THORNTON, Colo., July 31, 2024 (GLOBE NEWSWIRE) -- MYR Group Inc. ("MYR") (NASDAQ:MYRG), a holding company of leading specialty contractors serving the electric utility infrastructure, commercial and industrial construction markets in the United States and Canada, announced today its second-quarter and first-half 2024 financial results. Highlights for Second Quarter 2024 Quarterly revenues of $828.9 million Quarterly net loss of $15.3 million, or ($0.91) per diluted share Quarterly EBITDA of ($4.7) million Backlog of $2.54 billion Management CommentsRick Swartz, MYR's President and CEO, said, "Our second quarter 2024 financials reflected decreased revenues and consolidated gross profit, compared to the same period of 2023, which were primarily related to unfavorable clean energy projects within our T&D segment and one project within our C&I segment. We expect all of these projects will reach mechanical completion this year." Mr. Swartz also said, "Aside from these challenged projects, our core businesses in transmission, distribution and C&I performed well, and we see steady bidding activity in both of our segments. Our team continues to execute well and with increased electrification, growing demand for data centers, and continued investments being made in electrical infrastructure, we are confident in our ability to generate positive returns for our shareholders going forward." Second Quarter ResultsMYR reported second-quarter 2024 revenues of $828.9 million, a decrease of $59.7 million, or 6.7 percent, compared to the second quarter of 2023. Specifically, our Transmission and Distribution ("T&D") segment reported quarterly revenues of $458.2 million, a decrease of $45.5 million, or 9.0 percent, from the second quarter of 2023, due to a decrease of $39.8 million in revenue on transmission projects and a decrease of $5.8 million in revenue on distribution projects. Our Commercial and Industrial ("C&I") segment reported quarterly revenues of $370.7 million, a decrease of $14.2 million, or 3.7 percent, from the second quarter of 2023, which was primarily due to the delayed start of certain projects. Consolidated gross profit decreased to $40.8 million for the second quarter of 2024, compared to $90.1 million for the second quarter of 2023. The decrease in gross profit was due to lower margin and lower revenues. Gross margin decreased to 4.9 percent for the second quarter of 2024 from 10.1 percent for the second quarter of 2023. The decrease in gross margin was primarily related to clean energy projects in T&D, the unfavorable impact of a C&I project, as well as an increase in costs associated with labor, project inefficiencies and schedule compression on certain projects. These margin decreases were partially offset by favorable change orders, better-than-anticipated productivity, a favorable job closeout, favorable joint venture results and favorable materials pricing on a project. Changes in estimates of gross profit on certain projects resulted in gross margin decreases of 7.2 percent and 1.3 percent for the second quarter of 2024 and 2023, respectively. Selling, general and administrative expenses ("SG&A") increased to $61.8 million for the second quarter of 2024, compared to $57.8 million for the second quarter of 2023. The period-over-period increase was primarily due to an increase in contingent compensation expense related to a prior acquisition and an increase in employee-related expenses to support future growth, partially offset by a decrease in employee incentive compensation costs. Income tax benefit was $6.9 million for the second quarter of 2024, with an effective tax rate of 31.0 percent, compared to income tax expense of $9.3 million for the second quarter of 2023, with an effective tax rate of 29.5 percent. The increase in the effective tax rate for the second quarter of 2024 compared to the second quarter of 2023 was primarily due to higher other permanent difference items. For the second quarter of 2024, net loss was $15.3 million, or ($0.91) per diluted share, compared to net income of $22.3 million, or $1.33 per diluted share, for the same period of 2023. Second-quarter 2024 EBITDA, a non-GAAP financial measure, was ($4.7) million, compared to $47.1 million in the second quarter of 2023. First-Half ResultsMYR reported first-half 2024 revenues of $1.64 billion, a decrease of $55.7 million, or 3.3 percent, compared to the first half of 2023. Specifically, our T&D segment reported revenues of $948.6 million, a decrease of $0.5 million, from the first half of 2023, due to a decrease of $24.0 million in revenue on transmission projects, mostly offset by an increase of $23.5 million in revenue on distribution projects. Our C&I segment reported revenues of $695.8 million, a decrease of $55.4 million, or 7.4 percent from the first half of 2023, which was primarily due to the delayed start of certain projects. Consolidated gross profit decreased to $127.1 million in the first half of 2024, compared to $174.5 million in the first half of 2023. The decrease in gross profit was due to lower margin and lower revenues. Gross margin decreased to 7.7 percent for the first half of 2024 from 10.3 percent for the first half of 2023. The decrease in gross margin was primarily related to clean energy projects in T&D, labor and project inefficiencies, the unfavorable impact of a C&I project, an increase in costs associated with schedule compression on certain projects and an unfavorable change order. These margin decreases were partially offset by better-than-anticipated productivity, favorable change orders, favorable joint venture results and a favorable job closeout. Changes in estimates of gross profit on certain projects resulted in a gross margin decreases of 4.2 percent and 1.0 percent for the first half of 2024 and 2023, respectively. SG&A increased to $124.1 million in the first half of 2024, compared to $114.7 million for the first half of 2023. The period-over-period increase was primarily due to an increase in contingent compensation expense related to a prior acquisition and an increase in employee-related expenses to support future growth. Interest expense increased to $2.3 million in the first half of 2024, compared to $1.7 million for the first half of 2023. The period-over-period increase was primarily due to higher interest rates, partially offset by lower average debt balances during the first half of 2024 as compared to the first half of 2023. Income tax benefit was $2.7 million for the first half of 2024, with an effective tax rate of negative 281.9 percent, compared to income tax expense of $13.2 million for the first half of 2023, with an effective tax rate of 22.6 percent. The period-over-period change in tax rate was primarily due to lower pretax income and higher other permanent difference items, offset by lower stock compensation excess tax benefits. For the first half of 2024, net income was $3.7 million, or $0.22 per diluted share, compared to $45.4 million, or $2.70 per diluted share, for the same period of 2023. BacklogAs of June 30, 2024, MYR's backlog was $2.54 billion, compared to $2.43 billion as of March 31, 2024. As of June 30, 2024, T&D backlog was $830.7 million, and C&I backlog was $1.71 billion. Total backlog at June 30, 2024 decreased $190.5 million, or 7.0 percent, from the $2.73 billion reported at June 30, 2023. Balance SheetAs of June 30, 2024, MYR had $426.6 million of borrowing availability under its $490 million revolving credit facility. Non-GAAP Financial MeasuresTo supplement MYR's financial statements presented in accordance with generally accepted accounting principles in the United States ("GAAP"), MYR uses certain non-GAAP measures. Reconciliation to the nearest GAAP measures of all non-GAAP measures included in this press release can be found at the end of this release. MYR's definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. MYR believes that these non-GAAP measures are useful because they (i) provide both management and investors meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results, (ii) permit investors to view MYR's performance using the same tools that management uses to evaluate MYR's past performance, reportable business segments and prospects for future performance, (iii) publicly disclose results that are relevant to financial covenants included in MYR's credit facility and (iv) otherwise provide supplemental information that may be useful to investors in evaluating MYR. Conference CallMYR will host a conference call to discuss its second-quarter 2024 results on Thursday, August 1, 2024 at 8:00 a.m. Mountain time. To participate via telephone and join the call live, please register in advance here: https://register.vevent.com/register/BI677e6fd415474feea43f3f2f3bbcb594. Upon registration, telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number and a unique passcode. Participants may access the audio-only webcast of the conference call from the Investors page of MYR Group's website at myrgroup.com. A replay of the webcast will be available for seven days. About MYR Group Inc. MYR Group is a holding company of leading, specialty electrical contractors providing services throughout the United States and Canada through two business segments: Transmission & Distribution (T&D) and Commercial & Industrial (C&I). MYR Group subsidiaries have the experience and expertise to complete electrical installations of any type and size. Through their T&D segment they provide services on electric transmission, distribution networks, substation facilities, clean energy projects and electric vehicle charging infrastructure. Their comprehensive T&D services include design, engineering, procurement, construction, upgrade, maintenance and repair services. T&D customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. Through their C&I segment, they provide a broad range of services which include the design, installation, maintenance and repair of commercial and industrial wiring generally for airports, hospitals, data centers, hotels, stadiums, commercial and industrial facilities, clean energy projects, manufacturing plants, processing facilities, water/waste-water treatment facilities, mining facilities, intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure. C&I customers include general contractors, commercial and industrial facility owners, government agencies and developers. For more information, visit myrgroup.com. Forward-Looking StatementsVarious statements in this announcement, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenue, income, capital spending, segment improvements and investments. Forward-looking statements are generally accompanied by words such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "may," "objective," "outlook," "plan," "project," "possible," "potential," "should," "unlikely," or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this announcement speak only as of the date of this announcement. We disclaim any obligation to update these statements (unless required by securities laws), and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. No forward-looking statement can be guaranteed and actual results may differ materially from those projected. Forward-looking statements in this announcement should be evaluated together with the many uncertainties that affect MYR's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A. of MYR's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in any risk factors or cautionary statements contained in MYR's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. MYR Group Inc. Contact:Kelly M. Huntington, Chief Financial Officer, Investor Contact:David Gutierrez, Dresner Corporate Services, Financial tables follow… MYR GROUP INC. Consolidated Balance Sheets As of June 30, 2024 and December 31, 2023   (in thousands, except share and per share data) June 30, 2024   December 31,  2023   (unaudited)     ASSETS       Current assets:       Cash and cash equivalents $ 1,869     $ 24,899   Accounts receivable, net of allowances of $898 and $1,987, respectively   554,822       521,893   Contract assets, net of allowances of $619 and $610, respectively   402,301       420,616   Current portion of receivable for insurance claims in excess of deductibles   8,349       8,267   Refundable income taxes   14,093       4,034   Prepaid expenses and other current assets   35,871       46,535   Total current assets   1,017,305       1,026,244   Property and equipment, net of accumulated depreciation of $387,375 and $380,465, respectively   278,099       268,978   Operating lease right-of-use assets   40,396       35,012   Goodwill   115,372       116,953   Intangible assets, net of accumulated amortization of $32,688 and $30,534, respectively   79,855       83,516   Receivable for insurance claims in excess of deductibles   33,687       33,739   Investment in joint ventures   12,861       8,707   Other assets   5,667       5,597   Total assets $ 1,583,242     $ 1,578,746           LIABILITIES AND SHAREHOLDERS' EQUITY       Current liabilities:       Current portion of long-term debt $ 6,617     $ 7,053   Current portion of operating lease obligations   10,472       9,237   Current portion of finance lease obligations   2,168       2,039   Accounts payable   344,130       359,363   Contract liabilities   256,622       240,411   Current portion of accrued self-insurance   24,190       28,269   Accrued income taxes   —       237   Other current liabilities   103,244       100,593   Total current liabilities   747,443       747,202   Deferred income tax liabilities   47,647       48,230   Long-term debt   38,448       29,188   Accrued self-insurance   51,700       51,796   Operating lease obligations, net of current maturities   29,897       25,775   Finance lease obligations, net of current maturities   1,645       314   Other liabilities   33,120       25,039   Total liabilities   949,900       927,544   Commitments and contingencies       Shareholders' equity:       Preferred stock—$0.01 par value per share; 4,000,000 authorized shares; none issued and outstanding at June 30, 2024 and December 31, 2023   —       —   Common stock—$0.01 par value per share; 100,000,000 authorized shares; 16,648,028 and 16,684,492 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively   166       167   Additional paid-in capital   160,001       162,386   Accumulated other comprehensive loss   (7,525 )     (3,880 ) Retained earnings   480,700       492,529   Total shareholders' equity   633,342       651,202   Total liabilities and shareholders' equity $ 1,583,242     $ 1,578,746                   MYR GROUP INC. Unaudited Consolidated Statements of Operations Three and Six Months Ended June 30, 2024 and 2023     Three months ended June 30,   Six months ended June 30, (in thousands, except per share data) 2024   2023   2024   2023 Contract revenues $ 828,890     $ 888,616     $ 1,644,452     $ 1,700,232   Contract costs   788,047       798,489       1,517,366       1,525,713   Gross profit   40,843       90,127       127,086       174,519   Selling, general and administrative expenses   61,839       57,775       124,072       114,739   Amortization of intangible assets   1,217       1,229       2,445       2,455   Gain on sale of property and equipment   (1,506 )     (1,315 )     (2,995 )     (2,539 ) Income (loss) from operations   (20,707 )     32,438       3,564       59,864   Other income (expense):               Interest income   81       193       223       514   Interest expense   (1,241 )     (1,154 )     (2,295 )     (1,740 ) Other income (expense), net   (270 )     120       (533 )     30   Income (loss) before provision for income taxes   (22,137 )     31,597       959       58,668   Income tax expense (benefit)   (6,860 )     9,324       (2,703 )     13,232   Net income (loss) $ (15,277 )   $ 22,273     $ 3,662     $ 45,436   Income (loss) per common share:               —Basic $ (0.91 )   $ 1.33