Primoris Services Corporation Investor Presentation January 2019

Transcription

1 Primoris Services Corporation Investor Presentation January 2019

2 Disclosure Regarding Forward-Looking Statements This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, including with regard to the Company s future performance. Words such as "estimated," "believes," "expects," "projects," and "future" or similar expressions are intended to identify forward-looking statements. Forward-looking statements inherently involve risks, uncertainties, and assumptions that are difficult to predict or are beyond Primoris control. Prior to making an investment decision, please refer to the Risk Factors section and other portions of our annual Form 10-K and other filings with the Securities and Exchange Commission for additional information concerning some of the risks, uncertainties and assumptions that could affect our forward-looking statements. Forward-looking statements are based on management s current expectations at the time of this presentation. Primoris does not have any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. 2

3 Primoris Diverse Operating Segments Power, Industrial & Engineering Pipeline & Underground Utilities & Distribution Transmission & Distribution Civil 3

4 Primoris - Extensive List of Capabilities 12,000+ Dedicated Employees Company- Owned Equipment Fleet Company- Owned Fabrication Facilities Full EPC Capabilities Strong Self-Perform Construction Capabilities 4

5 Primoris - A Commitment to Core Values Primoris is Diversity Safety Relationships Integrity Value Excellence Sustainability FOUR C s OF RISK MANAGEMENT Customer Contract Cash Cost 5

6 Power, Industrial & Engineering 3Q18 REVENUE $182MM 3Q18 GROSS MARGIN $32MM 3Q18 BACKLOG $387MM Current Market Trends Industrial and turnaround market continues to grow in CA due to SB 54 Growing renewable power market Opportunities for engineering and EPC awards along Gulf Coast USA Natural gas processing & export facilities opportunities 11% - 13% Typical Gross Profit Traditional Gas-fired Power Plants Non-traditional (Solar) Power Projects Refineries and Terminal Stations Compressor Stations Petrochemical and Processing Facilities 6

7 Pipeline & Underground 3Q18 REVENUE $213MM 3Q18 GROSS MARGIN $25MM 3Q18 BACKLOG $911MM Current Market Trends Small and medium diameter pipeline market improving Permian Basin market strong Micro tunneling market strong Primoris Field Services integration complete and backlog building 10% - 14% Typical Gross Profit Oil, Gas, and Product Pipelines Water Pipelines Large and Small Diameter Pipelines Gathering and Long-Haul Systems Compressor and Pump Stations Provide Pipeline Field Services 7

8 Utilities & Distribution 3Q18 REVENUE $269MM 3Q18 GROSS MARGIN $35MM 3Q18 BACKLOG $683MM Current Market Trends MSA revenue at all time high Willbros acquisition brings additional gas utilities opportunities Focus on expansion into new geographies across Midwest and Southeast markets 13% - 16% Typical Gross Profit Natural Gas Distribution Systems Water Distribution Systems Sewer Collection Systems Electrical Transmission and Distribution 8

9 Transmission & Distribution 3Q18 REVENUE $122MM 3Q18 GROSS MARGIN $14MM 3Q18 BACKLOG $326MM Current Market Trends Continued T&D market strength Adding crews for additional work with existing customers New awards with major clients underway and being announced Cross-selling opportunities with electric and gas utilities 11% - 15% Typical Gross Profit Electrical Substations Electrical Distribution Electrical Transmission (OH & UG) Cable Restoration Smart Grids Emergency Restoration Telecom 9

10 Civil 3Q18 REVENUE $123MM 3Q18 GROSS MARGIN $0MM 3Q18 BACKLOG $527MM Current Market Trends Texas heavy civil market continued strength I&M partnering with other Primoris business units Site prep opportunities with Gulf Coast petrochemical expansion 5% - 8% Typical Gross Profit Highways Bridges Airports Ports Mining Facilities Sitework Soil Stabilization 10

11 Increasing Gross Margin Shifting revenue to higher margin operating segments Revenue Total Power Pipeline Utilities Transmission Civil $0 $500 $1,000 $1,500 $2,000 $2,500 $3, LTM 2018 Backlog Total Power Pipeline Utilities Transmission Civil $0 $500 $1,000 $1,500 $2,000 $2,500 $3, LTM *LTM as of 09/30/2018. Includes only four months of Willbros acquisition. Values in MM.

12 Growing MSA Revenues Provides a stable base of revenue $1,000 36% 40% 35% $800 $600 27% 24% 24% 29% 29% 28% 30% 25% 20% $400 15% 10% $200 5% $ LTM 2018 Q3 MSA Revenue % Total Revenue 0% 12 Values in MM.

13 Committed to Maintaining a Conservative Balance Sheet Actively paying down debt after 2Q18 Willbros acquisition 74.3% 63.0% 50.7% 46.6% 47.5% 46.6% 44.2% 4.1% Weighted Average Interest Rate 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 Debt to Equity 13

14 Priorities for Capital Allocation Reduce Debt Invest in Internal Growth Growth Through Acquisitions Dividend Growth 14

15 Strategy Leads to Growing Earnings per Share $1.70 $1.70 $1.40 $1.50 $1.41 $1.50 $ E 15 *2016 and 2017 earnings per fully diluted share are actual guidance is as of 11/6/18

16 APPENDIX

17 Conservative Capital Structure Balance ($MMs) Interest Rate Maturity Term Loan $217 Variable July 2023 Equipment Notes $ %-4.40% April 2019 April 2023 Mortgage Notes $11 4.3%-5.0% January 2031 October 2038 Total Debt $371 Weighted Average Interest Rate 4.1% Total Shareholder Equity $587 TOTAL CAPITAL $958 Available Cash Balance [1] $44 Revolving Credit Facility $200 July Canadian Credit Facility [2] $6 Outstanding Letters of Credit [2] $51 Total Available Liquidity $ *As of 9/30/18. [1] Includes cash and short term investments, less $16MM related to VIE. [2] Canadian facility in US dollars

18 Primoris Historical Timeline Revenue MM $3,000 $2, Acquires Mueller; Acquires Pipe Jacking; Acquires Northern Energy & Power; Founded Design & Construction 2015 Acquires Aevenia 2013 Acquires Force Specialty Services 2017 Acquires Florida Gas Contractors; Acquires Coastal Field Services 2018 Acquires Willbros $2,000 $1,500 $1,000 $500 $ Brian Pratt becomes President; begins the process of growing ARB from $12MM revenue in 1983 to Primoris more than $2.5 billion revenue 1989 Acquires assets of Oilfield Construction 1991 Acquires Harco; Enters foreign markets 1992 Acquires OFCCO Constructors 1993 Acquires Macco Constructors 1994 Develops steel structure capabilities 1996 Acquires Saffel & McAdams 2009 Acquires James Construction Group; Acquires Cravens 2002 Services Founded OnQuest 2004 Acquires Cardinal Contractors; Formed Primoris Services Corporation 2005 OnQuest acquires Born Canada 2010 Acquires Rockford Corporation 2008 Becomes publicly traded company on the NASDAQ under ticker PRIM 2014 Acquires Ram-Fab; Acquires Surber Roustabout; Acquires Blaus Wasser; Acquires Vadnais Trenchless 2012 Acquires Sprint Pipeline; Acquires The Silva Companies; Acquires The Saxon Group; Acquires Q3 Contracting s 1990s 2000s 2010s 18

19 19 Power, Industrial & Engineering

20 20 Pipeline & Underground

21 21 Utilities & Distribution

22 22 Civil

23 Connect with Primoris on Social Media Primoris Services Primoris Services 23

24 Investor Contact: Kate Tholking Vice President, Investor Relations (214) Corporate Contact: 2100 McKinney Ave. Suite 1500 Dallas, TX