Attached files
file | filename |
---|---|
8-K - 8-K - Primoris Services Corp | a17-11022_18k.htm |
Exhibit 99.1
Primoris Services Corporation
Segment Realignment 2016 and 2015
Through the end of the year 2016, the Company segregated its business into three reportable segments: the Energy segment, the East Construction Services segment and the West Construction Services segment. In the first quarter 2017, the Company reorganized its reportable segments to match the change in the Companys realigned internal organization and management structure. The segment changes during the quarter reflect the focus of our new chief operating officer on the range of services we provide to our end user markets. The chief operating officer regularly reviews the operating and financial performance based on these revised segments.
The revised reportable segments include the Power, Industrial, and Engineering segment (PI&E segment), the Pipeline and Underground segment (P&U segment), the Utilities and Distribution segment (U&D segment), and the Civil segment. The purpose of this document is to report the revenue and gross profit for the annual periods of 2016 and 2015 and the quarterly periods for the year ended December 31, 2016 for the reclassified segments.
The classification of our business unit revenues and gross profit for segment reporting purposes can at times require judgment on the part of management. Our business units 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.
The following table lists the Companys primary business units and their reportable segment:
Business Unit |
|
New Reportable |
|
Former |
|
ARB Industrial (a division of ARB, Inc.) |
|
PI&E |
|
West |
|
ARB Structures, Inc. |
|
PI&E |
|
West |
|
Primoris Power (formerly PES Saxon division) |
|
PI&E |
|
Energy |
|
Primoris Renewable Energy |
|
PI&E |
|
Energy |
|
Primoris Industrial Constructors (formerly PES Industrial Division) |
|
PI&E |
|
Energy |
|
Primoris Fabrication (a division of PES) |
|
PI&E |
|
Energy |
|
Primoris Mechanical Contractors (a combination of a division of PES and Cardinal Contractors, Inc.) |
|
PI&E |
|
Energy |
|
OnQuest, Inc. |
|
PI&E |
|
Energy |
|
OnQuest Canada, ULC |
|
PI&E |
|
Energy |
|
Primoris Design and Construction (PD&C); created 2017 |
|
PI&E |
|
NA |
|
Rockford Corporation (Rockford) |
|
P&U |
|
West |
|
Vadnais Trenchless Services, Inc. (Vadnais Trenchless) |
|
P&U |
|
West |
|
Primoris Field Services (a division of PES Primoris Pipeline) |
|
P&U |
|
Energy |
|
Primoris Pipeline (a division of PES Primoris Pipeline) |
|
P&U |
|
Energy |
|
ARB Underground (a division of ARB, Inc.) |
|
U&D |
|
West |
|
Q3 Contracting (Q3C) |
|
U&D |
|
West |
|
Primoris AV |
|
U&D |
|
Energy |
|
Primoris Heavy Civil (formerly JCG Heavy Civil Division) |
|
Civil |
|
East |
|
Primoris I&M (formerly JCG Infrastructure & Maintenance Division) |
|
Civil |
|
East |
|
BW Primoris, LLC |
|
Civil |
|
East |
|
The following is a brief description of each of the Companys reportable segments and their operations.
The Power division of the PI&E segment includes ARB Industrial, Primoris Power, ARB Structures, and Primoris Renewable Energy. This division operates primarily in our California markets, with select projects performed nationwide. The Industrial division of this segment includes Primoris Industrial Constructors, Primoris Fabrication, and Primoris Mechanical Contractors. These groups are headquartered in and around Houston, TX and focus on the Southern region of the United States. The Engineering division of this segment includes OnQuest Inc., with offices in California, OnQuest Canada, ULC with offices in Calgary, and PD&C, located in Tyler, TX.
The P&U segment includes Rockford, Vadnais Trenchless, Primoris Field Services, and Primoris Pipeline. Rockford operates throughout the United States. Vadnais Trenchless provides specialized trenchless solutions in California and other select areas. Presently, both Primoris Field Services and Primoris Pipeline operate in Texas and surrounding states.
The U&D segment is comprised of ARB Underground, Q3C, and Primoris AV. ARB Underground operates primarily in California, while Q3C and Primoris AV are present throughout the Midwest region of the United States.
The Civil segment includes Primoris Heavy Civil, Primoris I&M, and BW Primoris, LLC. These business units are located primarily in the Southeastern and Gulf Coast regions of the United States.
Each of the four segments specializes in a range of services that include engineering, designing, building/installing, replacing, repairing/rehabilitating, and providing management services for construction and construction-related projects. Our services include:
· Providing installation of underground pipeline, cable, and conduits for entities in the petroleum, petrochemical, and water industries;
· Providing maintenance services to utilities for installation and repair of gas distribution lines;
· Providing engineering, installation, and maintenance of industrial facilities for entities in the petroleum, petrochemical, water, and other industries;
· Providing installation of commercial and industrial cast-in-place structures;
· Providing construction of highways and bridges; and
· Providing industrial and environmental construction.
Revenue and Gross Profit Annual 2016 and 2015
The following tables provide a summary of the revenues and gross profit for the twelve month periods ending December 31, 2016 and 2015 (unaudited and in thousands):
|
|
PI&E |
|
P&U |
|
U&D |
|
Civil |
|
12 Months |
| |||||
12 Months 2016 |
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
2016 |
| |||||
Gross Revenue |
|
$ |
482,858 |
|
$ |
402,619 |
|
$ |
637,212 |
|
$ |
479,416 |
|
$ |
2,002,105 |
|
Eliminations |
|
(4,205 |
) |
(688 |
) |
|
|
(264 |
) |
(5,157 |
) | |||||
Net Revenue |
|
$ |
478,653 |
|
$ |
401,931 |
|
$ |
637,212 |
|
$ |
479,152 |
|
$ |
1,996,948 |
|
Gross Profit |
|
$ |
49,807 |
|
$ |
68,100 |
|
$ |
100,071 |
|
$ |
(16,671 |
) |
$ |
201,307 |
|
% of Net Revenues |
|
10.4 |
% |
16.9 |
% |
15.7 |
% |
-3.5 |
% |
10.1 |
% |
|
|
PI&E |
|
P&U |
|
U&D |
|
Civil |
|
12 Months |
| |||||
12 Months 2015 |
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
2015 |
| |||||
Gross Revenue |
|
$ |
489,741 |
|
$ |
299,412 |
|
$ |
587,047 |
|
$ |
577,205 |
|
$ |
1,953,405 |
|
Eliminations |
|
(23,449 |
) |
(47 |
) |
|
|
(494 |
) |
(23,990 |
) | |||||
Net Revenue |
|
$ |
466,292 |
|
$ |
299,365 |
|
$ |
587,047 |
|
$ |
576,711 |
|
$ |
1,929,415 |
|
Gross Profit |
|
$ |
53,620 |
|
$ |
24,685 |
|
$ |
96,450 |
|
$ |
45,118 |
|
$ |
219,873 |
|
% of Net Revenues |
|
11.5 |
% |
8.2 |
% |
16.4 |
% |
7.8 |
% |
11.4 |
% |
Revenue and Gross Profit Quarterly 2016
The following tables provide a summary of the revenues and gross profit for each 2016 quarterly period (unaudited and in thousands):
|
|
PI&E |
|
P&U |
|
U&D |
|
Civil |
|
1st Quarter |
| |||||
1st Quarter 2016 |
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
2016 |
| |||||
Gross Revenue |
|
$ |
140,471 |
|
$ |
54,386 |
|
$ |
103,754 |
|
$ |
133,718 |
|
$ |
432,329 |
|
Eliminations |
|
(1,833 |
) |
(50 |
) |
|
|
|
|
(1,883 |
) | |||||
Net Revenue |
|
$ |
138,638 |
|
$ |
54,336 |
|
$ |
103,754 |
|
$ |
133,718 |
|
$ |
430,446 |
|
Gross Profit |
|
$ |
11,585 |
|
$ |
4,999 |
|
$ |
11,885 |
|
$ |
10,808 |
|
$ |
39,277 |
|
% of Net Revenues |
|
8.4 |
% |
9.2 |
% |
11.5 |
% |
8.1 |
% |
9.1 |
% |
|
|
PI&E |
|
P&U |
|
U&D |
|
Civil |
|
2nd Quarter |
| |||||
2nd Quarter 2016 |
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
2016 |
| |||||
Gross Revenue |
|
$ |
127,867 |
|
$ |
57,044 |
|
$ |
157,119 |
|
$ |
117,089 |
|
$ |
459,119 |
|
Eliminations |
|
(1,291 |
) |
(240 |
) |
|
|
(777 |
) |
(2,308 |
) | |||||
Net Revenue |
|
$ |
126,576 |
|
$ |
56,804 |
|
$ |
157,119 |
|
$ |
116,312 |
|
$ |
456,811 |
|
Gross Profit |
|
$ |
14,092 |
|
$ |
6,469 |
|
$ |
22,841 |
|
$ |
(117 |
) |
$ |
43,285 |
|
% of Net Revenues |
|
11.1 |
% |
11.4 |
% |
14.5 |
% |
-0.1 |
% |
9.5 |
% |
|
|
PI&E |
|
P&U |
|
U&D |
|
Civil |
|
3rd Quarter |
| |||||
3rd Quarter 2016 |
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
2016 |
| |||||
Gross Revenue |
|
$ |
102,678 |
|
$ |
106,434 |
|
$ |
186,985 |
|
$ |
112,473 |
|
$ |
508,570 |
|
Eliminations |
|
(867 |
) |
(392 |
) |
|
|
517 |
|
(742 |
) | |||||
Net Revenue |
|
$ |
101,811 |
|
$ |
106,042 |
|
$ |
186,985 |
|
$ |
112,990 |
|
$ |
507,828 |
|
Gross Profit |
|
$ |
10,893 |
|
$ |
32,402 |
|
$ |
33,925 |
|
$ |
(27,091 |
) |
$ |
50,129 |
|
% of Net Revenues |
|
10.7 |
% |
30.6 |
% |
18.1 |
% |
-24.0 |
% |
9.9 |
% |
|
|
PI&E |
|
P&U |
|
U&D |
|
Civil |
|
4th Quarter |
| |||||
4th Quarter 2016 |
|
Segment |
|
Segment |
|
Segment |
|
Segment |
|
2016 |
| |||||
Gross Revenue |
|
$ |
111,842 |
|
$ |
184,755 |
|
$ |
189,354 |
|
$ |
116,136 |
|
$ |
602,087 |
|
Eliminations |
|
(214 |
) |
(6 |
) |
|
|
(4 |
) |
(224 |
) | |||||
Net Revenue |
|
$ |
111,628 |
|
$ |
184,749 |
|
$ |
189,354 |
|
$ |
116,132 |
|
$ |
601,863 |
|
Gross Profit |
|
$ |
13,237 |
|
$ |
24,230 |
|
$ |
31,420 |
|
$ |
(271 |
) |
$ |
68,616 |
|
% of Net Revenues |
|
11.9 |
% |
13.1 |
% |
16.6 |
% |
-0.2 |
% |
11.4 |
% |
Fixed Backlog Activity 2016
Fixed Backlog by reporting segment and the changes in Fixed Backlog for the period ending December 31, 2016 was as follows (unaudited and in thousands):
|
|
Beginning Fixed |
|
|
|
|
|
Ending Fixed |
|
Revenue |
|
Total Revenue |
| ||||||
|
|
Backlog at |
|
Contract |
|
Revenue |
|
Backlog |
|
Recognized from |
|
for 12 Months |
| ||||||
Reportable |
|
December 31, |
|
Additions to |
|
Recognized from |
|
at December 31, |
|
Non-Fixed Backlog |
|
Ended December 31, |
| ||||||
Segment |
|
2015 |
|
Fixed Backlog |
|
Fixed Backlog |
|
2016 |
|
Projects |
|
2016 |
| ||||||
PI&E |
|
$ |
549,320 |
|
$ |
345,104 |
|
$ |
424,843 |
|
$ |
469,581 |
|
$ |
53,839 |
|
$ |
478,682 |
|
P&U |
|
225,637 |
|
1,161,823 |
|
368,068 |
|
1,019,392 |
|
33,833 |
|
401,901 |
| ||||||
U&D |
|
42,795 |
|
140,731 |
|
151,990 |
|
31,536 |
|
485,221 |
|
637,211 |
| ||||||
Civil |
|
699,475 |
|
370,930 |
|
464,511 |
|
605,894 |
|
14,643 |
|
479,154 |
| ||||||
Total |
|
$ |
1,517,227 |
|
$ |
2,018,588 |
|
$ |
1,409,412 |
|
$ |
2,126,403 |
|
$ |
587,536 |
|
$ |
1,996,948 |
|
Total Backlog 2016
The following table shows total backlog (Fixed Backlog plus MSA Backlog), by reportable segment at December 31, 2016 (unaudited and in thousands):
|
|
Ending |
|
MSA Backlog |
|
Total Backlog |
| |||
|
|
Fixed Backlog |
|
at December 31, |
|
at December 31, |
| |||
Reportable Segment: |
|
at December 31, 2016 |
|
2016 |
|
2016 |
| |||
PI&E |
|
$ |
469,581 |
|
$ |
42,346 |
|
$ |
511,927 |
|
P&U |
|
1,019,392 |
|
33,221 |
|
1,052,613 |
| |||
U&D |
|
31,536 |
|
574,958 |
|
606,494 |
| |||
Civil |
|
605,894 |
|
21,000 |
|
626,894 |
| |||
Total |
|
$ |
2,126,403 |
|
$ |
671,525 |
|
$ |
2,797,928 |
|
Segment Goodwill 2016
The amount of goodwill recorded by segment at December 31, 2016 was as follows (unaudited and in thousands):
|
|
Goodwill |
| |
Reportable Segment: |
|
at December 31, 2016 |
| |
PI&E |
|
$ |
24,512 |
|
P&U |
|
42,252 |
| |
U&D |
|
20,312 |
| |
Civil |
|
40,150 |
| |
Total |
|
$ |
127,226 |
|