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MYR Group Inc. Announces Third-Quarter and First Nine-Months 2012 Results



MYR Group Inc. Announces Third-Quarter and First Nine-Months 2012 Results

ROLLING MEADOWS, Ill., Nov. 7, 2012 (GLOBE NEWSWIRE) -- MYR Group Inc. ("MYR")
(Nasdaq:MYRG), a leading specialty contractor serving the electrical
infrastructure market in the United States, today announced its third-quarter
and first nine-months 2012 financial results.

Highlights

  * Q3 2012 revenues of $250.6 million compared to $210.5 million in Q3 2011.
  * Q3 2012 EBITDA of $20.7 million compared to $11.7 million in Q3 2011.
  * Q3 2012 diluted earnings per share (EPS) of $0.41 compared to $0.20 in Q3
    2011.
  * Q3 2012 gross margin of 11.8 percent compared to 9.4 percent in Q3 2011.
  * First nine-months 2012 EBITDA of $58.4 million compared to $34.2 million
    for the same period in 2011.
  * First nine-months 2012 diluted EPS of $1.15 compared to $0.59 for the same
    period in 2011.

Management Comments

Bill Koertner, MYR's president and CEO said, "We are very pleased to report
significant increases in revenue, contract margin, EBITDA and EPS compared to
the third quarter last year. We anticipate the investment in upgrading the
nation's transmission systems by our customers, which we are benefitting from,
will remain strong for several years. We continue to reap the benefits of the
investment we've made over the last several years in work force development,
equipment and tooling. Our equipment utilization remained strong during the
quarter and contributed to our strong financial performance. We remain focused
on improving the execution on our contracts and finding new work. We believe
our strong balance sheet provides us with the capital needed to pursue
projects that fit us strategically while we execute our work with the best
people, safety programs processes and equipment in the industry."

Third-Quarter Results

MYR reported third-quarter 2012 revenues of $250.6 million, an increase of
$40.1 million, or 19.0 percent, compared to the third quarter of 2011.
Specifically, the Transmission and Distribution (T&D) segment reported
revenues of $204.3 million, an increase of $33.4 million, or 19.6 percent,
over the third quarter of 2011. The majority of the growth in T&D revenues was
the result of increased revenues from several large transmission projects as
well as an increase in revenues from many small and a few medium-sized
transmission projects, which were partially offset by a decrease in
distribution revenues. The Commercial and Industrial (C&I) segment reported
third-quarter 2012 revenues of $46.3 million, an increase of $6.7 million, or
16.8 percent, over the third quarter of 2011, primarily as the result of an
increase in revenue on medium-sized projects.

Consolidated gross profit increased to $29.6 million, or 11.8 percent of
revenues, in the third quarter of 2012, compared to $19.8 million, or 9.4
percent of revenues, in the third quarter of 2011. The growth in gross profit
was primarily due to the increase in volume. The higher gross profit as a
percentage of revenues was mainly a result of improved overall project margins
in both segments and improved utilization of fleet assets.

Selling, general and administrative expenses increased to $15.6 million in the
third quarter of 2012, compared to $13.5 million in the third quarter of 2011,
mainly due to higher employee compensation and benefit costs primarily related
to an increase in the number of support personnel. As a percentage of
revenues, these expenses decreased to 6.3 percent for the third quarter of
2012 from 6.4 percent for the third quarter of 2011.

For the third quarter of 2012, net income was $8.7 million, or $0.41 per
diluted share, compared to $4.2 million, or $0.20 per diluted share, for the
same period of 2011. Third-quarter 2012 EBITDA was $20.7 million, or 8.2
percent of revenues, compared to $11.7 million, or 5.5 percent of revenues, in
the third quarter of 2011. The increase in EBITDA as a percentage of revenues
was mainly due to the higher gross margin, higher depreciation expense as a
percent of revenues and lower selling, general and administrative expenses as
a percent of revenues, as discussed above.

First Nine-Months Results

MYR reported revenues of $751.2 million for the first nine months of 2012, an
increase of $205.1 million, or 37.6 percent, compared with the first nine
months of 2011. The T&D segment reported revenues of $625.1 million in the
first nine months of 2012, an increase of 45.9 percent over the 2011 period.
The growth in revenues was primarily the result of an increase in revenues
from large transmission projects, as well as an increase in revenues from many
small and a few medium-sized transmission projects, which were partially
offset by a decrease in distribution revenues. The C&I segment reported first
nine-months 2012 revenues of $126.1 million, an increase of 7.3 percent from
2011, due to an increase in revenue on medium-sized projects.

Consolidated gross profit increased to $85.7 million for the first nine months
of 2012 from $60.9 million for the first nine months of 2011. As a percentage
of overall revenues, gross margin grew to 11.4 percent for the first nine
months of 2012 from 11.2 percent for the first nine months of 2011. The
increase in gross profit as a percentage of revenues was mainly attributable
to improved overall project margins on small and medium-sized projects in both
segments and to improved utilization of fleet assets.

Selling, general and administrative expenses increased to $46.1 million for
the first nine months of 2012 from $41.2 million for the first nine months of
2011, primarily due to higher employee compensation and benefit costs, related
primarily to the increased number of support personnel. As a percentage of
revenues, these expenses decreased to 6.1 percent for the first nine months of
2012 from 7.5 percent for the first nine months of 2011.

For the first nine months of 2012, net income was $24.5 million, or $1.15 per
diluted share, compared to $12.4 million, or $0.59 per diluted share, for the
same period of 2011. EBITDA for the first nine months of 2012 was $58.4
million, or 7.8 percent of revenues, compared to $34.2 million, or 6.3 percent
of revenues, for the first nine months of 2011. The increase in EBITDA as a
percentage of revenues was mainly due to the increase in gross margin and
lower selling, general and administrative expense as a percentage of revenues.

Backlog

As of September 30, 2012, MYR's backlog was $491.3 million, consisting of
$391.0 million in the T&D segment and $100.3 million in the C&I segment.
Compared to September 30, 2011, T&D backlog decreased $266.3 million, or 40.5
percent, while C&I backlog increased $36.2 million, or 56.6 percent.

Total backlog at September 30, 2012 was $51.7 million lower compared to the
$543.0 million reported at June 30, 2012. T&D backlog decreased $73.2 million,
or 15.8 percent, while C&I backlog increased $21.5 million, or 27.2 percent. 

Backlog may not accurately represent the revenues that MYR expects to realize
during any period. The timing of contract awards as well as the type and
duration of large projects can significantly affect MYR's backlog at any point
in time. Large projects that include a substantial amount of subcontractor and
material costs can also affect MYR's backlog at any point in time.  Backlog is
a non-GAAP measure; therefore, reporting on this measure can vary considerably
from company to company depending on each company's backlog definition.
Backlog should not be reviewed or relied upon as a stand-alone indicator of
future results.

Balance Sheet

As of September 30, 2012, MYR had cash and cash equivalents of $16.6 million
and $157.8 million of borrowing availability under its credit facility. MYR's
credit facility provides for revolving loans, letters of credit and swingline
loans and matures in December 2016.

Non-GAAP Financial Measures

To assist investors' understanding of MYR's financial results, MYR has
provided EBITDA and EBITDA per diluted share in this press release. MYR
defines EBITDA as earnings before interest, taxes, depreciation and
amortization. EBITDA is a measure not recognized by generally accepted
accounting principles in the United States (GAAP). EBITDA per diluted share is
also a non-GAAP calculation, defined as EBITDA divided by MYR's diluted
weighted average shares outstanding. Management believes this information is
useful to investors in understanding results of operations because it
illustrates the impact that interest, taxes, depreciation and amortization had
on MYR's results. EBITDA is not an alternative to net income as a measure of
operating performance or to net cash flows provided by operating activities as
a measure of liquidity. EBITDA per share is not an alternative to income per
share, nor is it a measure of liquidity per share. A reconciliation of EBITDA
to net income is provided at the end of this release.

Conference Call

MYR will host a conference call to discuss its third-quarter and first nine
months 2012 results on Thursday, November 8, 2012, at 9:00 a.m. Central time.
To participate in the conference call via telephone, please dial (877)
561-2750 (domestic) or (763) 416-8565 (international) at least five minutes
prior to the start of the event. A replay of the conference call will be
available through Wednesday, November 14, 2012, at 11:59 p.m. Eastern time, by
dialing (855) 859-2056 or (404) 537-3406, and entering conference ID 53856841.
MYR will also broadcast the conference call live via the internet. Interested
parties may access the webcast through the Investor Relations section of the
Company's website at www.myrgroup.com. Please access the website at least 15
minutes prior to the start of the call to register, download and install any
necessary audio software. The webcast will be archived for seven days.

About MYR Group Inc.

MYR is a leading specialty contractor serving the electrical infrastructure
market in the United States. MYR is one of the largest national contractors
servicing the transmission and distribution sector of the United States
electric utility industry. MYR's transmission and distribution customers
include electric utilities, cooperatives and municipalities. MYR provides a
broad range of transmission and distribution services which includes design,
engineering, procurement, construction, upgrade, maintenance and repair
services with a particular focus on construction, maintenance and repair
throughout the continental United States. MYR also provides commercial and
industrial electrical contracting services in the western United States.

Forward-Looking Statements

Various 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, share repurchases and investments. Forward-looking
statements are generally accompanied by words such as "estimate," "project,"
"predict," "believe," "expect," "anticipate," "potential," "plan," "goal,"
"should," "appears" 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 press 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, 2011, and in any risk factors or cautionary statements contained in MYR's
Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

Financial tables follow…

MYR GROUP INC. 
Consolidated Balance Sheets
As of September 30, 2012 and December 31, 2011
                                                              
(In thousands, except share and per share September 30, 2012 December 31, 2011
data)
                                          (unaudited)         
ASSETS                                                        
Current assets:                                               
Cash and cash equivalents                  $ 16,599           $ 34,013
Accounts receivable, net of allowances of  164,440            126,911
$1,338 and $1,078, respectively
Costs and estimated earnings in excess of  63,107             43,694
billings on uncompleted contracts
Construction materials inventory           —                  4,003
Deferred income tax assets                 13,118             13,253
Receivable for insurance claims in excess  11,282             10,122
of deductibles
Refundable income taxes                    —                  884
Other current assets                       1,540              3,071
Total current assets                       270,086            235,951
Property and equipment, net of
accumulated depreciation of $81,717 and    131,029            117,178
$64,345, respectively
Goodwill                                   46,599             46,599
Intangible assets, net of accumulated
amortization of $2,474 and $2,223,         10,618             10,869
respectively
Other assets                               1,917              1,971
Total assets                               $ 460,249          $ 412,568
LIABILITIES AND STOCKHOLDERS' EQUITY                          
Current liabilities:                                          
Short-term borrowings                      $ —                $ 10,000
Accounts payable                           92,915             73,924
Billings in excess of costs and estimated  30,065             24,945
earnings on uncompleted contracts
Accrued self insurance                     39,629             38,850
Accrued income taxes                       124                — 
Other current liabilities                  33,610             29,078
Total current liabilities                  196,343            176,797
Deferred income tax liabilities            19,416             19,354
Other liabilities                          1,258              679
Total liabilities                          217,017            196,830
Commitments and contingencies                                 
Stockholders' equity:                                         
Preferred stock—$0.01 par value per
share; 4,000,000 authorized shares; none   —                  — 
issued and outstanding at September 30,
2012 and December 31, 2011
Common stock—$0.01 par value per share;
100,000,000 authorized shares; 20,646,372
and 20,405,044 shares issued and           205                203
outstanding at September 30, 2012 and
December 31, 2011, respectively
Additional paid-in capital                 152,878            149,877
Retained earnings                          90,149             65,658
Total stockholders' equity                 243,232            215,738
Total liabilities and stockholders'        $ 460,249          $ 412,568
equity

 
 
MYR GROUP INC.
Unaudited Consolidated Statements of Operations
Three Months and Nine Months Ended September 30, 2012 and 2011
 
                                   Three months ended    Nine months ended
                                    September 30,         September 30, 
(In thousands, except per share     2012       2011       2012       2011 
data)
Contract revenues                   $ 250,558  $ 210,489  $ 751,196  $ 546,093
Contract costs                      220,986    190,676    665,459    485,152
Gross profit                        29,572     19,813     85,737     60,941
Selling, general and                15,639     13,523     46,072     41,174
administrative expenses
Amortization of intangible assets   84         84         251        251
Gain on sale of property and        (387)      (428)      (707)      (728)
equipment
Income from operations              14,236     6,634      40,121     20,244
Other income (expense)                                               
Interest income                     —          5          1          48
Interest expense                    (368)      (93)       (754)      (463)
Other, net                          (87)       (21)       (146)      (53)
Income before provision for income  13,781     6,525      39,222     19,776
taxes 
Income tax expense                  5,035      2,304      14,731     7,338
Net income                          $ 8,746    $ 4,221    $ 24,491   $ 12,438
Income per common share:                                             
—Basic                              $ 0.42     $ 0.21     $ 1.19     $ 0.62
—Diluted                            $ 0.41     $ 0.20     $ 1.15     $ 0.59
Weighted average number of common
shares and potential common shares                                   
outstanding:
—Basic                              20,410     20,265     20,349     20,102
—Diluted                            21,186     21,041     21,134     20,985

 
 
MYR GROUP INC.
Unaudited Consolidated Statements of Cash Flows
Three and Nine Months Ended September 30, 2012 and 2011
                                                                      
                                       Three months ended  Nine months ended
                                        September 30,       September 30, 
(In thousands)                          2012      2011      2012      2011 
Cash flows from operating activities:                                 
Net income                              $ 8,746   $ 4,221   $ 24,491  $ 12,438
Adjustments to reconcile net income to
net cash flows provided by (used in)                                  
operating activities —
Depreciation and amortization of        6,420     4,980     18,167    13,794
property and equipment
Amortization of intangible assets       84        84        251       251
Stock-based compensation expense        688       146       2,029     1,100
Deferred income taxes                   197       (622)     197       (576)
Gain on sale of property and            (387)     (428)     (707)     (728)
equipment 
Other non-cash items                    35        17        103       78
Changes in operating assets and                                       
liabilities
Accounts receivable, net                (10,269)  (37,261)  (37,529)  (29,831)
Costs and estimated earnings in excess  (8,941)   4,233     (19,413)  (20,947)
of billings on uncompleted contracts 
Construction materials inventory        —         (2,754)   4,003     (2,754)
Receivable for insurance claims in      (1,401)   35        (1,160)   (714)
excess of deductibles 
Other assets                            1,135     2,656     2,379     4,223
Accounts payable                        7,176     4,972     18,897    21,389
Billings in excess of costs and
estimated earnings on uncompleted       1,202     (3,014)   5,120     (6,566)
contracts 
Accrued self insurance                  1,291     2,797     779       3,799
Other liabilities                       6,617     967       5,133     315
Net cash flows provided by (used in)    12,593    (18,971)  22,740    (4,729)
operating activities
Cash flows from investing activities:                                 
Proceeds from sale of property and      513       508       877       808
equipment 
Purchases of property and equipment     (11,665)  (11,338)  (32,094)  (34,162)
Net cash flows used in investing        (11,152)  (10,830)  (31,217)  (33,354)
activities
Cash flows from financing activities:                                 
Repayments on term loan                 —         —         —         (20,000)
Net borrowings (repayments) on          (10,000)  10,000    (10,000)  10,000
revolving credit facility
Employee stock option transactions      719       711       864       1,290
Excess tax benefit from stock-based     139       1,228     174       1,672
awards
Debt issuance costs                     —         —         (13)      — 
Other financing activities              —         —         38        45
Net cash flows provided by (used in)    (9,142)   11,939    (8,937)   (6,993)
financing activities
Net decrease in cash and cash           (7,701)   (17,862)  (17,414)  (45,076)
equivalents 
Cash and cash equivalents:                                            
Beginning of period                     24,300    35,409    34,013    62,623
End of period                           $ 16,599  $ 17,547  $ 16,599  $ 17,547

 
 
 MYR GROUP INC. 
 Unaudited Consolidated Selected Data, Net Income Per Share 
 And EBITDA Reconciliation 
 Three and Nine Months Ended September 30, 2012 and 2011 
                                                            
                     Three months ended        Nine months ended
                      September 30,             September 30, 
(In thousands,
except per share      2012         2011         2012        2011 
data) 
                                                            
Summary Data:                                               
Contract revenues     $ 250,558    $ 210,489    $ 751,196   $ 546,093
Gross profit          $ 29,572     $ 19,813     $ 85,737    $ 60,941
Income from           $ 14,236     $ 6,634      $ 40,121    $ 20,244
operations 
Net income            $ 8,746      $ 4,221      $ 24,491    $ 12,438
                                                            
Income per common                                           
share (1): 
- Basic               $ 0.42       $ 0.21       $ 1.19      $ 0.62
- Diluted             $ 0.41       $ 0.20       $ 1.15      $ 0.59
                                                            
Weighted average
number of common
shares and potential                                        
common shares
outstanding (1): 
- Basic               20,410       20,265       20,349      20,102
- Diluted             21,186       21,041       21,134      20,985
                                                            
Reconciliation of
Net Income to                                               
EBITDA: 
Net income            $ 8,746      $ 4,221      $ 24,491    $ 12,438
Interest expense      368          88           753         415
(income), net 
Provision for income  5,035        2,304        14,731      7,338
taxes 
Depreciation and      6,504        5,064        18,418      14,045
amortization 
EBITDA (2)            $ 20,653     $ 11,677     $ 58,393    $ 34,236
                                                            
Calculation of
EBITDA per diluted                                          
share: 
EBITDA               $ 20,653     $ 11,677     $ 58,393    $ 34,236
Diluted weighted
average number of
common shares and     21,186       21,041       21,134      20,985
potential common
shares outstanding: 
EBITDA per diluted    $ 0.97       $ 0.55       $ 2.76      $ 1.63
share (2) 
                                                            
(1)  MYR calculates net income per common share in accordance with ASC
260, Earnings Per Share. Basic earnings per share are calculated by
dividing net income available to common shareholders by the weighted
average number of shares outstanding for the reporting period. Diluted
earnings per share are computed similarly, except that it reflects the        
potential dilutive impact that would occur if dilutive securities were
exercised into common shares. Potential common shares are not included
in the denominator of the diluted earnings per share calculation when
inclusion of such shares would be anti-dilutive or included
performance conditions that were not met.
(2)  EBITDA is not recognized under GAAP and does not purport to be an
alternative to net income as a measure of operating performance or to
net cash flows provided by operating activities as a measure of               
liquidity. EBITDA per diluted share is not recognized under GAAP and
does not purport to be an alternative to income per diluted share.

CONTACT: MYR Group Inc. Contact:
         Paul J. Evans, Chief Financial Officer
         847-290-1891, investorinfo@myrgroup.com
        
         Investor Contact:
         Philip Kranz, Dresner Corporate Services
         312-780-7240, pkranz@dresnerco.com
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