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What changed in Primoris Services Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Primoris Services Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+253 added−257 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-27)

Top changes in Primoris Services Corp's 2024 10-K

253 paragraphs added · 257 removed · 222 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

38 edited+9 added−12 removed47 unchanged
Biggest changeThe Utilities segment operates throughout the United States and specializes in a range of services, including the installation and maintenance of new and existing natural gas and electric utility distribution and transmission systems, and communications systems. ​ The Energy segment operates throughout the United States and Canada and specializes in a range of services that include engineering, procurement, construction, retrofits, highway and bridge construction, demolition, site work, soil stabilization, mass excavation, flood control, upgrades, repairs, outages, pipeline construction and maintenance, pipeline integrity services, and maintenance services for entities in the renewable energy and energy storage, renewable fuels, and petroleum and petrochemical industries, as well as state departments of transportation. ​ ​ 4 Table of Contents Acquisitions ​ See Note 4 — “ Business Combinations ” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional detail. ​ PLH Group, Inc.
Biggest changeThe remainder of our services are generated from contracts for specific construction or installation projects. ​ Reportable Segments ​ Our current reportable segments are the Utilities segment and the Energy segment. ​ The Utilities segment operates throughout the United States and specializes in a range of services, including the installation and maintenance of new and existing natural gas and electric utility distribution and transmission systems, and communications systems. ​ The Energy segment operates throughout the United States and Canada and specializes in a range of services that include engineering, procurement, construction, and maintenance services for entities in the energy, renewable energy and energy storage, renewable fuels, and petroleum and petrochemical industries, as well as state departments of transportation. ​ ​ 4 Table of Contents Strategy ​ Our strategy has remained consistent from year to year and continues to emphasize the following key elements: ​ ● Growth Through Controlled Expansion.
Historically, substantially all of the gas and electric distribution customers have renewed their MSAs with us. Facility maintenance services, such as regularly scheduled and emergency repair work, are provided on an ongoing basis at predetermined rates, or on a time and material basis. ​ Construction contracts are primarily obtained through competitive bidding or through negotiations with customers.
Historically, substantially all of the gas and electric distribution and communications customers have renewed their MSAs with us. Facility maintenance services, such as regularly scheduled and emergency repair work, are provided on an ongoing basis at predetermined rates, or on a time and material basis. ​ Construction contracts are primarily obtained through competitive bidding or through negotiations with customers.
The remainder of our services are generated from contracts for specific construction or installation projects, which are subject to multiple pricing options, including unit-price, time and material, fixed-price, or cost reimbursable plus fixed fee. Under a fixed-price contract, we provide labor, equipment and services required by a project for a competitively bid or negotiated fixed price.
The remainder of our services are generated from contracts for specific construction projects, which are subject to multiple pricing options, including unit-price, time and material, fixed-price, or cost reimbursable plus fixed fee. Under a fixed-price contract, we provide labor, equipment and services required by a project for a competitively bid or negotiated fixed price.
Dycom Industries, MYR Group, and MasTec, Inc.; competitors in our industrial markets include PCL, Kiewit, Granite Construction, Performance Contractors and Boh Brothers; competitors in the renewables market include Blattner Energy, and Mortenson; and competitors in our highway services markets include Sterling Construction Company and Zachry Construction Company.
Dycom Industries, MYR Group, and MasTec, Inc.; competitors in our industrial markets include PCL, Kiewit, Performance Contractors and Boh Brothers; competitors in the renewables market include Blattner Energy, and Mortenson; and competitors in our highway services markets include Sterling Construction Company and Zachry Construction Company.
Because of the cyclical nature of our business, the financial results for any period may fluctuate from prior periods, and our financial condition and operating results may vary from quarter to quarter.
Because of the cyclical nature of some of our business, the financial results for any period may fluctuate from prior periods, and our financial condition and operating results may vary from quarter to quarter.
All of our employees are subject to our Code of Conduct, which includes guidance and requirements concerning, among other things, general business ethics, including policies concerning the environment, conflicts of interest, anti-corruption, harassment and discrimination, data security and privacy, insider trading and the Anti-Bribery & Corruption Policy, which includes guidance and requirements concerning, among other things, interactions with government officials; provision of gifts, entertainment and hospitality; and charitable and political contributions. ​ Website Access and Other Information ​ Our website address is www.prim.com.
All of our employees are subject to our Code of Conduct, which includes guidance and requirements concerning, among other things, general business ethics, including policies concerning the environment, conflicts of interest, anti-corruption, harassment and discrimination, data security and privacy, related party transactions, insider trading and the Anti-Bribery & Corruption Policy, which includes guidance and requirements concerning, among other things, interactions with government officials; provision of gifts, entertainment and hospitality; and charitable and political contributions. ​ Website Access and Other Information ​ Our website address is www.prim.com.
You may obtain free electronic copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports through our website under the “Investors” tab or through the website of the Securities and Exchange Commission (the “SEC”) at www.sec.gov.
You may obtain free electronic copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports 10 Table of Contents through our website under the “Investors” tab or through the website of the Securities and Exchange Commission (the “SEC”) at www.sec.gov.
Although we have not been dependent upon any one customer in any year, a small number of customers tend to constitute a substantial portion of our total revenue in any given year. ​ We enter into a large number of contracts each year, and the projects can vary in length from daily work orders to as long as 36 months, and occasionally longer, for completion on larger projects.
Although we have not been dependent upon any one customer in any year, a small number of customers tend to constitute a substantial portion of our total revenue in any given year. ​ 5 Table of Contents We enter into a large number of contracts each year, and the projects can vary in length from daily work orders to as long as 36 months, and occasionally longer, for completion on larger projects.
Also posted on our website under the “Investors/Governance Documents” tab are our Code of Conduct and charters for our Environmental, Social and Governance Committee, Enterprise Risk Management Committee, Cyber Security Steering Committee, and Diversity and Inclusion Committee along with our Human Rights and Corporate Environmental policies.
Also posted on our website under the “Investors/Governance Documents” tab are our Code of Conduct and charters for our Environmental, Social and Governance Committee, Enterprise Risk Management Committee, and Cyber Security Steering Committee along with our Human Rights and Corporate Environmental policies.
Our business model emphasizes self-performance of a significant portion of our work. In both of our segments, we maintain a stable work force of skilled, experienced craft professionals, many of whom are cross-trained on projects such as pipeline and facility construction, refinery maintenance, gas and electrical distribution, and piping systems. ​ 5 Table of Contents ● Selective Bidding.
Our business model emphasizes self-performance of a significant portion of our work. In both of our segments, we maintain a stable work force of skilled, experienced craft professionals, many of whom are cross-trained on projects such as pipeline and facility construction, refinery maintenance, gas and electrical distribution, and piping systems. ​ ● Selective Bidding.
To date, we have obtained the level of surety bonds necessary to support our business. ​ 8 Table of Contents Regulation and Environmental Requirements ​ Our operations are subject to compliance with regulatory requirements of federal, state, and municipal agencies and authorities, and international laws and regulations including with respect to: ​ ● Licensing, permitting and inspection requirements applicable to construction projects; ● Worker safety, including regulations established by the Occupational Safety and Health Administration; ● Wage and hour regulations and regulations associated with our collective bargaining agreements and unionized workforce; ● Transportation of equipment and materials, including licensing and permitting requirements, as well as aviation activities; ● Building and electrical codes; ● Applicable U.S. and non-U.S. anti-corruption regulations; ● Immigration regulations applicable to the U.S. and cross-border employment; ● Labor relations and affirmative action; ● Special bidding, procurement and other requirements on government projects; and ● Protection of the environment, including regulations established by the Environmental Protection Agency, state agencies and other foreign environmental regulators. ​ We believe that we have all the licenses and permits required to conduct our operations and that we are in substantial compliance with applicable regulatory requirements. ​ We are subject to numerous federal, state, local and international environmental laws and regulations governing our operations, including the handling, transportation and disposal of non-hazardous and hazardous substances and wastes, as well as emissions and discharges into the environment, including discharges to air, surface water, groundwater and soil.
To date, we have obtained the level of surety bonds necessary to support our business. ​ Regulation and Environmental Requirements ​ Our operations are subject to compliance with regulatory requirements of federal, state, and municipal agencies and authorities, and international laws and regulations including with respect to: ​ ● Licensing, permitting and inspection requirements applicable to construction projects; ● Worker safety, including regulations established by the Occupational Safety and Health Administration (OSHA), Mine Safety and Health Administration (MSHA), and other local or state regulatory bodies; ● Wage and hour regulations and regulations associated with our collective bargaining agreements and unionized workforce; ● Transportation of equipment and materials, including licensing and permitting requirements, as well as aviation activities; ● Building and electrical codes; ● Applicable U.S. and non-U.S. anti-corruption regulations; ● Immigration regulations applicable to the U.S. and cross-border employment; ● Labor relations and affirmative action; ● Special bidding, procurement and other requirements on government projects; and ● Protection of the environment, including regulations established by the Environmental Protection Agency, state agencies and other foreign environmental regulators. ​ We believe that we have all the licenses and permits required to conduct our operations and that we are in substantial compliance with applicable regulatory requirements. ​ We are subject to numerous federal, state, local and international environmental laws and regulations governing our operations, including the handling, transportation and disposal of non-hazardous and hazardous substances and wastes, as well as emissions and discharges into the environment, including discharges to air, surface water, groundwater and soil.
Total Recordable Incident Rate (“TRIR”) tracks the total number of workplace injuries which rise to the level of Occupational Safety and Health Administration recordability, whether leading to time away from work or not. TRIR is reported as the number of workplace safety incidents per 100 full-time workers during a one-year period.
Total Recordable Incident Rate (“TRIR”) tracks the total number of workplace injuries which rise to the level of the Occupational Safety and Health Administration’s definition of recordability, whether leading to time away from work or not. TRIR is reported as the number of workplace safety incidents per 100 full-time workers during a one-year period.
Segment and business unit managers are also responsible for working with our business development group in pursuing growth opportunities with prospective new customers. ​ 6 Table of Contents We believe that developing and fostering strategic relationships with customers will result in increased future opportunities. Some of our strategic relationships are in the form of long-term MSAs.
Segment and business unit managers are also responsible for working with our business development group in pursuing growth opportunities with prospective new customers. ​ We believe that developing and fostering strategic relationships with customers will result in increased future opportunities. Some of our strategic relationships are in the form of long-term MSAs.
Lost Time Injury Rate (“LTIR”) tracks the rate of injuries in the workplace which results in the employee having to take a minimum of one full working day away from work. For the year ended December 31, 2023, our LTIR rate was 0.07 compared to an industry average of 1.0 per the U.S. Bureau of Labor construction industry statistics.
Lost Time Injury Rate (“LTIR”) tracks the rate of injuries in the workplace which results in the employee having to take a minimum of one full working day away from work. For the year ended December 31, 2024, our LTIR rate was 0.08 compared to an industry average of 1.0 per the U.S. Bureau of Labor construction industry statistics.
Physical risks associated with climate change have also increased hazards associated with certain of our operations, which in turn has increased the potential for liability and increased the costs associated with such operations. Additionally, new legislation or regulation related to 9 Table of Contents climate change could increase our costs.
Physical risks associated with climate change have also increased hazards associated with certain of our operations, which in turn has increased the potential for liability and increased the costs associated with such operations. Additionally, new legislation or regulation related to climate change could increase our costs.
In addition, contracts may be subject to certain completion schedule requirements which may include liquidated damages in the event schedules are not met. ​ We act as prime contractor on a majority of the construction projects we undertake.
In addition, contracts may be subject to certain completion schedule requirements which may include liquidated damages in the event schedules are not met. ​ 7 Table of Contents We act as prime contractor on a majority of the construction projects we undertake.
Competitors on small construction projects range from a few large construction companies, to a variety of smaller contractors. We compete with many local and regional firms for construction services and with a number of large firms on select projects.
Competitors 6 Table of Contents on small construction projects range from a few large construction companies, to a variety of smaller contractors. We compete with many local and regional firms for construction services and with a number of large firms on select projects.
A large construction project for a customer may result in significant revenue in one year, with significantly less revenue in subsequent years after project completion. For the years ended December 31, 2023, 2022 and 2021, 41.1%, 46.1% and 42.9%, respectively, of total revenue was generated from our top ten customers in each year.
A large construction project for a customer may result in significant revenue in one year, with significantly less revenue in subsequent years after project completion. For the years ended December 31, 2024, 2023 and 2022, 41.3%, 41.1% and 46.1%, respectively, of total revenue was generated from our top ten customers in each year.
Significant materials required under a fixed-price or unit-price contract, such as pipe, turbines, boilers and vessels, are typically supplied by the customer. 7 Table of Contents ​ Substantially all of our gas and electric distribution services are provided pursuant to renewable MSAs on a “unit-price” basis. Fees on unit-price contracts are negotiated and earned based on units completed.
Significant materials required under a fixed-price or unit-price contract, such as pipe, solar panels, turbines, boilers and vessels, are typically supplied by the customer. ​ Substantially all of our gas and electric distribution and communication services are provided pursuant to renewable MSAs on a “unit-price” basis. Fees on unit-price contracts are negotiated and earned based on units completed.
In addition, we have partnerships with technical schools where we recruit and hire craft employees. ​ Several of our subsidiaries have operations that are unionized through the negotiation and execution of collective bargaining agreements. As of December 31, 2023, approximately 30.6% of our hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements.
In addition, we have partnerships with technical schools where we recruit and hire craft employees. ​ Several of our subsidiaries have operations that are unionized through the negotiation and execution of collective bargaining agreements. As of December 31, 2024, approximately 22.9% of our hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements.
Each business unit faces varied competition depending on the types of projects, project locations, and services offered. ​ We compete with different companies in different end markets. For example, competitors in our utilities markets include Quanta Services, Inc.
Each business unit faces varied competition depending on the type of project, project location, and services offered. ​ We compete with different companies in different end markets. For example, competitors in our utilities markets include Quanta Services, Inc.
For additional information regarding our executive compensation, please see the information required in Item 11 “Executive Compensation,” which will be incorporated by reference from our definitive proxy statement related to our 2024 Annual Meeting of Stockholders. ​ We also provide additional benefits to our non-union employees, including a Company matched 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, flexible work schedules, and employee assistance programs. ​ Code of Conduct.
“Executive Compensation,” which will be incorporated by reference from our definitive proxy statement related to our 2025 Annual Meeting of Stockholders. ​ We also provide additional benefits to our non-union employees, including a Company matched 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, flexible work schedules, and employee assistance programs. ​ Code of Conduct.
In connection with these compensation programs, we grant stock-based compensation to management and key personnel at the business unit levels, which we believe helps to align incentives throughout our organization. We also enter into employment agreements with our executive officers and certain other key personnel.
In connection with these compensation programs, we grant stock-based compensation to management and key personnel at the business unit levels, which we believe helps to align incentives throughout our organization. We also enter into employment agreements with our executive officers and certain other key personnel. For additional information regarding our executive compensation, please see the information required in Item 11.
We have completed major underground and industrial projects for large natural gas transmission and petrochemical companies in the United States, major electrical and gas projects for large utility companies in the United States, as well as significant projects for our engineering customers.
We have completed major underground and industrial projects for large natural gas transmission and petrochemical companies in the United States and major electrical and gas projects for large utility companies in the United States.
These collective bargaining agreements have varying terms and are subject to renegotiation upon expiration. We have not experienced recent work stoppages and believe our employee and union relations are good. ​ As of December 31, 2023, we employed 2,773 salaried employees and 11,285 hourly employees.
These collective bargaining agreements have varying terms and are subject to renegotiation upon expiration. We have not experienced recent work stoppages and believe our employee and union relations are good. ​ As of December 31, 2024, we employed 3,074 salaried employees and 12,642 hourly employees.
For the year ended December 31, 2023, our TRIR rate was 0.46 compared to an industry average of 2.4 per the U.S. Bureau of Labor construction industry statistics. ​ 10 Table of Contents Compensation and Benefits.
For the year ended December 31, 2024, our TRIR rate was 0.50 compared to an industry average of 2.3 per the U.S. Bureau of Labor construction industry statistics. ​ Compensation and Benefits.
We maintain a revolving credit facility to provide letter of credit capability and, if needed, to augment our liquidity needs. ​ Backlog ​ Backlog is discussed in Item 7 “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of this Annual Report on Form 10-K, which is incorporated herein by reference. ​ Customers ​ We have longstanding customer relationships with utility, refining, petrochemical, communications, midstream, downstream, and engineering companies, as well as independent power producers and transportation agencies across our core markets.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of this Annual Report on Form 10-K, which is incorporated herein by reference. ​ Customers ​ We have longstanding customer relationships with solar facility developers and utility, refining, petrochemical, communications, midstream, downstream, and engineering companies, as well as power producers and transportation agencies across our core markets.
For the years ended December 31, 2023, 2022 and 2021, revenue derived from projects performed under MSAs was 36.7%, 45.8%, and 45.9 %, respectively. ​ Our customers have included the Texas Department of Transportation and Louisiana Department of Transportation and Development in the Southern United States as well as many of the leading energy and utility companies in the United States, including, among others, Enterprise Pipeline, Xcel Energy, Pacific Gas & Electric, Southern California Gas, Oncor Electric, Duke Energy, Sempra Energy, Williams, Hecate Energy, Consumers Energy, Dominion, Valero, Enel Green Power North America, ExxonMobil and Phillips 66. ​ Our top ten customers vary from year to year due to the nature of our business.
For the years ended December 31, 2024, 2023 and 2022, revenue derived from projects performed under MSAs was 36.8%, 36.7%, and 45.8% of total revenue, respectively. ​ Our customers have included many of the leading energy and utility companies in the United States, such as; Xcel Energy, Pacific Gas & Electric, Southern California Gas, Oncor Electric, Duke Energy, Sempra Energy, Williams, Hecate Energy, Consumers Energy, Dominion, Valero, Enel Green Power North America, D.E.
Though we strongly focus on safety in the workplace, we cannot give assurances that we can prevent or reduce all injuries and/or claims in our workplace. ​ In connection with our business, we generally are required to provide various types of surety bonds guaranteeing our performance under certain public and private sector contracts.
While we place a strong emphasis on maintaining a safe workplace, we cannot provide assurances that we will be able to prevent or reduce all injuries or claims within our operations. ​ In connection with our business, we generally are required to provide various types of surety bonds guaranteeing our performance under certain public and private sector contracts.
We are also focused on expanding our base of services provided under MSAs, which are generally multi-year agreements that provide visible, recurring revenue. ​ ● Ownership or Long-Term Leasing of Equipment. Many of our services are equipment intensive.
We are focused on an intentional mix of recurring work from MSAs, which are generally multi-year agreements that provide visible, recurring revenue, and project work in areas of our core competency. ​ ● Ownership or Long-Term Leasing of Equipment. Many of our services are equipment intensive.
All of our policies have been procured with limits and deductibles or self-insured retention amounts up to $1,000,000 per occurrence. In addition, we maintain certain self-insured retentions in our insurance policies in excess of our general and auto liability policies. ​ We maintain a diligent safety and risk management program that has resulted in a favorable loss experience factor.
In addition, we maintain certain self-insured retentions in our insurance policies in excess of our general, auto, and employers’ liability policies. ​ We maintain a comprehensive safety and risk management program that has contributed to a favorable loss experience factor.
The total number of hourly personnel employed is subject to the volume of infrastructure services and construction work in progress. ​ Diversity and Inclusion . We employ a dynamic mix of people to create the strongest company possible. Our policy prohibits discrimination in employment on the basis of age, culture, gender, national origin, sexual orientation, physical appearance, race or religion.
The total number of hourly personnel employed is subject to the volume of infrastructure services and construction work in progress. ​ 9 Table of Contents Diversity and Inclusion . We employ a dynamic mix of people to create the strongest company possible.
The structure of our reportable segments is generally focused on broad end-user markets for our services. ​ We have longstanding customer relationships with utility, refining, petrochemical, power, renewable energy, communications, midstream, and engineering companies, and state departments of transportation. We provide our services to a diversified base of customers, under a range of contracting options.
The structure of our reportable segments is generally focused on broad end-user markets for our services. ​ We have longstanding customer relationships with solar facility developers and utility, refining, petrochemical, communications, midstream, downstream, and engineering companies, as well as power producers and transportation agencies across our core markets.
Our strategy also focuses on higher growth end markets such as renewable energy, utilities and communications. ​ ● Emphasis on MSA Revenue Growth and Retention of Existing Customers. In order to fully leverage our relationships with our existing customer base, we believe it is important to maintain strong customer relationships in order to drive more revenue from them.
In order to fully leverage our relationships with our existing customer base, we believe it is important to maintain strong customer relationships in order to drive more revenue from them.
Our five cornerstone programs are Foreman Foundations, Extreme Ownership, Hunt for Leadership Success, Next Level Leadership, and The Leadership Experience.
We offer multiple levels of leadership programs designed to meet the needs of our employees and support the development of best-in-class talent. Our five cornerstone programs are Foreman Foundations, Extreme Ownership, Hunt for Leadership Success, Next Level Leadership, and The Leadership Experience.
We continue to grow our Company by expanding our scope of services, leveraging our existing customer base to expand into new geographic markets, and adding new customers. In addition, we continue to evaluate acquisitions that offer growth opportunities and the ability to leverage our resources as a leading service provider to the energy, power, utility and communications industries.
We continue to grow our Company by expanding our scope of services, leveraging our existing customer base to expand into new geographic markets, and adding new customers.
We have company-owned training facilities that support continuous skills training, including several locations where we train electric apprentices to become journeymen. We offer multiple levels of leadership programs designed to meet the needs of our employees and support the development of best-in-class talent.
We strive to develop and sustain a skilled labor advantage by providing thorough on-and off-site training programs, project management training, and leadership development programs. We have company-owned training facilities that support continuous skills training, including several locations where we train electric apprentices to become journeymen.
Through our safety director and the employment of a large staff of regional and site-specific safety managers, we have been able to effectively assess and control potential losses and liabilities in both the pre-construction and performance phases of our projects.
Under our senior leadership, our enterprise risk management department, and through a large network of safety directors and health, safety, and environmental professionals, we effectively assess and manage potential risks and liabilities throughout the pre-construction and performance phases of our projects.
Removed
A portion of our services are provided under Master Service Agreements (“MSA”), which are generally multi-year agreements. The remainder of our services are generated from contracts for specific construction or installation projects. ​ Reportable Segments ​ Through the end of 2022, we segregated our business into three reportable segments: the Utilities segment, the Energy/Renewables segment, and the Pipeline segment.
Added
We provide our services to a diversified base of customers, under a range of contracting options. A portion of our services are provided under Master Service Agreements (“MSA”), which are generally multi-year agreements.
Removed
In the first quarter of 2023, we changed our reportable segments in connection with the realignment of our internal organization and management structure. The segment changes reflect the focus of our Chief Operating Decision Maker (“CODM”) on the range of services we provide to our end user markets.
Added
In addition, we continue to evaluate acquisitions that offer growth opportunities and the ability to leverage our resources as a leading service provider to the utilities and energy industries, specifically focusing on attractive markets, including renewable energy, communications, gas distribution, and power generation.
Removed
Our CODM regularly reviews our operating and financial performance based on these new segments. ​ The current reportable segments include the Utilities segment and the Energy segment, which is made up of our former Energy/Renewables and Pipeline Services segments.
Added
See Note 4 — “Business Combinations” of the Notes to Consolidated Financial Statements included in Item 8. of this Annual Report on Form 10-K for additional detail.
Removed
On August 1, 2022, we acquired PLH Group, Inc. (“PLH”) in an all-cash transaction valued at approximately $429.0 million, net of cash acquired (the “PLH acquisition”). PLH is a utility-focused infrastructure services company with concentrations in growing regions of the United States.
Added
Our strategy also focuses on higher growth end markets such as renewable energy, utilities and communications. ​ ● Emphasis on MSA Revenue Growth, Retention of Existing Customers and Expansion of Project Work in our Core Competencies.
Removed
The transaction directly aligns with our strategic focus on higher-growth, higher margin markets and expands our capabilities in the power delivery, communications, and gas utilities markets. ​ B Comm, LLC. On June 8, 2022, we acquired B Comm, LLC (“B Comm”) in an all-cash transaction for approximately $36.0 million, net of cash acquired.
Added
We maintain a revolving credit facility to provide letter of credit capability and, if needed, to augment our liquidity needs. ​ Backlog ​ Backlog is discussed in Item 7.
Removed
B Comm is a provider of maintenance, repair, upgrade and installation services to the communications markets. The transaction directly aligns with the strategy to grow our MSA revenue base and expand our communication services within the utility markets. ​ Future Infrastructure Holdings, LLC.
Added
Shaw Renewable Investments, Entergy, Florida Power and Light, Intersect Power, Avantus, ExxonMobil, and Enterprise Pipeline as well as the Texas Department of Transportation and the Louisiana Department of Transportation and Development. ​ Our top ten customers vary from year to year due to the nature of our business.
Removed
On January 15, 2021, we acquired Future Infrastructure Holdings, LLC (“FIH”) in an all-cash transaction valued at approximately $604.7 million, net of cash acquired. FIH is a provider of non-discretionary maintenance, repair, upgrade, and installation services to the communications, regulated gas utility, and infrastructure markets.
Added
All of our policies have been procured with limits and deductibles or self-insured retention amounts up to certain limits applied on an occurrence or claims made basis.
Removed
FIH furthers our strategic plan to expand our service lines, enter new markets, and grow our MSA revenue base. The transaction directly aligns with our strategy to grow in large, higher growth, higher margin markets, and expands our utility services capabilities. ​ Other acquisitions .
Added
We manage these requirements through our corporate environmental management system and comprehensive 8 Table of Contents employee training programs to ensure compliance.
Removed
In addition to these acquisitions, we have acquired other businesses as we continue to seek opportunities to deepen our market presence, broaden our geographic reach, and expand our service offerings.
Added
Our policy prohibits discrimination in employment on the basis of age, culture, gender, national origin, sexual orientation, physical appearance, race or religion. We are an inclusive, diverse company with people of all backgrounds, experiences, cultures, styles and talents. ​ Professional and Career Development.
Removed
We continue to evaluate potential acquisition candidates, especially those with strong management teams and growing end markets such as renewable energy, gas and electric utilities, and communications. ​ Strategy ​ Our strategy has remained consistent from year to year and continues to emphasize the following key elements: ​ ● Growth Through Controlled Expansion.
Removed
We are an inclusive, diverse company with people of all backgrounds, experiences, cultures, styles and talents. We have a Diversity and Inclusion committee whose goal is to identify and advance efforts that aim to create and foster a workplace that is reflective of, and contributes to, the diverse communities in which we do business.
Removed
The committee promotes awareness of diversity and inclusion issues in support of company-wide efforts to build a more inclusive and diverse workplace. ​ Professional and Career Development. We strive to develop and sustain a skilled labor advantage by providing thorough on-and off-site training programs, project management training, and leadership development programs.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

55 edited+7 added−1 removed121 unchanged
Biggest changeIf we cannot reduce the alleged fractional exposure through exemptions or negotiations, the withdrawal from a plan could have a material adverse impact on our business. ​ 20 Table of Contents We depend on key personnel and we may not be able to operate and grow our business effectively if we lose the services of any of our key persons or are unable to attract qualified and skilled personnel in the future. ​ We are dependent upon the efforts of our key personnel, and our ability to retain them and hire other qualified employees.
Biggest changeIn any such event, our overall risk exposure would increase, which could negatively affect our results of operations, financial condition and cash flows. ​ The loss or long-term incapacitation of one or more of our executive officers or other key employees could adversely affect our business and we may not be able to operate and grow our business effectively if we lose the services of any of our key persons or are unable to attract qualified and skilled personnel in the future. ​ We are dependent upon the efforts of our key personnel, and our ability to retain them and hire other qualified employees.
Additional purchases made under the ESPP will have the effect of diluting our earnings per share and stockholders’ percentage of ownership. ​ In 2023, our stockholders adopted our 2023 Equity Incentive Plan (“2023 Equity Plan”). The 2023 Equity Plan replaced a previous plan.
Additional purchases made under the ESPP will have the effect of diluting our earnings per share and stockholders’ percentage of ownership. ​ In 2023, our stockholders adopted our 2023 Equity Incentive Plan (“2023 Equity Plan”). The 2023 Equity Plan replaced a previous equity plan.
Annual and quarterly results may also be adversely affected by: ​ ● Changes in our mix of customers, projects, contracts and business; ● Regional or national and/or general economic conditions and demand for our services; ● Variations and changes in the margins of projects performed during any particular quarter; ● Increases in the costs to perform services caused by changing conditions; ● The termination, or expiration of existing agreements or contracts; ● The budgetary spending patterns of customers; ● Increases in construction costs, including due to inflation or supply chain challenges, that we may be unable to pass through to our customers; ● Cost or schedule overruns on fixed-price contracts; ● Availability of qualified labor for specific projects; ● Changes in bonding requirements and bonding availability for existing and new agreements; ● The need and availability of letters of credit; ● Costs we incur to support growth, whether organic or through acquisitions; ● The timing and volume of work under contract; and ● Losses experienced in our operations. ​ As a result, our operating results in any particular quarter may not be indicative of the operating results expected for any other quarter, or for an entire year. ​ Demand for our services may decrease during economic recessions or volatile economic cycles, and a reduction in demand in end markets may adversely affect our business. ​ A substantial portion of our revenue and profit is generated from construction projects, the awarding of which we do not directly control.
Annual and quarterly results may also be adversely affected by: ​ ● Changes in our mix of customers, projects, contracts and business; ● Regional or national and/or general economic conditions and demand for our services; ● Variations and changes in the margins of projects performed during any particular quarter; ● Increases in the costs to perform services caused by changing conditions; ● The termination, or expiration of existing agreements or contracts; ● The budgetary spending patterns of customers; ● Increases in construction costs, including due to inflation or supply chain challenges, that we may be unable to pass through to our customers; ● Cost or schedule overruns on fixed-price contracts; ● Availability of qualified labor for specific projects; ● Changes in bonding requirements and bonding availability for existing and new agreements; ● The need for, and availability of, letters of credit; 11 Table of Contents ● Costs we incur to support growth, whether organic or through acquisitions; ● The timing and volume of work under contract; and ● Losses experienced in our operations. ​ As a result, our operating results in any particular quarter may not be indicative of the operating results expected for any other quarter, or for an entire year. ​ Demand for our services may decrease during economic recessions or volatile economic cycles, and a reduction in demand in end markets may adversely affect our business. ​ A substantial portion of our revenue and profit is generated from construction projects, the awarding of which we do not directly control.
We derive a small portion of our revenue and contract profit from engineering and construction services to clients that own and/or operate a wide range of process plants and own and/or operate electric power generating plants that generate electricity from burning natural gas or various types of solid fuels.
We derive a portion of our revenue and contract profit from engineering and construction services to clients that own and/or operate a wide range of process plants and own and/or operate electric power generating plants that generate electricity from burning natural gas or various types of solid fuels.
Elimination of, or changes to, existing renewable portfolio standards, tax credits or similar environmental policies may negatively affect future demand for our services. ​ We may lose business to competitors through the competitive bidding processes. ​ We are engaged in highly competitive businesses in which most customer contracts are awarded through bidding processes based on price and the acceptance of certain risks, along with other factors.
Elimination of, or changes to, existing renewable portfolio standards, tax credits or similar environmental policies may negatively affect future demand for our services. ​ We may lose business to competitors through the competitive bidding processes. ​ We are engaged in highly competitive businesses in which some customer contracts are awarded through bidding processes based on price and the acceptance of certain risks, along with other factors.
Reduced profitability or losses on projects could occur due to changes in a variety of factors such as: ​ ● Failure to properly estimate costs of engineering, materials, equipment or labor; ● Unanticipated technical problems with the structures, materials or services being supplied by us, which may require that we spend our own money to remedy the problem; ● Project modifications not reimbursed by the client creating unanticipated costs; ● Changes in the costs of equipment, materials, labor or subcontractors; ● Our suppliers or subcontractors failure to perform; ● Changes in local laws and regulations, and; ● Delays caused by weather conditions. ​ As projects grow in size and complexity, multiple factors may contribute to reduced profit or losses, and depending on the size of the particular project, variations from the estimated contract costs could have a material adverse effect on our business. ​ Weather can significantly affect our revenue and profitability. ​ Our ability to perform work and meet customer schedules can be affected by weather conditions such as snow, ice, rain, and named storms.
Reduced profitability or losses on projects could occur due to changes in a variety of factors such as: ​ ● Failure to properly estimate costs of engineering, materials, equipment or labor; ● Unanticipated technical problems with the structures, materials or services being supplied by us, which may require that we spend our own money to remedy the problem; ● Project modifications not reimbursed by the client creating unanticipated costs; ● Changes in the costs of equipment, materials, labor or subcontractors; 16 Table of Contents ● Our suppliers or subcontractors failing to perform; ● Changes in local laws and regulations; and ● Delays caused by weather. ​ As projects grow in size and complexity, multiple factors may contribute to reduced profit or losses, and depending on the size of the particular project, variations from the estimated contract costs could have a material adverse effect on our business. ​ Weather can significantly affect our revenue and profitability. ​ Our ability to perform work and meet customer schedules can be affected by weather conditions such as snow, ice, rain, and named storms.
We could be adversely affected by our failure to comply with laws applicable to our foreign activities, such as the U.S. Foreign Corrupt Practices Act. ​ During 2023, 2022 and 2021, revenue attributable to our services outside of the United States, principally in Canada, was 5.8%, 6.7% and 4.5% of our total revenue, respectively.
We could be adversely affected by our failure to comply with laws applicable to our foreign activities, such as the U.S. Foreign Corrupt Practices Act. ​ During 2024, 2023 and 2022, revenue attributable to our services outside of the United States, principally in Canada, was 4.6%, 5.8% and 6.7% of our total revenue, respectively.
We also currently maintain a cyber insurance policy; however, such insurance coverage may not be adequate to cover all the costs related to cyber security attacks or disruptions resulting from such events. 22 Table of Contents ​ While we have taken steps to mitigate persistent and continuously evolving cyber security threats by implementing network security and internal control measures, implementing policies and procedures for managing risk to our information systems, periodically testing our information technology systems, and conducting employee training on cyber security, a system or network failure or data security breach could have negative consequences for our company, customers, or partners and adversely affect our business.
We also currently maintain a cyber insurance policy; however, such insurance coverage may not be adequate to cover all the costs related to cyber security attacks or disruptions resulting from such events. ​ While we have taken steps to mitigate persistent and continuously evolving cyber security threats by implementing network security and internal control measures, implementing policies and procedures for managing risk to our information systems, periodically testing our information technology systems, and conducting employee training on cyber security, a system or network failure or data security breach could have negative consequences for our company, customers, or partners and adversely affect our business.
To the extent we face increased regulatory requirements, we may be required to expend significant additional resources to meet such requirements. ​ We may need additional capital in the future for working capital, capital expenditures or acquisitions, and we may not be able to access capital on favorable terms, or at all, which would impair our ability to operate our business or achieve our growth objectives. ​ Our ability to generate cash is essential for the funding of our operations and the servicing of our debt.
To the extent we face increased regulatory requirements, we may be required to expend significant additional resources to meet such requirements. ​ 22 Table of Contents We may need additional capital in the future for working capital, capital expenditures or acquisitions, and we may not be able to access capital on favorable terms, or at all, which would impair our ability to operate our business or achieve our growth objectives. ​ Our ability to generate cash is essential for the funding of our operations and the servicing of our debt.
For projects for which 16 Table of Contents a loss is expected, future revenue will be recorded with no margin, which may reduce the overall margin percentage for work performed. ​ Our actual cost may be greater than expected in performing our contracts causing us to realize significantly lower profit or losses on our projects. ​ We currently generate, and expect to continue to generate, a substantial portion of our revenue from fixed price and unit price contracts.
For projects for which a loss is expected, future revenue will be recorded with no margin, which may reduce the overall margin percentage for work performed. ​ Our actual cost may be greater than expected in performing our contracts causing us to realize significantly lower profit or losses on our projects. ​ We currently generate, and expect to continue to generate, a substantial portion of our revenue from fixed price and unit price contracts.
In certain circumstances, it is possible that such adjustments could be significant and could have an adverse effect on our business. ​ 23 Table of Contents Our reported results of operations could be adversely affected as a result of impairments of goodwill or other identifiable intangible assets. ​ When we acquire a business, we record an asset called “goodwill” for the excess amount we pay for the business over the net fair value of the tangible and identifiable intangible assets of the business we acquire.
In certain circumstances, it is possible that such adjustments could be significant and could have an adverse effect on our business. ​ Our reported results of operations could be adversely affected as a result of impairments of goodwill or other identifiable intangible assets. ​ When we acquire a business, we record an asset called “goodwill” for the excess amount we pay for the business over the net fair value of the tangible and identifiable intangible assets of the business we acquire.
Equity awards made to our directors and employees will have the effect of diluting our earnings per share and stockholders’ percentage of ownership. ​ Delaware law and our charter documents may impede or discourage a takeover or change in control. ​ As a Delaware corporation, anti-takeover provisions may impose an impediment to the ability of others to acquire control of us, even if a change of control would be of benefit to our stockholders.
Equity awards made to our directors and employees will have the effect of diluting our earnings per share and stockholders’ percentage of ownership. ​ 24 Table of Contents Delaware law and our charter documents may impede or discourage a takeover or change in control. ​ As a Delaware corporation, anti-takeover provisions may impose an impediment to the ability of others to acquire control of us, even if a change of control would be of benefit to our stockholders.
This Annual Report on Form 10-K includes projections, assumptions and beliefs that are intended to be “forward looking statements” and should be read in conjunction with the discussion of “Forward Looking Statements” at the beginning of this Annual Report on Form 10-K. ​ 11 Table of Contents The following risk factors could have a material adverse effect on our business, the results of our operations, our financial condition, our cash flow and the price of our shares.
This Annual Report on Form 10-K includes projections, assumptions and beliefs that are intended to be “forward looking statements” and should be read in conjunction with the discussion of “Forward Looking Statements” at the beginning of this Annual Report on Form 10-K. ​ The following risk factors could have a material adverse effect on our business, the results of our operations, our financial condition, our cash flow and the price of our shares.
However, concerns about climate change could also result in potential new regulations, regulatory actions or requirements to fund energy efficiency activities, as well as decreased demand for refined products, which in turn could negatively impact our customers and demand for certain of our pipeline, underground utility and infrastructure services. ​ Climate change could also affect our customers and the types of projects that they award.
However, concerns about climate change could also result in potential new regulations, regulatory actions or requirements to fund energy efficiency activities, as well as decreased demand for refined products, which in turn could negatively impact our customers and demand for certain of our pipeline, underground utility and infrastructure services. ​ 13 Table of Contents Climate change could also affect our customers and the types of projects that they award.
These actions could be taken on short notice. If our surety providers were to limit or eliminate our access to bonding, our alternatives would include seeking bonding 18 Table of Contents capacity from other sureties, finding more business that does not require bonds and posting other forms of collateral for project performance, such as letters of credit or cash.
These actions could be taken on short notice. If our surety providers were to limit or eliminate our access to bonding, our alternatives would include seeking bonding capacity from other sureties, finding more business that does not require bonds and posting other forms of collateral for project performance, such as letters of credit or cash.
We do not obtain contracts from all of our bids and our inability to win bids at acceptable profit margins would adversely affect our business. ​ 14 Table of Contents We may be unsuccessful at generating internal growth which may affect our ability to expand our operations or grow our business. ​ Our ability to generate internal growth may be affected by, among other factors, our ability to: ​ ● Attract new customers; ● Increase the number of projects performed for existing customers; ● Hire and retain qualified personnel; ● Secure appropriate levels of construction equipment; ● Successfully bid for new projects; and ● Adapt the range of services we offer to address our customers’ evolving construction needs. ​ In addition, our customers may reduce the number or size of projects available to us due to their inability to obtain capital.
We do not obtain contracts from all of our bids and our inability to win bids at acceptable profit margins would adversely affect our business. ​ We may be unsuccessful at generating organic growth which may affect our ability to expand our operations or grow our business. ​ Our ability to generate organic growth may be affected by, among other factors, our ability to: ​ ● Attract new customers; ● Increase the number of projects performed for existing customers; ● Hire and retain qualified personnel; ● Secure appropriate levels of construction equipment; ● Successfully bid for new projects; and ● Adapt the range of services we offer to address our customers’ evolving construction needs. ​ In addition, our customers may reduce the number or size of projects available to us due to their inability to obtain capital.
Reduced demand for our services by larger construction customers or a loss of a significant MSA customer could have an adverse effect on our business. ​ 15 Table of Contents Our international operations expose us to legal, political and economic risks in different countries as well as currency exchange rate fluctuations that could harm our business and financial results.
Reduced demand for our services by larger construction customers or a loss of a significant MSA customer could have an adverse effect on our business. ​ Our international operations expose us to legal, political and economic risks in different countries as well as currency exchange rate fluctuations that could harm our business and financial results.
Failure to provide a letter of credit when required by a client may result in our inability to compete for, win, or retain a project. ​ During the ordinary course of our business, we may become subject to material lawsuits or indemnity claims. ​ We have in the past been, and may in the future be, named as a defendant in lawsuits, claims and other legal proceedings during the ordinary course of our business.
Failure to provide a letter of credit when required by a client may result in our inability to compete for, win, or retain a project. ​ 18 Table of Contents During the ordinary course of our business, we may become subject to material lawsuits or indemnity claims. ​ We have in the past been, and may in the future be, named as a defendant in lawsuits, claims and other legal proceedings during the ordinary course of our business.
In addition, insurers may cancel our coverage or determine to exclude certain items from coverage, or we may elect not to obtain certain types or incremental levels of insurance based on the potential benefits 19 Table of Contents considered relative to the cost of such insurance, or coverage may not be available at reasonable and competitive rates.
In addition, insurers may cancel our coverage or determine to exclude certain items from coverage, or we may elect not to obtain certain types or incremental levels of insurance based on the potential benefits considered relative to the cost of such insurance, or coverage may not be available at reasonable and competitive rates.
Finally, the winding down or completion of work on significant projects will reduce our revenue and earnings if these projects have not been replaced. ​ We derive a meaningful portion of our revenue from a few customers, and the loss of one or more of these customers could have significant effects on our revenue, resulting in adverse effects on our financial condition, results of operations and cash flows. ​ Our customer base is reasonably concentrated, with our top ten customers accounting for approximately 41.1% of our revenue in 2023, 46.1% of our revenue in 2022 and 42.9% of our revenue in 2021.
Finally, the winding down or completion of work on significant projects will reduce our revenue and earnings if these projects have not been replaced. ​ We derive a meaningful portion of our revenue from a few customers, and the loss of one or more of these customers could have significant effects on our revenue, resulting in adverse effects on our financial condition, results of operations and cash flows. ​ Our customer base is reasonably concentrated, with our top ten customers accounting for approximately 41.3% of our revenue in 2024, 41.1% of our revenue in 2023 and 46.1% of our revenue in 2022.
In addition, if our safety record were to substantially deteriorate over time or we were to suffer substantial penalties or criminal prosecution for violation of health and safety regulations, our customers could cancel our contracts and not award us future business. ​ Disruptions to our operational systems could adversely impact our operations, our ability to report financial results and our business. ​ We rely on computer, information and communication technology and related systems to operate our business and to protect confidential, sensitive company, customer and partner information.
In addition, if our safety record were to substantially deteriorate over time or we were to suffer substantial 21 Table of Contents penalties or criminal prosecution for violating health and safety regulations, our customers could cancel our contracts and not award us future business. ​ Disruptions to our operational systems could adversely impact our operations, our ability to report financial results and our business. ​ We rely on computer, information and communication technology and related systems to operate our business and to protect confidential, sensitive company, customer and partner information.
Our Certificate of Incorporation permits us to issue up to 90.0 million shares of common stock of which approximately 53.4 million were outstanding at December 31, 2023. While New York Stock Exchange rules require that we obtain stockholder approval to issue more than 20% additional shares, stockholder approval is not required below that level.
Our Certificate of Incorporation permits us to issue up to 90.0 million shares of common stock of which approximately 53.7 million were outstanding at December 31, 2024. While New York Stock Exchange rules require that we obtain stockholder approval to issue more than 20% additional shares, stockholder approval is not required below that level.
Inability to realize revenue from our backlog could have an adverse effect on our business. ​ While backlog may not be indicative of the revenue we expect to earn the following fiscal year, it is a potential indicator of future revenue; however, recognition of revenue from backlog does not necessarily ensure that the projects will be profitable.
Inability to realize revenue from our backlog could have an adverse effect on our business. ​ While backlog may not be indicative of the revenue we expect to earn the following fiscal year, it is a potential, though not comprehensive, indicator of future revenue more generally; however, recognition of revenue from backlog does not necessarily ensure that the projects will be profitable.
We require our partners, subcontractors, agents and others who work for us or on our behalf to comply with the FCPA and other anti-bribery laws. There is no assurance that our policies or procedures will protect us against liability under the FCPA or other laws for actions taken by our agents, employees and intermediaries.
We require our partners, subcontractors, agents and others 15 Table of Contents who work for us or on our behalf to comply with the FCPA and other anti-bribery laws. There is no assurance that our policies or procedures will protect us against liability under the FCPA or other laws for actions taken by our agents, employees and intermediaries.
The additional cost or project delays could negatively impact project profitability. ​ Failure of a subcontractor or supplier to comply with laws, rules or regulations could negatively affect our reputation and our business. ​ 17 Table of Contents We periodically enter into joint ventures which require satisfactory performance by our venture partners of their obligations.
The additional cost or project delays can negatively impact project profitability. ​ Failure of a subcontractor or supplier to comply with laws, rules or regulations could negatively affect our reputation and our business. ​ We periodically enter into joint ventures which require satisfactory performance by our joint venture partners of their obligations.
In addition, for our employees not part of a collective bargaining agreement, we provide employee health care benefit plans. Our primary health insurance plan is subject to a deductible of $425,000 per individual claim per year. ​ Our insurance policies include various coverage requirements, including the requirement to give appropriate notice.
In addition, for our employees not part of a collective bargaining agreement, we provide employee health care benefit plans. Our primary health insurance plan is subject to a deductible per individual claimant per year. ​ Our insurance policies include various coverage requirements, including the requirement to give appropriate notice.
The Equity Plan authorized the Board of Directors to issue equity awards totaling 6.5 million shares of our common stock. As of December 31, 2023, there were 6.2 million shares of common stock remaining available for issuance under our 2023 Equity Plan.
The 2023 Equity Plan authorized the Board of Directors to issue equity awards totaling 6.5 million shares of our common stock. As of December 31, 2024, there were 5.8 million shares of common stock remaining available for issuance under our 2023 Equity Plan.
Acquisitions may expose us to operational challenges and risks, including, among others: ​ ● The diversion of management’s attention from the day-to-day operations of the combined company; ● Managing a significantly larger company than before completion of an acquisition; ● The assimilation of new employees and the integration of business cultures; ● Training and facilitating our internal control processes within the acquired organization; ● Retaining key personnel; ● The integration of information, accounting, finance, sales, billing, payroll and regulatory compliance systems; ● Challenges in keeping existing customers and obtaining new customers; ● Challenges in combining service offerings and sales and marketing activities; ● The assumption of unknown liabilities of the acquired business for which there are inadequate reserves; ● The potential impairment of acquired goodwill and intangible assets; and ● The inability to enforce covenants not to compete. ​ Failure to effectively manage the integration process could adversely impact our business, financial condition, results of operations, and cash flows. ​ We may incur higher costs on equipment necessary for our operations. ​ A significant portion of our contracts is built utilizing our own construction equipment rather than rented equipment.
Acquisitions may expose us to operational challenges and risks, including, among others: ​ ● The diversion of management’s attention from the day-to-day operations of the combined company; ● Managing a significantly larger company than before completion of an acquisition; ● The assimilation of new employees and the integration of business cultures; ● Training and facilitating our internal control processes within the acquired organization; ● Retaining key personnel; ● The integration of information, accounting, finance, sales, billing, payroll and regulatory compliance systems; ● Challenges in keeping existing customers and obtaining new customers; ● Challenges in combining service offerings and sales and marketing activities; ● The assumption of unknown liabilities of the acquired business for which there are inadequate reserves; ● The potential impairment of acquired goodwill and intangible assets; and ● The inability to enforce covenants not to compete. ​ Failure to effectively manage the integration process could adversely impact our business, financial condition, results of operations, and cash flows. ​ We may incur higher costs on equipment necessary for our operations. ​ A significant portion of our contracts are performed by utilizing our owned or leased construction equipment rather than short-term rental of equipment.
If we are unable to hire employees with the requisite skills, we may also be forced to incur significant training expenses. ​ Our unionized workforce may commence work stoppages or impact our ability to complete certain acquisitions, which could adversely affect our operations. ​ As of December 31, 2023, approximately 30.6% of our hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements.
If we are unable to hire employees with the requisite skills, we may also be forced to incur significant training expenses. ​ Our unionized workforce may commence work stoppages or impact our ability to complete certain acquisitions, which could adversely affect our operations. ​ As of December 31, 2024, approximately 22.9% of our hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements.
Based on our variable rate debt outstanding as of December 31, 2023, a 1.0% increase or decrease in interest rates would change annual interest expense by approximately $5.7 million. ​ Risks Related to our Common Stock ​ Our common stock is subject to potential dilution to our stockholders. ​ As part of our acquisition strategy, we have issued and used shares of common stock as a part of contingent earn-out consideration, which have resulted in dilution to our stockholders.
Based on our variable rate debt outstanding as of December 31, 2024, a 1.0% increase or decrease in interest rates would change annual interest expense by approximately $3.8 million. ​ Risks Related to our Common Stock ​ Our common stock is subject to potential dilution to our stockholders. ​ As part of our acquisition strategy, we have issued and used shares of common stock as a part of contingent earn-out consideration, which have resulted in dilution to our stockholders.
Currently, the development of solar and other renewable energy facilities is dependent on the existence of renewable portfolio standards and other state incentives and requirements. Renewable portfolio standards are state-specific statutory provisions requiring or encouraging that electric utilities generate a certain amount of electricity from renewable energy sources.
Currently, the development of solar and other renewable energy facilities benefit from the existence of renewable portfolio standards and other state incentives and requirements. Renewable portfolio standards are state-specific statutory provisions requiring or encouraging that electric utilities generate a certain amount of electricity from renewable energy sources.
Often, these estimates are particularly difficult to determine, and we must exercise significant judgment. Estimates may be used in our assessments of the allowance for doubtful accounts, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities, accounting for revenue recognized over time, and provisions for income taxes.
Often, these estimates are particularly difficult to determine, and we must exercise significant judgment. Estimates may be used in our assessments of the allowance for credit losses, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities, accounting for revenue recognized over time, and the provision for income taxes.
We compete with other infrastructure services contractors, both regional and national, as well as small local contractors. The strong competition in our markets requires maintaining skilled personnel and investing in technology, and puts pressure on profit margins.
We compete with other infrastructure services contractors, both regional and national, as well as small local contractors. The strong competition in our markets requires maintaining skilled personnel and investing in technology, which can put pressure on profit margins.
The portion of revenue generated from the competitive bid process for 2023, 2022 and 2021 was approximately 30.1%, 26.3%, and 31.2%, respectively. It is generally very difficult to predict the timing and geographic distribution of the projects that we will be awarded.
The portion of revenue generated from the competitive bid process for 2024, 2023 and 2022 was approximately 28.3 %, 30.1%, and 26.3%, respectively. It is generally very difficult to predict the timing and geographic distribution of the projects that we will be awarded.
If we are unsuccessful, we may not be able to achieve internal growth, expand our operations or grow our business. ​ The timing of new contracts may result in unpredictable fluctuations in our business. ​ Substantial portions of our revenue are derived from project-based work that is awarded through a competitive bid process.
If we are unsuccessful, we may not be able to achieve internal growth, expand our operations or grow our business. ​ 14 Table of Contents The timing of new contracts may result in unpredictable fluctuations in our business. ​ A portion of our revenue is derived from project-based work that is awarded through a competitive bid process.
There are risks inherent in doing business internationally, including: ​ ● Imposition of governmental controls and changes in laws, regulations, policies, practices, tariffs and taxes; ● Political and economic instability; ● Changes in United States and other national government trade policies affecting the market for our services; ● Potential non-compliance with a wide variety of laws and regulations, including the United States Foreign Corrupt Practices Act (“FCPA”) and similar non-United States laws and regulations; ● Currency exchange rate fluctuations, devaluations and other conversion restrictions; ● Restrictions on or fees or taxes associated with repatriating foreign profit back to the United States; and ● Difficulties in staffing and managing international operations. ​ The FCPA and similar anti-bribery laws in other jurisdictions prohibit U.S.-based companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business.
There are risks inherent in doing business internationally, including: ​ ● Imposition of governmental controls and changes in laws, regulations, policies, practices, tariffs and taxes; ● Political and economic instability; ● Changes in United States and other national government import or export licensing requirements, tariffs, trade policies and relations affecting the market for our services, including arising from policy initiatives implemented by the new U.S. presidential administration; ● Potential non-compliance with a wide variety of laws and regulations, including the United States Foreign Corrupt Practices Act (“FCPA”) and similar non-United States laws and regulations; ● Currency exchange rate fluctuations, devaluations and other conversion restrictions; ● Restrictions on or fees or taxes associated with repatriating foreign profit back to the United States; and ● Difficulties in staffing and managing international operations. ​ The FCPA and similar anti-bribery laws in other jurisdictions prohibit U.S.-based companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business.
These difficult conditions may also cause us to incur additional, unanticipated costs that we might not be able to pass on to our customers. 21 Table of Contents ​ We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters. ​ Our operations are subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace.
These difficult conditions may also cause us to incur additional, unanticipated costs that we might not be able to pass on to our customers. ​ We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters. ​ Our operations are subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace, including OSHA and other state and local laws and regulations.
Payments of significant amounts, even if reserved, could adversely affect our reputation, our cash flows, and our business. ​ We are self-insured up to certain limits. ​ Although we maintain insurance policies with respect to employer’s liability, general liability, auto and workers compensation claims, those policies are subject to deductibles or self-insured retention amounts up to $1,000,000 per occurrence.
Payments of significant amounts, even if reserved, could adversely affect our reputation, our cash flows, and our business. ​ We are self-insured up to certain limits. ​ Although we maintain insurance policies with respect to employer’s liability, general liability, auto and workers compensation claims, those policies are subject to deductibles or self-insured retention amounts up to certain limits applied on an occurrence or claims-made basis.
Many factors, including the financial condition of the industry, could adversely affect our customers and their willingness to fund capital expenditures in the future. ​ Economic, political, regulatory and market conditions affecting our specific end markets may adversely impact the demand for our services, resulting in the delay, reduction or cancellation of certain projects and these conditions may continue to adversely affect us in the future.
Many factors, including the financial condition of and potential disruptions related to artificial intelligence in the industries we serve, could adversely affect our customers and their willingness to fund capital expenditures in the future. ​ Economic, political, regulatory and market conditions affecting our specific end markets may adversely impact the demand for our services, resulting in the delay, reduction or cancellation of certain projects and these conditions may continue to adversely affect us in the future.
We present two measures of backlog; one that includes fixed backlog and estimated revenue on MSA work for the next four quarters, and total backlog that includes all fixed backlog and estimated revenue on MSA work to the end of the MSA agreement. We do not consider renewals when estimating total backlog.
We present two measures of backlog; one that includes fixed backlog and estimated revenue on MSA work for the next four quarters, and total backlog that includes all fixed backlog and estimated revenue on MSA work to the end of the MSA agreement.
In addition, consolidation, competition or capital constraints in the industries we serve may result in reduced spending by our customers. 12 Table of Contents ​ Many of our customers are regulated by federal and state government agencies and the addition of new regulations or changes to existing regulations may adversely impact demand for our services and the profitability of those services. ​ Many of our energy customers are regulated by the Federal Energy Regulatory Commission (“FERC”), and our utility customers are regulated by state public utility commissions.
In addition, consolidation, competition or capital constraints in the industries we serve can result in reduced spending by our customers. ​ Many of our customers operate in industries subject to rapid technological and regulatory changes, with many being regulated by federal and state government agencies, and the addition of new regulations or changes to existing regulations may adversely impact demand for our services and the profitability of those services. ​ Many of our energy customers are regulated by the Federal Energy Regulatory Commission (“FERC”), our communications customers are regulated by the Federal Communications Commission (“FCC”) and our utility customers are regulated by state public utility commissions.
If we pay our suppliers and subcontractors for materials purchased and work performed for customers who fail to pay us, or such customers delay paying us for the related work or materials, we could experience a material adverse effect on our business.
If we pay our suppliers and subcontractors for materials purchased and work performed for customers who fail to pay us, or such customers delay paying us for the related work or materials, we could experience a material adverse effect on our financial condition, results of operations and cash flows.
The loss of our executive officers, or other key personnel could affect our ability to run our business effectively. Competition for senior management is intense, and we may not be able to retain our personnel.
We depend on the continued and ongoing services of our executive officers and other key employees, including the senior management of our subsidiaries. The loss of our executive officers, or other key personnel could affect our ability to run our business effectively. Competition for senior management is intense, and we may not be able to retain our personnel.
When the general level of economic activity deteriorates, our customers may delay, or cancel upgrades, expansions, and/or maintenance and repairs to their systems.
When the general level of economic activity deteriorates, our customers have at times in the past and may in the future delay, or cancel upgrades, expansions, and/or maintenance and repairs to their systems.
At December 31, 2023, our balance sheet included goodwill of $857.7 million and intangible assets of $227.6 million resulting from previous acquisitions. Fair value is determined using a combination of the discounted cash flow, market multiple and market capitalization valuation approaches.
At December 31, 2024, our balance sheet included goodwill of $856.9 million and intangible assets of $207.9 million resulting from previous acquisitions. Fair value is determined using a combination of the discounted cash flow, market multiple and market capitalization valuation approaches.
In addition, if customers fail to pay us for work we perform, we could experience a material adverse effect on our business. ​ Our inability to recover on contract modifications against project owners for payment or performance could negatively affect our business. ​ We periodically present contract modifications to our clients for changes in contract specifications or requirements.
In addition, if customers fail to pay us for 17 Table of Contents work we perform, we could experience a material adverse effect on our financial condition, results of operations and cash flows. ​ Our inability to recover on contract modifications against project owners for payment or performance could negatively affect our financial condition, results of operations and cash flows. ​ We periodically present contract modifications to our clients for changes in contract specifications or requirements.
From time to time, we may use certain derivative instruments to hedge our exposure to variable interest rates. As of December 31, 2023, $300.0 million of our variable rate debt outstanding was economically hedged. The remaining $574.1 million of variable rate debt was unhedged.
From time to time, we may use certain derivative instruments to hedge our exposure to variable interest rates. As of December 31, 2024, $300.0 million of our variable rate debt outstanding was economically hedged. The interest rate swap matured on January 31, 2025. The remaining $376.9 million of variable rate debt was unhedged.
Under current accounting rules, goodwill and other identifiable intangible assets that have indefinite useful lives cannot be amortized, but instead must be tested at least annually for impairment, while identifiable intangible assets that have finite useful lives are amortized over their useful lives.
Under current accounting rules, goodwill and other identifiable intangible assets that have indefinite useful lives cannot be amortized, but instead must be tested at least annually for impairment, while identifiable intangible assets that have finite useful lives are amortized over their useful lives. Significant judgment is required in completing these tests, as described in Item 7.
The number of shares authorized and available for purchase under the ESPP is 1.0 million. As of December 31, 2023, there were 24 Table of Contents 977,000 shares of common stock remaining available for purchase.
The number of shares authorized and available for purchase under the ESPP is 1.0 million. As of December 31, 2024, there were 960,496 shares of common stock remaining available for purchase.
Recent pipeline safety legislation could increase demand for our pipeline facility, maintenance, integrity and repair services. ​ Our business may be materially adversely impacted by regional, national and/or global requirements related to climate change and the impact of greenhouse gas emissions in the future. ​ Greenhouse gases that result from human activities, including burning of fossil fuels, are the focus of increased scientific and political scrutiny and may be subject to changing legal requirements.
Our failure to rapidly adopt and master new technologies as they are developed or adapt to changing customer requirements could reduce demand for our services. ​ Our business may be materially adversely impacted by regional, national and/or global requirements related to climate change and the impact of greenhouse gas emissions in the future. ​ Greenhouse gases that result from human activities, including burning of fossil fuels, are the focus of increased scientific and political scrutiny and may be subject to changing legal requirements.
Significant judgment is required in completing these tests, as described in Item 7 “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates— Goodwill and Indefinite-Lived Intangible Assets ” of this Annual Report on Form 10-K.
“ Management’s Discussion and 23 Table of Contents Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates— Goodwill and Indefinite-Lived Intangible Assets ” of this Annual Report on Form 10-K.
Backlog is not a comprehensive indicator of future revenue. Most contracts may be terminated by our customers on short notice. Reductions in backlog due to cancellation by a customer, or for other reasons, could significantly reduce the revenue that we actually receive from contracts in backlog.
Reductions in backlog due to cancellation by a customer, or for other reasons, could significantly reduce the revenue that we actually receive from contracts in backlog.
We believe that we are in substantial compliance with our environmental obligations. ​ 13 Table of Contents While the potential impact of climate-related changes, including legislative and regulatory responses thereto, on our operations is uncertain, management considers climate-related risks and opportunities in connection with its long-term strategic planning and short-term deployment of resources.
From time to time, we may incur costs and obligations for correcting environmental noncompliance matters and for remediation at or relating to certain of our job sites or properties. ​ While the potential impact of climate-related changes, including legislative and regulatory responses thereto, on our operations is uncertain, management considers climate-related risks and opportunities in connection with its long-term strategic planning and short-term deployment of resources.
If we fail to find a suitable replacement for any departing executive or senior officer on a timely basis, such departure could adversely affect our ability to operate and grow our business. ​ If we fail to integrate acquisitions successfully, we may experience operational challenges and risks which may have an adverse effect on our business. ​ As part of our growth strategy, we intend to acquire companies that expand, complement or diversify our business.
If we cannot reduce the alleged fractional exposure through exemptions or negotiations, the withdrawal from a plan could have a material adverse impact on our business. ​ 20 Table of Contents If we fail to integrate acquisitions successfully, we may experience operational challenges and risks which may have an adverse effect on our business. ​ As part of our growth strategy, we intend to acquire companies that expand, complement or diversify our business.
Our contracts with our customers may also impose liabilities on us regarding environmental issues that arise through the performance of our services. From time to time, we may incur costs and obligations for correcting environmental noncompliance matters and for remediation at or relating to certain of our job sites or properties.
Our contracts with our customers may also impose liabilities on us regarding environmental issues that arise through the performance of our services.
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In any such event, our overall risk exposure would increase, which could negatively affect our results of operations, financial condition and cash flows. ​ Our business is labor intensive.
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Recent pipeline safety legislation could increase demand for our pipeline facility, maintenance, integrity and repair services. ​ 12 Table of Contents In addition, many customers operate in industries that are subject to rapid changes in technology, governmental regulation, changing consumer demands and consolidation.
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Technological advances in the markets we serve, including from climate-related initiatives, could render existing projects or technologies uncompetitive or obsolete, and cause longer-term changes in consumer behavior or alter our customers’ existing operating models.
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We do not consider renewals when estimating total backlog. ​ Backlog is not a comprehensive indicator of future revenue amounts or timing.
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For instance, contract revenues reflected in our backlog may be realized in different periods from those previously anticipated, which can result from project accelerations or delays due to various reasons, including changes in customer spending priorities, project cancellations, regulatory interruptions, scheduling changes, commercial issues (e.g., permitting), engineering revisions, job site conditions and adverse weather. ​ In addition, most contracts may be terminated by our customers on short notice.
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If we fail to find a suitable replacement for any departing executive or senior officer on a timely basis, such departure could adversely affect our ability to operate and grow our business. In many instances, these employees have significant experience and expertise in our industry.
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These key employees often possess and maintain key relationships with our customers and subcontractors that would be difficult to 19 Table of Contents replace. We do not carry “key-person” life or disability insurance on any of our employees.
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The loss or long-term incapacitation of any one of our executive officers or other key employees could negatively affect our customer relationships or the ability to execute our business strategy, which could adversely affect our business. Our business is labor intensive.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also have multiple third-party managed Security Operations Centers (“SOC”) in place; including a SOC for logging and monitoring of security events; a SOC for endpoint managed detection and response, including identity protection; a SOC for executive digital and brand protection; and a SOC for protection of network credentials. ​ In order to oversee and identify risks from cybersecurity threats associated with the Company’s use of vendors and other third-party service providers, we conduct continuous passive scanning of the Primoris network, as well as Primoris vendors’ external perimeter, on a regular basis to assess any potential vulnerabilities and weaknesses. ​ 25 Table of Contents We face certain ongoing risks from cybersecurity threats that, if realized, could materially affect us, including our business operations, results of operations or financial condition. ​ Cybersecurity Governance and Oversight ​ The Audit Committee of our Board of Directors provides direct oversight over cybersecurity risk and governance.
Biggest changeWe also have multiple third-party managed Security Operations Centers (“SOC”) in place; including a SOC for logging and monitoring of security events; a SOC for endpoint managed detection and response, including identity protection; a SOC for executive digital and brand protection; and a SOC for protection of network credentials. ​ In order to oversee and identify risks from cybersecurity threats associated with the Company’s use of vendors and other third-party service providers, we conduct continuous passive scanning of the Primoris network, as well as Primoris vendors’ external perimeter, on a regular basis to assess any potential vulnerabilities and weaknesses. ​ As of the date of this report, we are not aware of any known cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations or financial condition.
A key area of the cybersecurity program is the education of employees regarding cybersecurity using security awareness training, security bulletins and phishing simulations to reinforce training on a quarterly basis. Security awareness training covers all network users. On an annual basis an Acceptable Use Policy (“AUP”) is distributed to employees through our Learning Management System for understanding and acknowledgement.
A key area of the cybersecurity program is the education of employees regarding cybersecurity using security awareness training, security bulletins and phishing simulations to reinforce training on a quarterly basis. Security awareness training covers all network users. On an annual basis an Acceptable Use Policy (“AUP”) is distributed to employees through our Security Awareness Training System for understanding and acknowledgement.
Additionally, all new employees are provided the AUP by Human Resources and receive initial security training upon being granted access to our network. ​
Additionally, all new employees are provided the AUP through the Security Awareness System included with initial security training upon being granted access to our network. Additionally, all new employees are provided the AUP by Human Resources and receive initial security training upon being granted access to our network. ​
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However, as discussed under Part I, Item 1A.
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“Risk Factors, specifically the risks titled “ Disruptions to our operational systems could adversely impact our operations, our ability to report financial results and our business” and “Security breaches, cyber security attacks or other disruptions to our information technology systems and networks could adversely impact our operations or compromise the confidentiality of private customer data or our own proprietary information, ” the sophistication of cyber threats continues to increase, and the preventative actions we take to reduce the risk of cyber incidents and protect our systems and information may be insufficient.
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Accordingly, no matter how well designed or implemented our controls are, we will not be able to anticipate all security breaches, and we may 25 Table of Contents not be able to implement effective preventive measures against such security breaches in a timely manner, which could materially affect us, including our business operations, results of operations or financial condition. ​ Cybersecurity Governance and Oversight ​ The Audit Committee of our Board of Directors provides direct oversight over cybersecurity risk and governance.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeTotal construction equipment purchases in 2023 were $34.0 million. ​ We believe the ownership or long-term leasing of equipment is generally preferable to renting to ensure the equipment is available as needed. In addition, this approach has historically resulted in lower overall equipment costs. All equipment is subject to scheduled maintenance to help ensure reliability.
Biggest changeIn 2024, we spent approximately $126.6 million for capital expenditures, which included $81.9 million on our facilities and $36.6 million for construction equipment. ​ We believe the ownership or long-term leasing of equipment is generally preferable to renting to ensure the equipment is available as needed. In addition, this approach has historically resulted in lower overall equipment costs.
Maintenance facilities exist at most of our regional offices, as well as on-site on major projects to properly service and repair equipment. Major equipment not currently utilized is rented to third parties or sold whenever possible. ​ ​ 26 Table of Contents
All equipment is subject to scheduled maintenance to help ensure reliability. Maintenance facilities exist at most of our regional offices, as well as on-site on major projects to properly service and repair equipment. Major equipment not currently utilized is rented to third parties or sold whenever possible. ​ 26 Table of Contents
ITEM 2. PROPERTIES ​ Facilities ​ We lease our executive offices in Dallas, Texas and own and lease other facilities throughout the United States and Canada. Our facilities include offices, production yards, maintenance shops, and training and education facilities that are used in our operations. As of December 31, 2023, we owned 54 of our facilities and leased the remainder.
ITEM 2. PROPERTIES ​ Facilities ​ We lease our executive offices in Dallas, Texas and own and lease other facilities throughout the United States and Canada. Our facilities include offices, production yards, maintenance shops, and training and education facilities that are used in our operations by both of our segments.
We believe that our facilities are adequate to meet our current and foreseeable requirements. ​ Property, Plant and Equipment ​ The construction industry is capital intensive, and we expect to continue making capital expenditures to meet anticipated needs for our services. In 2023, capital expenditures were approximately $103.0 million.
As of December 31, 2024, we owned 46 of our facilities and leased the remainder. We believe that our facilities are adequate to meet our current and foreseeable requirements. ​ Property, Plant and Equipment ​ The construction industry is capital intensive, and we expect to continue making capital expenditures to meet anticipated needs for our services.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS ​ Legal Proceedings ​ For information regarding legal proceedings, see Note 12 — “ Commitments and Contingencies ” of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference. ​ ​ ITEM 4.
Biggest changeITEM 3. LEGAL PROCEEDINGS ​ Legal Proceedings ​ For information regarding legal proceedings, see Note 12 — “ Commitments and Contingencies ” of the Notes to Consolidated Financial Statements included in Item 8. “ Financial Statements And Supplementary Data ” of this Annual Report on Form 10-K, which is incorporated herein by reference. ​ ​ ITEM 4.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeFinancial Statements and Supplementary Data 51 Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 51 Item 9A. Controls and Procedures 52
Biggest changeFinancial Statements and Supplementary Data 49 Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 49 Item 9A. Controls and Procedures 50 Item 9B. Other Information 51
Item 4. Mine Safety Disclosures 27 ​ ​ ​ Part II ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. Reserved 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 50 Item 8.
Item 4. Mine Safety Disclosures 27 ​ ​ ​ Part II ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. Reserved 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 49 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Peer Group was modified in 2023 to replace Quanta Services, Inc. and Matrix Service Company with Dycom Industries, Inc. and MYR Group, Inc. as the overall composition of our business has changed and we believe this new peer group more closely resembles us from both an operations and market capitalization perspective. ​ The returns are calculated assuming that an investment with a value of $100 was made in our common stock, the S&P 500 and the Peer Group as of December 31, 2018.
Biggest changeThe Peer Group is composed of MasTec, Inc., MYR Group, Inc., Dycom Industries, Inc., Sterling Construction Company, Inc. and Granite Construction, Inc. ​ The returns are calculated assuming that an investment with a value of $100 was made in our common stock, the S&P 500 and the Peer Group as of December 31, 2019.
The declaration and payment of future dividends is contingent upon our revenue and earnings, capital requirements, and general financial conditions, as well as contractual restrictions and other considerations deemed to be relevant by the Board of Directors. 28 Table of Contents Performance Graph ​ The following Performance Graph and related information shall not be deemed to be filed with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing. ​ The following graph compares the cumulative total return to holders of our common stock during the five-year period from December 31, 2018, and in each quarter up through December 31, 2023.
The declaration and payment of future dividends is contingent upon our revenue and earnings, capital requirements, and general financial conditions, as well as contractual restrictions and other considerations deemed to be relevant by the Board of Directors. 28 Table of Contents Performance Graph ​ The following Performance Graph and related information shall not be deemed to be filed with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing. ​ The following graph compares the cumulative total return to holders of our common stock during the five-year period from December 31, 2019, and in each quarter through December 31, 2024.
The stock performance shown on the graph is not intended to be indicative of future stock performance. ​ COMPARISON OF DECEMBER 31, 2018 THROUGH DECEMBER 31, 2023 CUMULATIVE TOTAL RETURN Among Primoris Services Corporation (“PRIM”), the S&P 500 and the Peer Group ​ ​ ​ ​
The stock performance shown on the graph is not intended to be indicative of future stock performance. ​ COMPARISON OF DECEMBER 31, 2019 THROUGH DECEMBER 31, 2024 CUMULATIVE TOTAL RETURN Among Primoris Services Corporation (“PRIM”), the S&P 500 and the Peer Group ​ ​ ​ ​
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ Market Information ​ Our common stock is listed on the New York Stock Exchange under the symbol “PRIM”. We had outstanding 53,436,884 shares of common stock and 439 stockholders of record as of February 19, 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ​ Market Information ​ Our common stock is listed on the New York Stock Exchange under the symbol “PRIM”. We had outstanding 53,747,628 shares of common stock and 335 stockholders of record as of February 18, 2025.
Removed
The Peer Group is composed of MasTec, Inc., MYR Group, Inc., Dycom Industries, Inc., Sterling Construction Company, Inc. and Granite Construction, Inc.
Added
In October of 2024 we increased the quarterly cash dividend from $0.06 per share to $0.08 per share.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe 2022 effective tax rate was 16.5%. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 41 Table of Contents Segment Results ​ Utilities Segment ​ Revenue and gross profit for the Utilities segment for the years ended December 31, 2023, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ % of ​ ​ ​ % of ​ ​ ​ % of ​ ​ ​ ​ Segment ​ ​ ​ ​ Segment ​ ​ ​ ​ Segment ​ (Millions) ​ Revenue ​ (Millions) ​ Revenue ​ (Millions) ​ Revenue Utilities Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue $ 2,380.2 ​ ​ ​ $ 2,024.3 ​ ​ ​ $ 1,658.0 ​ ​ Gross profit ​ 207.0 8.7% ​ ​ 210.7 10.4% ​ ​ 186.3 11.2% ​ 2023 and 2022 ​ Revenue increased by $355.9 million, or 17.6%, during 2023 compared to 2022.
Biggest changeThe 2023 effective tax rate was 29.0%. ​ 40 Table of Contents Segment Results ​ Operating performance by segment for the years ended December 31, 2024, 2023, and 2022 was as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2024 ​ Utilities ​ % of Segment Revenue ​ Energy ​ % of Segment Revenue ​ Corporate and non-allocated costs ​ Consolidated ​ % of Consolidated Revenue Revenue ​ $ 2,439.0 ​ ​ — ​ $ 4,032.0 ​ ​ — ​ $ (104.2) (1) $ 6,366.8 ​ ​ — Cost of revenue ​ ​ 2,181.1 ​ ​ 89.4% ​ ​ 3,586.7 ​ ​ 89.0% ​ ​ (104.2) (1) ​ 5,663.6 ​ ​ 89.0% Gross profit ​ ​ 257.9 ​ ​ 10.6% ​ ​ 445.3 ​ ​ 11.0% ​ ​ — ​ ​ 703.2 ​ ​ 11.0% Selling, general, and administrative expenses ​ ​ 118.2 ​ ​ 4.8% ​ ​ 150.2 ​ ​ 3.7% ​ ​ 114.9 ​ ​ 383.3 ​ ​ 6.0% Transaction and related costs ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2.5 ​ ​ 2.5 ​ ​ ​ Operating income ​ $ 139.7 ​ ​ 5.7% ​ $ 295.1 ​ ​ 7.3% ​ $ (117.4) ​ $ 317.4 ​ ​ 5.0% ​ (1) Represents intersegment revenue and cost of revenue of $104.2 million in the Utilities segment eliminated in our Consolidated Statements of Income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2023 ​ Utilities ​ % of Segment Revenue ​ Energy ​ % of Segment Revenue ​ Corporate and non-allocated costs ​ Consolidated ​ % of Consolidated Revenue Revenue ​ $ 2,410.1 ​ ​ — ​ $ 3,346.2 ​ ​ — ​ $ (41.0) (1) $ 5,715.3 ​ ​ — Cost of revenue ​ ​ 2,203.1 ​ ​ 91.4% ​ ​ 2,965.7 ​ ​ 88.6% ​ ​ (41.0) (1) ​ 5,127.8 ​ ​ 89.7% Gross profit ​ ​ 207.0 ​ ​ 8.6% ​ ​ 380.5 ​ ​ 11.4% ​ ​ — ​ ​ 587.5 ​ ​ 10.3% Selling, general, and administrative expenses ​ ​ 117.8 ​ ​ 4.9% ​ ​ 132.6 ​ ​ 4.0% ​ ​ 78.3 ​ ​ 328.7 ​ ​ 5.8% Transaction and related costs ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5.7 ​ ​ 5.7 ​ ​ ​ Operating income ​ $ 89.2 ​ ​ 3.7% ​ $ 247.9 ​ ​ 7.4% ​ $ (84.0) ​ $ 253.1 ​ ​ 4.4% ​ (1) Represents intersegment revenue and cost of revenue of $29.9 million in the Utilities segment and $11.1 million in the Energy segment eliminated in our Consolidated Statements of Income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, 2022 ​ Utilities ​ % of Segment Revenue ​ Energy ​ % of Segment Revenue ​ Corporate and non-allocated costs ​ Consolidated ​ % of Consolidated Revenue Revenue ​ $ 2,033.7 ​ ​ — ​ $ 2,397.3 ​ ​ — ​ $ (10.4) (1) $ 4,420.6 ​ ​ — Cost of revenue ​ ​ 1,823.0 ​ ​ 89.6% ​ ​ 2,151.1 ​ ​ 89.7% ​ ​ (10.4) (1) ​ 3,963.7 ​ ​ 89.7% Gross profit ​ ​ 210.7 ​ ​ 10.4% ​ ​ 246.2 ​ ​ 10.3% ​ ​ — ​ ​ 456.9 ​ ​ 10.3% Selling, general, and administrative expenses ​ ​ 91.7 ​ ​ 4.5% ​ ​ 108.6 ​ ​ 4.5% ​ ​ 81.3 ​ ​ 281.6 ​ ​ 6.4% Transaction and related costs ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 20.1 ​ ​ 20.1 ​ ​ ​ Gain on sale and leaseback transaction ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (40.1) ​ ​ (40.1) ​ ​ ​ Operating income ​ $ 119.0 ​ ​ 5.9% ​ $ 137.6 ​ ​ 5.7% ​ $ (61.3) ​ $ 195.3 ​ ​ 4.4% ​ (1) Represents intersegment revenue and cost of revenue of $9.3 million in the Utilities segment and $1.1 million in the Energy segment eliminated in our Consolidated Statements of Income. 41 Table of Contents Utilities Segment ​ 2024 and 2023 ​ Revenue increased by $28.9 million, or 1.2%, during 2024 compared to 2023.
B Comm was incorporated into our Utilities segment and is a provider of maintenance, repair, upgrade and installation services to the communications markets. The transaction directly aligns with the strategy to grow our Master Services Agreement (“MSA”) revenue base and expand our communication services within the utility markets.
B Comm was incorporated into our Utilities segment and is a provider of maintenance, repair, upgrade and installation services to the communications markets. The transaction directly aligns with the strategy to grow our Master Services Agreement (“MSA”) revenue base and expand our communication services within the utility segment.
For these contracts, revenue is recognized over time as work is completed because of the continuous transfer of control to the customer (typically using an input measure such as costs incurred to date relative to total estimated costs at completion to measure progress).
For these contracts, revenue is recognized over time as work is completed because of the continuous transfer of control to the customer (typically using an input measure such as costs incurred to date relative to total estimated costs at completion to measure progress).
Quarterly non-use fees, letter of credit fees and administrative agent fees are payable at rates specified in the Amended Credit Agreement. ​ The principal amount of any loan drawn under the Amended Credit Agreement may be prepaid in whole or in part at any time, with a minimum prepayment of $5.0 million. ​ Loans made under the Amended Credit Agreement are secured by our assets, including, among others, our cash, inventory, equipment (excluding equipment subject to permitted liens), and accounts receivable.
Quarterly non-use fees, letter of credit fees and administrative agent fees are payable at rates specified in the Credit Agreement. ​ The principal amount of any loan drawn under the Credit Agreement may be prepaid in whole or in part at any time, with a minimum prepayment of $5.0 million. ​ Loans made under the Credit Agreement are secured by our assets, including, among others, our cash, inventory, equipment (excluding equipment subject to permitted liens), and accounts receivable.
Fair value is estimated as of the acquisition date based on management’s best estimate of estimated earnout payments. ​ Accounting principles generally accepted in the United States provide a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business.
Fair value is estimated as of the acquisition date based on management’s best estimate of potential earnout payments. ​ Accounting principles generally accepted in the United States provide a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business.
Certain subsidiaries have issued joint and several guaranties in favor of the Lenders for all amounts under the Amended Credit Agreement. ​ The Amended Credit Agreement contains various restrictive and financial covenants including, among others, a net senior debt/EBITDA ratio and minimum EBITDA to cash interest ratio.
Certain subsidiaries have issued joint and several guaranties in favor of the Lenders for all amounts under the Credit Agreement. ​ The Credit Agreement contains various restrictive and financial covenants including, among others, a net senior debt/EBITDA ratio and minimum EBITDA to cash interest ratio.
In addition, we recorded a loss on extinguishment of debt during the third quarter of 2022 of $0.8 million related to the Amended Credit Agreement. ​ The principal amount of all loans under the Amended Credit Agreement will bear interest at either: (i) the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin as specified in the Amended Credit Agreement (based on our net senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio as defined in the Amended Credit Agreement), or (ii) the Base Rate (which is the greater of (a) the Federal Funds Rate plus 0.50% or (b) the prime rate as announced by the Administrative Agent) plus an applicable margin as specified in the Amended Credit Agreement.
In addition, we recorded a loss on extinguishment of debt during the third quarter of 2022 of $0.8 million related to the Credit Agreement. ​ The principal amount of all loans under the Credit Agreement will bear interest at either: (i) the Secured Overnight Financing Rate plus an applicable margin as specified in the Credit Agreement (based on our net senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio as defined in the Credit Agreement), or (ii) the Base Rate (which is the greater of (a) the Federal Funds Rate plus 0.50% or (b) the prime rate as announced by the Administrative Agent) plus an applicable margin as specified in the Credit Agreement.
Letters of credit reduce our borrowing availability under our Amended Credit Agreement and Canadian Credit Facility. If a beneficiary were to successfully draw on any letter of credit, we would be required to reimburse the issuer of the letter of credit, and we may be required to record a charge to earnings for the reimbursement.
Letters of credit reduce our borrowing availability under our Credit Agreement and Canadian Credit Facility. If a beneficiary were to successfully draw on any letter of credit, we would be required to reimburse the issuer of the letter of credit, and we may be required to record a charge to earnings for the reimbursement.
If the carrying amount of a reporting unit is in excess of its fair value, goodwill is considered impaired and an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill of the reporting unit. ​ There were no impairments of goodwill for the years ended December 31, 2023, 2022 and 2021. ​ Income taxes —We account for income taxes under the asset and liability method as set forth in ASC 740, “ Income Taxes ”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
If the carrying amount of a reporting unit is in excess of its fair value, goodwill is considered impaired and an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill of the reporting unit. ​ There were no impairments of goodwill for the years ended December 31, 2024, 2023 and 2022. ​ Income taxes —We account for income taxes under the asset and liability method as set forth in ASC 740, “ Income Taxes ”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.
We believe the ownership or long-term leasing of equipment is generally preferable to renting equipment on a project-by-project basis, as this strategy helps to ensure the equipment is available for our projects when needed. In addition, this approach has historically resulted in lower overall equipment costs. ​ We periodically sell assets, typically to update our fleet.
We believe the ownership or long-term leasing of equipment is generally preferable to renting equipment on a project-by-project basis, as this strategy helps to ensure the equipment is available for our projects when needed. In addition, this approach has historically resulted in lower overall equipment costs. ​ We periodically sell assets and facilities, typically to update our fleet.
In addition, the Amended Credit Agreement includes restrictions on investments, change of control provisions and provisions in the event we dispose of more than 20% of our total assets. ​ We were in compliance with the covenants for the Amended Credit Agreement at December 31, 2023. ​ On January 31, 2023, we entered into an interest rate swap agreement to manage our exposure to the fluctuations in variable interest rates.
In addition, the Credit Agreement includes restrictions on investments, change of control provisions and provisions in the event we dispose of more than 20% of our total assets. ​ We were in compliance with the covenants for the Credit Agreement at December 31, 2024. ​ On January 31, 2023, we entered into an interest rate swap agreement to manage our exposure to the fluctuations in variable interest rates.
The proceeds from the New Term Loan and additional borrowings under the Revolving Credit Facility were used to finance the acquisition of PLH. ​ We capitalized $6.5 million of debt issuance costs during the third quarter of 2022 associated with the Amended Credit Agreement that is being amortized as interest expense over the life of the Amended Credit Agreement.
The proceeds from the Term Loan and additional borrowings under the Revolving Credit Facility were used to finance the acquisition of PLH. ​ We capitalized $6.5 million of debt issuance costs during the third quarter of 2022 associated with the Credit Agreement that is being amortized as interest expense over the life of the Credit Agreement.
Our Credit Agreement bears interest at variable market rates, and estimated payments are based on the interest rate in effect as of December 31, 2023, including the impact of our interest rate swap. ​ The summary does not include potential obligations under multi-employer pension plans in which some of our employees participate.
Our Credit Agreement bears interest at variable market rates, and estimated payments are based on the interest rate in effect as of December 31, 2024, including the impact of our interest rate swap. ​ The summary does not include potential obligations under multi-employer pension plans in which some of our employees participate.
Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defenses to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a material adverse effect on our consolidated results of operations, financial condition or cash flows.
Management is unable to ascertain the ultimate outcome of other claims and legal proceedings; 37 Table of Contents however, after review and consultation with counsel and taking into consideration relevant insurance coverage and related deductibles/self-insurance retention, management believes that it has meritorious defenses to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a material adverse effect on our consolidated results of operations, financial condition or cash flows.
The total purchase price was funded through a combination of borrowings under our Third Amended and Restated Credit Agreement, dated as of August 1, 2022, which increased our term loan to an aggregate principal amount of $945.0 million (the “ New Term Loan”) and borrowings under our revolving credit facility, in which the lenders agreed to make loans on a revolving basis from time to time and to issue letters of credit for up to $325.0 million (the “Revolving Credit Facility”).
The total purchase price was funded through a combination of borrowings under our Third Amended and Restated Credit Agreement, dated as of August 1, 2022, which increased our term loan to an aggregate principal amount of $945.0 million (the “Term Loan”) and borrowings under our revolving credit facility, in which the lenders agreed to make loans on a revolving basis from time to time and to issue letters of credit for up to $325.0 million (the “Revolving Credit Facility”).
The Amended Credit Agreement is scheduled to mature on August 1, 2027. ​ In addition to the New Term Loan, the Amended Credit Agreement increased the existing $200.0 million Revolving Credit Facility, whereby the Lenders agreed to make loans on a revolving basis from time to time and to issue letters of credit, to $325.0 million.
The Credit Agreement is scheduled to mature on August 1, 2027. ​ In addition to the Term Loan, the Credit Agreement increased the existing $200.0 million Revolving Credit Facility, whereby the Lenders agreed to make loans on a revolving basis from time to time and to issue letters of credit, to $325.0 million.
Actual results could materially differ from those that result from using the estimates under different assumptions or conditions. ​ An accounting policy is deemed to be critical if i) it requires an accounting estimate to be based on assumptions about matters that are highly uncertain at the time the estimate is made, ii) different estimates could have reasonably been used, or iii) changes in the accounting estimates that are reasonably likely to occur periodically could materially impact our consolidated financial statements. ​ 34 Table of Contents The following accounting policies require critical accounting estimates that are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties.
Actual results could materially differ from those that result from using the estimates under different assumptions or conditions. ​ An accounting policy is deemed to be critical if i) it requires an accounting estimate to be based on assumptions about matters that are highly uncertain at the time the estimate is made, ii) different estimates could have reasonably been used, or iii) changes in the accounting estimates that are reasonably likely to occur periodically could materially impact our consolidated financial statements. ​ The following accounting policies require critical accounting estimates that are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties.
However, production from the shale formations and increased demand for exporting liquified natural gas (“LNG”) could strain the current capacity limitations between production and processing locations which would provide opportunities for our Energy segment. ​ ​ ● Inspection, maintenance and replacement of pipeline infrastructure — We believe that regulatory measures around the frequency or stringency of pipeline integrity testing requirements provides growth opportunity in our Energy segment.
However, high levels of production from the shale formations and increased demand for exporting liquified natural gas (“LNG”) could strain the current pipeline capacity limitations between production and processing locations which would provide opportunities for our Energy segment. ​ ​ ● Inspection, maintenance and replacement of pipeline infrastructure — We believe that regulatory measures around the frequency or stringency of pipeline integrity testing requirements provides growth opportunity for our Energy segment.
The 37 Table of Contents effect of changes in tax rates on net deferred tax assets or liabilities is recognized as an increase or decrease in net income in the period the tax change is enacted. ​ Deferred tax assets may be reduced by a valuation allowance if, in the judgment of management, it is more likely than not that all or a portion of a deferred tax asset will not be realized.
The effect of changes in tax rates on net deferred tax assets or liabilities is recognized as an increase or decrease in net income in the period the tax change is enacted. ​ Deferred tax assets may be reduced by a valuation allowance if, in the judgment of management, it is more likely than not that all or a portion of a deferred tax asset will not be realized.
We do not believe that it is likely that a material claim will be made under our surety arrangements. ​ ● Certain of our subsidiaries are parties to collective bargaining agreements with unions. In most instances, these agreements require that we contribute to multi-employer pension and health and welfare plans.
We do not believe that it is likely that a material claim will be made under our surety arrangements. ​ 47 Table of Contents ● Certain of our subsidiaries are parties to collective bargaining agreements with unions. In most instances, these agreements require that we contribute to multi-employer pension and health and welfare plans.
Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work. ​ The timing of when we bill our customers is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when services are provided.
Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work. 35 Table of Contents ​ The timing of when we bill our customers is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when services are provided.
In performing these assessments, management relies on various factors, including operating results, business plans, economic projections, anticipated future cash flows, comparable transactions and other market data. There are inherent uncertainties related to these factors and judgment in applying them to the analysis of goodwill for impairment.
In performing these assessments, management relies on various factors, including operating results, business plans, economic projections, anticipated future cash flows, comparable 36 Table of Contents transactions and other market data. There are inherent uncertainties related to these factors and judgment in applying them to the analysis of goodwill for impairment.
In the event of a project cancellation, we are typically reimbursed for all of our costs through a specific date, as well as all reasonable costs associated with demobilizing from the jobsite, but typically we have no contractual right to the total revenue reflected in backlog.
In the event of a project cancellation, we are typically reimbursed for all of our costs through a specific date, as well as all reasonable costs associated with demobilizing from the jobsite, but typically we have no contractual right to the total revenue reflected in 48 Table of Contents backlog.
Often, estimates are particularly difficult to determine, and we must exercise significant judgment. Estimates may be used in our accounting for revenue recognized over time, the allowance for doubtful accounts, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities and deferred income taxes.
Often, estimates are particularly difficult to determine, and we must exercise significant judgment. Estimates may be used in our accounting for revenue recognized over time, the allowance for credit losses, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities and deferred income taxes.
The determination of fair value requires estimates and judgments of future cash flow expectations for the assignment of the fair values to the identifiable tangible and intangible assets. ​ 36 Table of Contents Identifiable Tangible Assets. Significant identifiable tangible assets acquired would include accounts receivable, contract assets, leases and fixed assets (generally consisting of facilities and construction equipment).
The determination of fair value requires estimates and judgments of future cash flow expectations for the assignment of the fair values to the identifiable tangible and intangible assets. ​ Identifiable Tangible Assets. Significant identifiable tangible assets acquired would include accounts receivable, contract assets, leases and fixed assets (generally consisting of facilities and construction equipment).
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes to those statements included in Item 8 in this Annual Report on Form 10-K.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes to those statements included in Item 8. “ Financial Statements And Supplementary Data ” in this Annual Report on Form 10-K.
Costs associated with contract modifications are included in the estimated costs to complete the contracts and are treated as project costs when incurred. In most instances, contract modifications are for 35 Table of Contents goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.
Costs associated with contract modifications are included in the estimated costs to complete the contracts and are treated as project costs when incurred. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those risks inherent with our business as discussed in “Item 1A Risk Factors”. ​ The following discussion starts with an overview of our business and a discussion of trends, including seasonality, that affect our industry.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those risks inherent with our business as discussed in Item 1A. “Risk Factors”. ​ The following discussion starts with an overview of our business and a discussion of trends, including seasonality, that affect our industry.
For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using the observable standalone selling price, if available, or alternatively our best estimate of the standalone selling price of each distinct performance obligation in the contract.
For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using the observable standalone selling price, if available, or alternatively our best 34 Table of Contents estimate of the standalone selling price of each distinct performance obligation in the contract.
We anticipate that our cash and investments on hand, existing borrowing capacity under our credit facilities, and our future cash flows from operations will provide sufficient funds to enable us to meet our operating needs, our planned capital expenditures, and settle our commitments and contingencies for the next twelve months and the foreseeable future. ​ The construction industry is capital intensive, and we expect to continue to make capital expenditures to meet anticipated needs for our services.
We anticipate that our cash and investments on hand, existing borrowing capacity under our credit facilities, access to and capacity under a shelf registration statement, and our future cash flows from operations will provide sufficient funds to enable us to meet our operating needs, our planned capital expenditures, and settle our commitments and contingencies for the next twelve months and the foreseeable future. ​ The construction industry is capital intensive, and we expect to continue to make capital expenditures to meet anticipated needs for our services.
Our national position in this specific market allows for scalable coverage across the industry. Electric distribution undergrounding initiatives with clients in our key markets has been, and will continue to be, a strong opportunity for us as we see utilities customers continue to invest in grid reliability.
Our national position in this market allows for scalable coverage across the industry. Electric distribution expansion and resiliency initiatives with clients in our key markets has been, and will continue to be, a strong opportunity for us as we see utilities customers continue to invest in grid reliability.
For certain contracts, where scope is not adequately defined and we can’t reasonably estimate total contract value, revenue is recognized either on an input basis, based on contract costs incurred as defined within the respective 30 Table of Contents contracts, or an output basis based on units completed.
For certain contracts, where scope is not adequately defined and we can’t reasonably estimate total contract value, revenue is recognized either on an input basis, based on contract costs incurred as defined within the respective contracts, or an output basis based on units completed.
Additionally, we are experiencing new opportunities as utilities providers invest in renewable energy and upgrade their transmission infrastructure. ​ ​ ● Inspection, maintenance and replacement of electric utility infrastructure — We expect the demand for electricity in the United States to grow over the long-term and believe enhancements to the electric utility infrastructure are needed to efficiently serve the power needs of the future.
Additionally, we are experiencing new opportunities as utilities providers invest in renewable and natural gas generation and upgrade their transmission infrastructure. ​ ​ ● Inspection, maintenance and replacement of electric utility infrastructure — We expect the demand for electricity in the United States to grow over the long-term and believe enhancements to the country’s electric utility infrastructure are needed to efficiently serve the power needs of the future.
For the years ended December 31, 2023, 2022, and 2021, $3.9 billion, $2.7 billion, and $2.1 billion, respectively of our revenue is derived from contracts where scope is adequately defined, and therefore we can reasonably estimate total contract value.
For the years ended December 31, 2024, 2023, and 2022, $4.7 billion, $3.9 billion, and $2.7 billion, respectively of our revenue is derived from contracts where scope is adequately defined, and therefore we can reasonably estimate total contract value.
Costs to obtain contracts are generally not significant and are expensed in the period incurred. ​ The classification of revenue and gross profit for segment reporting purposes can at times require judgment on the part of management. Our segments may perform services across industries or perform joint services for customers in multiple industries.
Costs to obtain contracts are generally not significant and are expensed in the period incurred. ​ The classification of revenue, gross profit, and operating income for segment reporting purposes can at times require judgment on the part of management. Our segments may perform services across industries or perform joint 30 Table of Contents services for customers in multiple industries.
We may elect to raise additional capital by issuing common stock, convertible notes, term debt or increasing our credit facility as necessary to fund our operations or to fund the acquisition of new businesses. ​ Our cash and cash equivalents totaled $217.8 million at December 31, 2023, compared to $248.7 million at December 31, 2022.
We may elect to raise additional capital by issuing common stock, convertible notes, term debt or increasing our credit facility as necessary to fund our operations or to fund the acquisition of new businesses. ​ Our cash and cash equivalents totaled $455.8 million at December 31, 2024, compared to $217.8 million at December 31, 2023.
There were no such comparable transactions for the years ended December 31, 2023 and 2021. ​ Other income and expense ​ Non-operating income and expense items for the years ended December 31, 2023, 2022 and 2021 were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 Foreign exchange gain (loss), net $ 1.2 ​ $ 1.1 ​ $ (0.1) Other income, net 1.6 ​ 2.1 ​ 0.3 Interest expense, net (78.2) ​ (39.2) ​ (18.5) Total other expense $ (75.4) ​ $ (36.0) ​ $ (18.3) ​ Interest expense, net for the year ended December 31, 2023 was $78.2 million compared to $39.2 million for the year ended December 31, 2022.
There were no such comparable transactions for the years ended December 31, 2024 and 2023. ​ Other income and expense ​ Non-operating income and expense items for the years ended December 31, 2024, 2023 and 2022 were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Foreign exchange gain (loss), net ​ $ 2.7 ​ $ 1.2 ​ $ 1.1 Other income, net ​ 0.1 ​ 1.6 ​ 2.1 Interest expense, net ​ (65.3) ​ (78.2) ​ (39.2) Total other expense ​ $ (62.5) ​ $ (75.4) ​ $ (36.0) ​ Interest expense, net for the year ended December 31, 2024 was $65.3 million compared to $78.2 million for the year ended December 31, 2023.
In addition, the generally historically low price of natural gas could result in the continued replacement of coal-fired power plants and the conversion and expansion at chemical plants and industrial facilities in other parts of the United States.
In addition, the historically low price of natural gas could result in the continued replacement of higher carbon emitting coal-fired power plants and the conversion and expansion at chemical plants and industrial facilities in other parts of the United States.
We also expect that ongoing gas utility repair and maintenance opportunities will continue. ​ ​ 32 Table of Contents ● Construction of natural gas-fired power plants and industrial plants — We expect continued construction opportunities for both base-load and peak shaving power plants; however, we are aware that environmental concerns over gas fired power plants may impact the timing and location of near-term construction opportunities in certain states.
We also expect that ongoing gas utility repair and maintenance opportunities will continue. ​ ​ ● Construction of natural gas-fired power plants and industrial plants — We expect continued construction opportunities for both baseload and peak shaving power plants; however, we are aware that environmental concerns over gas fired power plants may impact the timing and location of near-term construction opportunities in certain states.
In addition, the ability of our customers to obtain permits for projects could impact the demand for our services, especially for larger interstate pipelines.
In addition, the ability of our customers to obtain federal and state permits for projects could impact the demand for our services, especially for larger interstate pipelines.
We do not believe that it is likely that any material claims will be made under a letter of credit. ​ 48 Table of Contents ● In the ordinary course of our business, we may be required by our customers to post surety bid or completion bonds in connection with services that we provide.
We do not believe that it is likely that any material claims will be made under a letter of credit. ​ ● In the ordinary course of our business, we may be required by our customers to post surety bid or payment/performance bonds in connection with services that we provide.
Based on our variable rate debt outstanding as of December 31, 2023, a 1.0% increase or decrease in interest rates would change annual interest expense by approximately $5.7 million. ​ Seasonality, Cyclicality and Variability ​ Our results of operations are subject to quarterly variations.
Based on our variable rate debt outstanding as of December 31, 2024, a 1.0% increase or decrease in interest rates would change annual interest expense by approximately $3.8 million. ​ Seasonality, Cyclicality and Variability ​ Our results of operations are subject to quarterly variations.
While the construction of gathering lines within the oil shale formations may remain at lower levels for an extended period, we believe that over 33 Table of Contents time, the need for pipeline infrastructure for mid-stream and gas utility companies will result in a continuing need for our services. ​ The continuing changes in the regulatory environment have affected the demand for our services, either by increasing our work, delaying projects, or cancelling projects.
While the construction of gathering lines within the oil shale formations may remain at lower levels for a period, we believe that over time, the need for pipeline infrastructure for midstream and gas utility companies will result in a continuing need for our services. ​ The continuing changes in the regulatory environment have affected the demand for our services, either by increasing our work, delaying projects, or cancelling projects.
Over the past several years, each segment has benefited from demand for more efficient and more environmentally friendly energy and power facilities, more reliable gas and electric utility infrastructure, upgraded and expanded local highway and bridge needs, and from the activity level in the pipeline industry.
Over the past several years, each segment has benefited from demand for more efficient and more environmentally friendly energy and power facilities, more reliable gas and electric utility infrastructure, and upgraded and expanded local highway and bridge needs.
We have no off-balance sheet financing arrangement with VIEs. The following represents transactions, obligations or relationships that could be considered material off-balance sheet arrangements. ​ ● At December 31, 2023, we had letters of credit outstanding of $52.3 million under the terms of our credit agreements.
We have no off-balance sheet financing arrangement with VIEs. The following represents transactions, obligations or relationships that could be considered material off-balance sheet arrangements. ​ ● At December 31, 2024, we had letters of credit outstanding of $53.0 million under the terms of our credit agreements.
For contract revenue recognized over time, the accrued loss provision is adjusted so that the gross profit for the contract remains zero in future periods. ​ At December 31, 2023, we had approximately $203.5 million of unapproved contract modifications included in the aggregate transaction prices.
For contract revenue recognized over time, the accrued loss provision is adjusted so that the gross profit for the contract remains zero in future periods. ​ At December 31, 2024, we had approximately $220.8 million of unapproved contract modifications included in the aggregate transaction prices.
Approximately $175.7 million of the unapproved contract modifications had been recognized as revenue on a cumulative catch-up basis through December 31, 2023. ​ In all forms of contracts, we estimate the collectability of contract amounts at the same time that we estimate project costs.
Approximately $206.1 million of the unapproved contract modifications had been recognized as revenue on a cumulative catch-up basis through December 31, 2024. ​ In all forms of contracts, we estimate the collectability of contract amounts at the same time that we estimate project costs.
In addition, permitting challenges associated with construction of new pipelines can make existing pipeline infrastructure more valuable, motivating owners to extend the useful life of existing pipeline assets through maintenance and integrity initiatives.
In addition, permitting challenges associated with construction of new pipelines may make existing pipeline infrastructure more valuable, motivating owners to extend the 32 Table of Contents useful life of existing pipeline assets through maintenance and integrity initiatives.
ASC 606 defines a performance obligation as a contractual promise to transfer a distinct good or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.
Accounting Standards Codification (“ASC”) 606 defines a performance obligation as a contractual promise to transfer a distinct good or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.
We expect these opportunities, as well as ongoing spending by communications companies, to benefit our Utilities segment. ​ ​ ● Power Delivery — We are experiencing strong tailwinds in our power delivery business as the industry continues to invest in grid resiliency, modernization, renewable generation integration, and the push for electrification.
We expect these opportunities, as well as ongoing spending by communications and technology companies, to benefit our Utilities segment. ​ ​ ● Power Delivery — We are experiencing strong tailwinds in our power delivery business as the industry continues to invest in grid resiliency, modernization, renewable generation integration, and increased electrification of certain industries.
The swap effectively exchanged the interest rate on $300.0 million of the debt outstanding under our New Term Loan from variable to a fixed rate of 4.095% per annum, plus an applicable margin which was 2.25% at December 31, 2023.
The swap effectively exchanged the interest rate on $300.0 million of the debt outstanding under our Term Loan from variable to a fixed rate of 4.095% per annum, plus an applicable margin which was 1.50% at December 31, 2024.
Volatility in the prices of oil, gas, and liquid natural gas that has occurred in the past few years could create uncertainty with respect to demand for our pipeline services, both in the near term and for future projects.
Volatility in the prices of oil, gas, and liquid natural gas that has occurred in recent years has created uncertainty with respect to demand for our pipeline services, both in the near term and for future projects.
Capital expenditures are expected to total between $80.0 million and $100.0 million for 2024, which includes $20.0 million to $40.0 million for construction equipment. ​ Cash Flows ​ Cash flows during the years ended December 31, 2023, 2022 and 2021 are summarized as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 Change in cash: ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by operating activities $ 198.6 ​ $ 83.3 ​ $ 79.7 Net cash used in investing activities (30.0) ​ (481.9) ​ (691.3) Net cash (used in) provided by financing activities (205.3) ​ 452.0 ​ 485.8 Effect of exchange rate changes ​ 1.3 ​ ​ (0.1) ​ ​ 0.5 Net change in cash, cash equivalents and restricted cash $ (35.4) ​ $ 53.3 ​ $ (125.3) ​ 44 Table of Contents Operating Activities ​ The sources and uses of cash flow associated with operating activities for the years ended December 31, 2023, 2022 and 2021 were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 2021 Operating Activities: ​ ​ ​ ​ ​ ​ ​ ​ Net income $ 126.1 ​ $ 133.0 ​ $ 115.7 Depreciation and amortization 107.0 ​ 99.2 ​ 105.6 Gain on sale and leaseback transaction — ​ (40.1) ​ — Changes in assets and liabilities ​ (0.1) ​ ​ (79.0) ​ ​ (132.7) Gain on sale of property and equipment ​ (48.1) ​ ​ (31.9) ​ ​ (15.9) Other 13.6 ​ 2.1 ​ 7.0 Net cash provided by operating activities $ 198.6 ​ $ 83.3 ​ $ 79.7 ​ 2023 and 2022 ​ Net cash provided by operating activities for 2023 was $198.6 million, an increase of $115.3 million compared to 2022.
Capital expenditures are expected to total between $90.0 million and $110.0 million for 2025, which includes $60.0 million to $80.0 million for construction equipment. ​ Cash Flows ​ Cash flows during the years ended December 31, 2024, 2023 and 2022 are summarized as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 ​ 2022 Change in cash: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by operating activities ​ $ 508.3 ​ $ 198.6 ​ $ 83.3 Net cash used in investing activities ​ (27.2) ​ (30.0) ​ (481.9) Net cash (used in) provided by financing activities ​ (244.4) ​ (205.3) ​ 452.0 Effect of exchange rate changes ​ ​ 1.2 ​ ​ 1.3 ​ ​ (0.1) Net change in cash, cash equivalents and restricted cash ​ $ 237.9 ​ $ (35.4) ​ $ 53.3 ​ 43 Table of Contents Operating Activities ​ The sources and uses of cash flow associated with operating activities for the years ended December 31, 2024, 2023 and 2022 were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 2022 Operating Activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 180.9 ​ $ 126.1 ​ $ 133.0 Depreciation and amortization ​ 95.5 ​ 107.0 ​ 99.2 Gain on sale and leaseback transaction ​ — ​ — ​ (40.1) Changes in assets and liabilities ​ ​ 255.9 ​ ​ (0.1) ​ ​ (79.0) Gain on sale of property and equipment ​ ​ (44.8) ​ ​ (48.1) ​ ​ (31.9) Other ​ 20.8 ​ 13.6 ​ 2.1 Net cash provided by operating activities ​ $ 508.3 ​ $ 198.5 ​ $ 83.3 ​ 2024 and 2023 ​ Net cash provided by operating activities for 2024 was $508.3 million, an increase of $309.7 million compared to 2023.
As a result, we expect demand to continue to grow for our pipeline integrity services. ​ Material Trends and Uncertainties ​ We generate our revenue from construction and engineering projects, as well as from providing a variety of infrastructure services.
As a result, we expect a potential increase in demand for our pipeline integrity services. ​ Material Trends and Uncertainties ​ We generate our revenue from construction and engineering projects, as well as from providing a variety of infrastructure services.
Risk Factors , we believe, with our full-service operations, broad geographic reach, financial position and technical expertise, we are well positioned to capitalize on opportunities and trends in our industries. ​ 31 Table of Contents We have seen and continue to anticipate potential changes to the already stringent regulatory and environmental requirements for many of our clients’ infrastructure projects, which may improve the timing and certainty of the projects.
“ Risk Factors ,” we believe, with our full-service offerings, broad geographic reach, stable financial position and technical expertise, we are well positioned to capitalize on opportunities and trends in our industries. ​ We have seen and continue to anticipate potential changes to the regulatory and environmental requirements for many of our clients’ infrastructure projects, which may impact the timing and certainty of projects.
The increase is primarily due to the acquisitions of PLH and B Comm in 2022 and increased activity in our power delivery and communications markets. ​ Gross profit decreased $3.7 million, or 1.8%, during 2023 compared to 2022. The decrease is primarily due to a decrease in margins, partially offset by growth in revenue.
The increase is primarily due to the acquisitions of PLH and B Comm in 2022 and increased activity in our power delivery and communications markets. ​ Operating income decreased $29.8 million, or 25.0%, during 2023 compared to 2022. The decrease is primarily due to a decrease in gross profit, partially offset by growth in revenue.
The IRA and other Federal and State programs provide critical funding to help construct and improve the infrastructure required to provide sufficient broadband access to areas that have historically had lower access to broadband services.
Federal and State programs provide critical 31 Table of Contents funding to help construct and improve the infrastructure required to provide sufficient broadband access to areas that have historically had lower access to broadband services.
Economic and other factors outside of our control may affect the amount and size of contracts we are awarded in any particular period. ​ We actively monitor the impact of the dynamic macroeconomic environment, including the impact of inflation and the instability in the banking sector, on all aspects of our business.
Economic and other factors outside of our control may affect the amount and size of contracts we are awarded in any particular period. ​ We actively monitor the impact of the macroeconomic environment, including the impact of inflation, tariffs, and volatility in the commodities markets, on all aspects of our business.
At December 31, 2023, there were no outstanding borrowings under the Revolving Credit Facility, commercial letters of credit outstanding were $51.6 million, and available borrowing capacity was $273.4 million. ​ Under the Amended Credit Agreement, we must make quarterly principal payments on the New Term Loan in an amount equal to approximately $11.8 million, with the balance due on August 1, 2027.
At December 31, 2024, there were no outstanding borrowings under the Revolving Credit Facility, commercial letters of credit outstanding were $52.3 million, and available borrowing capacity was $272.7 million. ​ Under the Credit Agreement, we must make quarterly principal payments on the Term Loan in an amount equal to approximately $11.8 million, with the balance due on August 1, 2027.
The increase of $20.7 million was due primarily to higher average debt balances from the borrowings related to the PLH acquisition and a higher average interest rate. ​ The weighted average interest rate on total debt outstanding at December 31, 2023, 2022 and 2021 was 6.8%, 6.2% and 2.8%, respectively. ​ 40 Table of Contents Provision for income taxes ​ Our provision for income taxes increased $25.3 million to $51.5 million for 2023 compared to 2022.
The increase of $39.0 million was due primarily to higher average debt balances from the borrowings related to the PLH acquisition and a higher average interest rate. ​ 39 Table of Contents The weighted average interest rate on total debt outstanding at December 31, 2024, 2023 and 2022 was 5.6%, 6.8% and 6.2%, respectively. ​ Provision for income taxes ​ Our provision for income taxes increased $22.5 million to $74.0 million for 2024 compared to 2023.
PLH is a utility-focused infrastructure services company with concentrations in key fast-growing regions of the United States. The transaction directly aligns with our strategic focus on higher-growth, higher margin markets and expands our capabilities in the utility markets including power delivery, communications, and gas utilities.
(“PLH”) in an all-cash transaction valued at approximately $429.0 million, net of cash acquired. PLH is a utility-focused infrastructure services company with concentrations in key fast-growing regions of the United States. The transaction directly aligns with our strategic focus on higher-growth, higher margin markets and expands our capabilities in the utility markets including power delivery, communications, and gas utilities.
We have experienced increased fuel and labor costs and anticipate that elevated levels of cost inflation could persist in 2024.
We have experienced increased operating costs and anticipate that elevated levels of cost inflation could persist in 2025.
Our current view of the outlook for our major end markets is as follows: ​ ​ ● Construction of alternative energy facilities, chemical processing facilities, renewable natural gas facilities, solar power facilities, wind farms, battery storage — We believe state and federal governments, investors and utilities remain committed to a changing fuel generation mix that continues to move toward more alternative energy sources.
Our current outlook for our primary end markets is as follows: ​ ​ ● Construction of alternative energy facilities, chemical processing facilities, renewable natural gas facilities, solar power facilities, battery storage — We believe state and federal governments, investors and utilities remain committed to a diversified power generation mix that includes more alternative energy sources.
The decrease was due to professional fees paid to advisors for the acquisitions of B Comm and PLH in 2022. ​ 2022 and 2021 ​ Transaction and related costs for the year ended December 31, 2022 were $20.1 million, an increase of $3.7 million or 22.3% compared to 2021, primarily due to an increase in professional fees paid to advisors for the acquisitions of PLH and B Comm. ​ Gain on Sale and Leaseback Transaction ​ On June 22, 2022, we completed a sale and leaseback transaction of land and buildings located in Carson, California for an aggregate sales price, net of closing costs, of $49.9 million.
The decrease was due to professional fees paid to advisors for the acquisitions of B Comm and PLH in 2022. ​ Gain on Sale and Leaseback Transaction ​ On June 22, 2022, we completed a sale and leaseback transaction of land and buildings located in Carson, California for an aggregate sales price, net of closing costs, of $49.9 million.
At December 31, 2023, there were no outstanding borrowings under the Revolving Credit Facility, commercial letters of credit outstanding were $51.6 million, and available borrowing capacity was $273.4 million. ​ In June 2023, we entered into an Accounts Receivable Facility (the “Facility”) with PNC Bank, National Association (“PNC”) to reduce interest costs and improve cash flows from trade accounts receivable.
In addition, there were no outstanding borrowings under our Canadian credit facilities as of December 31, 2024, commercial letters of credit outstanding were $1.0 million in Canadian dollars and available borrowing capacity was $13.0 million in Canadian dollars. ​ In June 2023, we entered into an Accounts Receivable Facility (the “Facility”) with PNC Bank, National Association (“PNC”) to reduce interest costs and improve cash flows from trade accounts receivable.
These opportunities would benefit our Energy segment. ​ ​ ● Construction of petroleum, natural gas, natural gas liquid, and other liquid pipelines — We expect that the volatility in the price of oil could reduce activities in most, if not all of the shale basins.
These opportunities would benefit our Energy segment. ​ ​ ● Construction of petroleum, natural gas, natural gas liquid, and other liquid pipelines — We expect that the volatility in the price of oil, gas, and condensates could reduce production of higher operating cost shale basins.
While permitting and other regulatory challenges create uncertainty as to the timing of some of our opportunities, we continue to see bidding activity for numerous midstream pipeline projects. We believe that we have the financial and operational strength to meet the challenge of either short-term delays or the impact of significant increases in work.
While permitting and other regulatory challenges create uncertainty as to the timing of some of our opportunities, we continue to see consistent investment activity across a wide range of projects in the end markets we serve. We believe that we have the financial and operational strength to meet the challenge of either short-term delays or significant increases in work.
Based on our results for the year ended December 31, 2023, a one-percentage point increase in our effective tax rate would have resulted in an increase in our income tax expense of approximately $1.8 million. ​ Litigation and contingencies — Litigation and contingencies are included in our consolidated financial statements based on our assessment of the expected outcome of litigation proceedings or the expected resolution of the contingency.
For tax positions not meeting the more likely than not test, no tax benefit is recorded. ​ Based on our results for the year ended December 31, 2024, a one-percentage point increase in our effective tax rate would have resulted in an increase in our income tax expense of approximately $2.5 million. ​ Litigation and contingencies — Litigation and contingencies are included in our consolidated financial statements based on our assessment of the expected outcome of litigation proceedings or the expected resolution of the contingency.
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on ultimate settlement with the tax authority. For tax positions not meeting the more likely than not test, no tax benefit is recorded.
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on ultimate settlement with the tax authority.
SG&A expense as a percentage of revenue for the year ended December 31, 2022 decreased to 6.4% compared to 6.6% for the year ended December 31, 2021, primarily due to increased revenue. ​ 39 Table of Contents Transaction and related costs ​ 2023 and 2022 ​ Transaction and related costs for the year ended December 31, 2023 were $5.7 million, a decrease of $14.4 million or 71.7% compared to 2022.
SG&A expense as a percentage of revenue for the year ended December 31, 2023 decreased to 5.8% compared to 6.4% for the year ended December 31, 2022, primarily due to increased revenue. ​ Transaction and related costs ​ 2024 and 2023 ​ Transaction and related costs for the year ended December 31, 2024 were $2.4 million, a decrease of $3.2 million or 57.0% compared to 2023 primarily related to a decrease in integration costs for the PLH acquisition. ​ 2023 and 2022 ​ Transaction and related costs for the year ended December 31, 2023 were $5.7 million, a decrease of $14.4 million or 71.7% compared to 2022.
The change year-over-year was primarily due to improvement in the impact from the changes in assets and liabilities and the inclusion of $40.1 million of gain on a sale and leaseback transaction in 2022 net income. ​ The significant components of the $0.1 million change in assets and liabilities for the year ended December 31, 2023 are summarized as follows: ​ ● Contract assets increased by $229.8 million from December 31, 2022 primarily due to significant revenue growth in 2023; ​ ​ ● Accounts receivable increased $16.9 million from December 31, 2022, which is net of the $75.0 million we received from the Accounts Receivable Securitization Facility; ​ ​ ● Accounts payable increased $93.4 million from December 31, 2022 primarily due to increased revenue and the timing of payments to our vendors; ​ ​ ● Contract liabilities increased $84.7 million, primarily due to higher deferred revenue; and ​ ​ ● Other current assets decreased by $45.6 million primarily due to an income tax refund and the timing of prepaid material purchases. ​ 2022 and 2021 ​ Net cash provided by operating activities for 2022 was $83.3 million, an increase of $3.6 million compared to 2021.
The change year-over-year was primarily due to improvement in the impact from the changes in assets and liabilities and the inclusion of $40.1 million of gain on a sale and leaseback transaction in 2022 net income. ​ The significant components of the $0.1 million change in assets and liabilities for the year ended December 31, 2023 are summarized as follows: ​ ● Contract assets increased by $229.8 million from December 31, 2022 primarily due to significant revenue growth in 2023; ​ ● Accounts receivable increased $16.9 million from December 31, 2022, which is net of the $75.0 million we received from the Accounts Receivable Securitization Facility; ​ ● Accounts payable increased $93.4 million from December 31, 2022 primarily due to increased revenue and the timing of payments to our vendors; ​ ● Contract liabilities increased $84.7 million, primarily due to higher deferred revenue; and 44 Table of Contents ​ ● Other current assets decreased by $45.6 million primarily due to an income tax refund and the timing of prepaid material purchases. ​ Investing activities ​ Net cash used in investing activities was $27.2 million, $30.0 million, and $481.9 million in the years ended December 31, 2024, 2023 and 2022, respectively. ​ We received net proceeds of $49.9 million from a sale and leaseback transaction of land and buildings during the year ended December 31, 2022. ​ We purchased property and equipment for $126.6 million, $103.0 million and $94.7 million in the years ended December 31, 2024, 2023 and 2022 respectively, principally for our construction activities and facilities investment.
However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. In some cases, our actual cost increases have exceeded the contractual caps, and therefore negatively impacted our operations.
However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted.
As a result, we usually experience higher revenue and earnings in the second, third and fourth quarters of the year as compared to the first quarter. ​ Our project values range in size from several hundred dollars to several hundred million dollars. The bulk of our work is comprised of project sizes that average less than $3.0 million.
As 33 Table of Contents a result, we usually experience higher revenue and earnings in the second, third and fourth quarters of the year as compared to the first quarter. ​ Our project values range in size from several hundred dollars to several hundred million dollars.
The interest rate swap matures on January 31, 2025. ​ 47 Table of Contents Canadian Credit Facilities ​ We have credit facilities totaling $14.0 million in Canadian dollars for the purposes of issuing commercial letters of credit and providing funding for working capital.
The interest rate swap matured on January 31, 2025. ​ Canadian Credit Facilities ​ We have credit facilities totaling $14.0 million in Canadian dollars for the purposes of issuing commercial letters of credit and providing funding for working capital. At December 31, 2024, commercial letters of credit outstanding were $1.0 million in Canadian dollars and there were no outstanding borrowings.
We estimate MSA Backlog based on historical trends, anticipated seasonal impacts and estimates of customer demand based on information from our customers. ​ 49 Table of Contents Fixed and MSA Backlog by reporting segment for the periods ending December 31, 2023 and 2022 were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 ​ ​ ​ Next 12 Months ​ Total ​ Next 12 Months ​ Total 00 Utilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed Backlog ​ $ 96.3 ​ $ 96.3 ​ $ 183.3 ​ $ 183.3 ​ MSA Backlog ​ ​ 1,776.5 ​ ​ 5,093.6 ​ ​ 1,649.9 ​ ​ 4,967.1 ​ Backlog ​ $ 1,872.8 ​ $ 5,189.9 ​ $ 1,833.2 ​ $ 5,150.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Energy ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed Backlog ​ $ 2,599.0 ​ $ 5,102.6 ​ $ 1,920.8 ​ $ 3,391.8 ​ MSA Backlog ​ ​ 308.2 ​ ​ 602.4 ​ ​ 258.5 ​ ​ 552.8 ​ Backlog ​ $ 2,907.2 ​ $ 5,705.0 ​ $ 2,179.3 ​ $ 3,944.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed Backlog ​ $ 2,695.3 ​ $ 5,198.9 ​ $ 2,104.1 ​ $ 3,575.1 ​ MSA Backlog ​ ​ 2,084.7 ​ ​ 5,696.0 ​ ​ 1,908.4 ​ ​ 5,519.9 ​ Backlog ​ $ 4,780.0 ​ $ 10,894.9 ​ $ 4,012.5 ​ $ 9,095.0 ​ ​ Backlog should not be considered a comprehensive indicator of future revenue, as a percentage of our revenue is derived from projects that are not part of a backlog calculation.
We estimate MSA Backlog based on historical trends, anticipated seasonal impacts and estimates of customer demand based on information from our customers. ​ Fixed and MSA Backlog by reporting segment for the periods ending December 31, 2024 and 2023 were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ Next 12 Months ​ Total ​ Next 12 Months ​ Total Utilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed Backlog ​ $ 71.1 ​ $ 71.1 ​ $ 96.3 ​ $ 96.3 MSA Backlog ​ ​ 1,822.6 ​ ​ 5,449.8 ​ ​ 1,776.5 ​ ​ 5,093.6 Backlog ​ $ 1,893.7 ​ $ 5,520.9 ​ $ 1,872.8 ​ $ 5,189.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Energy ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed Backlog ​ $ 3,160.6 ​ $ 6,023.7 ​ $ 2,599.0 ​ $ 5,102.6 MSA Backlog ​ ​ 142.7 ​ ​ 320.7 ​ ​ 308.2 ​ ​ 602.4 Backlog ​ $ 3,303.3 ​ $ 6,344.4 ​ $ 2,907.2 ​ $ 5,705.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed Backlog ​ $ 3,231.7 ​ $ 6,094.8 ​ $ 2,695.3 ​ $ 5,198.9 MSA Backlog ​ ​ 1,965.3 ​ ​ 5,770.5 ​ ​ 2,084.7 ​ ​ 5,696.0 Backlog ​ $ 5,197.0 ​ $ 11,865.3 ​ $ 4,780.0 ​ $ 10,894.9 ​ Backlog should not be considered a comprehensive indicator of future revenue, as a percentage of our revenue is derived from projects that are not part of a backlog calculation.
At December 31, 2023, we had bid and completion bonds issued and outstanding totaling approximately $5.9 billion. The remaining performance obligation on those bonded projects totaled approximately $2.7 billion at December 31, 2023.
At December 31, 2024, we had bid and payment/performance bonds issued and outstanding totaling approximately $8.1 billion. The remaining performance obligation on those bonded projects totaled approximately $3.0 billion at December 31, 2024.
The increase was primarily due to growth in both our Energy and Utilities segments, and the acquisitions of PLH and B Comm in 2022. 38 Table of Contents ​ 2022 and 2021 ​ Revenue for the year ended December 31, 2022 increased by $923.0 million, or 26.4%, compared to 2021.
The increase was primarily due to growth in both our Energy and Utilities segments, and the acquisitions of PLH and B Comm in 2022. ​ Gross Profit ​ 2024 and 2023 ​ For the year ended December 31, 2024, gross profit increased by $115.8 million, or 19.7%, compared to 2023. The increase was primarily due to an increase in revenue.
The total outstanding balance of trade accounts receivable that have been sold and derecognized is $75.0 million as of December 31, 2023. As of December 31, 2023, we had $25.0 million in available capacity under the Facility. ​ In order to maintain sufficient liquidity, we evaluate our working capital requirements on a regular basis.
As of December 31, 2024, we had $75.0 million in available capacity under the Facility. ​ In order to maintain sufficient liquidity, we evaluate our working capital requirements on a regular basis.
Because of the cyclical nature of our business, the financial results for any period may fluctuate from prior periods, and our financial condition and operating results may vary from quarter to quarter.
Our business may be affected by declines, or delays in new projects, or by client project schedules. Because of the cyclical nature of some of our business, the financial results for any period may fluctuate from prior periods, and our financial condition and operating results may vary from quarter to quarter.
Renewable generation will require substations and transmission lines to connect the new generation sources to customers. In addition, current federal legislation also requires the power industry to meet federal reliability standards for its transmission and distribution systems. We also expect to benefit from the spending authorized in the 2021 Infrastructure Investment and Jobs Act intended to improve the electric grid.
New natural gas and renewable generation will require substations and transmission lines to connect the new generation sources to customers. In addition, current federal legislation also requires the power industry to meet federal reliability standards for its transmission and distribution systems.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFrom time to time, we may use certain derivative instruments to hedge our exposure to variable interest rates. As of December 31, 2023, $300.0 million of our variable rate debt outstanding was economically hedged.
Biggest changeFrom time to time, we may use certain derivative instruments to hedge our exposure to variable interest rates. As of December 31, 2024, $300.0 million of our variable rate debt outstanding was economically hedged. The interest rate swap matured on January 31, 2025.
These instruments have in the past included interest rate swaps and may in the future include foreign currency exchange contracts, interest rate swaps and hedges against commodity price fluctuations. ​ The carrying amounts for cash and cash equivalents, accounts receivable, short term investments, short-term debt, accounts payable and accrued liabilities shown in the Consolidated Balance Sheets approximate fair value at December 31, 2023, due to the generally short maturities of these items. ​ 50 Table of Contents Our Revolving Credit Facility and Term Loan bear interest at a variable rate which exposes us to interest rate risk.
These instruments have in the past included interest rate swaps and may in the future include foreign currency exchange contracts, interest rate swaps and hedges against commodity price fluctuations. ​ The carrying amounts for cash and cash equivalents, accounts receivable, short term investments, short-term debt, accounts payable and accrued liabilities shown in the Consolidated Balance Sheets approximate fair value at December 31, 2024, due to the generally short maturities of these items. ​ Our Revolving Credit Facility and Term Loan bear interest at a variable rate which exposes us to interest rate risk.
Based on our variable rate debt outstanding as of December 31, 2023, a 1.0% increase or decrease in interest rates would change annual interest expense by approximately $5.7 million. ​ We do not execute transactions or use financial derivative instruments for trading or speculative purposes.
Based on our variable rate debt outstanding as of December 31, 2024, a 1.0% increase or decrease in interest rates would change annual interest expense by approximately $3.8 million. ​ We do not execute transactions or use financial derivative instruments for trading or speculative purposes.

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