MYRG
Myr Group INC
NASDAQ
10-Q: MYR Group Inc. Reports Mixed Q1 2024 Results Amidst Project Estimate Adjustments
Sentiment:
Quarterly Report
1 May 2024 4:25 PM
MYR Group Inc. experienced a slight revenue increase but a decrease in net income for the first quarter of 2024, impacted by project estimate adjustments and increased operating expenses.
Worse than expected
Net income decreased compared to the same quarter last year.
Project estimate changes negatively impacted gross margin and operating income.
Backlog decreased from the previous quarter.
Delay expected
The company expects financial results to be affected by delays due to supply chain disruptions and regulatory slowdowns.
The C&I segment experienced a revenue decrease due to the delayed start of certain projects.
Summary
- MYR Group Inc.'s revenue for Q1 2024 was $815.6 million, a slight increase from $811.6 million in Q1 2023.
- Net income decreased to $18.9 million in Q1 2024 from $23.2 million in Q1 2023.
- The company's gross margin increased to 10.6% from 10.4% year-over-year, but was negatively impacted by project estimate changes.
- Changes in project estimates decreased consolidated gross margin by 1.2%, resulting in a $9.8 million decrease in operating income.
- Selling, general, and administrative expenses increased to $62.2 million from $57.0 million year-over-year.
- Backlog decreased to $2.43 billion at March 31, 2024, from $2.51 billion at December 31, 2023.
- The Transmission and Distribution (T&D) segment saw a revenue increase, while the Commercial and Industrial (C&I) segment experienced a revenue decrease.
- EBITDA for Q1 2024 was $39.8 million, compared to $41.3 million for Q1 2023.
Sentiment
Score: 4
Explanation: The document presents mixed results with a decrease in net income and backlog, offset by a slight increase in revenue and gross margin. The company faces ongoing challenges, but also has some positive aspects. The overall sentiment is cautiously negative.
Positives
- The company experienced a slight increase in overall revenue compared to the same period last year.
- Gross margin improved slightly to 10.6% despite negative impacts from project estimate changes.
- The T&D segment saw a significant revenue increase of 10.1% year-over-year.
- The company maintains a strong liquidity position with a $490 million revolving credit facility.
Negatives
- Net income decreased by $4.3 million compared to the same period last year.
- Project estimate changes negatively impacted gross margin by 1.2%, resulting in a $9.8 million decrease in operating income.
- Selling, general, and administrative expenses increased by $5.2 million year-over-year.
- The C&I segment experienced a significant revenue decrease of 11.2% year-over-year.
- Backlog decreased by $87.1 million from the previous quarter.
Risks
- The company's financial results are subject to delays and cost volatility due to supply chain disruptions, inflationary pressures, tariffs, and regulatory slowdowns.
- Changes in project estimates can significantly impact gross margins and operating income.
- The company faces risks related to labor and project inefficiencies, inclement weather, and unfavorable change orders.
- The company is exposed to potential credit risk related to changes in business and economic factors throughout the United States.
- The company is subject to risks associated with climate change including financial risks and physical risks such as an increase in extreme weather events.
- The company's use of percentage-of-completion accounting could result in a reduction or reversal of previously recognized revenues and profits.
Future Outlook
The company expects its financial results to continue to be affected by delays and cost volatility through 2024 due to supply chain disruptions, inflationary pressures, tariffs, and regulatory slowdowns. They anticipate continued bidding activity on large transmission projects and expect an incremental increase in distribution opportunities in some markets. The company also believes that the primary markets they serve in the C&I segment may be somewhat less vulnerable to an economic slowdown.
Management Comments
- Management believes legislative actions aimed at supporting infrastructure improvements in the United States may positively impact long-term demand.
- Management expects financial results to continue to be affected by delays and cost volatility through 2024.
- Management believes there is an ongoing need for utilities to sustain investment in their transmission systems.
- Management believes there is a need for further investment by utilities on their distribution systems.
- Management continues to implement strategies that are designed to further expand capabilities and effectively allocate capital.
Industry Context
The announcement reflects the ongoing challenges in the construction industry, including supply chain issues and inflationary pressures. The company's focus on infrastructure projects aligns with broader industry trends and government initiatives aimed at improving infrastructure. The mixed results highlight the volatility in the sector and the importance of effective project management and cost control.
Comparison to Industry Standards
- Comparing MYR Group to Quanta Services (PWR), a major competitor in the infrastructure services sector, shows that both companies are navigating similar challenges related to project delays and cost overruns.
- MYR Group's gross margin of 10.6% is within the typical range for construction companies, but the impact of project estimate changes highlights the importance of accurate forecasting, similar to issues faced by companies like MasTec (MTZ).
- The decrease in backlog is a concern, as it may indicate a slowdown in future projects, which is a metric closely watched by investors in the construction industry, similar to how investors monitor backlog for companies like Fluor (FLR).
- The company's focus on renewable energy projects and electric vehicle charging infrastructure aligns with the broader industry shift towards clean energy, similar to the strategies of companies like NextEra Energy (NEE) in the utility sector.
Stakeholder Impact
- Shareholders may be concerned about the decrease in net income and backlog.
- Employees may be affected by the company's efforts to manage increasing operating costs.
- Customers may experience delays due to supply chain disruptions and regulatory slowdowns.
- Suppliers may be impacted by the company's efforts to manage costs.
Next Steps
- The company will continue to manage increasing operating costs.
- The company will continue to invest in developing key management and craft personnel.
- The company will continue to procure the specific specialty equipment and tooling needed to win and execute projects.
- The company will continue to monitor and respond to challenges and uncertainties in the markets they serve.
Related Party Transactions
- Certain subsidiaries of the Company have operating leases for facilities from third party companies that are owned, in whole or part, by employees of the subsidiaries. The terms and rental rates of these leases are at or below market rental rates.
Key Dates
- March 1, 2024: Effective date of Brian K. Stern's employment agreement as Senior Vice President and Chief Operating Officer T&D.
- March 31, 2024: End of the quarterly period for this report.
- April 26, 2024: Date used to determine the number of outstanding shares of common stock.
- May 1, 2024: Date of the filing of this quarterly report.
- May 8, 2024: Expiration date of the share repurchase program.
Keywords
electrical construction, transmission and distribution, commercial and industrial, revenue, net income, gross margin, EBITDA, backlog, project estimates, operating expenses
MYRG
Myr Group INC
NASDAQ
Sector: Industrials
Filings with Classifications
Better than expected
30 April 2025 8:05 PM
Quarterly Report
- The company's net income increased from $18.9 million to $23.3 million year over year.
- The company's gross margin increased from 10.6% to 11.6% year over year.
- The company's EBITDA increased from $39.8 million to $50.2 million year over year.
Better than expected
30 April 2025 4:02 PM
Earnings Release
- The company's revenue, net income, and EBITDA all increased compared to the same period in the previous year, indicating improved financial performance.
Worse than expected
10 March 2025 4:04 PM
Investor Presentation
- Net income, EBITDA, earnings per share, and free cash flow decreased in 2024 compared to 2023.
Worse than expected
5 March 2025 4:29 PM
Proxy Statement
- The company's revenues decreased by 7.7% in 2024 compared to 2023.
- The company's net income decreased significantly in 2024, dropping from $91.0 million in 2023 to $30.3 million.
Worse than expected
26 February 2025 4:08 PM
Annual Results
- The company's revenue decreased by 7.7% to $3.36 billion in 2024 from $3.64 billion in 2023.
- The company's net income decreased significantly to $30.3 million in 2024 from $91.0 million in 2023.
- The company's gross margin decreased to 8.6% in 2024 compared to 10.0% for the year ended December 31, 2023.
Delay expected
26 February 2025 4:08 PM
Annual Results
- The decrease in C&I revenue was primarily due to the delayed start of certain projects in 2024.
Delay expected
26 February 2025 4:03 PM
Earnings Release
- The C&I segment experienced a decrease in revenue due to the delayed start of certain projects in 2024.
Worse than expected
26 February 2025 4:03 PM
Earnings Release
- The company's revenue and net income decreased for both the fourth quarter and the full year compared to the previous year.
Better than expected
6 November 2024 4:04 PM
Investor Presentation
- The company's third quarter performance showed improvement over the second quarter, demonstrating strong project execution in core areas of the business.
Delay expected
30 October 2024 4:06 PM
Quarterly Report
- The company's financial results are being affected by delays due to supply chain disruptions and regulatory slowdowns.
- Schedule extensions caused by owner-furnished panel delays led to increased costs on two clean energy projects.
Worse than expected
30 October 2024 4:06 PM
Quarterly Report
- The company's gross margin and net income were significantly lower than the same period last year due to unfavorable project estimate adjustments.
- The Transmission and Distribution segment experienced a significant decrease in operating income.
- The company's effective tax rate increased due to higher permanent difference items.
Worse than expected
30 October 2024 4:03 PM
Quarterly Report
- The company's third-quarter revenue and net income were lower than the same period last year.
- The company's gross margin decreased compared to the same period last year.
- The company's earnings per share were lower than the same period last year.
Worse than expected
21 August 2024 4:29 PM
Investor Presentation
- The company reported a net loss of $15.3 million in Q2 2024, which is worse than expected due to project timing issues.
Delay expected
31 July 2024 4:26 PM
Quarterly Report
- The company's financial results are expected to continue to be affected by delays and cost volatility through 2024 due to supply chain disruptions, inflationary pressures, tariffs and regulatory slowdowns.
- The company experienced a decrease in C&I revenue due to the delayed start of certain projects.
Worse than expected
31 July 2024 4:26 PM
Quarterly Report
- The company's net income was significantly lower than expected due to significant changes in project cost estimates.
- The company's gross margin was significantly lower than expected due to significant changes in project cost estimates.
- The company's revenue was lower than expected due to a decrease in revenue on transmission projects, a decrease in C&I revenue, and a decrease in revenue on distribution projects.
Delay expected
31 July 2024 4:16 PM
Quarterly Report
- The Commercial and Industrial (C&I) segment reported a decrease in quarterly revenues primarily due to the delayed start of certain projects.
Worse than expected
31 July 2024 4:16 PM
Quarterly Report
- The company reported a net loss of $15.3 million for the second quarter, a significant downturn compared to the net income of $22.3 million in the same period last year.
- EBITDA for the second quarter was ($4.7) million, a substantial decrease from $47.1 million in the second quarter of 2023.
- Gross margin decreased to 4.9% in the second quarter of 2024, down from 10.1% in the second quarter of 2023.
Better than expected
8 May 2024 4:02 PM
Investor Presentation
- The company achieved record revenue and EPS in 2023, exceeding previous results.
- The company's LTM revenue as of March 31, 2024, reached a record high of $3.65 billion.
- The company has a strong backlog of $2.43 billion, indicating future growth potential.
Delay expected
1 May 2024 4:25 PM
Quarterly Report
- The company expects financial results to be affected by delays due to supply chain disruptions and regulatory slowdowns.
- The C&I segment experienced a revenue decrease due to the delayed start of certain projects.
Worse than expected
1 May 2024 4:25 PM
Quarterly Report
- Net income decreased compared to the same quarter last year.
- Project estimate changes negatively impacted gross margin and operating income.
- Backlog decreased from the previous quarter.
Worse than expected
1 May 2024 4:08 PM
Quarterly Report
- Net income decreased from $23.2 million to $18.9 million year-over-year.
- EBITDA decreased from $41.3 million to $39.8 million year-over-year.
- Backlog decreased from $2.67 billion to $2.43 billion year-over-year.
Delay expected
1 May 2024 4:08 PM
Quarterly Report
- The Commercial and Industrial segment experienced a revenue decrease due to the delayed start of certain projects.
Better than expected
5 March 2024 4:06 PM
Investor Presentation
- The company achieved record revenue, net income, earnings per share, and EBITDA for the full year 2023, indicating better than expected results.
- The company's backlog of $2.51 billion demonstrates strong future demand, exceeding expectations.
Worse than expected
28 February 2024 4:16 PM
Annual Results
- The company's gross margin decreased to 10.0% in 2023 from 11.4% in 2022, primarily due to significant changes in estimated gross profit on certain projects.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.