Everus Reports First Quarter Results, Affirms Guidance for 2025
BISMARCK, N.D.--(BUSINESS WIRE)--May 13, 2025--
Everus Construction Group (NYSE: ECG) today reported financial results for first quarter 2025.
First Quarter 2025 Summary
(all comparisons versus the prior-year period unless otherwise noted)
-- Revenues of $826.6 million, up 32.1%.
-- Net income of $36.7 million, up 30.1%; net income margin of 4.4%.
-- Diluted earnings per share of 72 cents, up 30.9%.
-- Earnings before interest, taxes, depreciation and amortization of $61.8
million, up 31.8%; EBITDA margin of 7.5%.
-- Backlog of $3.1 billion, up 10.0% from Dec. 31, 2024, and up 40.5% from
March 31, 2024.
-- Affirms estimated full-year guidance for 2025.
See the Non-GAAP Measures sections for definitions and reconciliations of the non-GAAP financial measures used in this news release.
Management Commentary
"Everus' strong first quarter results reflect robust opportunities across our diverse end markets, efficient project execution and record backlog," said Jeffrey S. Thiede, president and CEO of Everus. "Our electrical and mechanical segment increased revenues 47% with growth across all end markets, particularly data center work, and our transmission and distribution segment also had solid results with strong project execution.
"Our record backlog was up 10% from year-end and more than 40% compared to first quarter last year, with growth in both the E&M and T&D segments. We saw continued strong project opportunities across our diverse service offerings, particularly for data center, hospitality, undergrounding and high-tech work. With our successful track record of executing on complex projects and our long-term customer relationships, we remain well-positioned to benefit from favorable secular demand drivers, including high-tech reshoring, data center construction and utility infrastructure investments, giving us the opportunity to continue growing backlog.
"Based on our strong first quarter results and continued favorable market outlook, balanced against economic uncertainties and typical project timing movement, we are maintaining our guidance for 2025. We are confident with our favorable backlog trends, attractive financial position and our focus on our 4EVER strategy that we remain on track to execute on our long-term financial targets to drive value for shareholders."
First Quarter 2025 Consolidated Results
Revenues increased 32.1% to $826.6 million in the first quarter of 2025, compared to $625.7 million in the first quarter of 2024. Electrical and mechanical revenues grew $207.2 million, or 47.0%, and transmission and distribution revenues declined $3.5 million, or 1.9%.
Gross profit increased 23.8% to $92.5 million in the first quarter of 2025, compared to $74.7 million in the first quarter of 2024. The increase was primarily driven by higher revenues due to project timing and efficiency gains on certain projects, partially offset by higher operating costs and lower gross profit margin from changes in project mix. Gross profit margin was 11.2% in the first quarter of 2025, compared to 11.9% in the first quarter of 2024.
Selling, general and administrative expenses increased to $41.5 million in the first quarter of 2025, compared to $35.8 million in the first quarter of 2024. The increase was primarily driven by higher labor and professional service-related expenses, including incremental stand-alone operating costs, to support the operational growth of the business.
Net income increased 30.1% to $36.7 million, or diluted EPS of 72 cents, in the first quarter of 2025, compared to $28.2 million, or diluted EPS of 55 cents, in the first quarter of 2024. The increase was primarily from increased gross profit and higher income from joint ventures, partially offset by higher selling, general and administrative expenses, including incremental stand-alone operating costs, and interest expense related to the company's borrowing arrangements. Net income margin was 4.4% in the first quarter of 2025, compared to 4.5% in the first quarter of 2024.
EBITDA increased 31.8% to $61.8 million in the first quarter of 2025, compared to $46.9 million in the first quarter of 2024. The increase was primarily from higher revenues and higher income from joint ventures, partially offset by higher selling, general and administrative expenses, including stand-alone operating costs. EBITDA margin was 7.5%, consistent with the first quarter of 2024.
Backlog increased to $3.1 billion as of March 31, 2025, up 10.0% compared to $2.8 billion as of Dec. 31, 2024, and up 40.5% compared to $2.2 billion as of March 31, 2024.
First Quarter 2025 Segment Results
Electrical and Mechanical
E&M segment revenues increased 47.0% to $648.2 million in the first quarter of 2025, compared to $441.0 million in the first quarter of 2024. The increase was driven by higher workloads in each of the E&M end markets, particularly growth in the data center submarket.
E&M segment net income increased to $36.6 million during the first quarter of 2025, compared to $23.0 million in the first quarter of 2024. E&M segment net income margin was 5.6%, up compared to 5.2% in the first quarter of 2024.
E&M segment EBITDA increased 50.9% to $49.5 million in the first quarter of 2025, compared to $32.8 million in the first quarter of 2024. The increase was driven by higher revenues, higher income from joint ventures and efficiency gains on certain projects, partially offset by changes in project mix and higher selling, general and administrative expenses. E&M segment EBITDA margin was 7.6%, up compared to 7.4% in the first quarter of 2024.
E&M backlog increased to $2.7 billion as of March 31, 2025, up 7.9% compared to $2.5 billion as of Dec. 31, 2024, and up 46.3% compared to $1.8 billion as of March 31, 2024.
Transmission and Distribution
T&D segment revenues were $185.0 million during the first quarter of 2025, compared to $188.5 million in the first quarter of 2024. The utility end market experienced slightly lower workloads due in part to weather-related impacts and reductions in the storm and distribution submarkets, partially offset by growth in the underground submarket. The utility end market declines were partially offset by increased workloads in the transportation end market, particularly in the traffic signalization submarket.
T&D segment net income increased to $10.5 million during the first quarter of 2025, compared to $10.2 million in the first quarter of 2024. T&D segment net income margin was 5.7%, up compared to 5.4% in the first quarter of 2024.
T&D segment EBITDA increased 5.8% to $20.1 million in the first quarter of 2025, compared to $19.0 million in the first quarter of 2024. The modest increase was primarily from solid project execution and lower selling, general and administrative expenses, partially offset by lower revenues. T&D segment EBITDA margin was 10.9%, up compared to 10.1% in the first quarter of 2024.
T&D backlog increased to $353.1 million as of March 31, 2025, up 29.1% compared to $273.6 million as of Dec. 31, 2024, and up 7.9% compared to $327.1 million as of March 31, 2024.
Balance Sheet and Cash Flow Commentary
Balance Sheet
As of March 31, 2025, the company had $54.3 million of unrestricted cash and cash equivalents and $296.2 million of gross debt, compared to $69.9 million and $300.0 million as of Dec. 31, 2024.
As of both March 31, 2025, and Dec. 31, 2024, the company had $209.4 million available under the revolving credit facility, net of $15.6 million of outstanding standby letters of credit.
Net leverage, defined as net debt-to-trailing 12-month EBITDA, was 1.0x as of both March 31, 2025, and Dec. 31, 2024.
Working capital, defined as current assets minus current liabilities, was $425.0 million as of March 31, 2025, compared to $403.9 million as of Dec. 31, 2024.
Cash Flow
Operating cash flows were $7.1 million for the first quarter of 2025, compared to $21.8 million for the first quarter of 2024. The decrease was primarily related to higher working capital needs.
Capital expenditures were $18.5 million for the first quarter of 2025, compared to $9.2 million for the first quarter of 2024. The increase was primarily from vehicle, equipment and building investments to support the company's growth.
Everus had negative free cash flow of $8.1 million for the first quarter of 2025, compared to positive free cash flow of $15.4 million for the first quarter of 2024. The decrease was primarily from lower operating cash flows and higher net capital expenditures.
Forecast for 2025
Everus is affirming its estimated full-year guidance for 2025.
-- Revenue is expected to be in the range of $3.0 billion to $3.1 billion.
-- EBITDA is expected to be in the range of $210 million to $225 million,
with EBITDA margins expected to be lower than in 2024 due to stand-alone
operating costs and associated dis-synergies.
-- Gross capital expenditures for 2025 are expected to be in the range of
$65 million to $70 million.
Basis of Presentation
Prior to the spinoff from MDU Resources Group, Inc. on Oct. 31, 2024, Everus Construction, Inc., including its subsidiaries, operated as a wholly owned subsidiary of CEHI, LLC (Centennial) and an indirect, wholly owned subsidiary of MDU Resources and not as a stand-alone company. Following the separation, Everus Construction is now a wholly owned subsidiary of Everus. As a result, for periods prior to the separation, Everus' financial information, including the results of operations, financial condition, cash flows, and the accompanying unaudited condensed consolidated financial statements, was prepared on a "carve-out" basis in connection with the spinoff and was derived from the unaudited condensed consolidated financial statements of MDU Resources as if Everus operated on a stand-alone basis. The calculation of basic and diluted earnings per share for periods presented prior to the spinoff have been retrospectively adjusted to the number of shares outstanding on Oct. 31, 2024, the separation and distribution date. It is assumed that there were no dilutive or anti-dilutive equity instruments as of Oct. 31 because there were no Everus stock-based awards outstanding for periods prior to the separation.
Non-GAAP Financial Measures
Throughout this news release, Everus presents financial information prepared in accordance with U.S. generally accepted accounting principles (GAAP), as well as non-GAAP financial measures, including EBITDA, EBITDA margin, net debt, net leverage and free cash flow, and, in some cases, applicable measures by segment. The use of these non-GAAP financial measures should not be construed as alternatives to net income, net income margin, total debt, gross leverage and cash provided by (used in) operating activities. Everus believes the use of these non-GAAP financial measures are beneficial in evaluating the company's financial performance. Please refer to the Non-GAAP Financial Measures sections contained in this news release for additional information.
Conference Call
Management will discuss Everus' first quarter 2025 results on a webcast at 10:30 a.m. EDT May 14. The webcast and accompanying presentation materials can be accessed at investors.everus.com by selecting "Events & Presentations" and "Everus Q1 Earnings Call." After the conclusion of the webcast, a replay will be available at the same location.
Participants also can listen to the webcast by phone at 646-307-1963 for toll-based U.S. and international callers or at 800-715-9871 for toll-free U.S. callers, with conference ID 1034822.
About Everus Construction Group
Everus Construction Group, Inc., a member of the S&P SmallCap 600$(R)$ index, is Building America's Future$(TM)$ by providing a full spectrum of construction services through its electrical and mechanical, and transmission and distribution specialty contracting services across the United States. These specialty contracting services are provided to utility, transportation, commercial, industrial, institutional, renewable, service and other customers. Its E&M contracting services include construction and maintenance of electrical and communication wiring and infrastructure, fire suppression systems, and mechanical piping and services in both the public and private sectors. Its T&D contracting services include construction and maintenance of overhead and underground electrical, gas and communication infrastructure, as well as design, manufacturing and distribution of overhead and underground transmission line construction equipment and tools. For more information about Everus, visit everus.com or email investors@everus.com.
Forward-Looking Statements
Information in this news release includes certain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this news release, including statements about the company's 4EVER strategy, future performance, financial guidance, long-term targets and statements made by the CEO, are expressed in good faith and are believed by the company to have a reasonable basis. This news release highlights key growth strategies, projections and certain assumptions for the company and its subsidiaries and other matters for each of the company's segments. Many of these highlighted statements and other statements not historical in nature are "forward-looking statements." Although the company believes that its expectations are based on reasonable assumptions as of the date they are made, there is no assurance the company's projections, including estimates for growth, shareholder value creation and financial guidance, will be achieved. Readers are encouraged to refer to assumptions contained in this news release, as well as the various important factors listed in Part I, Item 1A - Risk Factors in the company's most recent Annual Report on Form 10-K filing and subsequent filings with the Securities and Exchange Commission.
Changes in such assumptions and factors could cause actual future results to differ materially from growth and financial guidance. All forward-looking statements in this news release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. Except as required by law, the company does not undertake any obligation to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise.
Everus Construction Group, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
Three months ended March 31,
----------------------------------------------
2025 2024
----------------------- ---------------------
(In thousands, except per share amounts)
Operating revenues $ 826,629 $ 625,689
Cost of sales 734,136 550,972
--- ------------------ -----------------
Gross profit 92,493 74,717
Selling, general and
administrative expenses 41,509 35,833
--- ------------------ -----------------
Operating income 50,984 38,884
Interest expense, net 4,694 2,726
Other income, net 567 918
--- ------------------ -----------------
Income before income taxes
and income from equity
method investments 46,857 37,076
Income taxes 13,573 9,977
Income from equity method
investments 3,388 1,115
--- ------------------ -----------------
Net income $ 36,672 $ 28,214
=== ================== =================
Earnings per share:
Basic $ 0.72 $ 0.55
Diluted $ 0.72 $ 0.55
Weighted average common
shares outstanding:
Basic 51,042 50,972
Diluted 51,091 50,972
Everus Construction Group, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
March 31, 2025 December 31, 2024
---------------------------- ----------------------
(In thousands, except share and per share amounts)
Assets
Current assets:
Cash, cash
equivalents and
restricted cash $ 73,981 $ 86,012
Receivables, net of
allowances of
$3,064 and $7,097,
respectively 592,809 590,028
Contract assets 221,910 167,049
Inventories 47,413 43,750
Prepayments and
other current
assets 34,854 30,390
----- --------------------- ------------------
Total current assets 970,967 917,229
----- --------------------- ------------------
Noncurrent assets:
Property, plant and
equipment, net of
accumulated
depreciation of
$161,545 and
$157,278,
respectively 145,801 134,409
Goodwill 143,224 143,224
Other intangible
assets, net of
accumulated
amortization of
$6,990 and
$10,334,
respectively -- 116
Operating lease
right-of-use
assets 67,742 67,045
Investments 23,504 21,286
Other 4,609 5,154
----- --------------------- ------------------
Total noncurrent
assets 384,880 371,234
----- --------------------- ------------------
Total assets $ 1,355,847 $ 1,288,463
===== ===================== ==================
Liabilities and
Stockholder's Equity
Current liabilities:
Current portion of
long-term debt $ 15,000 $ 15,000
Contract
liabilities, net 186,571 207,304
Accounts payable 182,335 138,097
Taxes payable 24,508 6,768
Accrued
compensation 52,864 67,815
Current portion of
operating lease
liabilities 27,762 26,354
Accrued
payroll-related
liabilities 43,544 38,995
Other accrued
liabilities 13,355 13,037
----- --------------------- ------------------
Total current
liabilities 545,939 513,370
----- --------------------- ------------------
Noncurrent
liabilities:
Long-term debt 277,123 280,648
Deferred income
taxes 9,209 8,161
Operating lease
liabilities 40,473 41,200
Other 22,904 22,472
----- --------------------- ------------------
Total noncurrent
liabilities 349,709 352,481
----- --------------------- ------------------
Total liabilities $ 895,648 $ 865,851
----- --------------------- ------------------
Commitments and
contingencies
Common stockholder's
equity:
Common stock,
300,000,000 shares
authorized, $0.01
par value,
50,999,228 and
50,980,924 shares
issued and
outstanding as of
March 31, 2025 and
December 31, 2024,
respectively $ 510 $ 510
Other paid-in
capital 139,045 138,130
Retained earnings 320,644 283,972
----- --------------------- ------------------
Total stockholder's
equity 460,199 422,612
----- --------------------- ------------------
Total liabilities and
stockholder's equity $ 1,355,847 $ 1,288,463
===== ===================== ==================
Everus Construction Group, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three months ended March 31,
--------------------------------------
2025 2024
----------- ----------
(in thousands)
Operating activities:
Net income $ 36,672 $ 28,214
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation 6,774 5,461
Amortization of intangible
assets 116 522
Deferred income taxes 1,048 193
Provision for credit losses (1,729) (411)
Amortization of debt issuance
costs 394 --
Stock-based compensation costs 1,747 344
Net unrealized (gains) losses
on investments 117 --
Gain on sale of assets (2,371) (1,283)
Equity in earnings of
unconsolidated affiliates,
net of distributions (2,743) 1,544
Changes in current assets and
liabilities, net of acquisitions:
Receivables (1,052) (14,891)
Due from related-party -- (2,140)
Contract assets (54,861) 1,110
Inventories (3,663) (937)
Other current assets (4,464) 270
Accounts payable 43,625 2,318
Due to related-party -- 590
Contract liabilities, net (20,733) 202
Other current liabilities 7,579 (421)
Other noncurrent changes 672 1,171
----------- ----------
Net cash provided by operating
activities 7,128 21,856
----------- ----------
Investing activities:
Capital expenditures (18,539) (9,222)
Net proceeds from sale or
disposition of property 3,310 2,810
Proceeds from insurance
contracts 2,174 --
Investments (1,766) --
----------- ----------
Net cash used in investing
activities (14,821) (6,412)
----------- ----------
Financing activities:
Repayment of long-term debt (3,750) --
Tax withholding on stock-based
compensation $(588.SI)$ --
Net amounts received from
related-party cash management
program -- (4,650)
Transfers to Centennial and
MDU Resources -- (11,818)
----------- ----------
Net cash used in financing
activities (4,338) (16,468)
----------- ----------
(Decrease) increase in cash, cash
equivalents and restricted cash (12,031) (1,024)
----------- ----------
Cash, cash equivalents and
restricted cash - beginning of
period 86,012 1,567
----------- ----------
Cash, cash equivalents and
restricted cash - end of period $ 73,981 $ 543
=========== ==========
Everus Construction Group, Inc.
Segment and Other Financial Information
(Unaudited)
Revenues
The following table sets forth segment revenues for the periods indicated, as well as the percentage change from the prior period:
Three months ended March 31,
---------------------------------------------
2025 2024 % Change
--------- -------- -----------
(In millions, except percentages)
Operating revenues:
Electrical & Mechanical $ 648.2 $ 441.0 47.0%
Transmission &
Distribution 185.0 188.5 (1.9)%
Eliminations (6.6) (3.8) 73.7%
--------- --------
Total operating revenues $ 826.6 $ 625.7 32.1%
========= ========
Backlog
Backlog is a common measurement in the construction services industry. Everus' determination of backlog can include projects that have a written award, a letter of intent, a notice to proceed, an agreed upon work order to perform work on mutually accepted terms, and conditions and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. Contracts are subject to delays, defaults or cancellations; changes in scope of services to be provided; and adjustments to costs. Backlog also may be affected by project delays or cancellations resulting from weather conditions, external market factors and economic factors beyond Everus' control, among other things. Accordingly, there is no assurance that backlog will be realized. For the periods presented in the following backlog table, Everus did not experience any material impacts related to delays or cancellations of planned projects included in backlog. The timing of contract awards, including contracts awarded pursuant to Master Service Agreements, duration of large new contracts and the mix of services can significantly affect backlog. Backlog at any given point in time may not accurately represent revenue or net income realized in any period, and backlog as of the end of the year may not be indicative of revenue or net income expected to be realized in the following year. Backlog should not be relied upon as a stand-alone indicator of future results.
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