement also included a provision that PES make an up-front payment of $1,000 for a five-year employment, non-competition and non-solicitation agreement with a key employee. If the employee terminated his employment or violated the agreement prior to the end of the five-year period, he would be required to repay the unamortized amount of the $1,000 payment. This agreement was accounted for as a prepaid asset and was being amortized equally over a five-year period. | |||||||||||||
The fair value of the FSSI assets acquired and the FSSI liabilities assumed is detailed in the section below “Schedule of Assets Acquired and Liabilities Assumed for 2014 and 2013 Acquisitions”. | |||||||||||||
Because the operating results for FSSI did not meet the expected targets during the fourth quarter 2013, the Company made certain changes in FSSI management. As a result of the changes, several adjustments were made to the value of certain FSSI assets and liabilities as of December 31, 2013. First, the Company determined that the value attributed to the intangible asset for customer relationships was impaired and the remaining value of $808 of such asset was expensed in the fourth quarter 2013 to “Selling, general and administrative expenses”. Second, the unamortized portion of the prepaid payment made to the employee of $850 was fully reserved as a fourth quarter 2013 charge to “Selling general and administrative expenses”. Third, as discussed above, no remaining value was attributed for any future contingent consideration as of December 31, 2013, and $760 was credited to non-operating income in the fourth quarter 2013. The Company believes the remaining fair value of the FSSI business was properly reflected on the balance sheet at December 31, 2013. | |||||||||||||
From its March 11, 2013 acquisition date through December 31, 2013, FSSI contributed revenues of $4,946 and gross profit of $164. Acquisition costs related to the FSSI acquisition of $89 were expensed in 2013. | |||||||||||||
Summary of Cash Paid for Acquisitions for the years ended December 31, 2014 and 2013 | |||||||||||||
The following table summarizes the cash paid for acquisitions for the years ended December 31, 2014 and 2013. | |||||||||||||
Year ended December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
FSSI — purchased March 11, 2013 | $ | — | $ | 1,675 | |||||||||
Q3C — additional cash paid August 2013 for prior year November 2012 purchase | — | 598 | (*) | ||||||||||
Vadnais — purchased June 5, 2014 | 6,355 | — | |||||||||||
Surber — purchased July 28, 2014 | 3,642 | — | |||||||||||
Ram-Fab — purchased August 29, 2014 | 3,569 | — | |||||||||||
Williams — purchased September 19, 2014 | 1,030 | — | |||||||||||
$ | 14,596 | $ | 2,273 | ||||||||||
(*) In August 2013, additional cash of $598 was paid to the Q3C sellers and goodwill was increased to $13,160 in 2013. | |||||||||||||
Schedule of Assets Acquired and Liabilities Assumed for 2014 and 2013 Acquisitions | |||||||||||||
The following table summarizes the fair value of the assets acquired and the liabilities assumed at the acquisitions date: | |||||||||||||
2014 | 2013 | ||||||||||||
Vadnais | Third Quarter | FSSI | |||||||||||
Acquisitions | Acquisitions | Acquisition | |||||||||||
Cash | $ | — | $ | 3 | $ | — | |||||||
Accounts receivable | — | 2,768 | — | ||||||||||
Inventory and other assets | — | 711 | 302 | ||||||||||
Prepaid expenses | — | 57 | — | ||||||||||
Property, plant and equipment | 6,355 | 5,447 | 448 | ||||||||||
Other assets | — | 4 | — | ||||||||||
Intangible assets | 679 | 1,100 | 1,600 | ||||||||||
Goodwill | — | 784 | 1,087 | ||||||||||
Accounts payable | — | (570 | ) | (1,060 | ) | ||||||||
Accrued expenses | — | (905 | ) | — | |||||||||
Total | $ | 7,034 | $ | 9,399 | $ | 2,377 | |||||||
Identifiable Tangible Assets. Significant identifiable tangible assets acquired include accounts receivable, inventory and fixed assets, consisting primarily of construction equipment, for each of the acquisitions. The Company determined that the recorded value of accounts receivable and inventory reflect fair value of those assets. The Company estimated the fair value of fixed assets on the effective dates of the acquisitions using a market approach, based on comparable market values for similar equipment of similar condition and age. | |||||||||||||
Identifiable Intangible Assets. We estimated and used the assistance of an independent third party valuation specialist to determine the fair value of the intangible assets acquired for the acquisitions. The fair value measurements of the intangible assets were based primarily on significant unobservable inputs and thus represent a Level 3 measurement as defined in Note 3 — “Fair Value Measurements”. Based on the Company’s assessment, the acquired intangible asset categories, fair value and average amortization periods, generally on a straight-line basis, are as follows: | |||||||||||||
2014 Fair Value | 2013 Fair Value | ||||||||||||
Amortization | Vadnais | Third Quarter | FSSI | ||||||||||
Period | Acquisition | 2014 | Acquisition | ||||||||||
Acquisitions | |||||||||||||
Tradename | 3 to 10 years | $ | — | $ | 650 | $ | 550 | ||||||
Non-compete agreements | 2 to 5 years | — | 250 | 100 | |||||||||
Customer relationships | 5 to 10 years | 679 | 200 | 950 | (*) | ||||||||
Total | $ | 679 | $ | 1,100 | $ | 1,600 | |||||||
(*) At December 31, 2013, the Company determined the value attributed to the customer relationships was impaired and the net book value of the intangible of $850 was expensed to “Selling, general and administrative expenses” at December 31, 2013. | |||||||||||||
The fair value of the tradename was determined based on the “relief from royalty” method. A royalty rate was selected based on consideration of several factors, including external research of third party trade name licensing agreements and their royalty rate levels, and management estimates. The useful life was estimated at five years for FSSI and ten years for the Third Quarter 2014 acquisitions based on management’s expectation for continuing value of the tradename in the future. | |||||||||||||
The fair value for the non-compete agreements was valued based on a discounted “income approach” model, including estimated financial results with and without the non-compete agreements in place. The agreements were analyzed based on the potential impact of competition that certain individuals could have on the financial results, assuming the agreements were not in place. An estimate of the probability of competition was applied and the results were compared to a similar model assuming the agreements were in place. | |||||||||||||
The customer relationships were valued utilizing the “excess earnings method” of the income approach. The estimated discounted cash flows associated with existing customers and projects were based on historical and market participant data. Such discounted cash flows were net of fair market returns on the various tangible and intangible assets that are necessary to realize the potential cash flows. | |||||||||||||
Goodwill. Goodwill for Surber largely consists of expected benefits from the geographic expansion into the growing Midland/Permian Basin area of Texas and to the expansion of offerings for the Energy segment to include more pipeline and station work and a greater presence and convenient access to south Texas, the Houston ship channel and Louisiana. Goodwill is also attributable to FSSI’s expertise in turn-around work for refineries and chemical plants, as well as the opportunity to extend our infrastructure operations and other synergies of the combined companies. Goodwill also includes the value of the assembled workforce of the various acquired businesses. | |||||||||||||
Based on the current tax treatment of the acquisitions, the goodwill and other intangible assets associated with them are deductible for income tax purposes over a fifteen-year period. | |||||||||||||
Supplemental Unaudited Pro Forma Information | |||||||||||||
In accordance with ASC 805, we are combining the pro forma information for the Vadnais and Third Quarter Acquisitions (“the Acquisitions”). The following pro forma information presents the results of operations of the Acquisitions combined, as if the Acquisitions had each occurred at the beginning of 2013. The supplemental pro forma information has been adjusted to include: | |||||||||||||
· | the pro forma impact of amortization of intangible assets and depreciation of property, plant and equipment, based on the fair values assigned to the purchased assets; | ||||||||||||
· | the pro forma impact of the expense associated with the amortization of the discount for the fair value of the contingent consideration for potential earnout liabilities that may be achieved in 2015 and 2016 for the Vadnais acquisition and 2015 through 2017 for the Third Quarter Acquisitions. | ||||||||||||
· | the pro forma tax effect of both the income before income taxes and the pro forma adjustments, calculated using a tax rate of 39.0% for the years ended 2014 and 2013. | ||||||||||||
The pro forma results are presented for illustrative purposes only and are not necessarily indicative of, or intended to represent, the results that would have been achieved had the Acquisitions been completed on January 1, 2013. For example, the pro forma results do not reflect any operating efficiencies and associated cost savings that the Company might have achieved with respect to the acquisitions. | |||||||||||||
2014 | 2013 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||
Revenues | $ | 2,110,072 | $ | 1,974,760 | |||||||||
Income before provision for income taxes | $ | 101,948 | $ | 114,197 | |||||||||
Net income attributable to Primoris | $ | 62,924 | $ | 66,379 | |||||||||
Weighted average common shares outstanding: | |||||||||||||
Basic | 51,607 | 51,540 | |||||||||||
Diluted | 51,747 | 51,610 | |||||||||||
Earnings per share attributable to Primoris: | |||||||||||||
Basic | $ | 1.22 | $ | 1.29 | |||||||||
Diluted | $ | 1.22 | $ | 1.29 | |||||||||
Accounts_Receivable
Accounts Receivable | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Receivable. | ||||||||
Accounts Receivable | ||||||||
Note 5—Accounts Receivable | ||||||||
The following is a summary of accounts receivable at December 31: | ||||||||
2014 | 2013 | |||||||
Contracts receivable, net of allowance for doubtful accounts of $540 and $692 for 2014 and 2013, respectively | $ | 287,806 | $ | 257,354 | ||||
Retention | 49,104 | 47,054 | ||||||
336,910 | 304,408 | |||||||
Other accounts receivable | 472 | 547 | ||||||
$ | 337,382 | $ | 304,955 | |||||
Costs_and_Estimated_Earnings_o
Costs and Estimated Earnings on Uncompleted Contracts | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Costs and Estimated Earnings on Uncompleted Contracts | ||||||||
Costs and Estimated Earnings on Uncompleted Contracts | ||||||||
Note 6—Costs and Estimated Earnings on Uncompleted Contracts | ||||||||
Costs and estimated earnings on uncompleted contracts consist of the following at December 31: | ||||||||
2014 | 2013 | |||||||
Costs incurred on uncompleted contracts | $ | 5,194,769 | $ | 4,741,249 | ||||
Gross profit recognized | 613,510 | 582,430 | ||||||
5,808,279 | 5,323,679 | |||||||
Less: billings to date | (5,898,220 | ) | (5,439,898 | ) | ||||
$ | (89,941 | ) | $ | (116,219 | ) | |||
This amount is included in the accompanying consolidated balance sheets at December 31 under the following captions: | ||||||||
2014 | 2013 | |||||||
Costs and estimated earnings in excess of billings | $ | 68,654 | $ | 57,146 | ||||
Billings in excess of cost and estimated earnings | (158,595 | ) | (173,365 | ) | ||||
$ | (89,941 | ) | $ | (116,219 | ) | |||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Property and Equipment | ||||||||||
Property and Equipment | ||||||||||
Note 7—Property and Equipment | ||||||||||
The following is a summary of property and equipment at December 31: | ||||||||||
2014 | 2013 | Useful Life | ||||||||
Land and buildings | $ | 40,604 | $ | 36,883 | 30 years | |||||
Leasehold improvements | 11,267 | 7,958 | Lease life | |||||||
Office equipment | 3,651 | 3,171 | 3 - 5 years | |||||||
Construction equipment | 308,915 | 247,997 | 3 - 7 years | |||||||
Transportation equipment | 83,845 | 67,550 | 3 - 18 years | |||||||
448,282 | 363,559 | |||||||||
Less: accumulated depreciation and amortization | (176,851 | ) | (137,047 | ) | ||||||
Net property and equipment | $ | 271,431 | $ | 226,512 | ||||||
Equity_Method_Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2014 | |
Equity Method Investments. | |
Equity Method Investments | |
Note 8—Equity Method Investments | |
WesPac Energy LLC and WesPac Midstream LLC | |
On July 1, 2010, the Company acquired a 50% membership interest in WesPac Energy LLC (“WesPac”), a Nevada limited liability company, from Kealine Holdings, LLC (“Kealine”), a Nevada limited liability company, with Kealine retaining a remaining 50% membership interest. WesPac developed pipeline and terminal projects, primarily for the oil and gas industry. | |
On September 30, 2013, WesPac, Kealine and the Company entered into an agreement (the “Midstream Agreement”) with Highstar Capital IV, LP (“Highstar”), to form a new entity, WesPac Midstream LLC, a Delaware limited liability company (“Midstream”), with WesPac contributing project assets to Midstream and Highstar investing $6,082 in cash. | |
The Company accounted for the investment using the equity method of accounting and recorded its proportionate share of operating expenses. During the fourth quarter of 2013, the Company recorded non-cash impairment charges and wrote-off the total value of its equity investment of $4,932. | |
In 2014, the Company entered into negotiations with the members of Midstream, and in August 2014, the Company entered into a redemption agreement for the sale of all of the Company’s ownership in both WesPac and Midstream for a total of $5,250 in cash, which was recorded as income from non-consolidated entities. | |
St.—Bernard Levee Partners | |
The Company purchased a 30% interest in St. — Bernard Levee Partners (“Bernard”) in 2009 for $300 and accounted for this investment using the equity method. Bernard engaged in construction activities in Louisiana, and all work was completed in January 2013. The Company’s share of Bernard distributions for the years ended December 31, 2014 and 2013, was $0 and $145, respectively. | |
Alvah, Inc. | |
As part of its acquisition of Q3C in November 2012, the Company acquired a 49% membership interest in Alvah, Inc., a California corporation (“Alvah”). Alvah is engaged in electrical contracting activities, primarily in Northern California, and has worked as a subcontractor for ARB both prior to and subsequent to the Q3C acquisition. | |
On February 5, 2014, the majority owner of Alvah, in accordance with the original investment agreement, elected to purchase the Company’s minority interest effective January 1, 2014 for a cash payment of $1,189. At the time of the transaction, the Company recorded income adjustments of $14 related to the final sale in the first quarter of 2014. | |
Intangible_Assets
Intangible Assets | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Intangible Assets | ||||||||||||
Intangible Assets | ||||||||||||
Note 9—Intangible Assets | ||||||||||||
The table below summarizes the intangible asset categories, amounts and the average amortization periods, which are generally on a straight-line basis, at December 31: | ||||||||||||
Amortization | Amount | |||||||||||
Period | 2014 | 2013 | ||||||||||
Tradename | 3 to 10 years | $ | 18,194 | $ | 21,023 | |||||||
Non-compete agreements | 2 to 5 years | 1,074 | 2,575 | |||||||||
Customer relationships | 5 to 15 years | 20,313 | 21,705 | |||||||||
Total | $ | 39,581 | $ | 45,303 | ||||||||
Amortization expense of intangible assets was $7,504, $7,467 and $6,543 for the years ended December 31, 2014, 2013 and 2012, respectively. Estimated future amortization expense for intangible assets as of December 31, 2014 is as follows: | ||||||||||||
For the Years Ending | Estimated | |||||||||||
December 31, | Intangible | |||||||||||
Amortization | ||||||||||||
Expense | ||||||||||||
2015 | $ | 6,414 | ||||||||||
2016 | 5,980 | |||||||||||
2017 | 5,703 | |||||||||||
2018 | 5,239 | |||||||||||
2019 | 3,388 | |||||||||||
Thereafter | 12,857 | |||||||||||
$ | 39,581 | |||||||||||
Accounts_Payable_and_Accrued_L
Accounts Payable and Accrued Liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Payable and Accrued Liabilities | ||||||||
Accounts Payable and Accrued Liabilities | ||||||||
Note 10—Accounts Payable and Accrued Liabilities | ||||||||
At December 31, 2014 and 2013, accounts payable included retention amounts of approximately $9,285 and $5,602, respectively. These amounts due to subcontractors have been retained pending contract completion and customer acceptance of jobs. | ||||||||
The following is a summary of accrued expenses and other current liabilities at December 31: | ||||||||
2014 | 2013 | |||||||
Payroll and related employee benefits | $ | 37,261 | $ | 36,556 | ||||
Insurance, including self-insurance reserves | 34,377 | 33,880 | ||||||
Reserve for estimated losses on uncompleted contracts | 2,363 | 1,392 | ||||||
Corporate income taxes and other taxes | 3,775 | 13,305 | ||||||
Accrued overhead cost | 1,059 | 1,165 | ||||||
Other | 4,566 | 4,781 | ||||||
$ | 83,401 | $ | 91,079 | |||||
Capital_Leases
Capital Leases | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Capital Leases | |||||
Capital Leases | |||||
Note 11—Capital Leases | |||||
The Company leases vehicles and certain equipment under capital leases. The economic substance of the leases is a financing transaction for acquisition of the vehicles and equipment, and accordingly, the leases are recorded as assets and liabilities. Included in depreciation expense is amortization of vehicles and equipment held under capital leases, amortized over their useful lives on a straight-line basis. | |||||
At December 31, 2014, total assets under capital leases were $11,563, accumulated depreciation was $6,311 and the net book value was $5,252. For 2013, total assets under capital leases were $12,942, accumulated depreciation was $4,689 and the net book value of assets was $8,253. | |||||
The following is a schedule by year of the future minimum lease payments required under capital leases together with their present value as of December 31: | |||||
2015 | $ | 1,733 | |||
2016 | 672 | ||||
Total minimum lease payments | $ | 2,405 | |||
Amounts representing interest | (98 | ) | |||
Net present value of minimum lease payments | 2,307 | ||||
Less: current portion of capital lease obligations | (1,650 | ) | |||
Long-term capital lease obligations | $ | 657 | |||
Credit_Arrangements
Credit Arrangements | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Credit Arrangements | ||||||||
Credit Arrangements | ||||||||
Note 12—Credit Arrangements | ||||||||
Credit facilities and long-term debt consist of the following at December 31: | ||||||||
2014 | 2013 | |||||||
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.78% to 3.51% per annum. Monthly principal and interest payments are due in the amount of $2,521 per month until the maturity dates, which range from November 30, 2016 to December 13, 2020. The notes are secured by certain construction equipment of the Company | $ | 112,420 | $ | 144,526 | ||||
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.94% to 2.75% per annum. Monthly principal and interest payments are due in the amount of $999 per month until the maturity dates, which range from March 31, 2019 to September 24, 2021. The notes are secured by certain construction equipment assets of the Company. | 55,518 | — | ||||||
Senior Secured Notes payable to an insurance finance company, with an interest rate of 3.65% per annum. Quarterly interest payments began March 31, 2013. Principal repayments start on December 28, 2016 until the maturity date on December 28, 2022. The notes are secured by the assets of the Company | 50,000 | 50,000 | ||||||
Senior Secured Notes payable to an insurance finance company, with an interest rate of 3.85% per annum. Quarterly interest payments began October 25, 2013. Principal repayments start on July 25, 2017 until the maturity date on July 25, 2023. The notes are secured by the assets of the Company | 25,000 | 25,000 | ||||||
242,938 | 219,526 | |||||||
Less: current portion | (38,909 | ) | (28,475 | ) | ||||
Long-term debt, net of current portion | $ | 204,029 | $ | 191,051 | ||||
Scheduled maturities of long-term debt are as follows: | ||||||||
Year Ending | ||||||||
December 31, | ||||||||
2015 | $ | 38,909 | ||||||
2016 | 46,315 | |||||||
2017 | 41,282 | |||||||
2018 | 38,566 | |||||||
2019 | 33,965 | |||||||
Thereafter | 43,901 | |||||||
$ | 242,938 | |||||||
Revolving Credit Facility | ||||||||
As of December 31, 2014, the Company had a revolving credit facility, as amended on December 12, 2014 (the “Credit Agreement”) with The PrivateBank and Trust Company, as administrative agent (the “Administrative Agent”) and co-lead arranger, The Bank of the West, as co-lead arranger, and IBERIABANK Corporation, Branch Banking and Trust Company and UMB Bank, N.A. (the “Lenders”). The Credit Agreement is a $125 million revolving credit facility whereby the Lenders agree to make loans on a revolving basis from time to time and to issue letters of credit for up to the $125 million committed amount. The termination date of the Credit Agreement is December 28, 2017. | ||||||||
The principal amount of any loans under the Credit Agreement will bear interest at either: (i) LIBOR plus an applicable margin as specified in the Credit Agreement (based on the Company’s senior debt to EBITDA ratio as that term is defined in the Credit Agreement), or (ii) the Base Rate (which is the greater of (a) the Federal Funds Rate plus 0.5% or (b) the prime rate as announced by the Administrative Agent). Quarterly non-use fees, letter of credit fees and administrative agent fees are payable at rates specified in the Credit Agreement. | ||||||||
The principal amount of any loan drawn under the Credit Agreement may be prepaid in whole or in part, with a minimum prepayment of $5 million, at any time, potentially subject to make-whole provisions. | ||||||||
The Credit Agreement includes customary restrictive covenants for facilities of this type, as discussed below. | ||||||||
Commercial letters of credit outstanding were $4,659 at December 31, 2014 and $5,074 at December 31, 2013. Other than commercial letters of credit, there were no borrowings under this line of credit during the twelve months ended December 31, 2014, and available borrowing capacity at December 31, 2014 was $120,341. | ||||||||
Senior Secured Notes and Shelf Agreement | ||||||||
On December 28, 2012, the Company entered into a $50 million Senior Secured Notes purchase (“Senior Notes”) and a $25 million private shelf agreement (the “Notes Agreement”) by and among the Company, The Prudential Investment Management, Inc. and certain Prudential affiliates (the “Noteholders”). | ||||||||
The Senior Notes amount was funded on December 28, 2012. The Senior Notes are due December 28, 2022 and bear interest at an annual rate of 3.65%, paid quarterly in arrears. Annual principal payments of $7.1 million are required from December 28, 2016 through December 28, 2021 with a final payment due on December 28, 2022. The principal amount may be prepaid, with a minimum prepayment of $5 million, at any time, subject to make-whole provisions. | ||||||||
On July 25, 2013, the Company drew the full $25 million available under the Notes Agreement. The notes are due July 25, 2023 and bear interest at an annual rate of 3.85% paid quarterly in arrears. Seven annual principal payments of $3.6 million are required from July 25, 2017 with a final payment due on July 25, 2023. | ||||||||
Loans made under both the Credit Agreement and the Notes Agreement are secured by our assets, including, among others, our cash, inventory, goods, equipment (excluding equipment subject to permitted liens) and accounts receivable. All of our domestic subsidiaries have issued joint and several guaranties in favor of the Lenders and Noteholders for all amounts under the Credit Agreement and Notes Agreement. | ||||||||
Both the Credit Agreement and the Notes Agreement contain various restrictive and financial covenants including among others, minimum tangible net worth, senior debt/EBITDA ratio, debt service coverage requirements and a minimum balance for unencumbered net book value for fixed assets. In addition, the agreements include restrictions on investments, change of control provisions and provisions in the event the Company disposes more than 20% of its total assets. | ||||||||
The Company was in compliance with the covenants for the Credit Agreement and Notes Agreement at December 31, 2014. | ||||||||
Canadian Credit Facility | ||||||||
The Company has a credit facility for $8,000 in Canadian dollars with a Canadian bank for purposes of issuing commercial letters of credit in Canada. The credit facility has an annual renewal and provides for the issuance of commercial letters of credit for a term of up to five years. The facility provides for an annual fee of 1% for any issued and outstanding commercial letters of credit. Letters of credit can be denominated in either Canadian or U.S. dollars. At December 31, 2014 and 2013, letters of credit outstanding totaled $2,563 and $2,252 in Canadian dollars, respectively. At December 31, 2014, the available borrowing capacity was $5,437 in Canadian dollars. The credit facility contains a working capital restrictive covenant for our Canadian subsidiary, OnQuest Canada, ULC. At December 31, 2014, OnQuest Canada, ULC was in compliance with the covenant. | ||||||||
Noncontrolling_Interests
Noncontrolling Interests | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Noncontrolling Interests | ||||||||
Noncontrolling Interests | ||||||||
Note 13 — Noncontrolling Interests | ||||||||
The Company determined that the Blythe joint venture was a variable interest entity (“VIE”) and that the Company was the primary beneficiary as a result of its significant influence over the joint venture operations. | ||||||||
The Blythe joint venture operating activities are included in the Company’s consolidated statements of income as follows for the years ended December 31: | ||||||||
2014 | 2013 | |||||||
Revenues | $ | 1,169 | $ | 58,704 | ||||
Net income attributable to noncontrolling interests | 526 | 5,020 | ||||||
Since Blythe is a partnership, no tax effect was recognized for the income. Blythe made distributions of $1,590 to the non-controlling interests and $1,590 to the Company during the year ended December 31, 2014 and $5.5 million to the non-controlling interests and $5.5 million to the Company during the prior year. There were no capital contributions made during the years ended December 31, 2014 and 2013. The project has been completed and following the end of the project warranty period in May 2015, Blythe will be terminated. | ||||||||
The carrying value of the assets and liabilities associated with the operations of the Blythe joint venture are included in the Company’s consolidated balance sheets at December 31 as follows: | ||||||||
2014 | 2013 | |||||||
Cash | $ | 60 | $ | 3,025 | ||||
Accounts receivable | — | 1,085 | ||||||
Current liabilities | 119 | 2,041 | ||||||
The net assets of the joint venture are restricted for use by the project and are not available for general operations of the Company. | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Commitments and Contingencies. | ||||||||||||||
Commitments and Contingencies | ||||||||||||||
Note 14—Commitments and Contingencies | ||||||||||||||
Leases—The Company leases certain property and equipment under non-cancelable operating leases, which expire at various dates through 2023. The leases require the Company to pay all taxes, insurance, maintenance, and utilities and are classified as operating leases in accordance with ASC Topic 840 “Leases”. | ||||||||||||||
The future minimum lease payments required under non-cancelable operating leases are as follows: | ||||||||||||||
For the Years Ending | Real | Real | Equipment | Total | ||||||||||
December 31, | Property | Property | Commitments | |||||||||||
(Related | ||||||||||||||
Party) | ||||||||||||||
2015 | $ | 3,540 | $ | 1,449 | $ | 7,048 | $ | 12,037 | ||||||
2016 | 2,771 | 1,469 | 2,614 | 6,854 | ||||||||||
2017 | 2,585 | 1,437 | 1,278 | 5,300 | ||||||||||
2018 | 2,212 | 1,146 | 501 | 3,859 | ||||||||||
2019 | 1,070 | 879 | 454 | 2,403 | ||||||||||
Thereafter | 335 | 2,782 | 554 | 3,671 | ||||||||||
$ | 12,513 | $ | 9,162 | $ | 12,449 | $ | 34,124 | |||||||
Leases identified above as related party leases represent property with entities related through common ownership by stockholders, officers, and directors of the Company. | ||||||||||||||
Total lease expense during the years ended December 31, 2014, 2013 and 2012 was $14,325, $14,533 and $10,684, respectively, including amounts paid to related parties of $1,505, $1,556 and $1,342, respectively. | ||||||||||||||
Withdrawal liability for multiemployer pension plan—In November 2011, Rockford and ARB, along with other members of the Pipe Line Contractors Association (“PLCA”), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (the “Plan”). The Company withdrew from the Plan in order to mitigate its liability in connection with the Plan, which is significantly underfunded. The Company recorded a liability of $7,500 based on information provided by the Plan. However, the Plan has asserted that the PLCA members did not affect a proper withdrawal in 2011. The Company believes that a legally effective withdrawal occurred in November 2011 and has recorded the withdrawal liability on that basis. In May 2014, the Plan asserted that the liability was $11.7 million. Without agreeing to the amount and while initiating an appeal, the Company has made monthly payments, which are being expensed, including interest, totaling $733 through December 31, 2014. | ||||||||||||||
Prior to the Company’s acquisition, Q3C had also withdrawn from the Plan. In November 2012, Q3C estimated a withdrawal liability of $85. In the first quarter of 2013, the Plan asserted that the liability was $119. Without agreeing to the amount, Q3C has made monthly payments, including interest, totaling $30 through December 31, 2014. | ||||||||||||||
Letters of credit—As of December 31, 2014 and 2013, the Company had total letters of credit outstanding of approximately $6,864 and $7,696, respectively. The outstanding amounts include the U.S. dollar equivalents for letters of credit issued in Canadian dollars. | ||||||||||||||
Litigation—On February 7, 2012, the Company was sued in an action entitled North Texas Tollway Authority, Plaintiff v. James Construction Group, LLC, and KBR, Inc., Defendants, v. Reinforced Earth Company, Third-Party Defendant (the “Lawsuit”). In the Lawsuit, the North Texas Tollway Authority (“NTTA”) alleged damages to a road and retaining wall that were constructed in 1999 on the George Bush Turnpike near Dallas, Texas, due to negligent construction by JCG. The Lawsuit claimed that the cost to repair the retaining wall was approximately $5,400. The NTTA also alleged that six other walls constructed on the project by JCG had the same potential exposure to failure. For the past 18 months, the Company participated in Court-ordered mediation, and on February 25, 2015 the Lawsuit was settled for an expected cost to the Company of $9 million. During the years ended December 31, 2014, 2013, and 2012, the Company recorded liability amounts of $3,000, $4,500 and $1,500, respectively. The amounts recorded were the approximate amounts that the Company allocated for negotiation purposes in the mediation process. | ||||||||||||||
At December 31, 2014, the Company is engaged in dispute resolution to enforce collection for two construction projects completed by the Company in 2014. For one project, a cost reimbursable contract, the Company has recorded a receivable of $33.8 million, and for the other project, the Company has recorded a receivable of $29.3 million. At December 31, 2014, the Company has not recorded revenues in excess of cost for these two projects, however, the Company has specific reserves of approximately $27 million included in “billings in excess of costs and estimated earnings.” At this time, the Company cannot predict the amount that it will collect nor the timing of any collection. | ||||||||||||||
The Company is subject to other claims and legal proceedings arising out of its business. The Company provides for costs related to contingencies when a loss from such claims is probable and the amount is reasonably determinable. In determining whether it is possible to provide an estimate of loss, or range of possible loss, the Company reviews and evaluates its litigation and regulatory matters on a quarterly basis in light of potentially relevant factual and legal developments. If we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for a potential litigation loss. Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defense to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a materially adverse effect on the consolidated results of operations, financial condition or cash flows of the Company. | ||||||||||||||
Bonding—As of December 31, 2014, 2013 and 2012, the Company had bid and completion bonds issued and outstanding totaling approximately $1,518,018, $1,458,744 and $1,298,589, respectively. | ||||||||||||||
Reportable_Operating_Segments
Reportable Operating Segments | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Reportable Operating Segments | |||||||||||||||||
Reportable Operating Segments | |||||||||||||||||
Note 15—Reportable Operating Segments | |||||||||||||||||
For a number of years and through the end of the second quarter 2014, the Company segregated its business into three operating segments: the East Construction Services segment, the West Construction Services segment and the Engineering segment. In the third quarter 2014, the Company reorganized its business segments to match the change in the Company’s internal organization and management structure. The segment changes during the quarter reflect the focus of our new chief operating officer on the services we provide to our energy related customers, primarily in the Gulf Coast area (the “Energy segment”) and a continuing geographic view for the West and East segments. The chief operating officer regularly reviews the Company’s operating and financial performance using these revised segments. The operating segments include: the West Construction Services segment (“West segment”), which is unchanged from the previous segment, the East Construction Services segment (“East segment”), which is realigned from the previous East Construction Services segment, and the Energy segment (which includes the previous Engineering segment). All prior period amounts related to the segment change have been retrospectively reclassified throughout these consolidated financial statements to conform to the new presentation. The following is a brief description of each of the Company’s reportable segments and business activities. | |||||||||||||||||
The West segment includes the underground and industrial operations and construction services performed by ARB, ARB Structures, Inc., Rockford, Alaska Continental Pipeline, Inc., Q3C, Primoris Renewables, LLC, Juniper Rock Corporation, Stellaris, LLC and Vadnais, acquired in June 2014. Most of the entities perform work primarily in California; however, Rockford operates throughout the United States and Q3C operates in Colorado and the upper Midwest United States. The Blythe joint venture is also included as a part of the segment. The West segment consists of businesses headquartered primarily in the western United States. | |||||||||||||||||
The East segment includes the JCG Heavy Civil division, the JCG Infrastructure and Maintenance division, BW Primoris and the Cardinal Contractors, Inc. construction business, located primarily in the southeastern United States and in the Gulf Coast region of the United States. | |||||||||||||||||
The Energy segment businesses are located primarily in the southeastern United States and in the Gulf Coast region of the United States. The segment includes the operations of the PES pipeline and gas facility construction and maintenance operations, the JCG Industrial division and the newly acquired Surber and Ram-Fab operations. Additionally, the segment includes the OnQuest, Inc. and OnQuest Canada, ULC operations for the design and installation of high-performance furnaces and heaters for the oil refining, petrochemical and power generation industries. | |||||||||||||||||
All intersegment revenues and gross profit, which were immaterial, have been eliminated in the following tables. | |||||||||||||||||
Segment Revenues | |||||||||||||||||
Revenue by segment for the years ended December 31, 2014, 2013 and 2012 was as follows: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Business Segment | Revenue | % of | Revenue | % of | Revenue | % of | |||||||||||
Revenue | Revenue | Revenue | |||||||||||||||
West | $ | 964,093 | 46.2 | % | $ | 1,151,433 | 59.2 | % | $ | 832,860 | 54.0 | % | |||||
East | 489,926 | 23.5 | % | 430,438 | 22.1 | % | 469,963 | 30.5 | % | ||||||||
Energy | 632,175 | 30.3 | % | 362,349 | 18.7 | % | 238,911 | 15.5 | % | ||||||||
Total | $ | 2,086,194 | 100.0 | % | $ | 1,944,220 | 100.0 | % | $ | 1,541,734 | 100.0 | % | |||||
Segment Gross Profit | |||||||||||||||||
Gross profit by segment for the years ended December 31, 2014, 2013 and 2012 was as follows: | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Business Segment | Gross Profit | % of | Gross Profit | % of | Gross Profit | % of | |||||||||||
Segment | Segment | Segment | |||||||||||||||
Revenue | Revenue | Revenue | |||||||||||||||
West | $ | 143,468 | 14.9 | % | $ | 190,747 | 16.6 | % | $ | 119,328 | 14.3 | % | |||||
East | 25,749 | 5.3 | % | 24,309 | 5.6 | % | 40,185 | 8.6 | % | ||||||||
Energy | 66,823 | 10.6 | % | 40,959 | 11.3 | % | 33,197 | 13.9 | % | ||||||||
Total | $ | 236,040 | 11.3 | % | $ | 256,015 | 13.2 | % | $ | 192,710 | 12.5 | % | |||||
Segment Goodwill | |||||||||||||||||
The amount of goodwill recorded by segment at December 31, 2014 and 2013 was as follows: | |||||||||||||||||
Segment | 2014 | 2013 | |||||||||||||||
West | $ | 45,239 | $ | 45,239 | |||||||||||||
East | 43,267 | 43,267 | |||||||||||||||
Energy | 30,904 | 30,120 | |||||||||||||||
Total | $ | 119,410 | $ | 118,626 | |||||||||||||
Geographic Region — Revenues and Total Assets | |||||||||||||||||
The majority of the Company’s revenues are derived from customers in the United States, and less than 1% is generated from sources outside of the United States. Approximately 1% of total assets were located outside of the United States. | |||||||||||||||||
Customer_Concentrations
Customer Concentrations | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Customer Concentrations | |||||||||||||||||
Customer Concentrations | |||||||||||||||||
Note 16—Customer Concentrations | |||||||||||||||||
The Company operates in multiple industry segments encompassing the construction of commercial, industrial, and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues and consist of a different group of customers in each year. | |||||||||||||||||
During the years ended December 31, 2014, 2013 and 2012, the Company generated 36.4%, 35.6% and 44.0%, of its revenues, respectively, from the following customers: | |||||||||||||||||
Description of | 2014 | 2013 | 2012 | ||||||||||||||
Customer’s | |||||||||||||||||
Business | Amount | Percentage | Amount | Percentage | Amount | Percentage | |||||||||||
Texas DOT | $ | 183,221 | 8.8 | % | $ | 140,458 | 7.2 | % | $ | 88,783 | 5.8 | % | |||||
Petrochemical producer | 164,634 | 7.9 | % | * | * | * | * | ||||||||||
Private gas and electric utility | 145,677 | 7.0 | % | 104,828 | 5.4 | % | * | * | |||||||||
Public gas and electric utility | 144,567 | 6.9 | % | 153,908 | 7.9 | % | 224,845 | 14.6 | % | ||||||||
Pipeline operator | 121,220 | 5.8 | % | * | * | * | * | ||||||||||
Gas utility | * | * | 143,171 | 7.4 | % | 86,786 | 5.6 | % | |||||||||
Private gas and electric utility | * | * | * | * | 106,804 | 6.9 | % | ||||||||||
Gas utility | * | * | 149,794 | 7.7 | % | * | * | ||||||||||
Louisiana DOT | * | * | * | * | 170,899 | 11.1 | % | ||||||||||
$ | 759,319 | 36.4 | % | $ | 692,159 | 35.6 | % | $ | 678,117 | 44.0 | % | ||||||
(*)Indicates a customer with less than 5% of revenues during such period. | |||||||||||||||||
For the years ended December 31, 2014, 2013 and 2012, approximately 53.6%, 50.0% and 55.9%, respectively, of total revenues were generated from the top ten customers of the Company in that year. In each of the years, a different group of customers comprised the top ten customers by revenue. | |||||||||||||||||
At December 31, 2014, approximately 10.0% of the Company’s accounts receivable were due from one customer, and that customer provided 4.0% of the Company’s revenues for the year ended December 31, 2014. At December 31, 2013, approximately 7.0% of the Company’s accounts receivable were due from one customer, and that customer provided 7.4% of the Company’s revenues for the year ended December 31, 2013. | |||||||||||||||||
Multiemployer_Plans
Multiemployer Plans | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Multiemployer Plans | |||||||||||||||||||||||
Multiemployer Plans | |||||||||||||||||||||||
Note 17 — Multiemployer Plans | |||||||||||||||||||||||
Union Plans—Various subsidiaries in the West segment are signatories to collective bargaining agreements. These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. | |||||||||||||||||||||||
The Company contributed $38,107, $42,919 and $30,103, to multiemployer pension plans for the years ended December 31, 2014, 2013 and 2012, respectively. These costs were charged to the related construction contracts in process. Contributions during 2013 increased from 2012 noticeably as a result of the November 2012 acquisition of Q3C and increased volume of project activity. The decrease in 2014 compared to 2013 was due to a decrease in the number of man-hours worked by our union labor. | |||||||||||||||||||||||
For the Company, the financial risks of participating in multiemployer plans are different from single-employer plans in the following respects: | |||||||||||||||||||||||
· | Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. | ||||||||||||||||||||||
· | If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. | ||||||||||||||||||||||
· | If a participating employer chooses to stop participating in the plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan. | ||||||||||||||||||||||
Under U.S. legislation regarding multiemployer pension plans, a company is required to pay an amount that represents its proportionate share of a plan’s unfunded vested benefits in the event of withdrawal from a plan or upon plan termination. The Company participates in a number of multiemployer pension plans, and its potential withdrawal obligation may be significant. Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP. As discussed in Note 14—“Commitments and Contingencies,” in 2011 the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan. The Company has no plans to withdraw from any other agreements. | |||||||||||||||||||||||
During the last three years, the Company made annual contributions to 82 pension plans. One of the pension plans that the Company contributed to in 2014 listed the Company in the plan’s Form 5500 as providing more than 5% of the plan’s total contributions. The contribution to that plan was $5,239 for the twelve months ending December 31, 2014. Two pension plans listed the Company on their Form 5500 as providing more than 5% of the plan’s total 2013 contributions. The contributions for the two plans amounted to $1,427 for the twelve months ending December 31, 2013. For 2012, the Company was not listed on any Form 5500 as providing more than 5% of the plan’s total contributions. Our participation in significant plans for the year ended December 31, 2014 and 2013 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three digit plan number. The zone status is based on the latest information that we received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The “Surcharge Imposed” column includes plans in a red zone status that require a payment of a surcharge in excess or regular contributions. The next column lists the expiration date of the collective bargaining agreement to which the plan is subject. The table follows: | |||||||||||||||||||||||
EIN / | Pension Protection Act Zone | FIP/RP | Surcharge | Collective | Contributions of the Company | ||||||||||||||||||
Pension Plan | Status | Status | Bargaining | ||||||||||||||||||||
Pending / | Agreement | ||||||||||||||||||||||
Expiration | |||||||||||||||||||||||
Pension Fund Name | Number | 2014 | 2013 | Implemented | Imposed | Date | 2014 | 2013 | 2012 | ||||||||||||||
Central Pension Fund of the International Union of Operating Engineers and Participating Employers | 36-6052390/001 | Green as of February 1, 2013 | Green as of February 1, 2012 | No | No | 5/31/17 | $ | 6,204 | $ | 7,286 | $ | 2,206 | |||||||||||
Laborers International Union of North America National (Industrial) Pension Fund | 52-6074345/001 | Red as of January 1, 2013 | Red as of January 1, 2012 | Yes | No | 5/31/17 | 3,382 | 5,025 | 1,995 | ||||||||||||||
Southern California Pipetrades Trust Funds | 51-6108443/001 | Green as of January 1, 2013 | Green as of January 1, 2012 | No | No | 7/30/16 | 5,239 | 6,179 | 5,298 | ||||||||||||||
Pipeline Industry Benefit Fund | 73-6146433/001 | Green as of January 1, 2013 | Green as of January 1, 2012 | No | No | 5/31/17 | 2,686 | 4,605 | 1,747 | ||||||||||||||
Laborers Pension Trust Fund for Northern California | 94-6277608/001 | Yellow as of June 10, 2013 | Yellow as of June 10, 2012 | Yes | No | 6/30/19 | 3,116 | 3,869 | 4,816 | ||||||||||||||
Construction Laborers Pension Trust for Southern California | 43-6159056/001 | Green as of January 1, 2013 | Green as of January 1, 2012 | No | No | 6/30/15 | 2,444 | 2,951 | 2,952 | ||||||||||||||
Contributions to significant plans | $ | 23,071 | $ | 29,915 | $ | 19,014 | |||||||||||||||||
Contributions to other multiemployer plans | 15,036 | 13,004 | 11,089 | ||||||||||||||||||||
Total contributions made | $ | 38,107 | $ | 42,919 | $ | 30,103 | |||||||||||||||||
Company_Retirement_Plans
Company Retirement Plans | 12 Months Ended |
Dec. 31, 2014 | |
Company Retirement Plans | |
Company Retirement Plans | |
Note 18—Company Retirement Plans | |
401(k) Plan—The Company provides a 401(k) plan for its employees not covered by collective bargaining agreements. Under the plan, employees are allowed to contribute up to 100% of their compensation, within the Internal Revenue Service (“IRS”) prescribed annual limit. The Company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions. The Company may, at the discretion of its Board of Directors, make an additional profit share contribution to the 401(k) plan. The Company’s contribution to the plan for the years ended December 31, 2014, 2013 and 2012 were $3,111, $2,771 and $2,267, respectively. | |
Effective January 1, 2011, the members of the JCG 401(k) plan became eligible for entry into the Company plan and the JCG plan was terminated. Effective October 1, 2011, the members of the Rockford 401(k) plan became eligible for entry into the Company plan and the Rockford plan was terminated. | |
The members of the Q3C 401(k) plan became eligible for entry into the Company plan on December 31, 2013 and the Q3C plan was terminated. Employees of the other acquisitions made by the Company in 2012 through 2014 had no 401(k) plans prior to the acquisitions, and their employees became eligible for the Company plan. | |
OnQuest Canada, ULC RRSP-DPSP Plan—The Company provides a RRSP-DPSP plan (Registered Retirement Saving Plan—Deferred Profit Sharing Plan) for its employees of OnQuest Canada, ULC, not covered by collective bargaining agreements. There are two components to the plan. The RRSP portion is contributed to by the employee, while the Company portion is paid to the DPSP. Under this plan, the Company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions. Vesting in the DPSP portion is one year of employment. The Company’s contribution to the DPSP during the years ended December 31, 2014, 2013 and 2012 was $69, $70 and $69, respectively. | |
The Company has no other post-retirement benefits. | |
Deferred_Compensation_Agreemen
Deferred Compensation Agreements and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2014 | |
Deferred Compensation Agreements and Stock-Based Compensation | |
Deferred Compensation Agreements and Stock-Based Compensation | |
Note 19—Deferred Compensation Agreements and Stock-Based Compensation | |
Primoris Long-Term Retention Plan — The Company adopted a long-term retention plan for certain senior managers and executives. The voluntary plan provides for the deferral of one half of the participant’s annual earned bonus for one year. Except in the case of death, disability or involuntary separation from service, the deferred compensation is vested to the participant only if actively employed by the Company on the payment date of bonus amounts the following year. The amount of compensation deferred under this plan is calculated each year. Total deferred compensation liability under this plan as of December 31, 2014 and 2013 was $4,779 and $4,984, respectively. | |
Participants in the long term retention plan may elect to purchase Company common stock at a discounted price. For bonuses earned in 2014 and 2013, the participants could use up to one sixth of their bonus amount to purchase shares of stock, whose price was calculated as 75% of the average market closing price for the month of December 2014 and 2013, respectively. The 25% discount is treated as compensation to the participant. | |
JCG Stakeholder Incentive Plan — In December 2014 and 2013, JCG maintained a deferred compensation plan for some senior management employees. The plan provided for annual vesting over a five-year period. Once vested and upon a triggering event, such as termination, death or disability, the deferred benefit amount plus interest is paid in equal monthly installments over three years. The amount of compensation deferred under the plan is calculated each year. In 2014, the terms of the plan were changed, and all accrued amounts will be paid to the employees as part of the LTR plan with 50% of the accrued amount added to the LTR payments to be made in 2015 and the remainder added to LTR payments to be made in 2016. Total deferred compensation liability under this plan at December 31, 2014 and 2013 was $599 and $1,755, respectively. | |
Stock-based compensation — In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”), after approval by the shareholders and adoption by the Company on May 3, 2013. | |
On May 3, 2013, the Board of Directors granted 100,000 Restricted Stock Units (“Units”) to an executive under the 2013 Long-term Incentive Equity Plan (the “Equity Plan”). Commencing annually on May 10, 2014 and ending April 30, 2017, the Units will vest in four equal installments subject to continuing employment of the executive. On May 10, 2014, 25,000 of these Units vested. On March 24, 2014, the Board of Directors granted 48,512 Units to another executive under the Equity Plan. The Units will vest 50% on September 23, 2015 and 50% on March 23, 2017, subject to continuing employment of the executive. Vesting in both grants is also subject to earlier acceleration, termination, cancellation or forfeiture as provided in the underlying Primoris Restricted Stock Unit agreement (“RSU Award Agreement”). Each Unit represents the right to receive one share of the Company’s common stock when vested. | |
Under guidance of ASC Topic 718 “Compensation — Stock Compensation”, stock-based compensation cost is measured at the date of grant (utilizing the prior-day closing price), based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award). | |
The fair value of the Units was based on the closing market price of our common stock on the day prior to the date of the grant. Stock compensation expense for the Units is being amortized using the straight-line method over the service period. For the years ended December 31, 2014 and 2013, the Company recognized $934 and $366, respectively, in compensation expense. At December 31, 2014, approximately $2.4 million of unrecognized compensation expense remains for the Units, which will be recognized over the next 2.3 years through April 30, 2017. | |
Vested Units accrue “Dividend Equivalents” (as defined in the Equity Plan) which will be accrued as additional Units. At December 31, 2014, there were 110 Dividend Equivalent Units that were accrued on 25,000 Units that vested on April 30, 2014. | |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Related Party Transactions | ||||
Related Party Transactions | ||||
Note 20—Related Party Transactions | ||||
Primoris has entered into leasing transactions with Stockdale Investment Group, Inc. (“SIGI”). Brian Pratt, our Chief Executive Officer, President and Chairman of the Board of Directors and our largest stockholder, holds a majority interest and is the chairman, president and chief executive officer and a director of SIGI. John M. Perisich, our Executive Vice President and General Counsel, is secretary of SIGI. | ||||
Primoris leases properties from SIGI at the following locations: | ||||
1 | Bakersfield, California (lease expires October 2022) | |||
2 | Pittsburg, California (lease expires April 2023) | |||
3 | San Dimas, California (lease expires March 2019) | |||
4 | Pasadena, Texas (lease was mutually terminated as of August 31, 2014) | |||
During the years ended December 31, 2014, 2013 and 2012, the Company paid $862, $907 and $929, respectively, in lease payments to SIGI for the use of these properties. | ||||
Primoris leases a property from Roger Newnham, a former owner and current manager of our subsidiary, OnQuest Canada, ULC. The property is located in Calgary, Canada. During the years ended December 31, 2014, 2013 and 2012 Primoris paid $289, $295 and $292, respectively, in lease payments. The current term of the lease is through December 31, 2017. | ||||
Primoris leases a property from Lemmie Rockford, one of the Rockford sellers, which commenced November 1, 2011. The property is located in Toledo, Washington. During the years ended December 31, 2014, 2013 and 2012, Primoris paid $90, $90 and $90, respectively, in lease payments. The current term of the lease is through January 13, 2016. | ||||
Primoris leases a property from Quality RE Partners, owned by three of the Q3C selling shareholders, of whom two are current employees, including Jay Osborn, President of Q3C. The property is located in Little Canada, Minnesota. During the years ended December 31, 2014 and 2013, the Company paid $264 and $264, respectively, in lease payments to Quality RE Partners. The lease expires in October 2022. | ||||
As discussed in Note 8— “Equity Method Investments”, the Company owns several non-consolidated investments and has recognized revenues on work performed by the Company for those joint ventures. | ||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | |||||||||||
Note 21—Income Taxes | |||||||||||
The components of the provision for income taxes are as follows: | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current provision (benefit) | |||||||||||
Federal | $ | 28,203 | $ | 41,323 | $ | 27,524 | |||||
State | 5,398 | 10,051 | 7,125 | ||||||||
Foreign | 1,074 | 772 | 67 | ||||||||
$ | 34,675 | $ | 52,146 | $ | 34,716 | ||||||
Deferred provision (benefit) | |||||||||||
Federal | 3,586 | (6,099 | ) | (451 | ) | ||||||
State | 457 | (874 | ) | (366 | ) | ||||||
Foreign | (72 | ) | 67 | (62 | ) | ||||||
3,971 | (6,906 | ) | (879 | ) | |||||||
Change in valuation allowance | — | (344 | ) | — | |||||||
Total | $ | 38,646 | $ | 44,896 | $ | 33,837 | |||||
A reconciliation of income tax expense compared to the amount of income tax expense that would result by applying the U.S. federal statutory income tax rate to pre-tax income is as follows: | |||||||||||
2014 | 2013 | 2012 | |||||||||
U.S. federal statutory income tax rate | 35 | % | 35 | % | 35 | % | |||||
State taxes, net of federal income tax impact | 4.66 | % | 4.72 | % | 4.87 | % | |||||
Foreign tax credit | (0.98 | )% | (0.73 | )% | (0.01 | )% | |||||
Canadian income tax | 0.98 | % | 0.73 | % | 0.01 | % | |||||
Domestic production activities deduction | (3.07 | )% | (3.67 | )% | (2.97 | )% | |||||
Nondeductible meals & entertainment | 3.38 | % | 2.58 | % | 2.12 | % | |||||
Other items | (2.01 | )% | 0.56 | % | (1.67 | )% | |||||
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests | 37.96 | % | 39.19 | % | 37.35 | % | |||||
Impact of income from noncontrolling interests on effective tax rate | (0.19 | )% | (1.65 | )% | (0.61 | ) | |||||
Effective tax rate on income before provision for income taxes and noncontrolling interests | 37.77 | % | 37.54 | % | 36.74 | % | |||||
Deferred income taxes are recognized for temporary differences between the financial reporting basis of the assets and liabilities and their respective tax basis and operating losses, capital losses and tax credit carry-forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based upon consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. | |||||||||||
During 2009, the Company recognized a capital loss related to the sale of its equity interest in ARB Arendal. A valuation allowance of $344 was provided against the Company’s deferred tax for its capital loss carryforward as the Company believed that it was more likely than not that this capital loss would not be realized. However, in the 2012 tax year, the Company generated sufficient capital gain to utilize the capital loss carryforward, resulting in the utilization of the deferred tax asset and removal of the related valuation allowance. No valuation allowance has been provided to the Company’s remaining deferred tax assets as the Company believes it is more likely than not that these deferred tax assets will be realized. | |||||||||||
The tax effect of temporary differences that give rise to deferred income taxes for the year ended December 31, 2014 and 2013 are as follows: | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Accrued workers compensation | $ | 6,460 | $ | 6,561 | |||||||
Insurance reserves | 3,698 | 3,448 | |||||||||
Other accrued liabilities | 15,729 | 20,466 | |||||||||
State income taxes | 654 | 1,551 | |||||||||
Capital loss carryforward | 1,139 | — | |||||||||
Foreign tax credit | 575 | 522 | |||||||||
Total deferred tax assets | 28,255 | 32,548 | |||||||||
Deferred tax liabilities | |||||||||||
Depreciation and amortization | (33,657 | ) | (28,844 | ) | |||||||
Prepaid expenses and other | (527 | ) | (663 | ) | |||||||
Total deferred tax liabilities | (34,184 | ) | (29,507 | ) | |||||||
Total | $ | (5,929 | ) | $ | 3,041 | ||||||
In the third quarter of 2014, the Internal Revenue Service concluded an examination of our federal income tax returns for 2011 and 2012 which did not have a material impact on our financial statements. The Company’s federal income tax returns are no longer subject to examination for tax years before 2013. The statutes of limitation of state and foreign jurisdictions vary generally between 3 to 5 years. Accordingly, the tax years 2009 through 2013 generally remain open to examination by the other taxing jurisdictions in which the Company operates. | |||||||||||
A reconciliation of the beginning and ending amounts and aggregate changes in the balance of unrecognized tax benefits for each period is as follows: | |||||||||||
2014 | 2013 | 2012 | |||||||||
Beginning balance | $ | 5,382 | $ | 72 | $ | 467 | |||||
Increases in balances for tax positions taken during the current year | — | 1,340 | — | ||||||||
Increases in balances for tax positions taken during prior years | — | 3,993 | — | ||||||||
Settlements and effective settlements with tax authorities | (4,878 | ) | — | — | |||||||
Lapse of statute of limitations | (48 | ) | (23 | ) | (395 | ) | |||||
Total | $ | 456 | $ | 5,382 | $ | 72 | |||||
The unrecognized tax benefits, if recognized, would not have a material impact on the Company’s effective tax rate. | |||||||||||
The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense, which for the three years presented were not material. | |||||||||||
The Company does not anticipate that there will be a material change in the balance of the unrecognized tax benefits within the next 12 months. | |||||||||||
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Earnings Per Share | |||||||||||
Earnings Per Share | |||||||||||
Note 22—Earnings Per Share | |||||||||||
The computation of basic and diluted earnings per share for the years ended December 31, 2014, 2013 and 2012 follows: | |||||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net income | $ | 63,682 | $ | 74,680 | $ | 58,267 | |||||
Net income attributable to noncontrolling interests | (526 | ) | (5,020 | ) | (1,511 | ) | |||||
Net income attributable to Primoris | $ | 63,156 | $ | 69,660 | $ | 56,756 | |||||
Denominator (shares in thousands): | |||||||||||
Weighted average shares for computation of basic earnings per share | 51,607 | 51,540 | 51,391 | ||||||||
Dilutive effect of shares issued to independent directors | 2 | 3 | 11 | ||||||||
Dilutive effect of unvested restricted stock units (1) | 138 | 66 | — | ||||||||
Dilutive effect of shares issued to Q3C sellers (2) | — | 1 | 4 | ||||||||
Weighted average shares for computation of diluted earnings per share | 51,747 | 51,610 | 51,406 | ||||||||
Earnings per share attributable to Primoris: | |||||||||||
Basic | $ | 1.22 | $ | 1.35 | $ | 1.1 | |||||
Diluted | $ | 1.22 | $ | 1.35 | $ | 1.1 | |||||
-1 | Represents the effect of the grant of 100,000 shares of Restricted Stock Units on May 3, 2013 and 48,512 Units on March 24, 2014. | ||||||||||
-2 | Represents the effect of the 29,273 unregistered shares of common stock issued in February 2013 as part of the purchase consideration for the Q3C acquisition in 2012. | ||||||||||
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Stockholders' Equity | ||||
Stockholders' Equity | ||||
Note 23—Stockholders’ Equity | ||||
Common Stock | ||||
The Company is authorized to issue 90,000,000 shares of $0.0001 par value common stock, of which 51,561,396 and 51,571,394 shares were issued and outstanding as of December 31, 2014 and 2013, respectively. As of December 31, 2014, there were 364 holders of record of our common stock. | ||||
In March 2014, the Company received $1,671 for 77,455 shares of common stock purchased and issued in accordance with the Company’s Long-Term Retention Plan (“LTR Plan”). The Company’s LTR Plan for managers and executives allows participants to use a portion of their annual bonus amount to purchase Company common stock at a discount from the market price. The shares purchased in March 2014 were for bonus amounts earned in 2013 and the number of shares was calculated at 75% of the average market price of December 2013. In March 2013, the Company received $1,455 for 131,989 shares of common stock issued under the LTR Plan for bonus amounts earned in the prior year. | ||||
As part of the Company’s quarterly compensation for the non-employee members of the Board of Directors, the Company issued shares of common stock under the Equity Plan as follows: | ||||
· | 6,172 shares in August 2014, | |||
· | 6,375 shares in February 2014, | |||
· | 9,110 shares in August 2013, | |||
· | 12,480 shares in March 2013, | |||
· | 15,280 shares in August 2012, and | |||
· | 12,395 shares in February 2012. | |||
The shares were fully vested upon issuance and have a one-year trading restriction. | ||||
As part of the acquisition of Q3C, the Company issued 29,273 unregistered shares of stock on January 7, 2013 based on the average December 2012 closing prices, or $14.69 per share for a total value of $430. | ||||
As discussed in Note 19—“Deferred Compensation,” the Board of Directors has granted a total of 148,512 shares of Units under the Equity Plan. | ||||
At December 31, 2014, there were 2,278,651 shares of common stock reserved to provide for the grant and exercise of all future stock option grants, SARS, Units and grants of restricted shares under the Equity Plan. Other than the Units discussed above, there were no stock options, SARS or restricted shares of stock issued or outstanding at December 31, 2014. | ||||
The Company was provided 15,144 shares of Primoris common stock in exchange for the payment of a $300 note receivable associated with the February 2010 sale of the Company’s Ecuador business. The note was fully reserved in 2010. The shares, valued at $19.81 per share, were cancelled by the Company and the Company recorded the transaction as non-operating income in March 2013. | ||||
In February 2014, the Company’s Board of Directors authorized a share repurchase program under which the Company, from time to time and depending on market conditions, share price and other factors, could acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $23 million. During the period from February 2014 through September 2014, the Company purchased and cancelled 100,000 shares of stock for $2.8 million at an average cost of $28.44 per share. This share repurchase program expired on December 31, 2014. | ||||
In May 2012, the Company’s Board of Directors authorized a share repurchase program of up to an aggregate purchase price of $20 million. During the period from May 2012 through June 2012, the Company purchased and cancelled 89,600 shares of stock for $1.0 million at an average cost of $11.17 per share. This share repurchase program expired on December 31, 2012. | ||||
Preferred Stock | ||||
The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. No shares of Preferred Stock were outstanding at December 31, 2014 or 2013. | ||||
Warrants | ||||
At December 31, 2014 and 2013, there were no warrants outstanding. | ||||
Selected_Quarterly_Financial_I
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Selected Quarterly Financial Information (Unaudited) | ||||||||||||||
Selected Quarterly Financial Information (Unaudited) | ||||||||||||||
Note 24—Selected Quarterly Financial Information (Unaudited) | ||||||||||||||
Selected unaudited quarterly consolidated financial information is presented in the following tables: | ||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | ||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
Revenues | $ | 470,074 | $ | 515,291 | $ | 613,237 | $ | 487,592 | ||||||
Gross profit | 49,757 | 61,194 | 75,473 | 49,616 | ||||||||||
Net income | 11,265 | 16,003 | 27,390 | 9,024 | ||||||||||
Net income attributable to Primoris | 10,833 | 16,003 | 27,390 | 8,930 | ||||||||||
Earnings per share: | ||||||||||||||
Basic earnings per share | $ | 0.21 | $ | 0.31 | $ | 0.53 | $ | 0.17 | ||||||
Diluted earnings per share | $ | 0.21 | $ | 0.31 | $ | 0.53 | $ | 0.17 | ||||||
Weighted average shares outstanding (in thousands) | ||||||||||||||
Basic | 51,610 | 51,655 | 51,606 | 51,561 | ||||||||||
Diluted | 51,714 | 51,804 | 51,759 | 51,710 | ||||||||||
Year Ended December 31, 2013 | ||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | ||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
Revenues | $ | 409,995 | $ | 445,013 | $ | 551,333 | $ | 537,879 | ||||||
Gross profit | 46,096 | 59,537 | 75,465 | 74,917 | ||||||||||
Net income | 10,040 | 15,893 | 23,193 | 25,554 | ||||||||||
Net income attributable to Primoris | 9,770 | 15,564 | 21,845 | 22,481 | ||||||||||
Earnings per share: | ||||||||||||||
Basic earnings per share | $ | 0.19 | $ | 0.30 | $ | 0.42 | $ | 0.44 | ||||||
Diluted earnings per share | $ | 0.19 | $ | 0.30 | $ | 0.42 | $ | 0.44 | ||||||
Weighted average shares outstanding (in thousands) | ||||||||||||||
Basic | 51,456 | 51,562 | 51,568 | 51,571 | ||||||||||
Diluted | 51,467 | 51,626 | 51,671 | 51,671 | ||||||||||
Year Ended December 31, 2012 | ||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | ||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
Revenues | $ | 291,573 | $ | 337,436 | $ | 431,842 | $ | 480,883 | ||||||
Gross profit | 37,596 | 44,004 | 56,291 | 54,819 | ||||||||||
Net income | 10,530 | 11,857 | 17,948 | 17,932 | ||||||||||
Net income attributable to Primoris | 10,486 | 11,733 | 17,516 | 17,021 | ||||||||||
Earnings per share: | ||||||||||||||
Basic earnings per share | $ | 0.21 | $ | 0.23 | $ | 0.34 | $ | 0.33 | ||||||
Diluted earnings per share | $ | 0.20 | $ | 0.23 | $ | 0.34 | $ | 0.33 | ||||||
Weighted average shares outstanding (in thousands) | ||||||||||||||
Basic | 51,096 | 51,435 | 51,398 | 51,404 | ||||||||||
Diluted | 51,337 | 51,435 | 51,404 | 51,418 | ||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events. | |
Subsequent Events | |
Note 25—Subsequent Events | |
On February 28, 2015, the Company acquired Aevenia, Inc. (“Aevenia”), a subsidiary of Otter Tail Corporation for approximately $23 million in cash. Headquartered in Moorhead, Minnesota, Aevenia is an energy and electrical construction company. For the year ended December 31, 2014, Aevenia generated operating income of $4.2 million on revenues of $44.4 million. The assets purchased and liabilities assumed on the acquisition date included $3.8 million in current assets, $1.1 million in current liabilities and $20.3 million in equipment, intangible assets and goodwill. Due to the short period of time between the acquisition date and this report, the estimated values are preliminary and subject to change. | |
Aevenia specializes in overhead and underground line work, substations, telecom/fiber, and certain other client-specific on-demand call out services. The majority of their work is delivered under unit-price Master Services Agreements (“MSAs”). Aevenia has operations in Minnesota, North Dakota, South Dakota and Iowa. The Company believes there are opportunities for Aevenia to grow sales by performing in-house work for other Primoris subsidiaries and expands the Company’s offerings to new geographies in the Midwest. Aevenia will be re-branded as Primoris AV, Energy and Electrical Construction Corporation, and operate as part of Primoris’ Energy segment. | |
In addition, on February 24, 2015, the Board of Directors declared a cash dividend of $0.04 per common share for stockholders of record as of March 31, 2015, payable on or about April 15, 2015. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Summary of Significant Accounting Policies | ||||||||||
Basis of presentation | ||||||||||
Basis of presentation—The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”). References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”). | ||||||||||
Certain reclassifications have been made to the prior year Consolidated Statements of Cash Flows and Notes to the Consolidated Financial Statements to conform to the current year presentation and had no impact on net income or earnings per share. These reclassifications include the new segment presentation. | ||||||||||
Principles of consolidation | ||||||||||
Principles of consolidation—The accompanying Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries and the noncontrolling interests of the Blythe joint venture, a variable interest entity for which the Company is the primary beneficiary as determined under the provisions of ASC Topic 810-10-45. All intercompany balances and transactions have been eliminated in consolidation. | ||||||||||
Use of estimates | ||||||||||
Use of estimates—The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. As a construction contractor, the Company uses significant estimates for costs to complete construction projects and the contract value of construction projects. These estimates have a direct effect on gross profit as reported in these consolidated financial statements. Actual results could materially differ from the Company’s estimates. | ||||||||||
Operating cycle | ||||||||||
Operating cycle— In the accompanying consolidated balance sheets, assets and liabilities relating to long-term construction contracts (e.g. costs and estimated earnings in excess of billings, billings in excess of costs and estimated earnings) are considered current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year. | ||||||||||
The Company has significant working capital invested in assets that may have a liquidation period extending beyond one year. The Company has claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation. | ||||||||||
Cash and cash equivalents | ||||||||||
Cash and cash equivalents—The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents. | ||||||||||
Short-term investments | ||||||||||
Short-term investments—The Company classifies as short-term investments all securities or other assets acquired which have ready marketability and can be liquidated, if necessary, within the current operating cycle and which have readily determinable fair values. Short-term investments are classified as available for sale and are recorded at fair value using the specific identification method. Currently, the majority of the Company’s short-term investments are in short-term dollar-denominated bank deposits and U.S. Treasury Bills in order to provide government backing of the investments. | ||||||||||
Customer retention deposits | ||||||||||
Customer retention deposits—Customer retention deposits consist of contract retention payments made by customers into escrow cash accounts with a bank as required in some state jurisdictions. Investments for these amounts are limited to highly graded U.S. and municipal government debt obligations, investment grade commercial paper and CDs, which limits credit risk on these balances. Escrow cash accounts are released to the Company by customers as projects are completed in accordance with contract terms. | ||||||||||
Inventory and uninstalled contract materials | ||||||||||
Inventory and uninstalled contract materials—Inventory consists of expendable construction materials and small tools that will be used in construction projects and is valued at the lower of cost, using first-in, first-out method, or market. Uninstalled contract materials are certain job specific materials not yet installed, primarily for highway construction projects, which are valued using the specific identification method relating the cost incurred to a specific project. In most cases, the Company is able to invoice a state agency for the materials, but title has not yet passed to the state agency. | ||||||||||
Business combinations | ||||||||||
Business combinations—Business combinations are accounted for using the acquisition method of accounting. We use the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses. The determination of fair value requires estimates and judgments of future cash flow expectations to assign fair values to the identifiable tangible and intangible assets. GAAP provides a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business. Most estimates are preliminary until the end of the measurement period. During the measurement period, any material, newly discovered information that existed at the acquisition date would be reflected as an adjustment to the initial valuations and estimates. After the measurement date, any adjustments would be recorded as a current period income or expense. Changes in deferred tax asset valuation allowances and acquired tax uncertainties after the measurement period are also recognized in net income. Expenses incurred in connection with a business combination are expensed as incurred. | ||||||||||
Goodwill and other intangible assets | ||||||||||
Goodwill and other intangible assets—The Company accounts for goodwill in accordance with ASC Topic 350 “Intangibles — Goodwill and Other”. Under ASC Topic 350, goodwill is not amortized but is subject to an annual impairment test as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist. The impairment review is performed at the reporting unit level for those units with recorded goodwill. In December 2013, an expense of $808 was recorded relating to the FSSI intangible asset for customer relations reflecting the impairment of the asset. See Note 4 — “Business Combinations” for further information. Otherwise, there were no impairments of goodwill for the years ended December 31, 2014, 2013 and 2012. | ||||||||||
Goodwill was recorded at our reporting units as follows: | ||||||||||
Reporting Unit | Segment | December 31, | December 31, | |||||||
2014 | 2013 | |||||||||
Rockford | West | $ | 32,079 | $ | 32,079 | |||||
Q3C | West | 13,160 | 13,160 | |||||||
JCG (includes JCG Heavy Civil and Infrastructure and Maintenance divisions) | East | 42,866 | 42,866 | |||||||
Cardinal Contractors, Inc. | East | 401 | 401 | |||||||
PES (includes PPS, JCG Industrial, FSSI, Saxon and Surber divisions) | Energy | 28,463 | 27,679 | |||||||
OnQuest Canada, ULC | Energy | 2,441 | 2,441 | |||||||
Total Goodwill | $ | 119,410 | $ | 118,626 | ||||||
Income tax | ||||||||||
Income tax— Current income tax expense is the amount of income taxes expected to be paid for the financial results of the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. Further, the Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC Topic 740. The difference between a tax position taken or expected to be taken on the Company’s income tax returns and the benefit recognized on our financial statements is referred to as an unrecognized tax benefit. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. | ||||||||||
Comprehensive income | ||||||||||
Comprehensive income—The Company accounts for comprehensive income in accordance with ASC Topic 220 “Comprehensive Income”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). During the reported periods, the Company had no material comprehensive income. | ||||||||||
Foreign operations | ||||||||||
Foreign operations—At December 31, 2014, the Company had operations in Canada with assets aggregating approximately $11,505, compared to $11,371 at December 31, 2013. The Canadian operations had revenues of $19,840 and income before tax of $3,183 for the year ending December 31, 2014; revenues of $15,993 and income before tax of $2,742 for the year ended December 31, 2013, and revenues of $10,915 and income before tax of $304 for the year ending December 31, 2012. | ||||||||||
Functional currencies and foreign currency translation | ||||||||||
Functional currencies and foreign currency translation—The Company uses the United States dollar as its functional currency in Canada for the Canadian operations of OnQuest Canada, as substantially all monetary transactions are made in dollars, and other significant economic facts and circumstances currently support that position. As these factors may change, the Company periodically assesses its position with respect to the functional currency of its foreign subsidiary. Non-monetary balance sheet items and related revenue, gain, expense and loss accounts are remeasured using historical rates. All other items are remeasured using the current exchange rate in effect at the balance sheet date. Foreign exchange gains of $374 in 2014, gains of $153 in 2013 and losses of $36 in 2012 are included in the “other income or expense” line of the Consolidated Statements of Income. | ||||||||||
Partnerships and joint ventures | ||||||||||
Partnerships and joint ventures — As is normal in the construction industry, the Company is periodically a member of a partnership or a joint venture. These partnerships or joint ventures are used primarily for the execution of single contracts or projects. The Company’s ownership can vary from a small noncontrolling ownership to a significant ownership interest. The Company evaluates each partnership or joint venture to determine whether the entity is considered a variable interest entity (“VIE”) as defined in FASB ASC Topic 810, and if a VIE, whether the Company is the primary beneficiary of the VIE, which would require the Company to consolidate the VIE with the Company’s financial statements. When consolidation occurs, the Company accounts for the interests of the other parties as a noncontrolling interest and discloses the net income attributable to noncontrolling interests. | ||||||||||
Equity method of accounting | ||||||||||
Equity method of accounting— The Company accounts for its interest in an investment using the equity method of accounting per ASC Topic 323 if the Company is not the primary beneficiary of a VIE or does not have a controlling interest. The investment is recorded at cost and the carrying amount is adjusted periodically to recognize the Company’s proportionate share of income or loss, additional contributions made and dividends and capital distributions received. The Company records the effect of any impairment or an other than temporary decrease in the value of its investment. | ||||||||||
In the event a partially owned equity affiliate were to incur a loss and the Company’s cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and the Company’s proportionate share of further losses would not be recognized unless the Company committed to provide further financial support to the affiliate. The Company would resume application of the equity method once the affiliate became profitable and the Company’s proportionate share of the affiliate’s earnings equals the Company’s cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended. | ||||||||||
See Note 8 — “Equity Method Investments” regarding impairments of investments in partially owned affiliates. | ||||||||||
Cash concentration | ||||||||||
Cash concentration—The Company places its cash in short term U.S. Treasury bonds and certificates of deposit (“CDs”). At December 31, 2014 and 2013, the Company had cash balances of $139.5 million and $196.1 million, respectively. At December 31, 2014, the $139.5 million of cash consisted of $121.5 million in U.S. Treasury bill funds and the remaining $18.0 million was held with various financial institutions, some of which may not be backed by the federal government. At December 31, 2013, the $196.1 million consisted of $182.5 million held in U.S. Treasury bill funds and $13.6 million with various financial institutions that are backed by federal government guaranties. | ||||||||||
Collective bargaining agreements | ||||||||||
Collective bargaining agreements—Approximately 34% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2014. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 82 collective bargaining agreements to which the Company is a party to, 45 will require renegotiation during 2015. The Company has not had a work stoppage in more than 20 years. | ||||||||||
Multiemployer plans | ||||||||||
Multiemployer plans — Various subsidiaries in the West segment are signatories to collective bargaining agreements. These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. Federal law requires that if the Company were to withdraw from an agreement, it would incur a withdrawal obligation. The potential withdrawal obligation may be significant. Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP. In November 2011, the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan, as discussed in Note 14 — “Commitments and Contingencies.” The Company has no plans to withdraw from any other agreements. | ||||||||||
Worker's compensation insurance | ||||||||||
Worker’s compensation insurance—The Company self-insures worker’s compensation claims to a certain level. The Company maintained a self-insurance reserve totaling $22,270 and $20,551 at December 31, 2014 and 2013, respectively. The amount is included in “Accrued expenses and other current liabilities” on the accompanying Consolidated Balance Sheets. Claims administration expenses are charged to current operations as incurred. Future payments may materially differ from these reserves. | ||||||||||
Fair value of financial instruments | ||||||||||
Fair value of financial instruments—The consolidated financial statements include financial instruments for which the fair value may differ from amounts reflected on a historical basis. Financial instruments of the Company consist of cash, accounts receivable, short-term investments, accounts payable and certain accrued liabilities. These financial instruments generally approximate fair market value based on their short-term nature. The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities. | ||||||||||
The fair value of financial instruments is measured and disclosure is made in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures”. | ||||||||||
Revenue recognition | ||||||||||
Revenue recognition | ||||||||||
Fixed-price contracts — Historically, a substantial portion of the Company’s revenue has been generated under fixed-price contracts. For fixed-price contracts, the Company recognizes revenues primarily using the percentage-of-completion method, which may result in uneven and irregular results. In the percentage-of-completion method, estimated revenues, estimated contract values and total costs incurred to date are used to calculate revenues earned. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. Total estimated costs, and thus contract revenues and income, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected. | ||||||||||
The Company considers unapproved change orders to be contract variations for which it has customer approval for a change in scope but for which it does not have an agreed upon price change. Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes revenue equal to costs incurred on unapproved change orders when realization of change order approval is probable. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers. | ||||||||||
The Company considers claims to be amounts it seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers on both scope and price changes. Claims are included in the calculation of revenues when realization is probable and amounts can be reliably determined. Revenues in excess of contract costs incurred on claims are recognized when the amounts have been agreed upon with the customer. Revenue in excess of contract costs from claims is recognized when an agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred. | ||||||||||
Other contract forms — The Company also uses unit-price, time and material, and cost reimbursable plus fee contracts. For these jobs, revenue is recognized primarily based on contractual terms. For example, time and material contract revenues are generally recognized on an input basis, based on labor hours incurred and on purchases made. Similarly, unit price contracts generally recognize revenue on an output based measurement such as the completion of specific units at a specified unit price. | ||||||||||
At any time during a fixed-price contract if an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at that time. The loss amount is recognized as an “accrued loss provision” and is included in the accrued expenses and other liabilities amount on the balance sheet. As the percentage-of-completion method is used to calculate revenues, the accrued loss provision is changed so that the gross profit for the contract remains zero in future periods. If we anticipate that there will be a loss for unit price or cost reimbursable contracts, the projected loss is recognized in full at that time. | ||||||||||
Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are identified. | ||||||||||
In all forms of contracts, the Company estimates its collectability of contract amounts at the same time that it estimates project costs. If the Company anticipates that there may be issues associated with the collectability of the full amount calculated as revenues, the Company may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection. For example, when a cost reimbursable project exceeds the client’s expected budget amount, the client frequently requests an adjustment to the final amount. Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work. In these situations, the Company may choose to defer recognition of revenue up to the time that the client pays for the services. | ||||||||||
The caption “Costs and estimated earnings in excess of billings” in the Consolidated Balance Sheet represents unbilled receivables, which arise when revenues have been recorded but the amount will not be billed until a later date. Balances represent: (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting which may not be billed under the terms of the contract until a later date, (b) incurred costs to be billed under cost reimbursement type contracts, (c) amounts arising from routine lags in billing, or (d) the revenue associated with unapproved change orders or claims when realization is probable and amounts can be reliably determined. For those contracts in which billings exceed contract revenues recognized to date, the excess amounts are included in the caption “Billings in excess of costs and estimated earnings”. | ||||||||||
In accordance with applicable terms of certain construction contracts, retainage amounts may be withheld by customers until completion and acceptance of the project. Some payments of the retainage may not be received for a significant period after completion of our portion of a project. In some jurisdictions, retainage amounts are deposited into an escrow account. | ||||||||||
Accounts receivable | Accounts receivable—Accounts receivable and contract receivables are primarily with public and private companies and governmental agencies located in the United States. Credit terms for payment of products and services are extended to customers in the normal course of business and no interest is charged. Contract receivables are generally progress billings on projects, and as a result, are short term in nature. The Company requires no collateral from its customers, but generally files statutory liens or stop notices on all construction projects when collection problems are anticipated. While a project is underway, the Company estimates its collectability of contract amounts at the same time that it estimates project costs. As discussed in the “Revenue recognition” section above, realization of the eventual cash collection may be recognized as adjustments to revenues on a contract, otherwise, the Company uses the allowance method of accounting for losses from uncollectible accounts. Under this method an allowance is provided based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2014 and 2013 was $540 and $692, respectively. | |||||||||
Significant revision in contract estimate | ||||||||||
Significant revision in contract estimate — Revenue recognition is based on the percentage-of-completion method for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate revenue. Total estimated costs, and thus contract revenues and margin, are impacted by many factors, which can cause significant changes in estimates during the life cycle of a project. | ||||||||||
For projects that were in process in at the end of the prior year, there can be a difference in revenues and profits that would have been recognized in the prior year, had current year estimates of costs to complete been known at the end of the prior year. | ||||||||||
During the year ended December 31, 2014, certain contracts had revisions in cost estimates from those projected at December 31, 2013. If the revised estimates had been applied in the prior year, the gross profit earned on these contracts would have resulted in an increase of approximately $17,266 in gross profit in 2013. Similarly, had the revised estimates as of December 31, 2013 been applied in the prior year; the gross profit earned on these contracts would have resulted in an increase of approximately $10,867 in gross profit in 2012. The revised estimates for the year ended December 31, 2012 would have resulted in a gross profit increase of approximately $8,185 in the year 2011. | ||||||||||
The following table presents the financial impact of the changes in estimates that would have been reflected in the years 2013 and 2012 had the revised estimates been applied to the particular year. | ||||||||||
Estimated net impact of change in | ||||||||||
estimate for year the year ended | ||||||||||
2013 | 2012 | |||||||||
Revised estimates in 2014 that impact 2013 | $ | 17,266 | $ | — | ||||||
Revised estimates in 2013 that impact 2012 | (10,867 | ) | 10,867 | |||||||
Revised estimates in 2012 that impact 2011 | — | (8,185 | ) | |||||||
Net impact to gross margin | $ | 6,399 | $ | 2,682 | ||||||
EPS impact to year | $ | 0.077 | $ | 0.032 | ||||||
Customer concentration | ||||||||||
Customer concentration — The Company operates in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues; however, the group that comprise the top ten customers varies from year to year. See “Note 16 — Customer Concentrations” for further discussion. | ||||||||||
Property and equipment | ||||||||||
Property and equipment—Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations. | ||||||||||
The Company assesses the recoverability of property and equipment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. We perform an undiscounted operation cash flow analysis to determine if impairment exists. The amount of property and equipment impairment, if any, is measured based on fair value and is charged to operations in the period in which property and equipment impairment is determined by management. As of December 31, 2014 and 2013, the Company’s management has not identified any material impairment of its property and equipment. | ||||||||||
Taxes collected from customers | ||||||||||
Taxes collected from customers—Taxes collected from the Company’s customers are recorded on a net basis. | ||||||||||
Share-based payments and stock-based compensation | ||||||||||
Share-based payments and stock-based compensation—In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”) after approval of the shareholders and adoption by the Company on May 3, 2013. Detailed discussion of shares issued under the Equity Plan are included in “Note 19. — Deferred Compensation Agreements and Stock-Based Compensation.” | ||||||||||
The Company issued 77,455 shares of stock in 2014 and 131,989 shares of stock in 2013 under the Equity Plan to certain senior managers and executives, who, as part of the 2011 Primoris Long-Term Retention Plan (“LTR Plan”), may elect at the end of each year to purchase Company common stock at a discounted amount using a portion of their annual bonuses. For 2014 and 2013, the plan provided for a discount of 25% from the average daily closing price for the previous December. The amount of the discount is treated as compensation to the participant. The shares were fully vested upon issuance and have a six-month restriction on any trades. | ||||||||||
As part of the quarterly compensation of the non-employee members of the Board of Directors, the Company issued 12,547 shares of common stock during 2014 and 21,590 shares of common stock during 2013 under the Equity Plan. The shares were fully vested upon issuance and have a one-year restriction on any trades. | ||||||||||
On May 3, 2013, the Board of Directors granted 100,000 Restricted Stock Units (“Units”) to an executive under the Equity Plan. Commencing annually on May 10, 2014 and ending April 30, 2017, the Units will vest in four equal installments subject to continuing employment of the executive. On May 10, 2014, 25,000 of these Units vested. On March 24, 2014, the Board of Directors granted 48,512 Units to another executive under the Equity Plan. The Units will vest 50% on September 23, 2015 and the remaining 50% on March 23, 2017 subject to continuing employment of the executive. Vesting in both grants is also subject to earlier acceleration, termination, cancellation or forfeiture as provided in the underlying Primoris Restricted Stock Unit agreement (“RSU Award Agreement”). Each Unit represents the right to receive one share of the Company’s common stock when vested. | ||||||||||
Under guidance of ASC Topic 718 “Compensation — Stock Compensation”, stock-based compensation cost is measured at the date of grant (utilizing the prior-day closing price), based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award). | ||||||||||
The fair value of the Units was based on the closing market price of our common stock on the day prior to the date of the grant. Stock compensation expense for the Units is being amortized using the straight-line method over the service period. For the twelve months ended December 31, 2014, the Company recognized $934 in compensation expense. At December 31, 2014, approximately $2.4 million of unrecognized compensation expense remains for the Units, which will be recognized over the next 2.3 years through April 30, 2017. | ||||||||||
Vested Units accrue “Dividend Equivalents” (as defined in the Equity Plan) which will be accrued as additional Units. At December 31, 2014, there were 110 Dividend Equivalent Units that were accrued based on 25,000 Units that vested on May 10, 2014. The number of Dividend Equivalent Units are calculated based on the amount of dividends that would have been paid on the vested Units divided by the fair value of the Company’s stock on the record date each quarter end. | ||||||||||
At December 31, 2014, there were 2,278,651 shares of common stock reserved to provide for the grant and exercise of all future stock option grants, stock appreciation rights (“SARS”), Units and grants of restricted shares under the Equity Plan. Other than the Units discussed above, there were no stock options, SARS or restricted shares of stock issued or outstanding at December 31, 2014. | ||||||||||
Contingent Earnout Liabilities | ||||||||||
Contingent Earnout Liabilities—As part of recent acquisitions, the Company has agreed to pay cash to the sellers upon meeting certain operating performance targets for specified periods subsequent to the acquisition date. Each quarter, the Company evaluates the fair value of the estimated contingency and records a non-operating charge for the change in the fair value. Upon meeting the target, the Company reflects the full liability on the balance sheet and records as a charge to “Selling, general and administration expense” for the change in the fair value of the liability from the prior period. | ||||||||||
Recently Issued Accounting Pronouncements | ||||||||||
Recently Issued Accounting Pronouncements | ||||||||||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus of the FASB Emerging Issues Task Force)” (“ASU 2013-04”). ASU 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. This ASU is an update to FASB ASC Topic 405, “Liabilities”. The Company adopted this guidance as of January 1, 2014 which did not have a material impact on the Company’s consolidated financial statements. | ||||||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The new standard is effective for reporting periods beginning after December 15, 2016 and early adoption is not permitted. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption would require new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. For the Company, the new standard will be effective January 1, 2017 and the Company is currently evaluating the potential impact of adoption and the implementation approach to be used. | ||||||||||
In April 2014, the FASB issued ASU 2014-08 “Presentation of Financial Statements (Topic 205)) and Property, Plant, and Equipment (Topic 360)” which changes the requirement for reporting discontinued operations. A disposal of a component of an entity or a group of components of an entity will be required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the entity or group of components of an entity meets the criteria to be classified as held for sale or when it is disposed of by sale or other than by sale. The update also requires additional disclosures about discontinued operations, a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements, and an entity’s significant continuing involvement with a discontinued operation. The update is effective prospectively for fiscal years beginning on or after December 15, 2014, including interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in previously issued financial statements. The Company adopted this guidance effective January 1, 2015. This guidance will impact the disclosure and presentation of how we report any future disposals of components or groups of components of our business. | ||||||||||
In August 2014, the FASB issued ASU 2014-15 “Presentation of Financial Statements — Going Concern (Subtopic 205-40)” to address the diversity in practice in determining when there is substantial doubt about an entity’s ability to continue as a going concern and when and how an entity must disclose certain relevant conditions and events. This update requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued). If such conditions or events exist, an entity should disclose that there is substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued), along with the principal conditions or events that raise substantial doubt, management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations and management’s plans that are intended to mitigate those conditions or events. The guidance is effective for annual and interim periods ending after December 15, 2016. This guidance will impact the disclosure and presentation of how we report any substantial doubt about our ability to continue as a going concern, if such substantial doubt were to exist. The Company will adopt this guidance effective January 1, 2017. | ||||||||||
In February 2015, the FASB issued ASU 2015-02 “Consolidation (Topic 810): Amendment to the Consolidation Analysis” which amends existing consolidation guidance, including amending the guidance related to determining whether an entity is a variable interest entity. The update is effective for interim and annual periods beginning after December 15, 2015, although early adoption is permitted. The guidance may be applied using a modified retrospective approach whereby the entity records a cumulative effect of adoption at the beginning of the fiscal year of initial application. A reporting entity may also apply the amendments on a full retrospective basis. The Company is currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements. | ||||||||||
Nature_of_Business_Tables
Nature of Business (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Nature of Business | |||||
Schedule of list of primary operating subsidiaries and their reportable operating segment | |||||
Subsidiary | Operating Segment | Prior Operating Segment | |||
ARB, Inc., including Stellaris, LLC (“ARB”) | West | West | |||
ARB Structures, Inc. | West | West | |||
Q3 Contracting, Inc. (“Q3C”) | West | West | |||
Rockford Corporation (“Rockford”) | West | West | |||
Vadnais Trenchless Services, Inc. (“Vadnais”); acquired in 2014 | West | West | |||
Silva Group (“Silva”) | East | East | |||
Cardinal Contractors, Inc. | East | East | |||
BW Primoris, LLC (“BWP”) | East | East | |||
James Construction Group, LLC (“JCG”): | |||||
JCG Heavy Civil Division | East | East | |||
JCG Infrastructure and Maintenance Division | East | East | |||
JCG Industrial Division | Energy | East | |||
Primoris Energy Services Corporation (“PES”) | Energy | East | |||
OnQuest, Inc. | Energy | Engineering | |||
OnQuest, Canada, ULC (Born Heaters Canada, ULC prior to 2013) | Energy | Engineering | |||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Summary of Significant Accounting Policies | ||||||||||
Schedule of goodwill by reporting unit | ||||||||||
Reporting Unit | Segment | December 31, | December 31, | |||||||
2014 | 2013 | |||||||||
Rockford | West | $ | 32,079 | $ | 32,079 | |||||
Q3C | West | 13,160 | 13,160 | |||||||
JCG (includes JCG Heavy Civil and Infrastructure and Maintenance divisions) | East | 42,866 | 42,866 | |||||||
Cardinal Contractors, Inc. | East | 401 | 401 | |||||||
PES (includes PPS, JCG Industrial, FSSI, Saxon and Surber divisions) | Energy | 28,463 | 27,679 | |||||||
OnQuest Canada, ULC | Energy | 2,441 | 2,441 | |||||||
Total Goodwill | $ | 119,410 | $ | 118,626 | ||||||
Schedule of the financial impact of the changes in estimates that would have been reflected in the prior years had the revised estimates been applied to the particular year | ||||||||||
Estimated net impact of change in | ||||||||||
estimate for year the year ended | ||||||||||
2013 | 2012 | |||||||||
Revised estimates in 2014 that impact 2013 | $ | 17,266 | $ | — | ||||||
Revised estimates in 2013 that impact 2012 | (10,867 | ) | 10,867 | |||||||
Revised estimates in 2012 that impact 2011 | — | (8,185 | ) | |||||||
Net impact to gross margin | $ | 6,399 | $ | 2,682 | ||||||
EPS impact to year | $ | 0.077 | $ | 0.032 | ||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Fair Value Measurements | |||||||||||||
Schedule of financial assets and liabilities which are required to be measured at fair value | |||||||||||||
Fair Value Measurements at Reporting Date | |||||||||||||
Amount | Quoted Prices | Significant | Significant | ||||||||||
Recorded | in Active Markets | Other | Unobservable | ||||||||||
on Balance | for Identical Assets | Observable | Inputs | ||||||||||
Sheet | (Level 1) | Inputs | (Level 3) | ||||||||||
(Level 2) | |||||||||||||
Assets as of December 31, 2014: | |||||||||||||
Cash and cash equivalents | $ | 139,465 | $ | 139,465 | — | — | |||||||
Short-term investments | $ | 30,992 | $ | 30,992 | — | — | |||||||
Liabilities as of December 31, 2014: | |||||||||||||
Contingent consideration | $ | 6,922 | — | — | $ | 6,922 | |||||||
Assets as of December 31, 2013: | |||||||||||||
Cash and cash equivalents | $ | 196,077 | $ | 196,077 | — | — | |||||||
Short-term investments | $ | 18,686 | $ | 18,686 | — | — | |||||||
Liabilities as of December 31, 2013: | |||||||||||||
Contingent consideration | $ | 9,233 | — | — | $ | 9,233 | |||||||
Schedule of changes to the Company's contingent consideration liability Level 3 fair value measurements | |||||||||||||
Significant Unobservable Inputs | |||||||||||||
(Level 3) | |||||||||||||
2014 | 2013 | ||||||||||||
Contingent Consideration Liability | |||||||||||||
Beginning balance | $ | 9,233 | $ | 23,431 | |||||||||
Additions to contingent consideration liability: | |||||||||||||
FSSI acquisition | — | 702 | |||||||||||
Vadnais acquisition | 679 | — | |||||||||||
Surber and Ram-Fab acquisitions | 1,154 | — | |||||||||||
Change in fair value of contingent consideration liability | 856 | 2,500 | |||||||||||
Reductions in the contingent consideration liability: | |||||||||||||
Payment to Rockford sellers for meeting performance targets | — | (6,900 | ) | ||||||||||
Payment to Sprint sellers for meeting performance targets | — | (4,000 | ) | ||||||||||
Payment to Q3C sellers for meeting performance targets | (5,000 | ) | — | ||||||||||
Reduction due to non-attainment of performance targets | — | (6,500 | ) | ||||||||||
Ending balance | $ | 6,922 | $ | 9,233 | |||||||||
Business_Combinations_Tables
Business Combinations (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Business Combinations | |||||||||||||
Summary of the cash paid for acquisitions | |||||||||||||
Year ended December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
FSSI — purchased March 11, 2013 | $ | — | $ | 1,675 | |||||||||
Q3C — additional cash paid August 2013 for prior year November 2012 purchase | — | 598 | (*) | ||||||||||
Vadnais — purchased June 5, 2014 | 6,355 | — | |||||||||||
Surber — purchased July 28, 2014 | 3,642 | — | |||||||||||
Ram-Fab — purchased August 29, 2014 | 3,569 | — | |||||||||||
Williams — purchased September 19, 2014 | 1,030 | — | |||||||||||
$ | 14,596 | $ | 2,273 | ||||||||||
(*) In August 2013, additional cash of $598 was paid to the Q3C sellers and goodwill was increased to $13,160 in 2013. | |||||||||||||
Summary of the fair value of assets acquired and the liabilities assumed | |||||||||||||
2014 | 2013 | ||||||||||||
Vadnais | Third Quarter | FSSI | |||||||||||
Acquisitions | Acquisitions | Acquisition | |||||||||||
Cash | $ | — | $ | 3 | $ | — | |||||||
Accounts receivable | — | 2,768 | — | ||||||||||
Inventory and other assets | — | 711 | 302 | ||||||||||
Prepaid expenses | — | 57 | — | ||||||||||
Property, plant and equipment | 6,355 | 5,447 | 448 | ||||||||||
Other assets | — | 4 | — | ||||||||||
Intangible assets | 679 | 1,100 | 1,600 | ||||||||||
Goodwill | — | 784 | 1,087 | ||||||||||
Accounts payable | — | (570 | ) | (1,060 | ) | ||||||||
Accrued expenses | — | (905 | ) | — | |||||||||
Total | $ | 7,034 | $ | 9,399 | $ | 2,377 | |||||||
Schedule of the acquired intangible assets categories, fair value and average amortization periods | |||||||||||||
2014 Fair Value | 2013 Fair Value | ||||||||||||
Amortization | Vadnais | Third Quarter | FSSI | ||||||||||
Period | Acquisition | 2014 | Acquisition | ||||||||||
Acquisitions | |||||||||||||
Tradename | 3 to 10 years | $ | — | $ | 650 | $ | 550 | ||||||
Non-compete agreements | 2 to 5 years | — | 250 | 100 | |||||||||
Customer relationships | 5 to 10 years | 679 | 200 | 950 | (*) | ||||||||
Total | $ | 679 | $ | 1,100 | $ | 1,600 | |||||||
(*) At December 31, 2013, the Company determined the value attributed to the customer relationships was impaired and the net book value of the intangible of $850 was expensed to “Selling, general and administrative expenses” at December 31, 2013. | |||||||||||||
Schedule of pro forma results | |||||||||||||
2014 | 2013 | ||||||||||||
(unaudited) | (unaudited) | ||||||||||||
Revenues | $ | 2,110,072 | $ | 1,974,760 | |||||||||
Income before provision for income taxes | $ | 101,948 | $ | 114,197 | |||||||||
Net income attributable to Primoris | $ | 62,924 | $ | 66,379 | |||||||||
Weighted average common shares outstanding: | |||||||||||||
Basic | 51,607 | 51,540 | |||||||||||
Diluted | 51,747 | 51,610 | |||||||||||
Earnings per share attributable to Primoris: | |||||||||||||
Basic | $ | 1.22 | $ | 1.29 | |||||||||
Diluted | $ | 1.22 | $ | 1.29 | |||||||||
Accounts_Receivable_Tables
Accounts Receivable (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Receivable. | ||||||||
Summary of accounts receivable | ||||||||
2014 | 2013 | |||||||
Contracts receivable, net of allowance for doubtful accounts of $540 and $692 for 2014 and 2013, respectively | $ | 287,806 | $ | 257,354 | ||||
Retention | 49,104 | 47,054 | ||||||
336,910 | 304,408 | |||||||
Other accounts receivable | 472 | 547 | ||||||
$ | 337,382 | $ | 304,955 | |||||
Costs_and_Estimated_Earnings_o1
Costs and Estimated Earnings on Uncompleted Contracts (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Costs and Estimated Earnings on Uncompleted Contracts | ||||||||
Schedule of costs and estimated earnings on uncompleted contracts | ||||||||
2014 | 2013 | |||||||
Costs incurred on uncompleted contracts | $ | 5,194,769 | $ | 4,741,249 | ||||
Gross profit recognized | 613,510 | 582,430 | ||||||
5,808,279 | 5,323,679 | |||||||
Less: billings to date | (5,898,220 | ) | (5,439,898 | ) | ||||
$ | (89,941 | ) | $ | (116,219 | ) | |||
Schedule of costs and estimated earnings on uncompleted contracts included in consolidated balance sheet | ||||||||
2014 | 2013 | |||||||
Costs and estimated earnings in excess of billings | $ | 68,654 | $ | 57,146 | ||||
Billings in excess of cost and estimated earnings | (158,595 | ) | (173,365 | ) | ||||
$ | (89,941 | ) | $ | (116,219 | ) | |||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Property and Equipment | ||||||||||
Summary of property and equipment | ||||||||||
2014 | 2013 | Useful Life | ||||||||
Land and buildings | $ | 40,604 | $ | 36,883 | 30 years | |||||
Leasehold improvements | 11,267 | 7,958 | Lease life | |||||||
Office equipment | 3,651 | 3,171 | 3 - 5 years | |||||||
Construction equipment | 308,915 | 247,997 | 3 - 7 years | |||||||
Transportation equipment | 83,845 | 67,550 | 3 - 18 years | |||||||
448,282 | 363,559 | |||||||||
Less: accumulated depreciation and amortization | (176,851 | ) | (137,047 | ) | ||||||
Net property and equipment | $ | 271,431 | $ | 226,512 | ||||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Intangible Assets | ||||||||||||
Summary of intangible asset categories, amounts and the average amortization periods | ||||||||||||
Amortization | Amount | |||||||||||
Period | 2014 | 2013 | ||||||||||
Tradename | 3 to 10 years | $ | 18,194 | $ | 21,023 | |||||||
Non-compete agreements | 2 to 5 years | 1,074 | 2,575 | |||||||||
Customer relationships | 5 to 15 years | 20,313 | 21,705 | |||||||||
Total | $ | 39,581 | $ | 45,303 | ||||||||
Schedule of estimated future amortization expense for intangible assets | ||||||||||||
For the Years Ending | Estimated | |||||||||||
December 31, | Intangible | |||||||||||
Amortization | ||||||||||||
Expense | ||||||||||||
2015 | $ | 6,414 | ||||||||||
2016 | 5,980 | |||||||||||
2017 | 5,703 | |||||||||||
2018 | 5,239 | |||||||||||
2019 | 3,388 | |||||||||||
Thereafter | 12,857 | |||||||||||
$ | 39,581 | |||||||||||
Accounts_Payable_and_Accrued_L1
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Payable and Accrued Liabilities | ||||||||
Summary of accrued expenses and other current liabilities | ||||||||
2014 | 2013 | |||||||
Payroll and related employee benefits | $ | 37,261 | $ | 36,556 | ||||
Insurance, including self-insurance reserves | 34,377 | 33,880 | ||||||
Reserve for estimated losses on uncompleted contracts | 2,363 | 1,392 | ||||||
Corporate income taxes and other taxes | 3,775 | 13,305 | ||||||
Accrued overhead cost | 1,059 | 1,165 | ||||||
Other | 4,566 | 4,781 | ||||||
$ | 83,401 | $ | 91,079 | |||||
Capital_Leases_Tables
Capital Leases (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Capital Leases | |||||
Schedule of future minimum lease payments required under capital leases together with their present value | |||||
2015 | $ | 1,733 | |||
2016 | 672 | ||||
Total minimum lease payments | $ | 2,405 | |||
Amounts representing interest | (98 | ) | |||
Net present value of minimum lease payments | 2,307 | ||||
Less: current portion of capital lease obligations | (1,650 | ) | |||
Long-term capital lease obligations | $ | 657 | |||
Credit_Arrangements_Tables
Credit Arrangements (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Credit Arrangements | ||||||||
Schedule of credit facilities and long-term debt | ||||||||
2014 | 2013 | |||||||
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.78% to 3.51% per annum. Monthly principal and interest payments are due in the amount of $2,521 per month until the maturity dates, which range from November 30, 2016 to December 13, 2020. The notes are secured by certain construction equipment of the Company | $ | 112,420 | $ | 144,526 | ||||
Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.94% to 2.75% per annum. Monthly principal and interest payments are due in the amount of $999 per month until the maturity dates, which range from March 31, 2019 to September 24, 2021. The notes are secured by certain construction equipment assets of the Company. | 55,518 | — | ||||||
Senior Secured Notes payable to an insurance finance company, with an interest rate of 3.65% per annum. Quarterly interest payments began March 31, 2013. Principal repayments start on December 28, 2016 until the maturity date on December 28, 2022. The notes are secured by the assets of the Company | 50,000 | 50,000 | ||||||
Senior Secured Notes payable to an insurance finance company, with an interest rate of 3.85% per annum. Quarterly interest payments began October 25, 2013. Principal repayments start on July 25, 2017 until the maturity date on July 25, 2023. The notes are secured by the assets of the Company | 25,000 | 25,000 | ||||||
242,938 | 219,526 | |||||||
Less: current portion | (38,909 | ) | (28,475 | ) | ||||
Long-term debt, net of current portion | $ | 204,029 | $ | 191,051 | ||||
Schedule of maturities of long-term debt | ||||||||
Year Ending | ||||||||
December 31, | ||||||||
2015 | $ | 38,909 | ||||||
2016 | 46,315 | |||||||
2017 | 41,282 | |||||||
2018 | 38,566 | |||||||
2019 | 33,965 | |||||||
Thereafter | 43,901 | |||||||
$ | 242,938 | |||||||
Noncontrolling_Interests_Table
Noncontrolling Interests (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Noncontrolling Interests | ||||||||
Schedule of the Blythe joint venture operating activities included in the Company's consolidated statements of income | ||||||||
2014 | 2013 | |||||||
Revenues | $ | 1,169 | $ | 58,704 | ||||
Net income attributable to noncontrolling interests | 526 | 5,020 | ||||||
Schedule of the carrying value of the assets and liabilities associated with the operations of the Blythe joint venture included in the Company's consolidated balance sheets | ||||||||
2014 | 2013 | |||||||
Cash | $ | 60 | $ | 3,025 | ||||
Accounts receivable | — | 1,085 | ||||||
Current liabilities | 119 | 2,041 | ||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Commitments and Contingencies. | ||||||||||||||
Schedule of future minimum lease payments required under non-cancelable operating leases | ||||||||||||||
For the Years Ending | Real | Real | Equipment | Total | ||||||||||
December 31, | Property | Property | Commitments | |||||||||||
(Related | ||||||||||||||
Party) | ||||||||||||||
2015 | $ | 3,540 | $ | 1,449 | $ | 7,048 | $ | 12,037 | ||||||
2016 | 2,771 | 1,469 | 2,614 | 6,854 | ||||||||||
2017 | 2,585 | 1,437 | 1,278 | 5,300 | ||||||||||
2018 | 2,212 | 1,146 | 501 | 3,859 | ||||||||||
2019 | 1,070 | 879 | 454 | 2,403 | ||||||||||
Thereafter | 335 | 2,782 | 554 | 3,671 | ||||||||||
$ | 12,513 | $ | 9,162 | $ | 12,449 | $ | 34,124 | |||||||
Reportable_Operating_Segments_
Reportable Operating Segments (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Reportable Operating Segments | |||||||||||||||||
Schedule of revenue by segment | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Business Segment | Revenue | % of | Revenue | % of | Revenue | % of | |||||||||||
Revenue | Revenue | Revenue | |||||||||||||||
West | $ | 964,093 | 46.2 | % | $ | 1,151,433 | 59.2 | % | $ | 832,860 | 54.0 | % | |||||
East | 489,926 | 23.5 | % | 430,438 | 22.1 | % | 469,963 | 30.5 | % | ||||||||
Energy | 632,175 | 30.3 | % | 362,349 | 18.7 | % | 238,911 | 15.5 | % | ||||||||
Total | $ | 2,086,194 | 100.0 | % | $ | 1,944,220 | 100.0 | % | $ | 1,541,734 | 100.0 | % | |||||
Schedule of gross profit by segment | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Business Segment | Gross Profit | % of | Gross Profit | % of | Gross Profit | % of | |||||||||||
Segment | Segment | Segment | |||||||||||||||
Revenue | Revenue | Revenue | |||||||||||||||
West | $ | 143,468 | 14.9 | % | $ | 190,747 | 16.6 | % | $ | 119,328 | 14.3 | % | |||||
East | 25,749 | 5.3 | % | 24,309 | 5.6 | % | 40,185 | 8.6 | % | ||||||||
Energy | 66,823 | 10.6 | % | 40,959 | 11.3 | % | 33,197 | 13.9 | % | ||||||||
Total | $ | 236,040 | 11.3 | % | $ | 256,015 | 13.2 | % | $ | 192,710 | 12.5 | % | |||||
Schedule of amount of goodwill recorded by segment | |||||||||||||||||
Segment | 2014 | 2013 | |||||||||||||||
West | $ | 45,239 | $ | 45,239 | |||||||||||||
East | 43,267 | 43,267 | |||||||||||||||
Energy | 30,904 | 30,120 | |||||||||||||||
Total | $ | 119,410 | $ | 118,626 | |||||||||||||
Customer_Concentrations_Tables
Customer Concentrations (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Customer Concentrations | |||||||||||||||||
Schedule of revenue from customers | |||||||||||||||||
Description of | 2014 | 2013 | 2012 | ||||||||||||||
Customer’s | |||||||||||||||||
Business | Amount | Percentage | Amount | Percentage | Amount | Percentage | |||||||||||
Texas DOT | $ | 183,221 | 8.8 | % | $ | 140,458 | 7.2 | % | $ | 88,783 | 5.8 | % | |||||
Petrochemical producer | 164,634 | 7.9 | % | * | * | * | * | ||||||||||
Private gas and electric utility | 145,677 | 7.0 | % | 104,828 | 5.4 | % | * | * | |||||||||
Public gas and electric utility | 144,567 | 6.9 | % | 153,908 | 7.9 | % | 224,845 | 14.6 | % | ||||||||
Pipeline operator | 121,220 | 5.8 | % | * | * | * | * | ||||||||||
Gas utility | * | * | 143,171 | 7.4 | % | 86,786 | 5.6 | % | |||||||||
Private gas and electric utility | * | * | * | * | 106,804 | 6.9 | % | ||||||||||
Gas utility | * | * | 149,794 | 7.7 | % | * | * | ||||||||||
Louisiana DOT | * | * | * | * | 170,899 | 11.1 | % | ||||||||||
$ | 759,319 | 36.4 | % | $ | 692,159 | 35.6 | % | $ | 678,117 | 44.0 | % | ||||||
(*)Indicates a customer with less than 5% of revenues during such period. | |||||||||||||||||
Multiemployer_Plans_Tables
Multiemployer Plans (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Multiemployer Plans | |||||||||||||||||||||||
Schedule of the entity's contributions to different pension funds | |||||||||||||||||||||||
EIN / | Pension Protection Act Zone | FIP/RP | Surcharge | Collective | Contributions of the Company | ||||||||||||||||||
Pension Plan | Status | Status | Bargaining | ||||||||||||||||||||
Pending / | Agreement | ||||||||||||||||||||||
Expiration | |||||||||||||||||||||||
Pension Fund Name | Number | 2014 | 2013 | Implemented | Imposed | Date | 2014 | 2013 | 2012 | ||||||||||||||
Central Pension Fund of the International Union of Operating Engineers and Participating Employers | 36-6052390/001 | Green as of February 1, 2013 | Green as of February 1, 2012 | No | No | 5/31/17 | $ | 6,204 | $ | 7,286 | $ | 2,206 | |||||||||||
Laborers International Union of North America National (Industrial) Pension Fund | 52-6074345/001 | Red as of January 1, 2013 | Red as of January 1, 2012 | Yes | No | 5/31/17 | 3,382 | 5,025 | 1,995 | ||||||||||||||
Southern California Pipetrades Trust Funds | 51-6108443/001 | Green as of January 1, 2013 | Green as of January 1, 2012 | No | No | 7/30/16 | 5,239 | 6,179 | 5,298 | ||||||||||||||
Pipeline Industry Benefit Fund | 73-6146433/001 | Green as of January 1, 2013 | Green as of January 1, 2012 | No | No | 5/31/17 | 2,686 | 4,605 | 1,747 | ||||||||||||||
Laborers Pension Trust Fund for Northern California | 94-6277608/001 | Yellow as of June 10, 2013 | Yellow as of June 10, 2012 | Yes | No | 6/30/19 | 3,116 | 3,869 | 4,816 | ||||||||||||||
Construction Laborers Pension Trust for Southern California | 43-6159056/001 | Green as of January 1, 2013 | Green as of January 1, 2012 | No | No | 6/30/15 | 2,444 | 2,951 | 2,952 | ||||||||||||||
Contributions to significant plans | $ | 23,071 | $ | 29,915 | $ | 19,014 | |||||||||||||||||
Contributions to other multiemployer plans | 15,036 | 13,004 | 11,089 | ||||||||||||||||||||
Total contributions made | $ | 38,107 | $ | 42,919 | $ | 30,103 | |||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Schedule of components of the provision for income taxes | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current provision (benefit) | |||||||||||
Federal | $ | 28,203 | $ | 41,323 | $ | 27,524 | |||||
State | 5,398 | 10,051 | 7,125 | ||||||||
Foreign | 1,074 | 772 | 67 | ||||||||
$ | 34,675 | $ | 52,146 | $ | 34,716 | ||||||
Deferred provision (benefit) | |||||||||||
Federal | 3,586 | (6,099 | ) | (451 | ) | ||||||
State | 457 | (874 | ) | (366 | ) | ||||||
Foreign | (72 | ) | 67 | (62 | ) | ||||||
3,971 | (6,906 | ) | (879 | ) | |||||||
Change in valuation allowance | — | (344 | ) | — | |||||||
Total | $ | 38,646 | $ | 44,896 | $ | 33,837 | |||||
Schedule of reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income | |||||||||||
2014 | 2013 | 2012 | |||||||||
U.S. federal statutory income tax rate | 35 | % | 35 | % | 35 | % | |||||
State taxes, net of federal income tax impact | 4.66 | % | 4.72 | % | 4.87 | % | |||||
Foreign tax credit | (0.98 | )% | (0.73 | )% | (0.01 | )% | |||||
Canadian income tax | 0.98 | % | 0.73 | % | 0.01 | % | |||||
Domestic production activities deduction | (3.07 | )% | (3.67 | )% | (2.97 | )% | |||||
Nondeductible meals & entertainment | 3.38 | % | 2.58 | % | 2.12 | % | |||||
Other items | (2.01 | )% | 0.56 | % | (1.67 | )% | |||||
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests | 37.96 | % | 39.19 | % | 37.35 | % | |||||
Impact of income from noncontrolling interests on effective tax rate | (0.19 | )% | (1.65 | )% | (0.61 | ) | |||||
Effective tax rate on income before provision for income taxes and noncontrolling interests | 37.77 | % | 37.54 | % | 36.74 | % | |||||
Schedule of tax effect of temporary differences that give rise to deferred income taxes | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Accrued workers compensation | $ | 6,460 | $ | 6,561 | |||||||
Insurance reserves | 3,698 | 3,448 | |||||||||
Other accrued liabilities | 15,729 | 20,466 | |||||||||
State income taxes | 654 | 1,551 | |||||||||
Capital loss carryforward | 1,139 | — | |||||||||
Foreign tax credit | 575 | 522 | |||||||||
Total deferred tax assets | 28,255 | 32,548 | |||||||||
Deferred tax liabilities | |||||||||||
Depreciation and amortization | (33,657 | ) | (28,844 | ) | |||||||
Prepaid expenses and other | (527 | ) | (663 | ) | |||||||
Total deferred tax liabilities | (34,184 | ) | (29,507 | ) | |||||||
Total | $ | (5,929 | ) | $ | 3,041 | ||||||
Schedule of reconciliation of the beginning and ending amounts and aggregate changes in the balance of unrecognized tax benefits | |||||||||||
2014 | 2013 | 2012 | |||||||||
Beginning balance | $ | 5,382 | $ | 72 | $ | 467 | |||||
Increases in balances for tax positions taken during the current year | — | 1,340 | — | ||||||||
Increases in balances for tax positions taken during prior years | — | 3,993 | — | ||||||||
Settlements and effective settlements with tax authorities | (4,878 | ) | — | — | |||||||
Lapse of statute of limitations | (48 | ) | (23 | ) | (395 | ) | |||||
Total | $ | 456 | $ | 5,382 | $ | 72 | |||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Dividends and Earnings Per Share | |||||||||||
Schedule of computation of basic and diluted earnings per share | |||||||||||
2014 | 2013 | 2012 | |||||||||
Numerator: | |||||||||||
Net income | $ | 63,682 | $ | 74,680 | $ | 58,267 | |||||
Net income attributable to noncontrolling interests | (526 | ) | (5,020 | ) | (1,511 | ) | |||||
Net income attributable to Primoris | $ | 63,156 | $ | 69,660 | $ | 56,756 | |||||
Denominator (shares in thousands): | |||||||||||
Weighted average shares for computation of basic earnings per share | 51,607 | 51,540 | 51,391 | ||||||||
Dilutive effect of shares issued to independent directors | 2 | 3 | 11 | ||||||||
Dilutive effect of unvested restricted stock units (1) | 138 | 66 | — | ||||||||
Dilutive effect of shares issued to Q3C sellers (2) | — | 1 | 4 | ||||||||
Weighted average shares for computation of diluted earnings per share | 51,747 | 51,610 | 51,406 | ||||||||
Earnings per share attributable to Primoris: | |||||||||||
Basic | $ | 1.22 | $ | 1.35 | $ | 1.1 | |||||
Diluted | $ | 1.22 | $ | 1.35 | $ | 1.1 | |||||
-1 | Represents the effect of the grant of 100,000 shares of Restricted Stock Units on May 3, 2013 and 48,512 Units on March 24, 2014. | ||||||||||
-2 | Represents the effect of the 29,273 unregistered shares of common stock issued in February 2013 as part of the purchase consideration for the Q3C acquisition in 2012. | ||||||||||
Selected_Quarterly_Financial_I1
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Selected Quarterly Financial Information (Unaudited) | ||||||||||||||
Schedule of selected unaudited quarterly consolidated financial information | ||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | ||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
Revenues | $ | 470,074 | $ | 515,291 | $ | 613,237 | $ | 487,592 | ||||||
Gross profit | 49,757 | 61,194 | 75,473 | 49,616 | ||||||||||
Net income | 11,265 | 16,003 | 27,390 | 9,024 | ||||||||||
Net income attributable to Primoris | 10,833 | 16,003 | 27,390 | 8,930 | ||||||||||
Earnings per share: | ||||||||||||||
Basic earnings per share | $ | 0.21 | $ | 0.31 | $ | 0.53 | $ | 0.17 | ||||||
Diluted earnings per share | $ | 0.21 | $ | 0.31 | $ | 0.53 | $ | 0.17 | ||||||
Weighted average shares outstanding (in thousands) | ||||||||||||||
Basic | 51,610 | 51,655 | 51,606 | 51,561 | ||||||||||
Diluted | 51,714 | 51,804 | 51,759 | 51,710 | ||||||||||
Year Ended December 31, 2013 | ||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | ||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
Revenues | $ | 409,995 | $ | 445,013 | $ | 551,333 | $ | 537,879 | ||||||
Gross profit | 46,096 | 59,537 | 75,465 | 74,917 | ||||||||||
Net income | 10,040 | 15,893 | 23,193 | 25,554 | ||||||||||
Net income attributable to Primoris | 9,770 | 15,564 | 21,845 | 22,481 | ||||||||||
Earnings per share: | ||||||||||||||
Basic earnings per share | $ | 0.19 | $ | 0.30 | $ | 0.42 | $ | 0.44 | ||||||
Diluted earnings per share | $ | 0.19 | $ | 0.30 | $ | 0.42 | $ | 0.44 | ||||||
Weighted average shares outstanding (in thousands) | ||||||||||||||
Basic | 51,456 | 51,562 | 51,568 | 51,571 | ||||||||||
Diluted | 51,467 | 51,626 | 51,671 | 51,671 | ||||||||||
Year Ended December 31, 2012 | ||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | ||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
Revenues | $ | 291,573 | $ | 337,436 | $ | 431,842 | $ | 480,883 | ||||||
Gross profit | 37,596 | 44,004 | 56,291 | 54,819 | ||||||||||
Net income | 10,530 | 11,857 | 17,948 | 17,932 | ||||||||||
Net income attributable to Primoris | 10,486 | 11,733 | 17,516 | 17,021 | ||||||||||
Earnings per share: | ||||||||||||||
Basic earnings per share | $ | 0.21 | $ | 0.23 | $ | 0.34 | $ | 0.33 | ||||||
Diluted earnings per share | $ | 0.20 | $ | 0.23 | $ | 0.34 | $ | 0.33 | ||||||
Weighted average shares outstanding (in thousands) | ||||||||||||||
Basic | 51,096 | 51,435 | 51,398 | 51,404 | ||||||||||
Diluted | 51,337 | 51,435 | 51,404 | 51,418 | ||||||||||
Nature_of_Business_Details
Nature of Business (Details) (USD $) | 6 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2014 | Jun. 05, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Jan. 22, 2014 | Dec. 31, 2013 |
segment | segment | item | |||||
Nature of Business | |||||||
Number of operating segments | 3 | 3 | |||||
Capitalized property, plant and equipment | $448,282 | $448,282 | $363,559 | ||||
Vadnais Corporation | |||||||
Nature of Business | |||||||
Payments to Acquire Businesses, Gross | 6,355 | ||||||
Estimated fair value of the potential contingent consideration | 679 | 729 | |||||
Contingent earnout period (in years) | 1 year | 2 years | |||||
Surber, Ram-Fab and Williams | |||||||
Nature of Business | |||||||
Amount of purchase of assets and liabilities | 8,244 | ||||||
Number of small purchases made | 3 | ||||||
PES | |||||||
Nature of Business | |||||||
Number of subsidiaries that were merged into PES | 2 | ||||||
Blythe | |||||||
Nature of Business | |||||||
Ownership percentage | 50.00% | 50.00% | |||||
BWP | Blaus Wasser, LLC | |||||||
Nature of Business | |||||||
Amount of purchase of assets and liabilities | 5,000 | ||||||
Capitalized property, plant and equipment | $12,900 | $12,900 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
Operating cycle | ||||
Minimum liquidation period of assets in which significant working capital has been invested | 1 year | |||
Goodwill and other intangible assets | ||||
Intangible asset impairment | $808 | |||
Goodwill impairment charge | 0 | 0 | 0 | |
FSSI acquisition | Customer relationship | ||||
Goodwill and other intangible assets | ||||
Intangible asset impairment | $808 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 1 Months Ended | 0 Months Ended | 3 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Mar. 11, 2013 | Jun. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill and other intangible assets | |||||
Goodwill | $119,410 | $118,626 | |||
West | |||||
Goodwill and other intangible assets | |||||
Goodwill | 45,239 | 45,239 | |||
East | |||||
Goodwill and other intangible assets | |||||
Goodwill | 43,267 | 43,267 | |||
Energy | |||||
Goodwill and other intangible assets | |||||
Goodwill | 30,904 | 30,120 | |||
Rockford | West | |||||
Goodwill and other intangible assets | |||||
Goodwill | 32,079 | 32,079 | |||
Q3 Contracting | |||||
Goodwill and other intangible assets | |||||
Goodwill | 13,160 | ||||
Cash paid to sellers as part of tax-related elections that were made under the terms of the purchase agreement | 598 | ||||
Q3 Contracting | West | |||||
Goodwill and other intangible assets | |||||
Goodwill | 13,160 | 13,160 | |||
James Construction Group LLC | East | |||||
Goodwill and other intangible assets | |||||
Goodwill | 42,866 | 42,866 | |||
FSSI acquisition | |||||
Goodwill and other intangible assets | |||||
Goodwill | 1,087 | ||||
Cash paid to sellers as part of tax-related elections that were made under the terms of the purchase agreement | 1,025 | 650 | |||
Cardinal Contractors | East | |||||
Goodwill and other intangible assets | |||||
Goodwill | 401 | 401 | |||
PES | Energy | |||||
Goodwill and other intangible assets | |||||
Goodwill | 28,463 | 27,679 | |||
OnQuest Canada, ULC | Energy | |||||
Goodwill and other intangible assets | |||||
Goodwill | $2,441 | $2,441 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | ||||||||||||||||
Functional currencies and foreign currency translation | ||||||||||||||||
Foreign exchange gain (loss) | $374,000 | $153,000 | ($36,000) | |||||||||||||
Cash concentration | ||||||||||||||||
Cash balances | 139,465,000 | 196,077,000 | 157,551,000 | 139,465,000 | 196,077,000 | 157,551,000 | 120,306,000 | |||||||||
Treasury bill funds | 121,500,000 | 182,500,000 | 121,500,000 | 182,500,000 | ||||||||||||
Cash balances with various financial institutions that are backed by the federal government guaranties | 18,000,000 | 13,600,000 | 18,000,000 | 13,600,000 | ||||||||||||
Collective bargaining agreements | ||||||||||||||||
Percentage of labor force subject to collective bargaining agreements | 34.00% | |||||||||||||||
Number of collective bargaining agreements | 82 | |||||||||||||||
Number of collective bargaining agreements requiring renegotiation during the year | 45 | |||||||||||||||
Number of years without work stoppages | 20 years | |||||||||||||||
Worker's compensation insurance | ||||||||||||||||
Self insurance reserve | 22,270,000 | 20,551,000 | 22,270,000 | 20,551,000 | ||||||||||||
Accounts receivable | ||||||||||||||||
Allowance for doubtful accounts | 540,000 | 692,000 | 540,000 | 692,000 | ||||||||||||
Other contract forms | ||||||||||||||||
Future gross profit on contracts due to change from accrued loss provision | 0 | |||||||||||||||
Significant revision in contract estimate | ||||||||||||||||
Increase in gross profit earned, if revised estimates had been applied in prior year | 17,266,000 | 10,867,000 | 17,266,000 | 10,867,000 | 8,185,000 | |||||||||||
Estimated net impact of change in estimate | ||||||||||||||||
Revised estimates in current year that impact prior period | 17,266,000 | 10,867,000 | 17,266,000 | 10,867,000 | ||||||||||||
Revised estimates in current year that impact prior period | -10,867,000 | -8,185,000 | -10,867,000 | -8,185,000 | ||||||||||||
Net impact to gross margin | 6,399,000 | 2,682,000 | 6,399,000 | 2,682,000 | ||||||||||||
EPS impact to year | $0.08 | $0.03 | $0.08 | $0.03 | ||||||||||||
Foreign operations | ||||||||||||||||
Assets | 1,111,187,000 | 1,050,693,000 | 1,111,187,000 | 1,050,693,000 | ||||||||||||
Revenues | 487,592,000 | 613,237,000 | 515,291,000 | 470,074,000 | 537,879,000 | 551,333,000 | 445,013,000 | 409,995,000 | 480,883,000 | 431,842,000 | 337,436,000 | 291,573,000 | 2,086,194,000 | 1,944,220,000 | 1,541,734,000 | |
Canada | ||||||||||||||||
Foreign operations | ||||||||||||||||
Assets | 11,505,000 | 11,371,000 | 11,505,000 | 11,371,000 | ||||||||||||
Revenues | 19,840,000 | 15,993,000 | 10,915,000 | |||||||||||||
Income before tax of Canadian operations | $3,183,000 | $2,742,000 | $304,000 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (Revenues., Customer concentration, Top ten customers) | 12 Months Ended |
Dec. 31, 2014 | |
item | |
customer | |
Revenues. | Customer concentration | Top ten customers | |
Customer concentration | |
Number of top customers | 10 |
Number of calendar years in which top customers typically generate minimum specified percentage of revenue | 1 |
Minimum percentage of revenues generated by top ten customers | 50.00% |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) | 12 Months Ended |
Dec. 31, 2014 | |
Minimum | |
Property and equipment | |
Estimated useful lives of the related assets | 3 years |
Maximum | |
Property and equipment | |
Estimated useful lives of the related assets | 30 years |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Details 6) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||
Aug. 31, 2014 | Feb. 28, 2014 | Aug. 31, 2013 | Mar. 31, 2013 | Aug. 31, 2012 | Feb. 29, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 24, 2014 | 3-May-13 | 10-May-14 | |
Share-based payments and stock-based compensation | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Purchase Date | 25.00% | 25.00% | |||||||||
Period of restriction on trade for shares issued to employees under the Primoris Long-term Retention Plan | 6 months | ||||||||||
Shares of common stock issued as a part of quarterly compensation of non-employee members of the Board of Directors | 6,172 | 6,375 | 9,110 | 12,480 | 15,280 | 12,395 | 12,547 | 21,590 | |||
Period of restriction on trade for shares issued to non-employee members of the board of directors under the Primoris Long-term Retention Plan | 1 year | ||||||||||
Stock Options SARS or Restricted Shares of Stock Issued | 0 | ||||||||||
Stock Options SARS or Restricted Shares of Stock Outstanding | 0 | ||||||||||
Restricted Stock Units | |||||||||||
Share-based payments and stock-based compensation | |||||||||||
Shares granted | 48,512 | 100,000 | |||||||||
Equity Plan | |||||||||||
Share-based payments and stock-based compensation | |||||||||||
Issuance of employee LTR shares (in shares) | 77,455 | 131,989 | |||||||||
Shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2013 Equity Plan | 2,278,651 | ||||||||||
Equity Plan | Restricted Stock Units | |||||||||||
Share-based payments and stock-based compensation | |||||||||||
Shares granted | 100,000 | ||||||||||
Number of quarterly installments units will vest | 4 | ||||||||||
Number of shares of common stock issued for each unit when vested | 1 | ||||||||||
Compensation expense recognized | 934,000 | 366,000 | |||||||||
Unrecognized compensation expense | 2,400,000 | ||||||||||
Period to recognize unrecognized compensation expense | 2 years 3 months 18 days | ||||||||||
Accrued Dividend Equivalent Units | 110 | ||||||||||
Shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2013 Equity Plan | 2,278,651 | ||||||||||
Equity Plan | Restricted Stock Units | Executive One | |||||||||||
Share-based payments and stock-based compensation | |||||||||||
Shares granted | 100,000 | ||||||||||
Number of quarterly installments units will vest | 4 | ||||||||||
Shares vested | 25,000 | ||||||||||
Equity Plan | Restricted Stock Units | Executive Two | |||||||||||
Share-based payments and stock-based compensation | |||||||||||
Shares granted | 48,512 | ||||||||||
Units Vesting percentage on September 23, 2015 | 50.00% | ||||||||||
Units vesting percentage on March 23, 2017 | 50.00% | ||||||||||
Equity Plan | Restricted Stock Units | Executives | |||||||||||
Share-based payments and stock-based compensation | |||||||||||
Number of shares of common stock issued for each unit when vested | 1 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ||
Short-term investments | $30,992 | $18,686 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash and cash equivalents | 139,465 | 196,077 |
Short-term investments | 30,992 | 18,686 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Liabilities | ||
Contingent consideration | 6,922 | 9,233 |
Recurring | Amount Recorded on Balance Sheet | ||
Assets | ||
Cash and cash equivalents | 139,465 | 196,077 |
Short-term investments | 30,992 | 18,686 |
Liabilities | ||
Contingent consideration | $6,922 | $9,233 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2013 | Mar. 11, 2013 | Jun. 30, 2013 | Jun. 05, 2014 |
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Change in fair value of contingent consideration | ($4,145) | ($14,900) | ($1,435) | ||||
Q3 Contracting | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Payments | -598 | ||||||
FSSI acquisition | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Payments | -1,025 | -650 | |||||
Vadnais Corporation | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Payments | -6,355 | ||||||
Contingent Consideration Liability | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Balance at the beginning of the period | 9,233 | 23,431 | |||||
Change in fair value of contingent consideration | 856 | 2,500 | |||||
Reduction due to non-attainment of performance targets | -6,500 | ||||||
Balance at the end of the period | 6,922 | 9,233 | |||||
Additional information | |||||||
Number of unobservable inputs | 2 | ||||||
Minimum probability of acquired entity meeting contractual operating performance target (as a percent) | 33.00% | ||||||
Maximum probability of acquired entity meeting contractual operating performance target (as a percent) | 100.00% | ||||||
Contingent Consideration Liability | Sprint Acquisition | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Payments | -4,000 | ||||||
Contingent Consideration Liability | Q3 Contracting | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Payments | -5,000 | ||||||
Contingent Consideration Liability | FSSI acquisition | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Additions to contingent consideration liability | 702 | ||||||
Contingent Consideration Liability | Rockford | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Payments | -6,900 | ||||||
Contingent Consideration Liability | Vadnais Corporation | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Additions to contingent consideration liability | 679 | ||||||
Contingent Consideration Liability | Surber, Ram-Fab and Williams | |||||||
Rollforward of contingent consideration liability level three fair value measurements | |||||||
Additions to contingent consideration liability | $1,154 |
Business_Combinations_Details
Business Combinations (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 05, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Mar. 11, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
item | item | ||||||||
Vadnais Corporation | |||||||||
Business combinations | |||||||||
Cash payment made | $6,355 | ||||||||
Contingent earnout period (in years) | 1 year | 2 years | |||||||
Contingent performance period (in years) | 2 years | ||||||||
Estimated fair value of the potential contingent consideration | 679 | 729 | |||||||
Intangible assets | 679 | 679 | |||||||
Vadnais Corporation | 2014 earnout target | |||||||||
Business combinations | |||||||||
Contingent consideration in cash | 900 | 450 | 450 | ||||||
Vadnais Corporation | 2015 earnout target | |||||||||
Business combinations | |||||||||
Contingent consideration in cash | 450 | 450 | |||||||
Surber, Ram-Fab and Williams | |||||||||
Business combinations | |||||||||
Fair value of consideration | 8,244 | ||||||||
Number of small purchases made | 3 | ||||||||
Revenue since acquisition | 9,300 | ||||||||
Gross profit (loss) since acquisition | -45 | ||||||||
Acquisition costs | 355 | ||||||||
Surber | |||||||||
Business combinations | |||||||||
Contingent earnout period (in years) | 3 years | ||||||||
Contingent consideration in cash | 1,800 | ||||||||
Estimated fair value of the potential contingent consideration | 955 | ||||||||
RamFab | |||||||||
Business combinations | |||||||||
Contingent earnout period (in years) | 6 months | ||||||||
Contingent consideration in cash | 200 | ||||||||
Estimated fair value of the potential contingent consideration | 200 | ||||||||
FSSI acquisition | |||||||||
Business combinations | |||||||||
Fair value of consideration | 2,377 | ||||||||
Cash payment made | 1,025 | 650 | |||||||
Estimated fair value of the potential contingent consideration | 702 | ||||||||
Cash consideration | 1,675 | ||||||||
Number of future potential payments based on agreed upon contingencies | 3 | ||||||||
Contingent consideration credited to non-operating income | 760 | ||||||||
Intangible assets | 1,600 | 1,600 | 1,600 | ||||||
Intangible assets expensed to selling, general and administrative expenses | 808 | ||||||||
Unamortized portion of prepaid payment made to the employee charged to selling general and administrative expenses | 850 | 850 | |||||||
Remaining value attributed for future contingent consideration | 760 | 0 | |||||||
Revenue since acquisition | 4,946 | ||||||||
Gross profit (loss) since acquisition | 164 | ||||||||
Acquisition costs | 89 | ||||||||
FSSI acquisition | Non-competition and non-solicitation agreement with a key employee | |||||||||
Business combinations | |||||||||
Up-front payment | 1,000 | ||||||||
Period of employment, non-competition and non-solicitation agreement with a key employee | 5 years | ||||||||
Intangible assets | $1,000 | ||||||||
Amortization period of agreement | 5 years |
Business_Combinations_Details_
Business Combinations (Details 2) (USD $) | 12 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 11, 2013 | Jun. 30, 2013 | Aug. 31, 2013 | Jun. 05, 2014 |
Business combinations | |||||||
Cash paid for acquisitions | $14,596 | $2,273 | $86,207 | ||||
Goodwill | 119,410 | 118,626 | |||||
Fair value of the assets acquired and the liabilities assumed | |||||||
Goodwill | 119,410 | 118,626 | |||||
FSSI acquisition | |||||||
Business combinations | |||||||
Cash paid for acquisitions | 1,675 | ||||||
Cash paid | 1,025 | 650 | |||||
Goodwill | 1,087 | ||||||
Fair value of the assets acquired and the liabilities assumed | |||||||
Inventory and other assets | 302 | ||||||
Property, plant and equipment | 448 | ||||||
Intangible assets | 1,600 | ||||||
Goodwill | 1,087 | ||||||
Accounts payable | -1,060 | ||||||
Total | 2,377 | ||||||
Q3 Contracting | |||||||
Business combinations | |||||||
Cash paid for acquisitions | 598 | ||||||
Cash paid | 598 | ||||||
Goodwill | 13,160 | ||||||
Fair value of the assets acquired and the liabilities assumed | |||||||
Goodwill | 13,160 | ||||||
Vadnais Corporation | |||||||
Business combinations | |||||||
Cash paid for acquisitions | 6,355 | ||||||
Cash paid | 6,355 | ||||||
Fair value of the assets acquired and the liabilities assumed | |||||||
Property, plant and equipment | 6,355 | ||||||
Intangible assets | 679 | ||||||
Total | 7,034 | ||||||
Surber | |||||||
Business combinations | |||||||
Cash paid for acquisitions | 3,642 | ||||||
RamFab | |||||||
Business combinations | |||||||
Cash paid for acquisitions | 3,569 | ||||||
Williams | |||||||
Business combinations | |||||||
Cash paid for acquisitions | 1,030 | ||||||
Third Quarter Acquisition | |||||||
Business combinations | |||||||
Goodwill | 784 | ||||||
Fair value of the assets acquired and the liabilities assumed | |||||||
Cash | 3 | ||||||
Accounts receivable | 2,768 | ||||||
Inventory and other assets | 711 | ||||||
Prepaid expenses | 57 | ||||||
Property, plant and equipment | 5,447 | ||||||
Other assets | 4 | ||||||
Intangible assets | 1,100 | ||||||
Goodwill | 784 | ||||||
Accounts payable | -570 | ||||||
Accrued expenses | -905 | ||||||
Total | $9,399 |
Business_Combinations_Details_1
Business Combinations (Details 3) (USD $) | 12 Months Ended | 3 Months Ended | 0 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 11, 2013 |
Pro forma results | ||||
Percentage of pro forma tax rate used in calculating taxes on income from continuing operations | 39.00% | 39.00% | ||
Revenues | $2,110,072 | $1,974,760 | ||
Income before provision for income taxes | 101,948 | 114,197 | ||
Net income attributable to Primoris | 62,924 | 66,379 | ||
Weighted average common shares outstanding: | ||||
Basic (in shares) | 51,607 | 51,540 | ||
Diluted (in shares) | 51,747 | 51,610 | ||
Earnings per share: | ||||
Basic (in dollars per share) | $1.22 | $1.29 | ||
Diluted (in dollars per share) | $1.22 | $1.29 | ||
Tradename | Minimum | ||||
Acquired intangible assets | ||||
Amortization Period | 3 years | |||
Tradename | Maximum | ||||
Acquired intangible assets | ||||
Amortization Period | 10 years | |||
Non-compete agreements | Minimum | ||||
Acquired intangible assets | ||||
Amortization Period | 2 years | |||
Non-compete agreements | Maximum | ||||
Acquired intangible assets | ||||
Amortization Period | 5 years | |||
Customer relationship | Minimum | ||||
Acquired intangible assets | ||||
Amortization Period | 5 years | |||
Customer relationship | Maximum | ||||
Acquired intangible assets | ||||
Amortization Period | 10 years | |||
Vadnais Corporation | ||||
Acquired intangible assets | ||||
Fair Value | 679 | |||
Period for which goodwill and other intangible assets are deductible for income tax purposes | 15 years | |||
Vadnais Corporation | Customer relationship | ||||
Acquired intangible assets | ||||
Fair Value | 679 | |||
FSSI acquisition | ||||
Acquired intangible assets | ||||
Fair Value | 1,600 | 1,600 | ||
Period for which goodwill and other intangible assets are deductible for income tax purposes | 15 years | |||
Earnings per share: | ||||
Unamortized portion of prepaid payment made to the employee charged to selling general and administrative expenses | 850 | 850 | ||
FSSI acquisition | Tradename | ||||
Acquired intangible assets | ||||
Amortization Period | 5 years | |||
Fair Value | 550 | 550 | ||
FSSI acquisition | Non-compete agreements | ||||
Acquired intangible assets | ||||
Fair Value | 100 | 100 | ||
FSSI acquisition | Customer relationship | ||||
Acquired intangible assets | ||||
Fair Value | 950 | 950 | ||
Third Quarter Acquisition | ||||
Acquired intangible assets | ||||
Fair Value | 1,100 | |||
Period for which goodwill and other intangible assets are deductible for income tax purposes | 15 years | |||
Third Quarter Acquisition | Tradename | ||||
Acquired intangible assets | ||||
Amortization Period | 10 years | |||
Fair Value | 650 | |||
Third Quarter Acquisition | Non-compete agreements | ||||
Acquired intangible assets | ||||
Fair Value | 250 | |||
Third Quarter Acquisition | Customer relationship | ||||
Acquired intangible assets | ||||
Fair Value | $200 |
Accounts_Receivable_Details
Accounts Receivable (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts Receivable. | ||
Contracts receivable, net of allowance for doubtful accounts | $287,806 | $257,354 |
Retention receivable | 49,104 | 47,054 |
Contracts receivable and retention | 336,910 | 304,408 |
Other accounts receivable | 472 | 547 |
Accounts receivable, net | 337,382 | 304,955 |
Allowance for doubtful accounts | $540 | $692 |
Costs_and_Estimated_Earnings_o2
Costs and Estimated Earnings on Uncompleted Contracts (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Costs and Estimated Earnings on Uncompleted Contracts | ||
Costs incurred on uncompleted contracts | $5,194,769 | $4,741,249 |
Gross profit recognized | 613,510 | 582,430 |
Costs and Estimated Earnings on Uncompleted Contracts | 5,808,279 | 5,323,679 |
Less: billings to date | -5,898,220 | -5,439,898 |
Net cost and estimated earnings in excess of billings | -89,941 | -116,219 |
Amount included in consolidated balance sheet | ||
Costs and estimated earnings in excess of billings | 68,654 | 57,146 |
Billings in excess of costs and estimated earnings | -158,595 | -173,365 |
Net cost and estimated earnings in excess of billings | ($89,941) | ($116,219) |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Property and equipment | ||
Gross property and equipment | $448,282 | $363,559 |
Less: accumulated depreciation and amortization | -176,851 | -137,047 |
Net property and equipment | 271,431 | 226,512 |
Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Maximum | ||
Property and equipment | ||
Useful Life | 30 years | |
Land and buildings | ||
Property and equipment | ||
Gross property and equipment | 40,604 | 36,883 |
Useful Life | 30 years | |
Leasehold improvements | ||
Property and equipment | ||
Gross property and equipment | 11,267 | 7,958 |
Office equipment | ||
Property and equipment | ||
Gross property and equipment | 3,651 | 3,171 |
Office equipment | Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Office equipment | Maximum | ||
Property and equipment | ||
Useful Life | 5 years | |
Construction equipment | ||
Property and equipment | ||
Gross property and equipment | 308,915 | 247,997 |
Construction equipment | Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Construction equipment | Maximum | ||
Property and equipment | ||
Useful Life | 7 years | |
Transportation equipment | ||
Property and equipment | ||
Gross property and equipment | $83,845 | $67,550 |
Transportation equipment | Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Transportation equipment | Maximum | ||
Property and equipment | ||
Useful Life | 18 years |
Equity_Method_Investments_Deta
Equity Method Investments (Details) (USD $) | 12 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Aug. 31, 2014 | Feb. 05, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jul. 01, 2010 | Dec. 31, 2009 | Nov. 17, 2012 |
Equity method investments | |||||||||||
Impairment expense for non-consolidated entities | $4,932 | ||||||||||
Cash paid by 51% owner under net asset buy-out option to the entity | 6,439 | ||||||||||
Earnings data: | |||||||||||
Company's equity in earnings | 5,264 | -4,836 | 186 | ||||||||
Share in distribution | 2,821 | 1,358 | |||||||||
WPE and Kealine | Highstar | |||||||||||
Equity method investments | |||||||||||
Cash proceeds from sale of projects | 6,082 | ||||||||||
WesPac | |||||||||||
Equity method investments | |||||||||||
Membership interest (as a percent) | 50.00% | ||||||||||
WesPac | Kealine | |||||||||||
Equity method investments | |||||||||||
Membership interest (as a percent) | 50.00% | ||||||||||
WesPac & WesPac-Midstream | |||||||||||
Equity method investments | |||||||||||
Cash proceeds from sale of projects | 5,250 | ||||||||||
Bernard | |||||||||||
Equity method investments | |||||||||||
Membership interest (as a percent) | 30.00% | ||||||||||
Earnings data: | |||||||||||
Cost of investment | 300 | ||||||||||
Share in distribution | 0 | 145 | |||||||||
Alvah, Inc. | |||||||||||
Equity method investments | |||||||||||
Membership interest (as a percent) | 49.00% | ||||||||||
Cash paid by 51% owner under net asset buy-out option to the entity | 1,189 | ||||||||||
Earnings data: | |||||||||||
Company's equity in earnings | 14 | ||||||||||
Midstream | |||||||||||
Equity method investments | |||||||||||
Impairment expense for non-consolidated entities | $4,932 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible assets | |||
Total | $39,581 | $45,303 | |
Amortization expense of intangible assets | 7,504 | 7,467 | 6,543 |
Estimated future amortization expense for intangible assets | |||
2015 | 6,414 | ||
2016 | 5,980 | ||
2017 | 5,703 | ||
2018 | 5,239 | ||
2019 | 3,388 | ||
Thereafter | $12,857 | ||
Tradename | Minimum | |||
Intangible assets | |||
Amortization Period | 3 years | ||
Non-compete agreements | Minimum | |||
Intangible assets | |||
Amortization Period | 2 years | ||
Customer relationship | Minimum | |||
Intangible assets | |||
Amortization Period | 5 years |
Accounts_Payable_and_Accrued_L2
Accounts Payable and Accrued Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts Payable and Accrued Liabilities | ||
Retention amounts included in accounts payable | $9,285 | $5,602 |
Accrued expenses and other current liabilities | ||
Payroll and related employee benefits | 37,261 | 36,556 |
Insurance, including self-insurance reserves | 34,377 | 33,880 |
Reserve for estimated losses on uncompleted contracts | 2,363 | 1,392 |
Corporate income taxes and other taxes | 3,775 | 13,305 |
Accrued overhead cost | 1,059 | 1,165 |
Other | 4,566 | 4,781 |
Total accrued expenses and other current liabilities | $83,401 | $91,079 |
Capital_Leases_Details
Capital Leases (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Capital Leases | ||
Total assets under capital leases | $11,563 | $12,942 |
Accumulated depreciation of assets under capital leases | 6,311 | 4,689 |
Net book value of assets under capital leases | 5,252 | 8,253 |
Future minimum lease payments required under capital leases | ||
2015 | 1,733 | |
2016 | 672 | |
Total minimum lease payments | 2,405 | |
Amounts representing interest | -98 | |
Net present value of minimum lease payments | 2,307 | |
Less: current portion of capital lease obligations | -1,650 | -3,288 |
Long-term capital lease obligation | $657 | $2,295 |
Credit_Arrangements_Details
Credit Arrangements (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Credit arrangements | ||
Total long-term debt | $242,938 | $219,526 |
Less: current portion | -38,909 | -28,475 |
Long-term Debt, Excluding Current Maturities, Total | 204,029 | 191,051 |
Scheduled maturities of long-term debt | ||
2015 | 38,909 | |
2016 | 46,315 | |
2017 | 41,282 | |
2018 | 38,566 | |
2019 | 33,965 | |
Thereafter | 43,901 | |
Commercial equipment notes payable, maturing range from November 30, 2016 to December 13, 2020 | ||
Credit arrangements | ||
Total long-term debt | 112,420 | 144,526 |
Monthly payment of principal and interest | 2,521 | 2,521 |
Commercial equipment notes payable, maturing range from November 30, 2016 to December 13, 2020 | Minimum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.78% | 1.78% |
Commercial equipment notes payable, maturing range from November 30, 2016 to December 13, 2020 | Maximum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.51% | 3.51% |
Commercial equipment notes payable, maturing range from March 31, 2019 to September 24, 2021 | ||
Credit arrangements | ||
Total long-term debt | 55,518 | |
Monthly payment of principal and interest | 999 | |
Commercial equipment notes payable, maturing range from March 31, 2019 to September 24, 2021 | Minimum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.94% | |
Commercial equipment notes payable, maturing range from March 31, 2019 to September 24, 2021 | Maximum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.75% | |
Senior secured notes, maturing on December 28, 2022 | ||
Credit arrangements | ||
Total long-term debt | 50,000 | 50,000 |
Debt Instrument, Interest Rate, Stated Percentage | 3.65% | 3.65% |
Senior secured notes, maturing on July 25, 2023 | ||
Credit arrangements | ||
Total long-term debt | $25,000 | $25,000 |
Debt Instrument, Interest Rate, Stated Percentage | 3.85% |
Credit_Arrangements_Details_2
Credit Arrangements (Details 2) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2014 | Dec. 28, 2012 | Dec. 31, 2014 | Jul. 25, 2013 | Dec. 28, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Senior Notes | Senior Notes | Senior Notes | Notes Agreement | Notes Agreement | Notes Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Credit Agreement | Canadian Credit Facility | Canadian Credit Facility | Canadian Credit Facility | |
USD ($) | USD ($) | Minimum | USD ($) | USD ($) | Minimum | USD ($) | Federal funds rate | Minimum | Revolving line of credit | Commercial letters of credit | Commercial letters of credit | Commercial letters of credit | Commercial letters of credit | Commercial letters of credit | |
USD ($) | payment | USD ($) | USD ($) | USD ($) | USD ($) | CAD | CAD | Maximum | |||||||
Credit arrangements | |||||||||||||||
Maximum borrowing capacity | $125,000,000 | $125,000,000 | 8,000,000 | ||||||||||||
Basis spread on variable rate (as a percent) | 0.50% | ||||||||||||||
Prepayment to be paid on debt | 5,000,000 | 5,000,000 | |||||||||||||
Interest rate (as a percent) | 3.65% | 3.85% | |||||||||||||
Restrictions on investments, change of control provisions and provisions as a percentage of total assets to be disposed off | 20.00% | 20.00% | |||||||||||||
Total commercial letters of credit outstanding | 4,659,000 | 5,074,000 | 2,563,000 | 2,252,000 | |||||||||||
Available borrowing capacity | 120,341,000 | 5,437,000 | |||||||||||||
Borrowings outstanding | 0 | ||||||||||||||
Term of credit facility | 5 years | ||||||||||||||
Annual fee (as a percent) | 1.00% | ||||||||||||||
Required principal payment | 7,100,000 | 3,600,000 | |||||||||||||
Initial principal amount | $50,000,000 | $25,000,000 | $25,000,000 | ||||||||||||
Number of annual principal payments | 7 |
Noncontrolling_Interests_Detai
Noncontrolling Interests (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Noncontrolling Interests | |||||||||||||||
Revenues | $487,592 | $613,237 | $515,291 | $470,074 | $537,879 | $551,333 | $445,013 | $409,995 | $480,883 | $431,842 | $337,436 | $291,573 | $2,086,194 | $1,944,220 | $1,541,734 |
Net income attributable to noncontrolling interests | 526 | 5,020 | 1,511 | ||||||||||||
Tax effect on income recognized | 38,646 | 44,896 | 33,837 | ||||||||||||
Distributions to non-controlling interests | 1,590 | 5,500 | |||||||||||||
Accounts receivable | 337,382 | 304,955 | 337,382 | 304,955 | |||||||||||
Current liabilities | 419,311 | 430,314 | 419,311 | 430,314 | |||||||||||
Blythe joint venture | Primary beneficiary | |||||||||||||||
Noncontrolling Interests | |||||||||||||||
Revenues | 1,169 | 58,704 | |||||||||||||
Net income attributable to noncontrolling interests | 526 | 5,020 | |||||||||||||
Tax effect on income recognized | 0 | ||||||||||||||
Distributions to non-controlling interests | 1,590 | 5,500 | |||||||||||||
Distributions from joint venture | 1,590 | 5,500 | |||||||||||||
Capital contributions | 0 | 0 | |||||||||||||
Cash | 60 | 3,025 | 60 | 3,025 | |||||||||||
Accounts receivable | 1,085 | 1,085 | |||||||||||||
Current liabilities | $119 | $2,041 | $119 | $2,041 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Future minimum lease payments required under non-cancelable operating leases | |||
2015 | $12,037 | ||
2016 | 6,854 | ||
2017 | 5,300 | ||
2018 | 3,859 | ||
2019 | 2,403 | ||
Thereafter | 3,671 | ||
Total | 34,124 | ||
Total lease expense | 14,325 | 14,533 | 10,684 |
Lease payments to related party | 1,505 | 1,556 | 1,342 |
Real Property | |||
Future minimum lease payments required under non-cancelable operating leases | |||
2015 | 3,540 | ||
2016 | 2,771 | ||
2017 | 2,585 | ||
2018 | 2,212 | ||
2019 | 1,070 | ||
Thereafter | 335 | ||
Total | 12,513 | ||
Real Property (Related Party) | |||
Future minimum lease payments required under non-cancelable operating leases | |||
2015 | 1,449 | ||
2016 | 1,469 | ||
2017 | 1,437 | ||
2018 | 1,146 | ||
2019 | 879 | ||
Thereafter | 2,782 | ||
Total | 9,162 | ||
Equipment | |||
Future minimum lease payments required under non-cancelable operating leases | |||
2015 | 7,048 | ||
2016 | 2,614 | ||
2017 | 1,278 | ||
2018 | 501 | ||
2019 | 454 | ||
Thereafter | 554 | ||
Total | $12,449 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | 12 Months Ended | 38 Months Ended | 0 Months Ended | |||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Feb. 07, 2012 | Feb. 25, 2015 | 31-May-14 | Nov. 30, 2011 | Mar. 31, 2013 | Nov. 30, 2012 | |
item | ||||||||||
Commitments and contingencies | ||||||||||
Withdrawal liability recorded | $7,500,000 | |||||||||
Withdrawal liability asserted by the Plan | 11,700,000 | |||||||||
Monthly payments towards the liability amount | 38,107,000 | 42,919,000 | 30,103,000 | 733,000 | ||||||
Billings in excess of costs and estimated earnings | 158,595,000 | 173,365,000 | 158,595,000 | |||||||
Construction Projects | ||||||||||
Commitments and contingencies | ||||||||||
Number of projects under litigation | 2 | 2 | ||||||||
Billings in excess of costs and estimated earnings | 27,000,000 | 27,000,000 | ||||||||
Construction Project One | ||||||||||
Commitments and contingencies | ||||||||||
Receivable recorded relating to the project | 33,800,000 | 33,800,000 | ||||||||
Construction Project Litigation, Project Two [Member] | ||||||||||
Commitments and contingencies | ||||||||||
Receivable recorded relating to the project | 29,300,000 | 29,300,000 | ||||||||
James Construction Group LLC | North Texas Tollway Authority v. James Construction Group, LLC | ||||||||||
Commitments and contingencies | ||||||||||
Claimed cost to repair retaining wall | 5,400,000 | |||||||||
Number of other walls constructed on the project, which could have potential exposure to failure | 6 | |||||||||
Liability recorded on litigation | 3,000,000 | 4,500,000 | 1,500,000 | |||||||
James Construction Group LLC | North Texas Tollway Authority v. James Construction Group, LLC | Subsequent event | ||||||||||
Commitments and contingencies | ||||||||||
Expected cost on settlement | -9,000,000 | |||||||||
Q3 Contracting | ||||||||||
Commitments and contingencies | ||||||||||
Withdrawal liability recorded | 119,000 | 85,000 | ||||||||
Monthly payments towards the liability amount | 30,000 | |||||||||
Letters of credit | ||||||||||
Commitments and contingencies | ||||||||||
Total commercial letters of credit outstanding | 6,864,000 | 7,696,000 | 6,864,000 | |||||||
Bonding | ||||||||||
Commitments and contingencies | ||||||||||
Bid and completion bonds issued and outstanding | $1,518,018,000 | $1,458,744,000 | $1,298,589,000 | $1,518,018,000 |
Reportable_Operating_Segments_1
Reportable Operating Segments (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
segment | segment | |||||||||||||||
Reportable Operating Segments | ||||||||||||||||
Number of operating segments | 3 | 3 | ||||||||||||||
Segment reporting information | ||||||||||||||||
Revenue | $487,592 | $613,237 | $515,291 | $470,074 | $537,879 | $551,333 | $445,013 | $409,995 | $480,883 | $431,842 | $337,436 | $291,573 | $2,086,194 | $1,944,220 | $1,541,734 | |
% of Revenue | 100.00% | 100.00% | 100.00% | |||||||||||||
Gross Profit | 49,616 | 75,473 | 61,194 | 49,757 | 74,917 | 75,465 | 59,537 | 46,096 | 54,819 | 56,291 | 44,004 | 37,596 | 236,040 | 256,015 | 192,710 | |
% of Segment Revenue | 11.30% | 13.20% | 12.50% | |||||||||||||
Goodwill | 119,410 | 118,626 | 119,410 | 118,626 | ||||||||||||
West | ||||||||||||||||
Segment reporting information | ||||||||||||||||
Revenue | 964,093 | 1,151,433 | 832,860 | |||||||||||||
% of Revenue | 46.20% | 59.20% | 54.00% | |||||||||||||
Gross Profit | 143,468 | 190,747 | 119,328 | |||||||||||||
% of Segment Revenue | 14.90% | 16.60% | 14.30% | |||||||||||||
Goodwill | 45,239 | 45,239 | 45,239 | 45,239 | ||||||||||||
East | ||||||||||||||||
Segment reporting information | ||||||||||||||||
Revenue | 489,926 | 430,438 | 469,963 | |||||||||||||
% of Revenue | 23.50% | 22.10% | 30.50% | |||||||||||||
Gross Profit | 25,749 | 24,309 | 40,185 | |||||||||||||
% of Segment Revenue | 5.30% | 5.60% | 8.60% | |||||||||||||
Goodwill | 43,267 | 43,267 | 43,267 | 43,267 | ||||||||||||
Energy | ||||||||||||||||
Segment reporting information | ||||||||||||||||
Revenue | 632,175 | 362,349 | 238,911 | |||||||||||||
% of Revenue | 30.30% | 18.70% | 15.50% | |||||||||||||
Gross Profit | 66,823 | 40,959 | 33,197 | |||||||||||||
% of Segment Revenue | 10.60% | 11.30% | 13.90% | |||||||||||||
Goodwill | $30,904 | $30,120 | $30,904 | $30,120 |
Reportable_Operating_Segments_2
Reportable Operating Segments (Details 2) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenues and total assets by geographic area | |||
% of Revenue | 100.00% | 100.00% | 100.00% |
Non-United States | |||
Revenues and total assets by geographic area | |||
% of Revenue | 1.00% | ||
% of total assets | 1.00% |
Customer_Concentrations_Detail
Customer Concentrations (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Customer concentrations | |||||||||||||||
Amount | $487,592 | $613,237 | $515,291 | $470,074 | $537,879 | $551,333 | $445,013 | $409,995 | $480,883 | $431,842 | $337,436 | $291,573 | $2,086,194 | $1,944,220 | $1,541,734 |
Revenues. | Customer concentration | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | 759,319 | 692,159 | 678,117 | ||||||||||||
Percentage | 36.40% | 35.60% | 44.00% | ||||||||||||
Revenues. | Customer concentration | Texas DOT | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | 183,221 | 140,458 | 88,783 | ||||||||||||
Percentage | 8.80% | 7.20% | 5.80% | ||||||||||||
Revenues. | Customer concentration | Petrochemical producer | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | 164,634 | ||||||||||||||
Percentage | 7.90% | ||||||||||||||
Revenues. | Customer concentration | Petrochemical producer | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.00% | |||||||||||||
Revenues. | Customer concentration | Private gas and electric utility | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | 106,804 | ||||||||||||||
Percentage | 6.90% | ||||||||||||||
Revenues. | Customer concentration | Private gas and electric utility | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.00% | |||||||||||||
Revenues. | Customer concentration | Public gas and electric utility | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | 144,567 | 153,908 | 224,845 | ||||||||||||
Percentage | 6.90% | 7.90% | 14.60% | ||||||||||||
Revenues. | Customer concentration | Pipeline operator | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | 121,220 | ||||||||||||||
Percentage | 5.80% | ||||||||||||||
Revenues. | Customer concentration | Pipeline operator | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.00% | |||||||||||||
Revenues. | Customer concentration | Gas utility | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | 143,171 | 86,786 | |||||||||||||
Percentage | 7.40% | 5.60% | |||||||||||||
Revenues. | Customer concentration | Gas utility | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | ||||||||||||||
Revenues. | Customer concentration | Private gas and electric utility | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | 145,677 | 104,828 | |||||||||||||
Percentage | 7.00% | 5.40% | |||||||||||||
Revenues. | Customer concentration | Private gas and electric utility | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | ||||||||||||||
Revenues. | Customer concentration | Gas utility one | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | 149,794 | ||||||||||||||
Percentage | 7.70% | ||||||||||||||
Revenues. | Customer concentration | Gas utility one | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | ||||||||||||||
Revenues. | Customer concentration | Louisiana DOT | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $170,899 | ||||||||||||||
Percentage | 11.10% | ||||||||||||||
Revenues. | Customer concentration | Louisiana DOT | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.00% | |||||||||||||
Revenues. | Customer concentration | Top ten customers | |||||||||||||||
Customer concentrations | |||||||||||||||
Number of calendar years in which top customers typically generate minimum specified percentage of revenue | 1 | ||||||||||||||
Minimum percentage of revenues generated by top ten customers | 50.00% | ||||||||||||||
Percentage | 53.60% | 50.00% | 55.90% | ||||||||||||
Number of top customers | 10 | ||||||||||||||
Revenues. | Customer concentration | One customer | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 4.00% | 7.40% | |||||||||||||
Accounts receivable | Customer concentration | One customer | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 10.00% | 7.00% | |||||||||||||
Number of customers | 1 | 1 |
Multiemployer_Plans_Details
Multiemployer Plans (Details) (USD $) | 12 Months Ended | 38 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 |
item | item | |||
Multiemployer plans | ||||
Number of pension plans in which annual contribution was made by the entity during last three years | 82 | |||
Number of pension plans in which the entity contributed | 1 | 2 | ||
Contributions for specified plans | $5,239 | $1,427 | ||
Contributions for significant plans | 23,071 | 29,915 | 19,014 | |
Contributions to other multiemployer plans | 15,036 | 13,004 | 11,089 | |
Total contributions made | 38,107 | 42,919 | 30,103 | 733 |
Central Pension Fund of the International Union of Operating Engineers and Participating Employers | ||||
Multiemployer plans | ||||
Contributions for significant plans | 6,204 | 7,286 | 2,206 | |
Laborers International Union of North America National (Industrial) Pension Fund | ||||
Multiemployer plans | ||||
Contributions for significant plans | 3,382 | 5,025 | 1,995 | |
Southern California Pipetrades Trust Funds | ||||
Multiemployer plans | ||||
Contributions for significant plans | 5,239 | 6,179 | 5,298 | |
Pipeline Industry Benefit Fund | ||||
Multiemployer plans | ||||
Contributions for significant plans | 2,686 | 4,605 | 1,747 | |
Laborers Pension Trust Fund for Northern California | ||||
Multiemployer plans | ||||
Contributions for significant plans | 3,116 | 3,869 | 4,816 | |
Construction Laborers Pension Trust for Southern California | ||||
Multiemployer plans | ||||
Contributions for significant plans | $2,444 | $2,951 | $2,952 |
Company_Retirement_Plans_Detai
Company Retirement Plans (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
401(k) Plan | |||
Company retirement plans | |||
Maximum contribution by employees (as a percent) | 100.00% | ||
Employer match of employee contributions on first level of eligible compensation (as a percent) | 100.00% | ||
Percentage of eligible compensation, first level, matched by employer | 3.00% | ||
Employer match of employee contributions on the second level of eligible compensation (as a percent) | 50.00% | ||
Percentage of eligible compensation, second level, partially matched by employer | 2.00% | ||
Employer's contribution | $3,111 | $2,771 | $2,267 |
On Quest Canada, ULC RRSP-DPSP Plan | |||
Company retirement plans | |||
Number of components of the plan | 2 | ||
Employer match of employee contributions on first level of eligible compensation (as a percent) | 100.00% | ||
Percentage of eligible compensation, first level, matched by employer | 3.00% | ||
Employer match of employee contributions on the second level of eligible compensation (as a percent) | 50.00% | ||
Percentage of eligible compensation, second level, partially matched by employer | 2.00% | ||
Number of years of employment as a vesting period of DPSP portion | 1 year | ||
Employer's contribution | $69 | $70 | $69 |
Deferred_Compensation_Agreemen1
Deferred Compensation Agreements and Stock-Based Compensation (Details) (USD $) | 12 Months Ended | 1 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 |
Deferred compensation agreements | |||
Discounted price from market price at which shares purchased by participants in LTR Plan (as a percent) | 25.00% | 25.00% | |
Primoris Long-Term Retention Plan | |||
Deferred compensation agreements | |||
Percentage of participant's annual earned bonus deferred | 50.00% | ||
Period of deferral of annual earned bonus | 1 year | ||
Total deferred compensation liability | 4,779 | 4,984 | |
Maximum percentage of participant's prior year earned bonus amount up to which common stock can be purchased in a stock purchase plan | 16.67% | ||
Percentage of average market closing prices used in determining number of common stock that could be purchased by participants | 75.00% | ||
Discounted price from market price at which shares purchased by participants in LTR Plan (as a percent) | 25.00% | ||
JCG Stakeholder Incentive Plan | |||
Deferred compensation agreements | |||
Total deferred compensation liability | 599 | 1,755 | |
Vesting period | 5 years | ||
Period of payment of deferred benefit amount plus interest in equal monthly installments | 3 years | ||
LTR Plan | |||
Deferred compensation agreements | |||
Discounted price from market price at which shares purchased by participants in LTR Plan (as a percent) | 75.00% | ||
LTR Plan | JCG Stakeholder Incentive Plan | |||
Deferred compensation agreements | |||
Percentage of amounts accrued added to the 2015 payments | 50.00% |
Deferred_Compensation_Agreemen2
Deferred Compensation Agreements and Stock-Based Compensation (Details 2) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||
Aug. 31, 2014 | Feb. 28, 2014 | Aug. 31, 2013 | Mar. 31, 2013 | Aug. 31, 2012 | Feb. 29, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 24, 2014 | 3-May-13 | 10-May-14 | |
Stock-based compensation | |||||||||||
Shares of common stock issued as a part of quarterly compensation of non-employee members of the Board of Directors | 6,172 | 6,375 | 9,110 | 12,480 | 15,280 | 12,395 | 12,547 | 21,590 | |||
Period of restriction on trade for shares issued to non-employee members of the board of directors under the Primoris Long-term Retention Plan | 1 year | ||||||||||
Restricted Stock Units | |||||||||||
Stock-based compensation | |||||||||||
Shares granted | 48,512 | 100,000 | |||||||||
Equity Plan | Restricted Stock Units | |||||||||||
Stock-based compensation | |||||||||||
Shares granted | 100,000 | ||||||||||
Number of quarterly installments units will vest | 4 | ||||||||||
Number of shares of common stock issued for each unit when vested | 1 | ||||||||||
Compensation expense recognized | 934,000 | 366,000 | |||||||||
Unrecognized compensation expense | 2,400,000 | ||||||||||
Period to recognize unrecognized compensation expense | 2 years 3 months 18 days | ||||||||||
Accrued dividend equivalent units | 110 | ||||||||||
Equity Plan | Restricted Stock Units | Executive One | |||||||||||
Stock-based compensation | |||||||||||
Shares granted | 100,000 | ||||||||||
Number of quarterly installments units will vest | 4 | ||||||||||
Shares vested | 25,000 | ||||||||||
Equity Plan | Restricted Stock Units | Executive Two | |||||||||||
Stock-based compensation | |||||||||||
Shares granted | 48,512 | ||||||||||
Units Vesting percentage on September 23, 2015 | 50.00% | ||||||||||
Units vesting percentage on March 23, 2017 | 50.00% | ||||||||||
Equity Plan | Restricted Stock Units | Executives | |||||||||||
Stock-based compensation | |||||||||||
Number of shares of common stock issued for each unit when vested | 1 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Related party transactions | |||
Lease payments to related party | $1,505 | $1,556 | $1,342 |
SIGI | |||
Related party transactions | |||
Lease payments to related party | 862 | 907 | 929 |
Roger Newnham | |||
Related party transactions | |||
Lease payments to related party | 289 | 295 | 292 |
Lemmie Rockford | |||
Related party transactions | |||
Lease payments to related party | 90 | 90 | 90 |
Quality RE Partners | |||
Related party transactions | |||
Lease payments to related party | $264 | $264 | |
Number of former shareholders owning leased property | 3 | ||
Number of current employees owning leased property | 2 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 |
Current provision (benefit) | ||||
Federal | $28,203 | $41,323 | $27,524 | |
State | 5,398 | 10,051 | 7,125 | |
Foreign | 1,074 | 772 | 67 | |
Total | 34,675 | 52,146 | 34,716 | |
Deferred provision (benefit) | ||||
Federal | 3,586 | -6,099 | -451 | |
State | 457 | -874 | -366 | |
Foreign | -72 | 67 | -62 | |
Total | 3,971 | -6,906 | -879 | |
Change in valuation allowance | -344 | |||
Total | 38,646 | 44,896 | 33,837 | |
Reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income | ||||
U.S. federal statutory rate (as a percent) | 35.00% | 35.00% | 35.00% | |
State taxes, net of federal income tax impact (as a percent) | 4.66% | 4.72% | 4.87% | |
Foreign tax credit (as a percent) | -0.98% | -0.73% | -0.01% | |
Canadian income tax (as a percent) | 0.98% | 0.73% | 0.01% | |
Domestic production activities deduction (as a percent) | -3.07% | -3.67% | -2.97% | |
Nondeductible meals & entertainment | 3.38% | 2.58% | 2.12% | |
Other items (as a percent) | -2.01% | 0.56% | -1.67% | |
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests (as a percent) | 37.96% | 39.19% | 37.35% | |
Impact of income from noncontrolling interests on effective tax rate (as a percent) | -0.19% | -1.65% | -0.61% | |
Effective tax rate on income before provision for income taxes and noncontrolling interests (as a percent) | 37.77% | 37.54% | 36.74% | |
Valuation allowance for remaining deferred tax assets | 0 | |||
Tax effect of temporary differences that give rise to deferred income taxes | ||||
Valuation allowance | -344 | |||
Deferred tax assets: | ||||
Accrued workers compensation | 6,460 | 6,561 | ||
Insurance reserves | 3,698 | 3,448 | ||
Other accrued liabilities | 15,729 | 20,466 | ||
State income taxes | 654 | 1,551 | ||
Capital loss carryforward | 1,139 | |||
Foreign tax credit | 575 | 522 | ||
Total deferred tax assets | 28,255 | 32,548 | ||
Deferred tax liabilities | ||||
Depreciation and amortization | -33,657 | -28,844 | ||
Prepaid expenses and other | -527 | -663 | ||
Total deferred tax liabilities | -34,184 | -29,507 | ||
Total | -5,929 | 3,041 | ||
Minimum period of statute of limitations of state and foreign jurisdictions | 3 years | |||
Maximum period of statute of limitations of state and foreign jurisdictions | 5 years | |||
Reconciliation and aggregate changes for unrecognized tax benefits | ||||
Beginning balance | 5,382 | 72 | 467 | |
Increases in balances for tax positions taken during the current year | 1,340 | |||
Increases in balances for tax positions taken during prior years | 3,993 | |||
Settlements and effective settlements with tax authorities | -4,878 | |||
Lapse of statute of limitations | -48 | -23 | -395 | |
Total | $456 | $5,382 | $72 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | |||||||||||||||
Net income | $9,024 | $27,390 | $16,003 | $11,265 | $25,554 | $23,193 | $15,893 | $10,040 | $17,932 | $17,948 | $11,857 | $10,530 | $63,682 | $74,680 | $58,267 |
Net income attributable to noncontrolling interests | -526 | -5,020 | -1,511 | ||||||||||||
Net income attributable to Primoris | $8,930 | $27,390 | $16,003 | $10,833 | $22,481 | $21,845 | $15,564 | $9,770 | $17,021 | $17,516 | $11,733 | $10,486 | $63,156 | $69,660 | $56,756 |
Denominator: | |||||||||||||||
Weighted average shares for computation of basic earnings per share | 51,561 | 51,606 | 51,655 | 51,610 | 51,571 | 51,568 | 51,562 | 51,456 | 51,404 | 51,398 | 51,435 | 51,096 | 51,607 | 51,540 | 51,391 |
Dilutive effect of shares issued to independent directors | 2 | 3 | 11 | ||||||||||||
Dilutive effect of unvested restricted stock units | 138 | 66 | |||||||||||||
Dilutive effect of shares to be issued to Q3C sellers | 1 | 4 | |||||||||||||
Weighted average shares for computation of diluted earnings per share | 51,710 | 51,759 | 51,804 | 51,714 | 51,671 | 51,671 | 51,626 | 51,467 | 51,418 | 51,404 | 51,435 | 51,337 | 51,747 | 51,610 | 51,406 |
Earnings per share attributable to Primoris: | |||||||||||||||
Basic (in dollars per share) | $0.17 | $0.53 | $0.31 | $0.21 | $0.44 | $0.42 | $0.30 | $0.19 | $0.33 | $0.34 | $0.23 | $0.21 | $1.22 | $1.35 | $1.10 |
Diluted (in dollars per share) | $0.17 | $0.53 | $0.31 | $0.21 | $0.44 | $0.42 | $0.30 | $0.19 | $0.33 | $0.34 | $0.23 | $0.20 | $1.22 | $1.35 | $1.10 |
Earnings_Per_Share_Details_2
Earnings Per Share (Details 2) | 0 Months Ended | 1 Months Ended | 12 Months Ended | ||
Mar. 24, 2014 | 3-May-13 | Jan. 07, 2013 | Feb. 28, 2013 | Dec. 31, 2013 | |
Restricted Stock Units | |||||
Earnings per share | |||||
Shares granted | 48,512 | 100,000 | |||
Q3 Contracting | |||||
Earnings per share | |||||
Number of unregistered shares of common stock issued | 29,273 | 29,273 | 29,273 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 1 Months Ended | 2 Months Ended | 8 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||
Aug. 31, 2014 | Feb. 28, 2014 | Aug. 31, 2013 | Mar. 31, 2013 | Aug. 31, 2012 | Feb. 29, 2012 | Jun. 30, 2012 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Jan. 07, 2013 | Feb. 28, 2013 | 31-May-12 | |
item | |||||||||||||||
Common Stock | |||||||||||||||
Common stock, authorized (in shares) | 90,000,000 | 90,000,000 | |||||||||||||
Par value of common stock (in dollars per share) | $0.00 | $0.00 | |||||||||||||
Common stock issued (in shares) | 51,561,396 | 51,571,394 | |||||||||||||
Common stock outstanding (in shares) | 51,561,396 | 51,571,394 | |||||||||||||
Number of holders of common stock | 364 | ||||||||||||||
Cash received from issuance of common stock as part of the company's Plan for managers and executives | $1,671,000 | $1,455,000 | $1,240,000 | ||||||||||||
Discounted price from market price at which shares purchased by participants in LTR Plan (as a percent) | 25.00% | 25.00% | |||||||||||||
Shares of common stock issued as a part of quarterly compensation of non-employee members of the Board of Directors | 6,172 | 6,375 | 9,110 | 12,480 | 15,280 | 12,395 | 12,547 | 21,590 | |||||||
Period of restriction on trade for shares issued to non-employee members of the board of directors under the Primoris Long-term Retention Plan | 1 year | ||||||||||||||
Aggregate purchase price up to which shares can be acquired under share repurchase program | 23,000,000 | 20,000,000 | |||||||||||||
Number of shares purchased and cancelled under the share repurchase program | 89,600 | 100,000 | |||||||||||||
Amount paid for shares purchased and cancelled under share repurchase program | 1,000,000 | 2,800,000 | |||||||||||||
Average cost of repurchased shares of stock (in dollars per share) | $11.17 | $28.44 | |||||||||||||
Preferred Stock | |||||||||||||||
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 | |||||||||||||
Par value of preferred stock (in dollars per share) | $0.00 | $0.00 | |||||||||||||
Preferred stock, shares outstanding | 0 | 0 | |||||||||||||
Warrants | |||||||||||||||
Warrants outstanding (in shares) | 0 | 0 | |||||||||||||
Ecuador business | |||||||||||||||
Common Stock | |||||||||||||||
Price of shares issued (in dollars per share) | 19.81 | ||||||||||||||
Shares provided for the payment of note receivable | 15,144 | ||||||||||||||
Notes receivable | 300,000 | ||||||||||||||
LTR Plan | |||||||||||||||
Common Stock | |||||||||||||||
Amount received in exchange for shares of common stock under a long term incentive plan | 1,455,000 | 1,671,000 | |||||||||||||
Shares of common stock purchased under the long-term incentive plan | 131,989 | 77,455 | |||||||||||||
Discounted price from market price at which shares purchased by participants in LTR Plan (as a percent) | 75.00% | ||||||||||||||
Equity Plan | |||||||||||||||
Common Stock | |||||||||||||||
Shares of common stock purchased under the long-term incentive plan | 77,455 | 131,989 | |||||||||||||
Shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2013 Equity Plan | 2,278,651 | ||||||||||||||
Equity Plan | Restricted Stock Units | |||||||||||||||
Common Stock | |||||||||||||||
Shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2013 Equity Plan | 2,278,651 | ||||||||||||||
Q3 Contracting | |||||||||||||||
Common Stock | |||||||||||||||
Stock issued to sellers (in shares) | 29,273 | 29,273 | 29,273 | ||||||||||||
Price of shares issued (in dollars per share) | $14.69 | ||||||||||||||
Stock issued for acquisition | $430,000 |
Selected_Quarterly_Financial_I2
Selected Quarterly Financial Information (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Selected Quarterly Financial Information (Unaudited) | |||||||||||||||
Revenues | $487,592 | $613,237 | $515,291 | $470,074 | $537,879 | $551,333 | $445,013 | $409,995 | $480,883 | $431,842 | $337,436 | $291,573 | $2,086,194 | $1,944,220 | $1,541,734 |
Gross Profit | 49,616 | 75,473 | 61,194 | 49,757 | 74,917 | 75,465 | 59,537 | 46,096 | 54,819 | 56,291 | 44,004 | 37,596 | 236,040 | 256,015 | 192,710 |
Net income | 9,024 | 27,390 | 16,003 | 11,265 | 25,554 | 23,193 | 15,893 | 10,040 | 17,932 | 17,948 | 11,857 | 10,530 | 63,682 | 74,680 | 58,267 |
Net income attributable to Primoris | $8,930 | $27,390 | $16,003 | $10,833 | $22,481 | $21,845 | $15,564 | $9,770 | $17,021 | $17,516 | $11,733 | $10,486 | $63,156 | $69,660 | $56,756 |
Earnings per share: | |||||||||||||||
Basic earnings per share (in dollars per share) | $0.17 | $0.53 | $0.31 | $0.21 | $0.44 | $0.42 | $0.30 | $0.19 | $0.33 | $0.34 | $0.23 | $0.21 | $1.22 | $1.35 | $1.10 |
Diluted earnings per share (in dollars per share) | $0.17 | $0.53 | $0.31 | $0.21 | $0.44 | $0.42 | $0.30 | $0.19 | $0.33 | $0.34 | $0.23 | $0.20 | $1.22 | $1.35 | $1.10 |
Weighted average common shares outstanding: | |||||||||||||||
Basic (in shares) | 51,561 | 51,606 | 51,655 | 51,610 | 51,571 | 51,568 | 51,562 | 51,456 | 51,404 | 51,398 | 51,435 | 51,096 | 51,607 | 51,540 | 51,391 |
Diluted (in shares) | 51,710 | 51,759 | 51,804 | 51,714 | 51,671 | 51,671 | 51,626 | 51,467 | 51,418 | 51,404 | 51,435 | 51,337 | 51,747 | 51,610 | 51,406 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 24, 2015 | Feb. 28, 2015 | |
Subsequent events | |||||
Operating income | $103,792,000 | $125,237,000 | $96,286,000 | ||
Cash dividend declared (in dollars per share) | $0.15 | $0.14 | $0.12 | ||
Aevenia | |||||
Subsequent events | |||||
Operating income | 4,200,000 | ||||
Revenue | 44,400,000 | ||||
Subsequent event | |||||
Subsequent events | |||||
Cash dividend declared (in dollars per share) | $0.04 | ||||
Subsequent event | Aevenia | |||||
Subsequent events | |||||
Cash payment made | 23,000,000 | ||||
Current assets | 3,800,000 | ||||
Current liabilities | 1,100,000 | ||||
Equipment, intangible assets and goodwill | $20,300,000 |