CTRI Centuri Holdings Inc

Centuri Holdings, Inc. (NYSE: CTRI) ("Centuri" or the "Company") today announced financial and operating results for the third quarter, ended September 29, 2024. The Company also reiterates outlook for full year financial performance.

Third Quarter and Other Recent Business and Financial Highlights

• Secured customer awards reflecting total multi-year estimated revenue potential of approximately $350 million from a combination of new and renewed Master Service Agreements ("MSA") as well as strategic bid work; exited the third quarter of 2024 with a backlog totaling $4.3 billion, of which 87% is related to MSA revenue
• Third quarter 2024 revenue of $720.1 million
• Net loss attributable to common stock of $3.7 million (diluted loss per share of $0.04)
• Adjusted Net Income of $5.3 million (adjusted diluted earnings per share of $0.06)
• Adjusted EBITDA of $78.8 million and Adjusted EBITDA margin of 10.9%
• Entered into a $125.0 million three-year accounts receivable securitization facility, with proceeds primarily used to repay amounts outstanding under the Company’s existing term loan
• Released annual Sustainability Report in October 2024, which includes the introduction of Key Performance Indicators and aligns with six identified UN Sustainable Development Goals
• In November, appointed Christian (“Chris”) Brown as President and Chief Executive Officer, effective December 3, 2024, bringing over three decades of strategic and operational expertise in the energy and infrastructure sectors to advance Centuri’s growth and enhance efficiencies.

“Throughout the third quarter, we saw improvement in our core electric business and a higher volume of storm restoration services, which continued its momentum into early 4Q, driven by Hurricanes Helene and Milton,” said Interim President & CEO Paul Caudill. “We have invested significant effort into developing and training a safe, highly qualified workforce to make storm response a core customer offering. This was done intentionally as the recurrence of extreme weather events, while yet unpredictable, has become more likely each year in varying degrees of severity. Our strong performance during the recent storm season has given us further confidence to reiterate our full year 2024 outlook. Looking ahead, we remain well-positioned to diversify our customer and business mix by pursuing additional strategic bid opportunities that align with our risk profile and core competencies, while staying focused on strengthening our core MSA-based businesses serving electric and gas utilities. Our capabilities and decades of experience have situated us well to pursue and win myriad opportunities that exist across the high demand energy sector.”

Management Commentary

Financial results during the third quarter of 2024 declined on a year-over-year basis. Our results for the quarter benefited from increased storm restoration services, which generated revenues of $41.4 million, mainly resulting from the impacts of Hurricane Beryl early in the quarter and Hurricane Helene in the last few days of the period, and the benefit of previously disclosed cost savings initiatives. These positive contributions were offset by a high margin bid job in the third quarter of 2023 in our U.S. Gas segment that did not recur, reduced offshore wind activities, and cost pressures that arose in the U.S. Gas business, including recently incurred higher self-insurance costs associated with prior year claims and higher rental and equipment repair costs. In addition, spending remained relatively subdued among several of our largest gas customers operating under MSAs.

We were awarded approximately $350 million in new business during the quarter, which exemplifies Centuri’s ability to meet both existing and emerging needs in a dynamic energy market. These included entering into an MSA with a new U.S. Gas customer following an extensive period of relationship building, and securing for the first time a complex bid project award for a long-standing MSA customer.

During the quarter, we changed our how we calculate interim period income taxes by using the actual effective tax rate instead of the estimated annual effective tax rate used in prior quarters. This change has no impact on income taxes for the full year.

Management continued the process of identifying cost savings through a comprehensive supply chain and asset utilization review program. As of the end of October, Centuri has renegotiated a total of 14 supply chain contracts, with 21% of the spend among our top 100 vendors contracted.

In late September, we secured a three-year, $125.0 million accounts receivable securitization facility, primarily to repay our existing term loan. We ended the quarter with $52.5 million in cash and cash equivalents. Our leverage ratio improved from June 2024 and we remain focused on deleveraging the business.

Reiterates Full Year 2024 Outlook

• Revenue outlook of $2.5 to $2.7 billion
• Adjusted EBITDA margin percentage outlook at 9.0 to 9.6%
• Net capital expenditures outlook at $90 to $99 million

Centuri Holdings, Inc. and Subsidiaries

Supplemental Segment Data

For the Fiscal Three and Nine Months Ended

September 29, 2024 and October 1, 2023

(In thousands, except percentages)

(Unaudited)

 

Segment Results

 

Three months ended September 29, 2024 compared to the three months ended October 1, 2023

 

 

Fiscal Three Months Ended

 

Change

(dollars in thousands)

September 29, 2024

 

October 1, 2023

 

$

 

%

Revenue:

 

 

 

 

 

 

 

 

 

 

 

U.S. Gas

$

366,070

 

 

50.8

%

 

$

395,745

 

51.1

%

 

$

(29,675

)

 

(7.5

%)

Canadian Gas

 

50,354

 

 

7.0

%

 

 

54,590

 

 

7.0

%

 

 

(4,236

)

 

(7.8

%)

Union Electric

 

171,666

 

 

23.8

%

 

 

204,135

 

 

26.3

%

 

 

(32,469

)

 

(15.9

%)

Non-Union Electric

 

128,844

 

 

17.9

%

 

 

110,715

 

 

14.3

%

 

 

18,129

 

 

16.4

%

Other

 

3,119

 

 

0.5

%

 

 

9,704

 

 

1.3

%

 

 

(6,585

)

 

(67.9

%)

Consolidated revenue

$

720,053

 

 

100.0

%

 

$

774,889

 

 

100.0

%

 

$

(54,836

)

 

(7.1

%)

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

U.S. Gas

$

27,960

 

 

7.6

%

 

$

52,103

 

 

13.2

%

 

$

(24,143

)

 

(46.3

%)

Canadian Gas

 

11,789

 

 

23.4

%

 

 

10,020

 

 

18.4

%

 

 

1,769

 

 

17.7

%

Union Electric

 

15,427

 

 

9.0

%

 

 

11,724

 

 

5.7

%

 

 

3,703

 

 

31.6

%

Non-Union Electric

 

21,437

 

 

16.6

%

 

 

12,802

 

 

11.6

%

 

 

8,635

 

 

67.5

%

Other

 

(820

)

 

(26.3

%)

 

 

964

 

 

9.9

%

 

 

(1,784

)

 

NM

Consolidated gross profit

$

75,793

 

 

10.5

%

 

$

87,613

 

 

11.3

%

 

$

(11,820

)

 

(13.5

%)

 

NM — Percentage is not meaningful

 

• Revenue from our U.S. Gas segment totaled $366.1 million, reflecting a decrease of $29.7 million, or 7.5%, compared to the prior year period. This decrease was largely due to a reduction in net volumes under existing customer MSAs. As a percentage of revenue, gross profit decreased to 7.6% in the current period from 13.2% in the same period from the prior year. Profitability was negatively affected primarily by mix of bid work, as the same quarter in the prior year benefited from a highly profitable bid project. Additionally, the current quarter was impacted by lower utilization of fixed costs stemming from reduced revenues, lower productivity on MSA and bid jobs, caused in part by higher rental and repairs and maintenance costs due to equipment issues experienced, and higher costs of insurance claims.

• Revenue from our Canadian Gas segment totaled $50.4 million, reflecting a decrease of $4.2 million, or 7.8%, compared to the prior year period. This decrease was primarily due to a reduction in net volumes under existing MSAs. As a percentage of revenue, gross profit increased to 23.4% in the current period as compared to 18.4% in the same period from the prior year primarily due to favorable changes in mix of work.

• Revenue from our Union Electric segment totaled $171.7 million, reflecting a decrease of $32.5 million, or 15.9%, compared to the prior year period. This decrease was driven by a decline in offshore wind revenue of $38.0 million due to timing of projects, partially offset by increased revenue on bid projects. Storm restoration services revenue for the Union Electric segment was $6.7 million for the current period compared to $10.8 million for the prior year period. As a percentage of revenue, gross profit increased to 9.0% in the current period as compared to 5.7% in the prior year period as the segment experienced higher margins on their increased bid volumes.

• Revenue from our Non-Union Electric segment totaled $128.8 million, reflecting an increase of $18.1 million, or 16.4%, compared to the prior year period. This increase was primarily due to revenue from storm restoration services which accounted for $34.7 million of the segment’s revenue for the current period, compared to $8.1 million for the prior year period. As a percentage of revenue, gross profit increased to 16.6% in the current period compared to 11.6% in the prior year period, primarily due to the higher profitability of storm work, mainly resulting from the impacts of Hurricane Beryl early in the quarter and Hurricane Helene in the last few days of the period.

• Revenue from non-reportable segments decreased due to timing of bid projects.

Centuri Holdings, Inc. and Subsidiaries

Supplemental Segment Data

For the Fiscal Three and Nine Months Ended

September 29, 2024 and October 1, 2023

(In thousands, except percentages)

(Unaudited)

 

Nine months ended September 29, 2024 compared to the nine months ended October 1, 2023

 

 

Fiscal Nine Months Ended

 

Change

(dollars in thousands)

September 29, 2024

 

October 1, 2023

 

$

 

%

Revenue:

 

 

 

 

 

 

 

 

 

 

 

U.S. Gas

$

933,334

 

 

48.6

%

 

$

1,046,964

 

46.9

%

 

$

(113,630

)

 

(10.9

%)

Canadian Gas

 

125,992

 

 

6.6

%

 

 

141,977

 

 

6.4

%

 

 

(15,985

)

 

(11.3

%)

Union Electric

 

499,728

 

 

26.0

%

 

 

628,029

 

 

28.1

%

 

 

(128,301

)

 

(20.4

%)

Non-Union Electric

 

345,971

 

 

18.0

%

 

 

380,882

 

 

17.0

%

 

 

(34,911

)

 

(9.2

%)

Other

 

15,126

 

 

0.8

%

 

 

36,109

 

 

1.6

%

 

 

(20,983

)

 

(58.1

%)

Consolidated revenue

$

1,920,151

 

 

100.0

%

 

$

2,233,961

 

 

100.0

%

 

$

(313,810

)

 

(14.0

%)

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

U.S. Gas

$

49,140

 

 

5.3

%

 

$

99,509

 

 

9.5

%

 

$

(50,369

)

 

(50.6

%)

Canadian Gas

 

26,692

 

 

21.2

%

 

 

22,070

 

 

15.5

%

 

 

4,622

 

 

20.9

%

Union Electric

 

38,875

 

 

7.8

%

 

 

44,030

 

 

7.0

%

 

 

(5,155

)

 

(11.7

%)

Non-Union Electric

 

40,474

 

 

11.7

%

 

 

51,864

 

 

13.6

%

 

 

(11,390

)

 

(22.0

%)

Other

 

(5,605

)

 

(37.1

%)

 

 

2,061

 

 

5.7

%

 

 

(7,666

)

 

NM

Consolidated gross profit

$

149,576

 

 

7.8

%

 

$

219,534

 

 

9.8

%

 

$

(69,958

)

 

(31.9

%)

 

NM — Percentage is not meaningful

 

• Revenue from our U.S. Gas segment totaled $933.3 million, reflecting a decrease of $113.6 million, or 10.9%, compared to the prior year period. This decrease was largely due to a reduction in net volumes under existing customer MSAs stemming primarily from delayed or unfavorable regulatory decisions faced by key customers and timing of bid projects, as the prior year benefited from the commencement of a large project that was substantially complete in the third quarter of 2023. As a percentage of revenue, gross profit decreased to 5.3% in the current period from 9.5% in the prior year period. Profitability was negatively affected by lower margins on bid work as well as higher costs of insurance claims. Additionally, the prior year period reflected higher utilization of fixed costs due to increased volumes on both MSA and bid projects.

• Revenue from our Canadian Gas segment totaled $126.0 million, reflecting a decrease of $16.0 million, or 11.3%, compared to the prior year period. This decrease was primarily due to a reduction in net volumes under existing MSAs. As a percentage of revenue, gross profit increased to 21.2% in the current period as compared to 15.5% in the prior year period primarily due to favorable changes in mix of work.

• Revenue from our Union Electric segment totaled $499.7 million, reflecting a decrease of $128.3 million, or 20.4%, compared to the prior year period. This decrease was driven by a decline in offshore wind revenue of $71.4 million due to timing of projects, as well as a reduction in net volumes under existing customer MSAs. Storm restoration services revenue for the Union Electric segment was $20.3 million for the current period compared to $24.2 million for the prior year period. As a percentage of revenue, gross profit increased to 7.8% in the current period as compared to 7.0% in the prior year period primarily due to changes in the mix of work and in part from cost savings realized due to restructuring activities which occurred in the prior period.

• Revenue from our Non-Union Electric segment totaled $346.0 million, reflecting a decrease of $34.9 million, or 9.2%, compared to the prior year period. This decrease was primarily driven by a decrease in volumes under existing MSAs, partially offset by an increase in storm restoration services revenue of $7.5 million (which was $66.7 million for the first nine months of 2024 compared to $59.2 million for the same period in 2023). As a percentage of revenue, gross profit decreased to 11.7% in the current period, compared to 13.6% in the same period from the prior year. Profitability was negatively affected by unfavorable changes in mix of work and underutilization of fixed costs stemming from lower work hours.

• Revenue from non-reportable segments decreased due to timing of bid projects, and profitability was negatively impacted by performance issues on certain bid projects.

Conference Call Information

Centuri will conduct a conference call today, Wednesday, November 6, 2024 at 10:00 AM ET / 7:00 AM PT to discuss its third quarter 2024 financial results and other business highlights. The conference call will be webcast live on the Company's investor relations (IR) website at https://investor.centuri.com. The conference call can also be accessed via phone by dialing (800) 225-9448, or for international callers, (203) 518-9708. A supplemental investor presentation will also be available on the IR website prior to the start of the conference call. The earnings call will also be archived on the IR website and a replay of the call will be available by dialing 800-934-3639 in the U.S., or 402-220-1152 internationally. The replay dial-in feature will be made available one hour after the call’s conclusion and will be active for 12 months.

About Centuri

Centuri Holdings, Inc. is a strategic utility infrastructure services company that partners with regulated utilities to build and maintain the energy network that powers millions of homes and businesses across the United States and Canada.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can often be identified by the use of words such as “will,” “predict,” “continue,” “forecast,” “expect,” “believe,” “anticipate,” “outlook,” “could,” “target,” “project,” “intend,” “plan,” “seek,” “estimate,” “should,” “may” and “assume,” as well as variations of such words and similar expressions referring to the future. The specific forward-looking statements made herein include (without limitation) statements regarding our belief that the fundamentals of our business and services to our customers remain strong; our belief that, in the near term, the Company is well positioned to further implement its cost-focused initiatives; our estimation that awards secured in the quarter represent approximately $350 million in potential revenue; our belief that we remain well-positioned to diversify our business mix by pursuing additional strategic bid opportunities that align with our risk profile and core competencies, while staying focused on strengthening our core MSA-based businesses across electric and gas; our belief that our capabilities and decades of experience have situated us well to pursue and win myriad opportunities that exist across the dynamic and high demand energy sector; and the number ranges presented in our Full Year 2024 Outlook. A number of important factors affecting the business and financial results of Centuri could cause actual results to differ materially from those stated in the forward-looking statements. These factors include, but are not limited to, capital market risks and the impact of general economic or industry conditions. Factors that could cause actual results to differ also include (without limitation) those discussed in Centuri’s filings filed from time to time with the U.S. Securities and Exchange Commission. The statements in this press release are made as of the date of this press release, even if subsequently made available by Centuri on its website or otherwise. Centuri does not assume any obligation to update the forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise.

Backlog

Backlog represents our expected revenue from existing contracts and work in progress as of the end of the applicable reporting period.

Non-GAAP Financial Measures

We prepare and present our financial statements in accordance with GAAP. However, management believes that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share, all of which are measures not presented in accordance with GAAP, provide investors with additional useful information in evaluating our performance. We use these non-GAAP measures internally to evaluate performance and to make financial, investment and operational decisions. We believe that presentation of these non-GAAP measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparisons of results. Management also believes that providing these non-GAAP measures helps investors evaluate the Company’s operating performance, profitability and business trends in a way that is consistent with how management evaluates such matters.

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for (i) non-cash stock-based compensation expense, (ii) strategic review costs, (iii) severance costs, (iv) securitization facility transaction fees, and (v) CEO transition costs. Adjusted EBITDA Margin is defined as the percentage derived from dividing Adjusted EBITDA by revenue.

Adjusted Net Income is defined as net (loss) income adjusted for (i) strategic review costs, (ii) severance costs, (iii) amortization of intangible assets, (iv) securitization transaction fees, (v) CEO transition costs, (vi) loss on debt extinguishment, (vii) non-cash stock-based compensation expense, and (viii) the income tax impact of adjustments that are subject to tax, which is determined using the incremental statutory tax rates of the jurisdictions to which each adjustment relates for the respective periods. Adjusted Dilutive Earnings per Share is defined as Adjusted Net Income divided by weighted average diluted shares outstanding.

Using EBITDA as a performance measure has material limitations as compared to net income (loss), or other financial measures as defined under GAAP, as it excludes certain recurring items, which may be meaningful to investors. EBITDA excludes interest expense net of interest income; however, as we have borrowed money to finance transactions and operations, or invested available cash to generate interest income, interest expense and interest income are elements of our cost structure and can affect our ability to generate revenue and returns for our stockholders. Further, EBITDA excludes depreciation and amortization; however, as we use capital and intangible assets to generate revenue, depreciation and amortization are necessary elements of our costs and ability to generate revenue. Finally, EBITDA excludes income taxes; however, as we are organized as a corporation, the payment of taxes is a necessary element of our operations. As a result of these exclusions from EBITDA, any measure that excludes interest expense net of interest income, depreciation and amortization and income taxes has material limitations as compared to net income (loss). When using EBITDA as a performance measure, management compensates for these limitations by comparing EBITDA to net income (loss) in each period, to allow for the comparison of the performance of the underlying core operations with the overall performance of the company on a full-cost, after-tax basis.

As to certain of the items related to Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income: (i) non-cash stock-based compensation expense varies from period to period due to changes in the estimated fair value of performance-based awards, forfeitures and amounts granted; (ii) strategic review and related costs incurred in connection with the separation and stand up of Centuri as its own public company are non-recurring; (iii) severance costs relate to non-recurring restructuring activities, (iv) securitization facility transaction fees represent legal and other professional fees incurred to establish our accounts receivable securitization facility that was put in place in September 2024, (v) CEO transition costs represent incremental costs incurred to find and hire a replacement CEO, and (vi) loss on debt extinguishment relates to the write-off of debt issuance costs on the Company's term loan. Because EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income, as defined, exclude some, but not all, items that affect net (loss) income, such measures may not be comparable to similarly titled measures of other companies. The most comparable GAAP financial measure, net (loss) income, and information reconciling the GAAP and non-GAAP financial measures, are set forth below. We are unable to provide reconciliations for forward-looking non-GAAP metrics, such as EBITDA margin, without unreasonable efforts due to our inability to project non-recurring expenses. These items are uncertain and difficult to predict, depend on various factors, and could have a material impact on our GAAP results.

Centuri Holdings, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

For the Fiscal Three and Nine Months Ended

September 29, 2024 and October 1, 2023

(In thousands, except per share data)

(Unaudited)

 

Fiscal Three Months Ended

 

Fiscal Nine Months Ended

(dollars in thousands)

September 29,

2024

 

October 1,

2023

 

September 29,

2024

 

October 1,

2023

Net (loss) income

$

(3,617

)

 

$

16,918

 

 

$

(17,153

)

 

$

28,340

 

Interest expense, net

 

23,925

 

 

 

26,131

 

 

 

70,653

 

 

 

73,032

 

Income tax expense

 

21,770

 

 

 

10,010

 

 

 

523

 

 

 

16,835

 

Depreciation expense

 

26,546

 

 

 

29,582

 

 

 

81,921

 

 

 

90,975

 

Amortization of intangible assets

 

6,662

 

 

 

6,670

 

 

 

19,991

 

 

 

20,007

 

EBITDA

 

75,286

 

 

 

89,311

 

 

 

155,935

 

 

 

229,189

 

Non-cash stock-based compensation

 

1,318

 

 

 

1,316

 

 

 

810

 

 

 

2,149

 

Strategic review costs

 

—

 

 

 

549

 

 

 

2,010

 

 

 

1,777

 

Severance costs

 

531

 

 

 

335

 

 

 

7,188

 

 

 

567

 

Securitization facility transaction fees

 

1,393

 

 

 

—

 

 

 

1,393

 

 

 

—

 

CEO transition costs

 

233

 

 

 

—

 

 

 

233

 

 

 

—

 

Goodwill impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Adjusted EBITDA

$

78,761

 

 

$

91,511

 

 

$

167,569

 

 

$

233,682

 

Adjusted EBITDA Margin (% of revenue)

 

10.9

%

 

 

11.8

%

 

 

8.7

%

 

 

10.5

%

Centuri Holdings, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

For the Fiscal Three and Nine Months Ended

September 29, 2024 and October 1, 2023

(In thousands, except per share data)

(Unaudited)

 

Fiscal Three Months Ended

 

Fiscal Nine Months Ended

(dollars in thousands)

September 29,

2024

 

October 1,

2023

 

September 29,

2024

 

October 1,

2023

Net (loss) income

$

(3,617

)

 

$

16,918

 

 

$

(17,153

)

 

$

28,340

 

Strategic review costs

 

—

 

 

 

549

 

 

 

2,010

 

 

 

1,777

 

Severance costs

 

531

 

 

 

335

 

 

 

7,188

 

 

 

567

 

Amortization of intangible assets

 

6,662

 

 

 

6,670

 

 

 

19,991

 

 

 

20,007

 

Securitization facility transaction fees

 

1,393

 

 

 

—

 

 

 

1,393

 

 

 

—

 

CEO transition costs

 

233

 

 

 

—

 

 

 

233

 

 

 

—

 

Loss on debt extinguishment

 

1,726

 

 

 

—

 

 

 

1,726

 

 

 

—

 

Non-cash stock-based compensation

 

1,318

 

 

 

1,316

 

 

 

810

 

 

 

2,149

 

Income tax impact of adjustments(1)

 

(2,966

)

 

 

(2,217

)

 

 

(8,339

)

 

 

(6,125

)

Adjusted Net Income

$

5,280

 

 

$

23,571

 

 

$

7,859

 

 

$

46,715

 

 

(1) Calculated based on a blended statutory tax rate of 25%.

 

Fiscal Three Months Ended

 

Fiscal Nine Months Ended

 

September 29,

2024

 

October 1,

2023

 

September 29,

2024

 

October 1,

2023

Diluted (loss) earnings per share attributable to common stock (GAAP as reported)

$

(0.04

)

 

$

0.23

 

 

$

(0.21

)

 

$

0.34

 

Add-back (deduct) net income (loss) attributable to noncontrolling interests

 

—

 

 

 

0.01

 

 

 

—

 

 

 

0.05

 

Strategic review costs

 

—

 

 

 

0.01

 

 

 

0.02

 

 

 

0.02

 

Severance costs

 

0.01

 

 

 

—

 

 

 

0.09

 

 

 

0.01

 

Securitization transaction fees

 

0.02

 

 

 

—

 

 

 

0.02

 

 

 

—

 

Loss on debt extinguishment

 

0.02

 

 

 

—

 

 

 

0.02

 

 

 

—

 

Amortization of intangible assets

 

0.07

 

 

 

0.09

 

 

 

0.25

 

 

 

0.29

 

Non-cash stock-based compensation

 

0.01

 

 

 

0.02

 

 

 

0.01

 

 

 

0.03

 

Income tax impact of adjustments

 

(0.03

)

 

 

(0.03

)

 

 

(0.10

)

 

 

(0.09

)

Adjusted Diluted Earnings per Share

$

0.06

 

 

$

0.33

 

 

$

0.10

 

 

$

0.65

 

 

Note: The CEO transition costs adjustment is excluded from the table above as it has no impact on Adjusted Diluted Earnings per Share when rounded.

Centuri Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the Fiscal Three and Nine Months Ended

September 29, 2024 and October 1, 2023

(In thousands, except per share information)

(Unaudited)

 

 

Fiscal Three Months Ended

 

Fiscal Nine Months Ended

 

September 29,

2024

 

October 1,

2023

 

September 29,

2024

 

October 1,

2023

Revenue

$

692,821

 

 

$

745,639

 

 

$

1,840,960

 

 

$

2,145,601

 

Revenue, related party - parent

 

27,232

 

 

 

29,250

 

 

 

79,191

 

 

 

88,360

 

Total revenue, net

 

720,053

 

 

 

774,889

 

 

 

1,920,151

 

 

 

2,233,961

 

Cost of revenue (including depreciation)

 

620,751

 

 

 

662,427

 

 

 

1,699,359

 

 

 

1,935,111

 

Cost of revenue, related party - parent (including depreciation)

 

23,509

 

 

 

24,849

 

 

 

71,216

 

 

 

79,316

 

Total cost of revenue

 

644,260

 

 

 

687,276

 

 

 

1,770,575

 

 

 

2,014,427

 

Gross profit

 

75,793

 

 

 

87,613

 

 

 

149,576

 

 

 

219,534

 

Selling, general and administrative expenses

 

27,213

 

 

 

27,993

 

 

 

76,461

 

 

 

81,632

 

Amortization of intangible assets

 

6,662

 

 

 

6,670

 

 

 

19,991

 

 

 

20,007

 

Operating income

 

41,918

 

 

 

52,950

 

 

 

53,124

 

 

 

117,895

 

Interest expense, net

 

23,925

 

 

 

26,131

 

 

 

70,653

 

 

 

73,032

 

Other income, net

 

(160

)

 

 

(109

)

 

 

(899

)

 

 

(312

)

Income (loss) before income taxes

 

18,153

 

 

 

26,928

 

 

 

(16,630

)

 

 

45,175

 

Income tax expense

 

21,770

 

 

 

10,010

 

 

 

523

 

 

 

16,835

 

Net (loss) income

 

(3,617

)

 

 

16,918

 

 

 

(17,153

)

 

 

28,340

 

Net income (loss) attributable to noncontrolling interests

 

35

 

 

 

736

 

 

 

(130

)

 

 

3,856

 

Net (loss) income attributable to common stock

$

(3,652

)

 

$

16,182

 

 

$

(17,023

)

 

$

24,484

 

 

 

 

 

 

 

 

 

(Loss) income per share attributable to common stock:

 

 

 

 

 

 

 

Basic

$

(0.04

)

 

$

0.23

 

 

$

(0.21

)

 

$

0.34

 

Diluted

$

(0.04

)

 

$

0.23

 

 

$

(0.21

)

 

$

0.34

 

Shares used in computing earnings per share:

 

 

 

 

 

 

 

Weighted average basic shares outstanding

 

88,518

 

 

 

71,666

 

 

 

81,679

 

 

 

71,666

 

Weighted average diluted shares outstanding

 

88,518

 

 

 

71,666

 

 

 

81,679

 

 

 

71,666

 

Centuri Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

September 29,

2024

 

December 31,

2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

52,459

 

 

$

33,407

 

Accounts receivable, net

 

245,593

 

 

 

335,196

 

Accounts receivable, related party - parent, net

 

7,426

 

 

 

12,258

 

Contract assets

 

283,929

 

 

 

266,600

 

Contract assets, related party - parent

 

4,639

 

 

 

3,208

 

Prepaid expenses and other current assets

 

40,555

 

 

 

32,258

 

Total current assets

 

634,601

 

 

 

682,927

 

Property and equipment, net

 

498,154

 

 

 

545,442

 

Intangible assets, net

 

348,647

 

 

 

369,048

 

Goodwill, net

 

373,993

 

 

 

375,892

 

Right-of-use assets under finance leases

 

36,246

 

 

 

43,525

 

Right-of-use assets under operating leases

 

109,719

 

 

 

118,448

 

Other assets

 

111,351

 

 

 

54,626

 

Total assets

$

2,112,711

 

 

$

2,189,908

 

LIABILITIES, TEMPORARY EQUITY AND EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

30,264

 

 

$

42,552

 

Current portion of finance lease liabilities

 

10,110

 

 

 

11,370

 

Current portion of operating lease liabilities

 

19,372

 

 

 

19,363

 

Accounts payable

 

121,298

 

 

 

116,583

 

Accrued expenses and other current liabilities

 

183,290

 

 

 

187,050

 

Contract liabilities

 

21,894

 

 

 

43,694

 

Total current liabilities

 

386,228

 

 

 

420,612

 

Long-term debt, net of current portion

 

762,139

 

 

 

1,031,174

 

Line of credit

 

116,378

 

 

 

77,121

 

Finance lease liabilities, net of current portion

 

17,075

 

 

 

24,334

 

Operating lease liabilities, net of current portion

 

96,676

 

 

 

105,215

 

Deferred income taxes

 

134,885

 

 

 

135,123

 

Other long-term liabilities

 

67,891

 

 

 

71,076

 

Total liabilities

 

1,581,272

 

 

 

1,864,655

 

Commitments and contingencies

 

 

 

Temporary equity:

 

 

 

Redeemable noncontrolling interests

 

4,132

 

 

 

99,262

 

Equity:

 

 

 

Common stock, $0.01 par value, 850,000,000 shares authorized, 88,517,521 shares issued and outstanding at September 29, 2024 and 1,000 shares issued and outstanding at December 31, 2023

 

885

 

 

 

—

 

Additional paid-in capital

 

693,476

 

 

 

374,124

 

Accumulated other comprehensive loss

 

(6,087

)

 

 

(4,025

)

Accumulated deficit

 

(160,967

)

 

 

(144,108

)

Total equity

 

527,307

 

 

 

225,991

 

Total liabilities, temporary equity and equity

$

2,112,711

 

 

$

2,189,908

 

Centuri Holdings, Inc. and Subsidiaries

Condensed Statements of Cash Flows

For the Fiscal Nine Months Ended

September 29, 2024 and October 1, 2023

(In thousands)

(Unaudited)

 

Fiscal Nine Months Ended

 

September 29,

2024

 

October 1,

2023

Cash flows from operating activities:

 

 

 

Net (loss) income

$

(17,153

)

 

$

28,340

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities

 

 

 

Depreciation

 

81,921

 

 

 

90,975

 

Amortization of intangible assets

 

19,991

 

 

 

20,007

 

Amortization of debt issuance costs

 

4,052

 

 

 

3,779

 

Loss on debt extinguishment

 

1,726

 

 

 

—

 

Non-cash stock-based compensation expense

 

810

 

 

 

2,149

 

Gain on sale of equipment

 

(2,651

)

 

 

(2,954

)

Amortization of right-of-use assets

 

15,491

 

 

 

12,537

 

Deferred income taxes

 

(10,406

)

 

 

8,703

 

Other non-cash items

 

836

 

 

 

—

 

Changes in assets and liabilities, net of non-cash transactions

 

2,615

 

 

 

(101,727

)

Net cash provided by operating activities

 

97,232

 

 

 

61,809

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(66,093

)

 

 

(79,610

)

Proceeds from sale of property and equipment

 

6,802

 

 

 

7,673

 

Net cash used in investing activities

 

(59,291

)

 

 

(71,937

)

Cash flows from financing activities:

 

 

 

Proceeds from initial public offering and private placement, net of offering costs paid

 

327,967

 

 

 

—

 

Proceeds from line of credit borrowings

 

280,408

 

 

 

195,842

 

Payment of line of credit borrowings

 

(239,704

)

 

 

(134,073

)

Principal payments on long-term debt

 

(285,807

)

 

 

(34,054

)

Principal payments on finance lease liabilities

 

(8,574

)

 

 

(9,095

)

Redemption of redeemable noncontrolling interest

 

(92,839

)

 

 

(39,894

)

Other

 

(198

)

 

 

(213

)

Net cash used in financing activities

 

(18,747

)

 

 

(21,487

)

Effects of foreign exchange translation

 

(142

)

 

 

102

 

Net increase (decrease) in cash and cash equivalents

 

19,052

 

 

 

(31,513

)

Cash and cash equivalents, beginning of period

 

33,407

 

 

 

63,966

 

Cash and cash equivalents, end of period

$

52,459

 

 

$

32,453

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241106893388/en/

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