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EX-99.1 - EX-99.1 - Primoris Services Corpa14-23946_1ex99d1.htm

Exhibit 99.2

 

Primoris Services Corporation

Segment Realignment — September 2014

Amounts in thousands

 

For a number of years and through the end of the second quarter 2014, the Company segregated its business into three operating segments: the East Construction Services segment, the West Construction Services segment and the Engineering segment.  In the third quarter 2014, the Company reorganized its business segments to match the change in the Company’s internal organization and management structure.  The segment changes during the quarter reflect the focus of our new chief operating officer on the services we provide to our energy related customers, primarily in the Gulf Coast area, (the “Energy segment”) and a continuing geographic view for the West and new East segments.  The chief operating officer regularly reviews the operating and financial performance based on these revised segments.  The operating segments include:  The West Construction Services segment (“West segment”), which is unchanged from the previous segment, the East Construction Services segment (“East segment”), which is realigned from the previous East Construction Services segment and the Energy segment (which includes the previous Engineering segment).

 

The purpose of this document is to report the revenue and gross profit for the quarterly periods of 2013 and 2014 through September 30, 2014 for the reclassified segments.

 

The following is a brief description of each of the Company’s reportable segments and their operations.

 

The West segment consists of businesses headquartered primarily in the western United States and includes the underground and industrial operations and construction services performed by ARB, ARB Structures, Inc., Rockford, Alaska Continental Pipeline, Inc., Q3C, Primoris Renewables, LLC, Juniper Rock Corporation, Stellaris, LLC and Vadnais, acquired in June 2014.  Most of the entities perform work primarily in California; however, Rockford operates throughout the United States and Q3C operates in Colorado and the upper Midwest United States.  The Blythe Power Constructors joint venture is also included as a part of the segment.  The West segment consists of businesses headquartered primarily in the western United States.

 

The East segment includes the JCG Heavy Civil division, the JCG Infrastructure and Maintenance division, BW Primoris and Cardinal Contractors, Inc. construction business, located primarily in the southeastern United States and in the Gulf Coast region of the United States and includes the heavy civil construction and infrastructure and maintenance operations.

 

The Energy segment operations are located primarily in the southeastern United States and in the Gulf Coast region of the United States.  The segment includes the operations of the PES pipeline and gas facility construction and maintenance operations, the JCG Industrial division and the newly acquired Surber and Ram-Fab operations.  Additionally, the segment includes the OnQuest, Inc. and OnQuest Canada, ULC operations for the design and installation of high-performance furnaces and heaters for the oil refining, petrochemical and power generation industries.

 

The following table shows our major operating subsidiaries and their reporting segment:

 

Subsidiary

 

Operating Segment

 

Prior Operating Segment

 

ARB, Inc. (“ARB”)

 

West

 

West

 

ARB Structures, Inc.

 

West

 

West

 

Q3 Contracting, Inc. (“Q3C”)

 

West

 

West

 

Rockford Corporation (“Rockford”)

 

West

 

West

 

Stellaris, LLC.

 

West

 

West

 

Vadnais Trenchless Services, Inc. (“Vadnais”); acquired in 2014

 

West

 

West

 

Silva Group (“Silva”)

 

East

 

East

 

Cardinal Contractors, Inc.

 

East

 

East

 

BW Primoris, LLC (“BWP”)

 

East

 

East

 

James Construction Group, LLC (“JCG”):

 

 

 

 

 

JCG Heavy Civil Division

 

East

 

East

 

JCG Infrastructure and Maintenance Division

 

East

 

East

 

JCG Industrial Division

 

Energy

 

East

 

Primoris Energy Services Corporation (“PES”)

 

Energy

 

East

 

OnQuest, Inc.

 

Energy

 

Engineering

 

OnQuest, Canada, ULC (Born Heaters Canada, ULC prior to 2013)

 

Energy

 

Engineering

 

 

1



 

The following tables provide a summary of the revenues and gross profit for each quarterly period during the 2014 year:

 

 

 

1st Quarter
2014

 

2nd Quarter
2014

 

3rd Quarter
2014

 

9 Months YTD
2014

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West segment

 

$

234,027

 

$

224,391

 

$

289,405

 

$

747,823

 

East segment

 

106,970

 

118,554

 

135,450

 

360,974

 

Energy segment

 

129,077

 

172,346

 

188,382

 

489,805

 

 

 

$

470,074

 

$

515,291

 

$

613,237

 

$

1,598,602

 

 

 

 

1st Quarter
2014

 

2nd Quarter
2014

 

3rd Quarter
2014

 

9 Months YTD
2014

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West segment

 

$

31,674

 

$

37,809

 

$

46,240

 

$

115,723

 

East segment

 

6,758

 

8,727

 

9,110

 

24,595

 

Energy segment

 

11,325

 

14,658

 

20,123

 

46,106

 

 

 

$

49,757

 

$

61,194

 

$

75,473

 

$

186,424

 

 

The following tables provide a summary of the revenues and gross profit for each quarterly period during the 2013 year:

 

 

 

1st Quarter
2013

 

2nd Quarter
2013

 

3rd Quarter
2013

 

4th Quarter
2013

 

12 Months YTD
2013

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West segment

 

$

207,686

 

$

258,194

 

$

362,362

 

$

323,191

 

$

1,151,433

 

East segment

 

96,682

 

101,998

 

117.537

 

114,221

 

430,438

 

Energy segment

 

105,627

 

84,821

 

71,434

 

100,467

 

362,349

 

 

 

$

409,995

 

$

445,013

 

$

551,333

 

$

537,879

 

$

1,944,220

 

 

 

 

1st Quarter
2013

 

2nd Quarter
2013

 

3rd Quarter
2013

 

4th Quarter
2013

 

12 Months YTD
2013

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

West segment

 

$

28,750

 

$

41,926

 

$

62,520

 

$

57,551

 

$

190,747

 

East segment

 

6,917

 

8,131

 

4,527

 

4,734

 

24,309

 

Energy segment

 

10,429

 

9,480

 

8,418

 

12,632

 

40,959

 

 

 

$

46,096

 

$

59,537

 

$

75,465

 

$

74,917

 

$

256,015

 

 

2