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Primoris Services Corporation Announces 2012 Fourth Quarter And Full Year Financial Results

Stocks in this article: PRIM

SEGMENT RESULTS

  • East Construction Services - located primarily in the southeastern United States, incorporates the construction business of James Construction Group (JCG), Cardinal Contractors, Inc., Sprint Pipeline Services LP, acquired March 2012, and The Saxon Group, acquired September 2012. Silva, acquired May 2012, was merged with the operations of JCG.
  • West Construction Services - includes construction services performed by companies headquartered in the western United States including ARB, Inc., ARB Structures, Inc., Rockford, and Q3 Contracting Inc., acquired November 2012. The Blythe Power Constructors joint venture is also included as part of West Construction Services.
  • Engineering - incorporates the results of OnQuest, Inc. and Born Heaters Canada, ULC.
   

Segment Revenues

(in thousands, except %)

 

 

For the three months ended December 31,
2012

Unaudited

    2011

Unaudited

    % of     % of
Total Total

Segment

Revenue Revenue Revenue Revenue
 
East Construction Services $ 203,081 42.2 % $ 125,446 33.6 %
West Construction Services 265,509 55.2 % 234,093 62.8 %
Engineering   12,293 2.6 %   13,527 3.6 %
Total $ 480,883 100.0 % $ 373,066 100.0 %
 
 

 

Segment Gross Profit

(in thousands, except %)

For the three months ended December 31,
2012

Unaudited

2011

Unaudited

% of % of
Gross Segment Gross Segment

Segment

Profit Revenue Profit Revenue
 
East Construction Services $ 16,369 8.1 % $ 11,460 9.1 %
West Construction Services 35,031 13.2 % 37,557 16.0 %
Engineering   3,419 27.8 %   2,029 15.0 %
Total $ 54,819 11.4 % $ 51,046 13.7 %
 

East Construction Services: Revenues increased by $77.6 million in the 2012 fourth quarter, primarily due to the contribution from Primoris Energy Services (“PES”), which includes the March 2012 acquisition of Sprint and the September 2012 acquisition of Saxon. Excluding the impact of PES, revenues increased by $26.1 million due primarily to increased James industrial work in petrochemical and fertilizer facilities as a result of low natural gas prices in the Gulf Coast. Gross profit increased by $4.9 million in the 2012 fourth quarter, including $5.2 million of gross profit contribution from PES. Excluding the impact of PES, gross profit decreased by $0.4 million, primarily a result of lower profit margins on the startup projects in the Belton, TX area. Over time, we expect these projects to generate gross profit at historical heavy civil levels.

West Construction Services: Revenues increased by $31.4 million in the 2012 fourth quarter, due primarily to contributions from pipeline work and the acquisition of Q3 Contracting, which generated $12.8 million in revenue after its November 19, 2012 acquisition. Gross profit for the 2012 fourth quarter decreased by $2.5 million, as 2011 fourth quarter Rockford gross profit included the Ruby pipeline project.

Engineering: Revenues decreased by $1.2 million, mainly due to lower order activity across the operation. Gross profit increased by $1.4 million, primarily as we neared completion of a major project in Australia.

Selling, general and administrative expenses (“SG&A”) were $26.7 million, or 5.6% of revenues for the 2012 fourth quarter, compared to $25.8 million, or 6.9% of revenues for the 2011 fourth quarter. The increased SG&A included a $4.5 million increase attributable to the acquired companies of Sprint, Saxon, and Q3 Contracting and a $2.4 million increase in compensation, legal, consulting and acquisition related expenses, offset by a $3.5 million settlement with the sellers of Rockford and a $2.5 million reduction from Q4 2011 in pension withdrawal liability expense.

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