Primoris Services Corporation Investor Presentation March 2019

Transcription

1 Primoris Services Corporation Investor Presentation March 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 Operating Market Segments Power, Industrial & Engineering Pipeline & Underground Utilities & Distribution Civil Transmission & Distribution 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 2018 Highlights Reached goal of ~$3B revenue MSA revenues at record levels Successful entry into the electric T&D market Paid down debt while maintaining a strong balance sheet Resolved disputed receivable 5

6 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 6

7 Long Term Vision for Primoris Primoris vision is to provide infrastructure services across diverse end markets while maintaining a stable base of recurring revenue. Increase Profitability Increase Operational Visibility Strategic Capital Allocation 7

8 Strategic Plan for Long Term Vision Increase Profitability Shifting revenue to higher margin operating segments Growing revenues while controlling SG&A expenses Increase Operational Visibility Growing MSA-based revenues Growing funnel of opportunity Strategic Capital Allocation Reducing long-term debt Investing in organic and acquired growth 8

9 Increase Profitability Shifting revenue to higher margin operating segments Revenue 2015 Civil 30% Utilities 30% Power 24% Pipeline 16% 2018 Civil 16% Transmission 10% Utilities 31% Power 23% Pipeline 20% Backlog 2015 Civil Power 18% 13% Civil 34% Utilities 25% Power 28% Pipeline 13% 2018 Transmission 14% Utilities 29% Pipeline 26% 9 *2018 Includes only seven months of Willbros acquisition.

10 Increase Profitability Growing revenue while controlling SG&A expenses $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- 7.9% 7.0% 7.2% 6.2% Revenue SG&A 10

11 Increase Operational Visibility Growing MSA-based revenues $1,200 45% $1,000 38% 40% $800 35% $MMs $600 $400 27% 24% 24% 29% 29% 28% 30% 25% % Total Revenue $200 20% $ MSA Revenue % Total Revenue 15% 11

12 Increase Operational Visibility Growing funnel of opportunity Addressable Market $15B Addressable Market $27B Targeted Market $5B Targeted Market $11B Targeted market includes only opportunities for which Primoris is already working on or had submitted a proposal. 12

13 Strategic Capital Allocation Reduce Debt Invest in Internal Growth Growth Through Acquisitions Dividend Growth 13

14 Strategic Capital Allocation Reducing long-term debt Actively paying down debt after 2Q18 acquisition 74.3% 63.0% 60.9% 50.7% 46.6% 47.5% 46.6% 44.2% 4.1% Weighted Average Interest Rate 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 Debt to Equity 14

15 Strategic Capital Allocation Investing in internal and acquired growth Disciplined Investment in Internal Growth Targeted Investment in Acquired Growth 2019 Cap Ex Budget: $85MM-$90MM History of successful acquisitions Targeting markets with recurring revenue base, new geographies, or complimentary services Efficient Deployment of Capital 15

16 Strategy Leads Us to Growing EPS $1.80 $1.50 $1.60 $ E 16 *2017 and 2018 earnings per fully diluted share are actual guidance is as of 2/28/19

17 Key Takeaways Reached goal of ~$3B revenue MSA revenue at record levels Successful entry into the electric T&D market Growing funnel of opportunity Investing in organic and acquired growth 17

18 APPENDIX Appendix

19 2018 Full Year Summary Revenues (in millions) Net Income (in millions) $2,380.0 $2,939.5 $72.4 $ Operating Cash Flow (in millions) $ Tangible Net Worth (in millions) $358.3 $317.8 $ December 31, 2017 December 31,

20 Power, Industrial & Engineering REVENUE $694MM GROSS MARGIN $110MM BACKLOG $697MM 2019 Outlook Strong utility-scale renewable power market Natural gas processing & export facilities opportunities will be backend loaded 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 20 *Value for FY2018

21 Pipeline & Underground REVENUE $591MM GROSS MARGIN $67MM BACKLOG $703MM 2019 Outlook ACP project delayed until late 3Q2019 Small diameter pipeline market remains strong, but year should be back-end loaded Field services market strong 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 21 *Value for FY2018

22 Utilities & Distribution REVENUE $903MM GROSS MARGIN $112MM BACKLOG $789MM 2019 Outlook MSA revenue at all time high. Recent acquisition brings additional gas utilities opportunities Expanding into new geographies across Midwest, Southeast, and Southwest markets 13% - 16% Typical Gross Profit Natural Gas Distribution Systems Water Distribution Systems Sewer Collection Systems Electrical Transmission and Distribution 22 *Value for FY2018

23 Transmission & Distribution REVENUE $287MM GROSS MARGIN $32MM BACKLOG $395MM 2019 Outlook T&D market continued strength Strong demand from both existing and new customers New awards with major clients underway 10% - 12% Typical Gross Profit Electrical Substations Electrical Distribution Electrical Transmission (OH & UG) Cable Restoration Smart Grids Emergency Restoration Telecom 23 *Value for FY2018. Includes only seven months of Willbros acquisition.

24 Civil REVENUE $465MM GROSS MARGIN $5MM BACKLOG $506MM 2019 Outlook Louisiana heavy civil design build market strong Texas heavy civil market ramping up Demand for I&M services increasing for LNG and petchem opportunities 5% - 8% Typical Gross Profit Highways Bridges Airports Ports Mining Facilities Sitework Soil Stabilization 24 *Value for FY2018

25 Primoris Timeline Revenue MM $3,500 $3,000 $2,500 $2,000 $1,500 $1, Founded OnQuest 2004 Acquires Cardinal Contractors; Formed Primoris Services Corporation 2005 OnQuest acquires Born Canada 2008 Becomes publicly traded company on the NASDAQ under ticker PRIM 2009 Acquires James Construction Group; Acquires Cravens Services 2010 Acquires Rockford Corporation 2016 Acquires Mueller; Acquires Pipe Jacking; Acquires Northern Energy & Power; Founded Design & Construction 2015 Acquires Aevenia 2013 Acquires Force Specialty Services 2014 Acquires Ram-Fab; Acquires Surber Roustabout; Acquires Blaus Wasser; Acquires Vadnais Trenchless 2017 Acquires Florida Gas Contractors; Acquires Coastal Field Services 2018 Acquires Willbros $ Acquires Sprint Pipeline; Acquires The Silva Companies; Acquires The Saxon Group; Acquires Q3 Contracting $ s 2010s 25

26 Connect with Primoris on Social Media Primoris Services Primoris Services 26

27 Investor Contact: Kate Tholking Vice President, Investor Relations (214) Corporate Contact: 2300 N. Field Street Suite 1900 Dallas, TX