MYRG - Earnings call transcript Q2 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, everyone, and welcome to the MYR Group Second Quarter 2024 Earnings Results Conference Call. [Operator Instructions] Today's conference is being recorded.

At this time, for opening remarks and introductions, I would like to turn the call over to David Gutierrez of Dresner Corporate Services. Please go ahead, David.

David Gutierrez

Thank you, and good morning, everyone. you company's MYR XXXX, second reported welcome to conference which to yesterday. the discuss quarter like to Group the call were I'd results for

MYR Executive Rick on segment; Chief and and Commercial and segment. Vice Officer Brian Group's President Senior President call of us Vice Officer; Huntington, President are Don Senior Operating Chief Joining and Vice Egan, today's Financial Officer Chief Industrial and Distribution and Officer; Stern, President MYR Kelly Senior Transmission of Swartz, and Chief Operating Group's

today's you press a Investor If where call on XXX-XXXX, be X available release, days contact Dresner to you of did at for will a go website, page will we the Group (XXX) copy at please tab. is the Also, not of under receive available the MYR MYR Relations myrgroup.com. Investor Group or copy yesterday's the website a Corporate replay and send Services webcast

yesterday's of comparable that report measures Certain to the quarter XX-Q Rick forward-looking financial statements annual and second that the forth differ performance. yesterday's is These GAAP the involve cause are These press measures any uncertainties XX-K company's uncertainties may that discussed statements I begin, release. With available for Swartz. Group's turn on we ended to XXXX, Form in will company's Before this to non-GAAP based call XXXX non-GAAP management the statements. forward-looking in on over to materially upon XX, these actual be guarantee the risks release. results Group and no press statements. Accordingly, as call the of today. information of me on future set report update could in from statements these date, to such obligation discussion no A Form want statements. information forward-looking MYR for let the assumes of year are quarterly remind you Any such MYR are said, December and risks this contain reconciliation to discussed forward-looking the and most

Richard Swartz

Good and second David. to will we'll operational second our Financial results to a the call turn Officer, detailed of and XXXX a Chief more discuss I financial to the begin then Kelly Huntington, Thanks, Welcome conference by summary morning, quarter call financial review. providing everyone. results. quarter our for over

of Brian and Officers Stern Following of discuss for segments, Egan, and C&I some and questions. will then performance going overview, call Operating today's I Group's some and MYR for Kelly's call summary with the closing our forward. Chief our Don will conclude provide your remarks T&D segment's a opportunities up open

by Our and impacted scheduled substantial this results completion all during our year of quarter clean the to energy T&D end within X is that fourth to our C&I by of the year. the project within negatively segment that the projects reach were are quarter completion by mechanical scheduled segment for reach

markets the by across partnerships throughout to growth. The now business opportunities in for into our strong. serve healthy, as execution on other existing Bidding continue remains business we and well new we capture remains activity strategically as However, project segments, long-term expand for exciting offer the future. fueled and continued for the ever-growing to growth our of centers data continues prominence intelligence part artificial demand increasing opportunities

to to in new to investments for Group and power customer well center electrical XX infrastructure build meet capabilities seen is billion in help the power to the capacity report generation in new U.S. positioned demand coming experience of Our and contracts win not growth, a the April of work recent generation. additional report The our capital strong the utilities AI centers relationships U.S. by research demand load gigawatts of XXXX. Goldman power required forecasted breadth Sachs to Thanks MYR forecast those and equity data facilities. need data released power predicts on $XX surge

transportation awarded the Canada This region. valued Pacific was Western further at project in in Enterprises approximately long-standing segment, our quarter solidifying C&I the relationships in working a $XXX million

T&D master believe the and made our for Overall, success segment service agreements and for Midwest and come. investments increased for and markets across and work the Florida to transmission chosen are substation, highlight encouraging Carolinas, won years infrastructure ongoing electrical Additionally, electrification the why several in the in poised Kentucky. being distribution we are our

quarter XXXX Now provide on details Kelly will financial second our results.

Kelly Huntington

and everyone. good morning, Thank Rick, you,

period quarter $XX were XXXX decrease or million, $XXX year. to represents revenues second of last same which a Our compared the million X.X%

our of are the to $XXX performed quarter. million, breakdown revenues $X of $XXX year. due decreased of transmission million a X% to master revenues Work to in later $XX were decreased $XXX revenue transmission decrease last now discussed distribution. same start agreements Our primarily revenues projects. million was of to compared in the X% were year, and distribution for a projects, delayed decrease and a same to second million C&I period quarter T&D represent this the period revenues $XXX start continue of T&D million last decrease few under of a decrease a T&D of on to million, due The approximately projects The compared revenues revenues. C&I revenue T&D anticipated XX% segment segment last service year. on as which for

unfavorable margin disputes, favorable certain offset by due and impact compression unfavorable an increase inefficiencies, the joint last projects. well primarily and and of was margin and results orders, related compared The C&I project. T&D labor contractual was weather higher to quarter year. second X.X% and as project related These venture in primarily operating a energy second a projects conditions. as for X.X% XX.X% of XXXX to clean in materials project labor, to favorable to loss of job the change period with partially same in for favorable income the closeout, margin productivity, quarter decrease projects segment, labor on for were to for associated margin year. The was favorable Our was schedule decrease our T&D compared period X.X% better-than-anticipated energy costs pricing and contract-related gross of inefficiencies margin operating same costs clean decreases gross was XXXX the a on the last project

mechanical impacted In X operating completion fourth reach addition, profit for to related by remaining income anticipated reached energy quarters as in and of XX.X%. Many negatively clean owner-furnished of mechanical energy increased delays the caused projects pursuing the are costs these third changes gross panel have extensions we led orders. a projects to to XXXX. percentage the on are which schedule revenues change by of Combined, projects clean projects completion and

income XXXX on last were and on impacted in negative by productivity schedule compression C&I year. also depreciation scope and impacted XXXX, additions, X.X% an operating was single in inefficiencies impact costs compression related increase higher a results period favorable orders, with These associated favorable income income of workflow pricing was same to of decrease project better-than-anticipated fleet quarter to offset was operating margin second for partially had primarily the certain in the projects project. negatively project project operating higher and expenses and as margin work maintenance due a venture operating A favorable this related to and and access to schedule joint second during negatively productivity, is labor, the for Additionally, X.X% as well during of materials by compared labor margin margin T&D expense was quarter a a anticipated increased that a on C&I closeout, issues. by quarter. The job progress. lower the fourth income reach costs compensation to contingent substantial C&I change due completion loss to prior on decreases favorable X.X% acquisition.

to SG&A support year. The in to same period million acquisition an an in increase million, growth $XX were compensation employee prior in related increase by Second quarter of to was primarily XXXX last compensation employee-related and to partially a costs. incentive expenses $X increase increase offset expenses future contingent decrease an a expense the compared due

$XX per to diluted million last same Second $X.XX per period net net $XX of for to share Net last of of compared million income quarter the was loss same share for XXXX income diluted loss year. the compared $X.XX period year. net

increase the negative backlog compared lower Total million X% $X.XX a XX, Second was the XXXX, $XXX ago $X quarter of first consisted billion, X% year. quarter for than for segment. T&D last period XXXX, million year. year June EBITDA was XX, June a of of of XXXX million and and same from as as $X.XX this segment Total our our $XX C&I backlog for to billion

and flow $XX year. was operating cash cash timing cash of operating negative compared primarily $XX project was million payments increase Second period XXXX with last and the for activities to the starts completions. by billings provided same in operating million associated flow to The due quarter of

reflecting capital period to compared million operating for $X was flow increase the flow cash $XX same free free expenditures. year, of the million XXXX flow cash quarter Second and lower negative cash in last

million We liquidity. XXXX. debt million had working June of funded our $XX to as XX, and million credit under borrowing in Moving facility availability $XXX $XXX approximately capital, of of

will XXXX. strong business, from strong credit to X.Xx repurchase debt-to-EBITDA facility, of future us organic our our growth opportunistically that leverage shares. acquisitions believe to funded support operations meet We continued June maintain of flow the ratio capital a enable We have as pursue and XX, cash and balance our working needs, sheet of

a per average second at repurchased for a the quarter, weighted we total of During $XXX XXX,XXX million. expenditure shares price $XX of share

we XXXX, million had overview shares. I'll of segment. to will now Stern, call an Transmission and remaining provide XX, approximately repurchase Distribution who over of $XX As turn our Brian to June availability the of

Brian Stern

Thanks, Kelly, and everyone. good morning,

pursuing T&D projects, margins our performance within second negatively overcoming were monitor strategically in quarter strengthen of near-term selectively our and activity operating the new challenges we Kelly long-standing while as and remains second bidding expanding clean quarter customer quality on to of focus As had stated, by margins presence portfolio portfolio. Healthy Operating projects our projects energy various continued and our sizes. segment. relationships, in execution in clean the energy market our in pursue transmission impacted solid distribution opportunities and grow

awarded while projects won in and Construction awarded work Nebraska. and -- X Florida MSAs transmission transmission transmission Florida L.E. Construction distribution Great underground as Our won MSAs and multiple Myers competed in Line Kentucky, substation Indiana, projects for Carolinas, Midwest, this as were successfully the completed team for also Ohio the agreements distribution Country High quarter. overhead alliance well and substation, in and and California. in Southwestern work was

the consumption the a clients new all a white At generation X% future. this build Power as dedication XXx customers XXXX our agile as partner effort versus segment. for by in X.X% estimated to traditional and utility continues for search us of knowledgeable positions grow to In call will they MYR well and Don for employees annually an forecasts as an The as for electricity firm making and alone electricity demand, consume the principles require turn serve to overview to improved to Group as will As engine centers And summary, our demand our success. data talented strive will to helping now are our paper earlier, electrification Industrial over commitment energy report the meet estimated AI data an much queries. as thank strict that in everyday queries the U.S. of provide operating Rick and I a Egan, adherence to increasing possible. I center infrastructure AI today. their Research on technologies who and electricity of our is Commercial success Electric report only found increase for continue to mentioned the life. Institute from XXXX growing

Don Egan

morning, our related an productivity due unfavorable increased lower good scope a access was gross costs The due a to scheduled project and C&I to primarily to Brian, as additions, on labor decrease Thanks, and compression of and segment impact issues. in everyone. margin workflow C&I result in

awarded reflects Pacific project our As execution. being believe earlier, continued is history of the a we the infrastructure both project project successful with we why strength has mentioned Canada transit for States serve Canada success. large a in investments tremendous Rick and and markets Enterprises. WPE we made were in transit poised the large-scale proven demonstrating business Western United the This of

Sturgeon subsidiaries to health customers. facilities with Colorado perform active Electric Pharmaceuticals CSI, other organization, Arizona. contractors, in essential the markets work in projects and core Our electrical working valued remain and strong markets for our continuing and across also California with are care

our in decades Base Wyoming were have growth center Air in projects campus Civic and X a In to that of for consumption data Center business and addition, centers new continue be for Data facilities experience we Colorado. recently Force awarded these in. is in and new a market unprecedented. electricity The working a of California we

the load XXX from campuses megawatts, roughly equivalent New homes. ranging by XX,XXX capabilities are built XXX,XXX consumed with data to center being to X,XXX to

core By and safety-first to our intelligence. To talented the generate on. strength will safety increased mindset. time healthy retrofitting day, density our conclude, In facilities to our employees cooling for stand industry is of that with addition, now rely Thanks, a to leader everyone, of our customers meet back our living as with This relationships are opportunities. clients values projects to to our daily power see some chosen executing comments. their customer come your our we continue core call to help an execution and requirements Rick existing project turn the continue have the in closing today. I employees artificial will dedication and us their us and who thanks markets to provide every additional

Richard Swartz

Don. those you Thank and Brian for updates, Kelly,

underperforming we by relatively negatively projects, markets the reflecting and to was performance strengthen resiliency continue small and of of of projects, our to portfolio our our group quarter expand customer second our relationships. our impacted ability core Although execute successfully a

on market continued the We conditions our in and connecting like and foundation customers and prospects and in and fortifies that of and developing to landscape, operating our open team to forward energy comments now in the for MYR members customers to I I strong our We continually future the call their with we position contributions to look our changing breadth to provides capabilities. and for industry. This invaluable continue to a needs you navigate will of our and principles our would focus as projects investing while the Group. are dynamic employees grow leader opportunities bidding agile shareholders business for emphasize meeting with thank up maintain And they our as of quarters. Operator, a and ready partner. questions. support reflect your

Operator

first Capital Sangita Our the question with KeyBanc Markets. Instructions] of line from [Operator comes Jain

Sangita Jain

territories called this said Rick, these away step also market the the was that the the that and in quarter and on projects where So bidding you that that solar had would delays same from the are out overruns, project there? cost competitive getting you you

Richard Swartz

of If markets, yes. some they're in same those

Sangita Jain

to you So for that then can of solar asking up in -- by still this from does you want stay indication you Or kind now? feel if an that I follow away other okay give bidding do utility-scale markets?

Richard Swartz

we're of not to work. For going be have in us, about in the activity to It's we right talked I continue now. selective we're this We environment think to like change the take core markets. very it other doing long but But it's customer, something and we've price for a with our and the been selectively. work, additional time, we'll at the right on right

Sangita Jain

if I of and X% of T&D in expect the outlook? we is light margins end still can C&I in low ask And exit a on X%, you that should can which operating follow-up at your the Okay. long-term at that XQ,

Richard Swartz

Is Can we year? that that exit for the question? your

Sangita Jain

maybe. Yes, Yes. at that rate, exit

Richard Swartz

on projects. the performance in range lower be will on that will side. barring our C&I, midrange Well, I think be It the on T&D that these

going we can to the us of projects additional some on or where behind quarters projects. bit. and projects But think get ongoing have always couple could have troubled the these forward that it that next you but we I see are us. that's as identified, be they've for going projects been affect a changes all There exclude little these So we impacts

Operator

with Modak Goldman Sachs. line Our Ati next of from comes the question

Ati Modak

for you market So it tends that the like would your get about in the the seeing so to half I the perspective. some backlog know year, softness in love outlook you're expectations given but you've particular T&D to back there sounds talk lumpy, spoken I can be about are side on of the

Richard Swartz

Yes.

when I small would to projects. say, midsized seeing a comes it lot we're us, and of activity, For

you're I of think a revenue off it's been little projects, you looking months receive long-term to And of to opportunities, X I longer-term come burn any market. to think lots they've that. any kind when at large seeing you to before be going of a slower X start project, time

more there's to think that. on I So come

of marketplace. As in lots activity the I said,

happen. And do they're few think So it market. I great larger a to We to term, we see scheduled out need roll of and long projects as that. these a

So it's activity. We've to thing a of got lots good see. bidding

term, So it be a but good, short again, term, could long lumpy. little

Ati Modak

And year? for projects contractual remainder it's there are or of wondering the provisions that if the then through then orders, whether I'm were protection, mitigate think the change we offsetting you energy allow where just about owner-related clean Got there of it. some to delays. should other ways that And that? level the how

Richard Swartz

I projects, or a project? think all a the covers cover it every can we've Though certain to these think have I litigation. being this, potential that have there? does good item contract I on then litigation. that that. customer there's and able you stuff to there's you projects does or But us, with been pretty side discussions different Continuing any then And you historically, settle items, on delays always happen, like affect time for for never up. things it how in that where without on weighing it's for So going to seeing us, at projects say, know. settles acceleration would

So good if we to got position again, to need. think I we've go a litigation,

well items anything our that would talked Some own. anticipate we on beyond really of solve about could or that these are we've

monitor where think and we'll it goes. it I continue to So see

Operator

of Our Baird. Justin Hauke next question comes line from the with

Justin Hauke

they're guys of Yes. I for guess and mean, the are, general, kind the have the and same all quarters market items here same several in you of the just same fighting you I called out I wanted the been kind these to the charges, issues -- last I through mean, in projects.

this quarters. a the understand just write-down? on of that, am the of you've quarter event some having the gross that guess, kind took was several this trying to the in type that review of to magnitude I the assumptions I of triggering triggered charges relative broader broader been write-downs just of margin So there kind last

Richard Swartz

Sure.

If were we -- you really said, T&D impacted the as energy results projects. look at the clean by

it look at first not solar to derived the was at impacts of to And was into lot described that's sooner us. half within on where you it solar It's impacts things were that, But really -- did, were. in you us. side, like of lot we about had which revenue. mean in If a that, those come revenue us things that a our when at affected that that supposed it's huge than we XX% was revenue some with when from projects. they solar. other was it look that's you really due our the I do panel They affected then same different it's get you And and of percentage affected delays other weather and our them. from a look

X So quarter. a myriad us hit projects, on that of but affected in issues us those really

with So the impact it we like of projects that to wasn't we're And then those within all it business, do this C&I seeing really again, past. with had But -- I across side, that X into think quite the client described. the our just on we able that been to worked potentially on and continuing one. solve go to issues project in we're litigation a we've bit,

from here. So see it where we'll goes

Justin Hauke

just kind how about on of of on project is for to kind start million the I question that of a that Okay. larger guess second that maybe is that it? [indiscernible] won the just when Any Canada, details duration this that think you. just $XXX expected is transportation in project you my -- to

Richard Swartz

project. projects We've similar a transportation larger of size. That's done

it's something longer-term -- not and it's project. So a

project X.X- that that a frame. approximately will it's X-year to finish time So within

up couple was like A project, a finished it frame. a not over in it's time the that was years Colorado, million and of in it have ago, we turn and same we $XXX over did So huge every going year. you

Justin Hauke

And that starts year? next

Richard Swartz

Yes.

Operator

line Our Brian next Stifel. Brophy question of comes from with the

Brian Brophy

of curious quarter, you're about both the Just thinking for rest flat you about Last segments. how revenue the guidance talked for year.

it thinking you're about how today. curious Just

Richard Swartz

Yes.

other side look going think of now. the we're were where ones additive in good solar, markets, that, at been right when couple on prices about of we market be again, were that -- competitiveness to in we talked but business. to I continue that It's a the selective

to on much the T&D So we backlog segment. addition continue burn our side see our on not solar that with

segment, T&D our within say. should I So

side as with I see our selective a the we're to that little kind that, decline the So it go in seeing we will of offset But on as we the forward we're T&D revenue segment. bit, think will work. that be a growth on other within

we talked midsize projects we're large just those that lull It's continue and successful in receiving side. now. those rolling about out, kind hopefully, and project of So very to and on roll small right out,

Brian Brophy

that Okay. clear, correct? And just to was offset C&I, be growth by in

Richard Swartz

C&I, We do see yes. growth in

Brian Brophy

now off the you just of these midway of then not year a this at terms guess push about through towards gives been I a when moved goalpost, if roll. we're couple the high what challenged we another you And guess guys end level, I of Okay. out kind in expecting this when previously now going these of just has year. think projects were see to will, challenged out projects I times confidence that roll

Richard Swartz

Yes.

the project. it's us, C&I For additional X

they're C&I no at you margin a been of impact that in we on be set or And If X the profile we this really we the low that, have that. side, our it. as would change little was other rolling highlighted without planned, there that, where off look ones, above end project would

I'd that's as planned. So say going

we rolling those So see off.

impact there we it But to side, out there finish. solar a of side. T&D solar have of all the came on On kind related. couple visibility got And in the good what that was was we've to new projects

to have these coming So projects any far see into behind changes time. get additional But as at us. coming -- we that as do don't this we know projects I do

said are that, right than was where of should T&D Other changes. in the those the it market core midrange really be. So we our

Operator

line Capital. next Kansas Braatz the Our Instructions] question City comes Jon with from [Operator of

Jon Braatz

parse was as perform versus as quarter, that the Rick, you your of an problems Can would didn't when execute you maybe you look onus you you or internal how part the have well at external? was between much in thought. of might on -- the sort factors that that gave out projects that

Richard Swartz

really, -- always I portion a these see I potential it, things a into of could do you litigation, hindsight sins. for pay say, And our with I think of different. a we're to do willing whenever you always you own think going I what analysis, couple

So we this within Jon. That's weren't there's by perfect loss not can of as go out that it but litigation performance, our did. as into about there, we things all knowing potential I deep caused was

Jon Braatz

appreciate the that other there that. I so Okay. T&E And project inherently than and the might versus you? margins makes and then forth, riskier energy little on different sort the it projects, depress on for a clean project energy so that a anything landscape of competitive is bit clean about

Richard Swartz

In through margins general, that we on you performance riskier I our said good would project been on to things performance. not. along X our very I our that can went would the say say, make happen as It's can side, as way year one. the we accretive we've no, or to had on C&I

So say to it to with T&D had the what said, but good I of I business the and have And the and book book -- were in it visibility of side. wasn't got all on would the they finish. as do business we've left with same it's customer, we regionally based,

Jon Braatz

risk are that some you those accounted answered look the potentially you have I forward fully and this you And going how when comfortable additional is you there in in but problem the at projects And the costs? maybe the projects? second previously, think from second half for half, Okay.

Richard Swartz

you And if the said of I mid-range of be potential kind those give. With there's say projects, giving profile the in Yes, always as where I negotiations are our minus because T&D insight there those when into will of margin to when is, any projects finish look get -- there. I that you projects we think hard as you up up that operating why be, always moving to side we're there's is through risk parts. margins projects, that, you as it's our risk. going any at additional There that's finish do

forward as So we'll on it and could affect disclose basis. quarterly that us, go we a

Operator

in over to [Operator Instructions] back to showing Rick now would closing queue. further I I'm for the questions like no remarks. call the turn

Richard Swartz

To Don I you call for on conclude, of have Kelly, forward on forward. you further, don't myself, behalf and sincerely with we today. look thank us and I joining Brian, going to the anything working

Operator

call. Thank you gentlemen, for your participation. Ladies and conference today's this concludes

now may disconnect. You

MYR (MYRG) 1 Aug 242024 Q2 Earnings call transcript