2020 Form 10-K Financial Statement

#000155837021001389 Filed on February 23, 2021

View on sec.gov

Income Statement

Concept 2020 2019 Q4 2019 Q3
Revenue $3.491B $789.8M $865.1M
YoY Change 12.4% -10.01% -4.82%
Cost Of Revenue $3.121B $700.3M $756.6M
YoY Change 12.46% -9.57% -5.7%
Gross Profit $370.2M $89.51M $108.4M
YoY Change 11.87% -13.31% 1.8%
Gross Profit Margin 10.6% 11.33% 12.53%
Selling, General & Admin $202.8M $48.60M $49.83M
YoY Change 7.25% -2.8% -3.44%
% of Gross Profit 54.79% 54.29% 45.96%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $82.50M $20.90M $21.10M
YoY Change -3.4% -9.91% 1.44%
% of Gross Profit 22.28% 23.35% 19.46%
Operating Expenses $202.8M $48.50M $49.83M
YoY Change 7.25% -2.81% -3.44%
Operating Profit $163.9M $41.01M $58.59M
YoY Change 16.38% -23.13% 14.72%
Interest Expense $20.30M -$2.200M $5.186M
YoY Change 1.01% -71.43% -19.57%
% of Operating Profit 12.38% -5.36% 8.85%
Other Income/Expense, Net $1.234M $0.00 -$2.928M
YoY Change -139.37% -100.0% -9250.0%
Pretax Income $145.6M $38.70M $50.39M
YoY Change 23.52% -14.95% 10.69%
Income Tax $40.66M $11.20M $14.56M
% Of Pretax Income 27.92% 28.94% 28.9%
Net Earnings $105.0M $26.95M $35.65M
YoY Change 27.51% -16.75% 9.05%
Net Earnings / Revenue 3.01% 3.41% 4.12%
Basic Earnings Per Share $2.17 $0.53 $0.70
Diluted Earnings Per Share $2.16 $0.53 $0.70
COMMON SHARES
Basic Shares Outstanding 48.30M 50.48M 50.98M
Diluted Shares Outstanding 48.63M 50.71M 51.22M

Balance Sheet

Concept 2020 2019 Q4 2019 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $326.7M $120.3M $43.80M
YoY Change 171.57% -20.38% -27.0%
Cash & Equivalents $326.7M $120.3M $43.84M
Short-Term Investments
Other Short-Term Assets $30.20M $42.70M $34.20M
YoY Change -29.27% 17.31% 52.68%
Inventory
Prepaid Expenses
Receivables $758.3M $749.7M $883.5M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $1.115B $912.7M $961.5M
YoY Change 22.2% -1.27% 2.51%
LONG-TERM ASSETS
Property, Plant & Equipment $563.5M $375.9M $379.7M
YoY Change -8.86% 0.0% 2.88%
Goodwill $206.2M $215.1M
YoY Change 0.0%
Intangibles $69.83M $72.58M
YoY Change -14.0%
Long-Term Investments
YoY Change
Other Assets $14.70M $13.45M $11.05M
YoY Change 0.68% 168.95% -45.04%
Total Long-Term Assets $854.3M $917.8M $907.5M
YoY Change -6.92% 37.04% 32.84%
TOTAL ASSETS
Total Short-Term Assets $1.115B $912.7M $961.5M
Total Long-Term Assets $854.3M $917.8M $907.5M
Total Assets $1.970B $1.830B $1.869B
YoY Change 7.6% 14.82% 15.29%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $245.9M $236.0M $219.8M
YoY Change 4.19% -5.31% -8.91%
Accrued Expenses $186.9M $183.5M $219.5M
YoY Change 7.11% 56.14% 79.6%
Deferred Revenue $192.4M $189.7M
YoY Change 1.51%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $47.70M $55.66M $60.10M
YoY Change -14.36% -10.93% -5.94%
Total Short-Term Liabilities $764.4M $670.4M $692.1M
YoY Change 14.02% 7.82% 5.2%
LONG-TERM LIABILITIES
Long-Term Debt $268.8M $295.6M $307.4M
YoY Change -9.07% -3.28% 0.42%
Other Long-Term Liabilities $208.0M $45.80M $49.29M
YoY Change -4.15% -11.09% -23.82%
Total Long-Term Liabilities $476.8M $341.4M $356.7M
YoY Change -6.98% -4.41% -3.81%
TOTAL LIABILITIES
Total Short-Term Liabilities $764.4M $670.4M $692.1M
Total Long-Term Liabilities $476.8M $341.4M $356.7M
Total Liabilities $1.255B $1.201B $1.215B
YoY Change 4.39% 21.66% 17.52%
SHAREHOLDERS EQUITY
Retained Earnings $531.3M $507.3M
YoY Change 15.23%
Common Stock $97.14M $146.8M
YoY Change -32.57%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $714.8M $628.5M $653.7M
YoY Change
Total Liabilities & Shareholders Equity $1.970B $1.830B $1.869B
YoY Change 7.6% 14.82% 15.29%

Cashflow Statement

Concept 2020 2019 Q4 2019 Q3
OPERATING ACTIVITIES
Net Income $105.0M $26.95M $35.65M
YoY Change 27.51% -16.75% 9.05%
Depreciation, Depletion And Amortization $82.50M $20.90M $21.10M
YoY Change -3.4% -9.91% 1.44%
Cash From Operating Activities $313.0M $158.1M $56.40M
YoY Change 163.15% 13.17% -562.3%
INVESTING ACTIVITIES
Capital Expenditures $64.36M -$16.20M -$21.40M
YoY Change -31.89% -44.9% -38.33%
Acquisitions
YoY Change
Other Investing Activities $21.90M $4.200M $3.200M
YoY Change -23.43% 75.0% -15.79%
Cash From Investing Activities -$42.51M -$12.00M -$18.20M
YoY Change -35.47% -55.72% -40.91%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $10.88M
YoY Change 502.83%
Debt Paid & Issued, Net $68.88M
YoY Change -4.43%
Cash From Financing Activities -62.82M -69.80M -47.90M
YoY Change -24.57% 232.38% -33.29%
NET CHANGE
Cash From Operating Activities 313.0M 158.1M 56.40M
Cash From Investing Activities -42.51M -12.00M -18.20M
Cash From Financing Activities -62.82M -69.80M -47.90M
Net Change In Cash 207.5M 76.30M -9.700M
YoY Change -796.14% -16.7% -91.55%
FREE CASH FLOW
Cash From Operating Activities $313.0M $158.1M $56.40M
Capital Expenditures $64.36M -$16.20M -$21.40M
Free Cash Flow $248.6M $174.3M $77.80M
YoY Change 916.87% 3.08% 245.78%

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CY2020 us-gaap Nature Of Operations
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<p style="font-family:'Times New Roman','Times','serif';font-size:10pt;margin:0pt;"><b style="font-weight:bold;">Note 1—Nature of Business</b></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;margin:0pt;"><span style="visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="font-style:italic;font-weight:bold;">Organization and operations</span><b style="font-weight:bold;"> — </b>Primoris Services Corporation is one of the leading providers of specialty contracting services operating mainly in the United States and Canada. We provide a wide range of specialty construction services, fabrication, maintenance, replacement, and engineering services to a diversified base of customers through our five segments. </p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="font-size:8pt;visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;">We have longstanding customer relationships with major utility, refining, petrochemical, power, midstream, and engineering companies, and state departments of transportation. We provide our services to a diversified base of customers, under a range of contracting options. A substantial portion of our services are provided under Master Service Agreements (“MSA”), which are generally multi-year agreements. The remainder of our services are generated from contracts for specific construction or installation projects.</p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="font-size:8pt;visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;">We are incorporated in the State of Delaware, and our corporate headquarters are located at 2300 N. Field Street, Suite 1900, Dallas, Texas 75201. Unless specifically noted otherwise, as used throughout these consolidated financial statements, “Primoris”, “the Company”, “we”, “our”, “us” or “its” refers to the business, operations and financial results of the Company and its wholly-owned subsidiaries.</p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="font-style:italic;font-weight:bold;">Reportable Segments</span> — We segregate our business into five<span style="white-space:pre-wrap;"> reportable segments: the Power, Industrial and Engineering (“Power”) segment, the Pipeline and Underground (“Pipeline”) segment, the Utilities and Distribution (“Utilities”) segment, the Transmission and Distribution (“Transmission”) segment, and the Civil segment. See Note 14 – </span><i style="font-style:italic;">“Reportable Segments”</i> for a brief description of the reportable segments and their operations.</p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;">The classification of revenue and gross profit for segment reporting purposes can at times require judgment on the part of management. Our segments may perform services across industries or perform joint services for customers in multiple industries. To determine reportable segment gross profit, certain allocations, including allocations of shared and indirect costs, such as facility costs, equipment costs and indirect operating expenses were made.</p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="font-style:italic;font-weight:bold;">Acquisition of Willbros Group, Inc. </span>— On June 1, 2018, we completed our acquisition of Willbros Group, Inc. (“Willbros”) for approximately $110.6 million, net of cash and restricted cash acquired. Willbros was a specialty energy infrastructure contractor serving the oil and gas and power industries through its utility transmission and distribution, oil and gas, and Canadian operations, which principally provides unit-price maintenance services in existing operating facilities and executes industrial and power projects. The utility transmission and distribution operations formed the Transmission segment, the oil and gas operations are included in the Pipeline segment, and the Canadian operations are included in the Power segment. See Note 4 — “<i style="font-style:italic;">Business Combinations</i>”.</p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;margin:0pt;"><span style="visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:35.3pt;margin:0pt;"><span style="font-style:italic;font-weight:bold;">Joint Ventures </span>— We own a 50<span style="white-space:pre-wrap;">% interest in the Carlsbad Power Constructors joint venture (“Carlsbad”), which engineered and constructed a gas-fired power generation facility located in Southern California, and its operations are included as part of the Power segment. As a result of determining that we are the primary beneficiary of the variable interest entity (“VIE”), the results of the Carlsbad joint venture are consolidated in our financial statements. The project was substantially complete as of December 31, 2018, and the warranty period expires in December 2021. </span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:35.3pt;margin:0pt;"><span style="visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:35.3pt;margin:0pt;">We owned a 50% interest in the “ARB Inc. &amp; B&amp;M Engineering Co.” joint venture (“Wilmington”), which engineered and constructed a gas-fired power generation facility in Southern California, and its operations were included as part of the Power segment. As a result of determining that we were the primary beneficiary of the VIE, the results of the Wilmington joint venture were consolidated in our financial statements. The project has been completed, the project warranty period expired, and dissolution of the joint venture was completed in the first quarter of 2019. </p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:35.3pt;margin:0pt;"><span style="visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:35.3pt;margin:0pt;">Financial information for the joint ventures is presented in Note 11— <i style="font-style:italic;">“Noncontrolling Interests”</i>.</p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="font-style:italic;font-weight:bold;">Seasonality </span><b style="font-weight:bold;">—</b> Our results of operations are subject to quarterly variations. Some of the variation is the result of weather, particularly rain, ice, snow, and named storms, which can impact our ability to perform construction and specialty services. These seasonal impacts can affect revenue and profitability in all of our businesses since utilities defer routine replacement and repair during </p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;margin:0pt;"><span style="white-space:pre-wrap;">their period of peak demand. Any quarter can be affected either negatively or positively by atypical weather patterns in any part of the country. In addition, demand for new projects tends to be lower during the early part of the calendar year due to clients’ internal budget cycles. As a result, we usually experience higher revenue and earnings in the third and fourth quarters of the year as compared to the first two quarters.</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="font-style:italic;font-weight:bold;">Variability </span>— Our project values range in size from several hundred dollars to several hundred million dollars. The bulk of our work is comprised of project sizes that average less than $5.0<span style="white-space:pre-wrap;"> million. We also perform large construction projects which tend not to be seasonal, but can fluctuate from year to year based on customer timing, project duration, weather, and general economic conditions. Our business may be affected by declines or delays in new projects or by client project schedules. Because of the cyclical nature of our business, the financial results for any period may fluctuate from prior periods, and our financial condition and operating results may vary from quarter to quarter. Results from one quarter may not be indicative of financial condition or operating results for any other quarter or for an entire year.</span></p>
CY2020 us-gaap Number Of Reportable Segments
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CY2020 us-gaap Number Of Reportable Segments
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CY2020 us-gaap Prior Period Reclassification Adjustment Description
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<p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="font-style:italic;font-weight:bold;">Reclassification </span><b style="font-weight:bold;">—</b>Certain previously reported amounts have been reclassified to conform to the current year presentation.</p>
CY2020 us-gaap Use Of Estimates
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<p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="font-style:italic;font-weight:bold;">Use of estimates </span><b style="font-weight:bold;">—</b><span style="white-space:pre-wrap;">The preparation of our Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As a construction contractor, we use estimates for costs to complete construction projects and the contract value of certain construction projects. These estimates have a direct effect on gross profit as reported in these consolidated financial statements. Actual results could materially differ from our estimates.</span></p>
CY2020 prim Minimum Liquidation Period Of Assets In Which Significant Working Capital Invested
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<p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="font-style:italic;font-weight:bold;">Customer concentration</span> — We operate in multiple industry segments encompassing the construction of commercial, utility, industrial and public works infrastructure assets primarily throughout the United States. Typically, the top ten customers in any one calendar year account for approximately 50.0% of total revenue; however, the group that comprises the top ten customers varies from year to year. For the years ended December 31, 2020, 2019 and 2018, approximately 47.0%, 47.2% and 52.2%, respectively, of total revenue was generated from our top ten customers in each year. In each of the years, a different group of customers comprised the top ten customers by revenue, and no one customer accounted for more than 10% of total revenue.</p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;"><span style="visibility:hidden;">​</span></p><p style="font-family:'Times New Roman','Times','serif';font-size:10pt;text-indent:36pt;margin:0pt;">On January 29, 2019, one of our California utility customers filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. For the year ended December 31, 2019, the customer accounted for approximately 7.2% of our total revenue. In the third quarter of 2019, we entered into an agreement with a financial institution to sell, on a non-recourse basis, except in limited circumstances, substantially all of our pre-petition bankruptcy receivables with the customer. We received approximately $48.3 million upon the closing of this transaction in October 2019. During the year ended December 31, 2019, we recorded a loss of approximately $2.9 million in “<i style="font-style:italic;">Other income (expense), net</i>” on the Consolidated Statements of Income related to the sale agreement. During 2020, the customer emerged from bankruptcy. We are continuing to perform services for the customer and the amounts billed for these services continue to be collected in the ordinary course of the customer’s business.</p>
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