Centuri Holdings, Inc. (NYSE: CTRI) ("Centuri" or the "Company") 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
