ROLLING MEADOWS, Ill., Nov. 02, 2016 (GLOBE NEWSWIRE) -- MYR Group Inc. (“MYR”) (NASDAQ:MYRG), a leading specialty contractor serving the electrical infrastructure market in the United States and Canada, today announced its third-quarter and first nine-months 2016 financial results.
Highlights
- Third quarter revenues of $283.3 million, a record high quarterly revenue
- Third quarter net income of $6.1 million, or $0.38 per share
- Backlog increase of $145.6 million, or 30.6 percent, from the prior quarter to $620.6 million, our highest level since March 31, 2012
- Awarded the Cross Texas Transmission contract valued at approximately $125 million
- Third quarter common stock repurchases of $5.5 million and $20.0 million of additional repurchase capacity remains authorized
- Acquired substantially all of the assets of Western Pacific Enterprises, an electrical contracting firm operating in western Canada, on October 28, 2016, for approximately $16.1 million CDN
Management Comments
Bill Koertner, MYR’s President and CEO, said, “Third-quarter 2016 revenue and net income improved sequentially over the first two quarters of 2016. Revenue and margins also improved year over year due mainly to organic growth and acquisitions coupled with improved project execution. We also had a sizable increase in our backlog which was driven primarily by the Cross Texas Transmission award to construct approximately 68 miles of 345kV transmission line valued at approximately $125 million. While bidding activity continued at a robust pace during the quarter, both our T&D and C&I markets remain highly competitive. Our strategic acquisition of Western Pacific Enterprises (“WPE”), was completed on October 28 and will expand our C&I and T&D capabilities in western Canada to serve new and existing customers. WPE has an exceptional reputation in its market region and is managed by an excellent management team that shares MYR’s values.”
Third-Quarter Results
MYR reported third-quarter 2016 revenues of $283.3 million, an increase of $13.4 million, or 5.0 percent, compared to the third quarter of 2015. Specifically, the T&D segment reported revenues of $206.4 million, an increase of $2.5 million, or 1.3 percent, from the third quarter of 2015, primarily due to organic and acquisitive growth, partially offset by lower revenue from large, multi-year contracts. The C&I segment reported third-quarter 2016 revenues of $76.8 million, an increase of $10.8 million, or 16.4 percent, from the third quarter of 2015, primarily due to organic growth and acquisition expansion into new markets.
Consolidated gross profit increased to $34.1 million in the third quarter of 2016, compared to $28.6 million in the third quarter of 2015. The increase in gross profit was primarily due to higher revenues and gross margin. Gross margin increased to 12.0 percent for the third quarter of 2016 from 10.6 percent for the third quarter of 2015. The quarter-over-quarter increase in gross margin was primarily due to favorable close-outs and improved performance on several projects, offset by inclement weather experienced on certain other projects. Changes in estimates of gross profit on certain projects resulted in a gross margin increase of 0.7 percent compared to a decrease of 0.5 percent for the third quarter of 2016 and 2015, respectively.
Selling, general and administrative expenses increased to $23.2 million in the third quarter of 2016 compared to $19.0 million in the third quarter of 2015 primarily due to $1.9 million of costs associated with our expansion into new geographic markets, as well as higher bonus and profit sharing costs, and increases in other payroll costs to support new and existing operations. As a percentage of revenues, selling, general and administrative expenses increased to 8.2 percent for the third quarter of 2016 from 7.0 percent for the same quarter of 2015.
For the third quarter of 2016, net income was $6.1 million, or $0.38 per diluted share, compared to $6.2 million, or $0.29 per diluted share, for the same period of 2015. Third-quarter 2016 EBITDA, a non-GAAP financial measure, was $20.5 million, or 7.2 percent of revenues, compared to $20.1 million, or 7.4 percent of revenues, in the third quarter of 2015.
First Nine-Months Results
MYR reported first nine-months 2016 revenues of $798.8 million, an increase of $8.3 million, or 1.1 percent, compared to the first nine months of 2015. Specifically, the T&D segment reported revenues of $568.0 million, a decrease of $25.7 million, or 4.3 percent, from the first nine months of 2015, primarily due to a decline in revenue from large, multi-year transmission projects partially offset by organic and acquisition growth. The C&I segment reported first nine-months 2016 revenues of $230.8 million, an increase of $34.0 million, or 17.3 percent, from the first nine months of 2015, due primarily to organic and acquisition expansion into new markets.
Consolidated gross profit increased to $92.8 million in the first nine months of 2016, compared to $89.7 million in the first nine months of 2015. The increase in gross profit was primarily due to higher revenue and gross margin. Gross margin increased to 11.6 percent for the first nine months of 2016 from 11.4 percent for the first nine months of 2015. The increase in gross margin was largely due to favorable close-outs and improved performance on several projects. This was partially offset by lower bid margins caused by increased competition in many of our markets and an increase in shorter duration projects (which can affect labor productivity, fleet utilization, mobilization costs and demobilization costs) and write-downs due to unrecognized, pending change orders and a project claim, inclement weather and lower productivity experienced on certain projects. Changes in estimates of gross profit on certain projects resulted in a gross margin decrease of 0.5 percent and an increase of 0.5 percent for the first nine months of 2016 and 2015, respectively.
Selling, general and administrative expenses increased to $69.6 million in the first nine months of 2016 compared to $56.5 million in the first nine months of 2015. The increase in selling, general and administrative expenses in the first nine months of 2016 was primarily due to $7.2 million of costs associated with our expansion into new geographic markets, $1.0 million associated with activist investor activities, increased bonus costs and higher payroll costs to support operations. As a percentage of revenues, selling, general and administrative expenses increased to 8.7 percent for the first nine months of 2016 from 7.2 percent for the first nine months of 2015.
For the first nine months of 2016, net income was $13.6 million, or $0.77 per diluted share, compared to $21.4 million, or $1.01 per diluted share, for the same period of 2015. First nine-months 2016 EBITDA, a non-GAAP financial measure, was $52.7 million, or 6.6 percent of revenues, compared to $62.9 million, or 8.0 percent of revenues, in the first nine months of 2015.
Share Repurchase Program
In the 2016 third quarter, MYR purchased 224,189 shares of its common stock for $5.5 million, resulting in repurchases of 4.2 million shares, for $99.8 million, during the first nine months of 2016, under the share repurchase program (“Repurchase Program”). Since the inception of our Repurchase Program, MYR has purchased a total of 6,024,978 shares of our common stock for $142.5 million at an average share price of $23.64 per share. As of September 30, 2016, we had $20.0 million of remaining availability to purchase shares of our common stock under the Repurchase Program.
Backlog
As of September 30, 2016, MYR's backlog was $620.6 million, consisting of $436.9 million in the T&D segment and $183.7 million in the C&I segment. Total backlog of $620.6 million was $145.6 million higher than the $475.0 million reported as of June 30, 2016. Our backlog total has increased in nine of the past eleven quarters and, as of September 30, 2016, was at its highest level since March 31, 2012. T&D backlog increased $132.3 million, or 43.4 percent, from June 30, 2016, while C&I backlog increased $13.3 million, or 7.8 percent, over the same period. Total backlog at September 30, 2016 increased $195.5 million, or 46.0 percent, from the $425.1 million reported at September 30, 2015.
Balance Sheet
As of September 30, 2016, MYR had $192.3 million of borrowing availability under its credit facility.
Subsequent Event
On October 28, 2016, MYR Group completed the acquisition of substantially all of the assets of Western Pacific Enterprises GP and of Western Pacific Enterprises Ltd., except for certain real estate owned by Western Pacific Enterprises Ltd., which conducted business as Western Pacific Enterprises GP (“WPE”), an electrical contracting firm in western Canada. Headquartered in Coquitlam, British Columbia, WPE will provide a wide range of commercial and industrial electrical construction capabilities under the Company’s C&I segment. WPE will also provide substation construction capabilities under MYR’s T&D segment. The total consideration paid was approximately $16.1 million CDN, subject to working capital adjustments, which was funded through borrowings on the Company’s 2016 Facility. MYR Group does not expect WPE's revenues or profits to be material to the Company's 2016 operating results. Approximately $0.1 million of acquisition-related costs associated with this acquisition were expensed by the Company in the nine months ended September 30, 2016.
Non-GAAP Financial Measures
To supplement MYR’s financial statements presented in accordance with generally accepted accounting principles in the United States (GAAP), MYR uses certain non-GAAP measures. Reconciliation to the nearest GAAP measures of all non-GAAP measures included in this press release can be found at the end of this release. MYR’s definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.
MYR believes that these non-GAAP measures are useful because they (i) provide both management and investors meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results, (ii) permit investors to view MYR’s performance using the same tools that management uses to evaluate MYR’s past performance, reportable business segments and prospects for future performance, (iii) publicly disclose results that are relevant to financial covenants included in MYR’s credit facility and (iv) otherwise provide supplemental information that may be useful to investors in evaluating MYR.
Conference Call
MYR will host a conference call to discuss its third-quarter 2016 results on Thursday, November 3, 2016, at 9:30 a.m. Central time. To participate in the conference call via telephone, please dial (877) 561-2750 (domestic) or (763) 416-8565 (international) at least five minutes prior to the start of the event. A replay of the conference call will be available through Wednesday, November 9, 2016, at 11:59 p.m. Eastern time, by dialing (855) 859-2056 or (404) 537-3406, and entering conference ID 98416360. MYR will also broadcast the conference call live via the internet. Interested parties may access the webcast through the Investor Relations section of MYR's website at www.myrgroup.com. Please access the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. The webcast will be available until Wednesday, November 9, 2016, at 11:59 P.M. Eastern time.
About MYR
MYR is a leading specialty contractor serving the electrical infrastructure market throughout the United States and Canada, has the experience and expertise to complete electrical installations of any type and size. MYR’s comprehensive services on electric transmission and distribution networks and substation facilities include design, engineering, procurement, construction, upgrade, maintenance and repair services. MYR’s transmission and distribution customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. MYR also provides commercial and industrial electrical contracting services to general contractors, commercial and industrial facility owners, local governments and developers generally throughout the western and northeastern United States and western Canada. For more information, visit myrgroup.com.
Forward-Looking Statements
Various statements in this announcement, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenue, income, capital spending, segment improvements and investments. Forward-looking statements are generally accompanied by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “likely,” “unlikely,” “possible,” “potential,” “should” or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this announcement speak only as of the date of this announcement; we disclaim any obligation to update these statements (unless required by securities laws), and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. No forward-looking statement can be guaranteed and actual results may differ materially from those projected. Forward-looking statements in this announcement should be evaluated together with the many uncertainties that affect MYR's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of MYR's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and in any risk factors or cautionary statements contained in MYR's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
Financial tables follow…
| MYR GROUP INC. Consolidated Balance Sheets As of September 30, 2016 and December 31, 2015 | |||||||
| September 30, | December 31, | ||||||
| (In thousands, except share and per share data) | 2016 | 2015 | |||||
| (unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 584 | $ | 39,797 | |||
| Accounts receivable, net of allowances of $362 and $376, respectively | 185,454 | 187,235 | |||||
| Costs and estimated earnings in excess of billings on uncompleted contracts | 80,305 | 51,486 | |||||
| Receivable for insurance claims in excess of deductibles | 12,930 | 11,290 | |||||
| Refundable income taxes | 1,296 | 5,617 | |||||
| Other current assets | 5,383 | 7,942 | |||||
| Total current assets | 285,952 | 303,367 | |||||
| Property and equipment, net of accumulated depreciation of $203,786 and $181,575, respectively | 153,009 | 160,678 | |||||
| Goodwill | 46,781 | 47,124 | |||||
| Intangible assets, net of accumulated amortization of $4,489 and $3,798, respectively | 11,017 | 11,362 | |||||
| Other assets | 2,850 | 2,394 | |||||
| Total assets | $ | 499,609 | $ | 524,925 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Current maturities of long-term debt, including capital leases | $ | 1,062 | $ | — | |||
| Accounts payable | 85,867 | 73,300 | |||||
| Billings in excess of costs and estimated earnings on uncompleted contracts | 46,052 | 40,614 | |||||
| Accrued self insurance | 37,267 | 36,967 | |||||
| Other current liabilities | 28,101 | 28,856 | |||||
| Total current liabilities | 198,349 | 179,737 | |||||
| Deferred income tax liabilities | 14,242 | 14,382 | |||||
| Long-term debt, including capital leases, net of current maturities | 37,500 | — | |||||
| Other liabilities | 845 | 926 | |||||
| Total liabilities | 250,936 | 195,045 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity: | |||||||
| Preferred stock—$0.01 par value per share; 4,000,000 authorized shares; | |||||||
| none issued and outstanding at September 30, 2016 and December 31, 2015 | — | — | |||||
| Common stock—$0.01 par value per share; 100,000,000 authorized shares; | |||||||
| 16,064,682 and 19,969,347 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 158 | 198 | |||||
| Additional paid-in capital | 132,917 | 161,342 | |||||
| Accumulated other comprehensive income | 51 | 116 | |||||
| Retained earnings | 115,547 | 168,224 | |||||
| Total stockholders’ equity | 248,673 | 329,880 | |||||
| Total liabilities and stockholders’ equity | $ | 499,609 | $ | 524,925 | |||
| MYR GROUP INC. Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) Three and Nine Months Ended September 30, 2016 and 2015 | |||||||||||||||
| Three months ended | Nine months ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| (In thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||
| Contract revenues | $ | 283,259 | $ | 269,861 | $ | 798,827 | $ | 790,497 | |||||||
| Contract costs | 249,196 | 241,241 | 706,048 | 700,767 | |||||||||||
| Gross profit | 34,063 | 28,620 | 92,779 | 89,730 | |||||||||||
| Selling, general and administrative expenses | 23,203 | 18,974 | 69,579 | 56,513 | |||||||||||
| Amortization of intangible assets | 188 | 84 | 691 | 251 | |||||||||||
| Gain on sale of property and equipment | (467 | ) | (357 | ) | (1,079 | ) | (1,574 | ) | |||||||
| Income from operations | 11,139 | 9,919 | 23,588 | 34,540 | |||||||||||
| Other income (expense) | |||||||||||||||
| Interest income | — | 8 | 5 | 23 | |||||||||||
| Interest expense | (408 | ) | (180 | ) | (833 | ) | (546 | ) | |||||||
| Other, net | (417 | ) | 438 | (361 | ) | 349 | |||||||||
| Income before provision for income taxes | 10,314 | 10,185 | 22,399 | 34,366 | |||||||||||
| Income tax expense | 4,168 | 4,010 | 8,766 | 12,945 | |||||||||||
| Net income | $ | 6,146 | $ | 6,175 | $ | 13,633 | $ | 21,421 | |||||||
| Income per common share: | |||||||||||||||
| —Basic | $ | 0.39 | $ | 0.30 | $ | 0.78 | $ | 1.03 | |||||||
| —Diluted | $ | 0.38 | $ | 0.29 | $ | 0.77 | $ | 1.01 | |||||||
| Weighted average number of common shares and potential common shares outstanding: | |||||||||||||||
| —Basic | 15,805 | 20,788 | 17,489 | 20,662 | |||||||||||
| —Diluted | 16,177 | 21,214 | 17,817 | 21,113 | |||||||||||
| Net income | $ | 6,146 | $ | 6,175 | $ | 13,633 | $ | 21,421 | |||||||
| Other comprehensive income (loss): | |||||||||||||||
| Foreign currency translation adjustment | 19 | 50 | (65 | ) | 69 | ||||||||||
| Other comprehensive income (loss) | 19 | 50 | (65 | ) | 69 | ||||||||||
| Total comprehensive income | $ | 6,165 | $ | 6,225 | $ | 13,568 | $ | 21,490 | |||||||
| MYR GROUP INC. Unaudited Consolidated Statements of Cash Flows Nine Months Ended September 30, 2016 and 2015 | |||||||
| Nine months ended | |||||||
| September 30, | |||||||
| (In thousands) | 2016 | 2015 | |||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 13,633 | $ | 21,421 | |||
| Adjustments to reconcile net income to net cash flows provided by operating activities — | |||||||
| Depreciation and amortization of property and equipment | 28,747 | 27,767 | |||||
| Amortization of intangible assets | 691 | 251 | |||||
| Stock-based compensation expense | 3,488 | 3,843 | |||||
| Deferred income taxes | (116 | ) | (186 | ) | |||
| Gain on sale of property and equipment | (1,079 | ) | (1,574 | ) | |||
| Other non-cash items | (38 | ) | 175 | ||||
| Changes in operating assets and liabilities | |||||||
| Accounts receivable, net | 1,770 | (24,301 | ) | ||||
| Costs and estimated earnings in excess of billings on | |||||||
| uncompleted contracts | (28,774 | ) | (31,319 | ) | |||
| Receivable for insurance claims in excess of deductibles | (1,640 | ) | 920 | ||||
| Other assets | 7,008 | (1,234 | ) | ||||
| Accounts payable | 11,022 | 17,014 | |||||
| Billings in excess of costs and estimated earnings on | |||||||
| uncompleted contracts | 5,454 | 6,079 | |||||
| Accrued self insurance | 299 | (3,387 | ) | ||||
| Other liabilities | 32 | (4,774 | ) | ||||
| Net cash flows provided by operating activities | 40,497 | 10,695 | |||||
| Cash flows from investing activities: | |||||||
| Proceeds from sale of property and equipment | 2,544 | 1,980 | |||||
| Cash paid for acquired business | — | (11,374 | ) | ||||
| Purchases of property and equipment | (17,948 | ) | (42,795 | ) | |||
| Net cash flows used in investing activities | (15,404 | ) | (52,189 | ) | |||
| Cash flows from financing activities: | |||||||
| Net borrowings under revolving lines of credit | 33,407 | — | |||||
| Payment of principal obligations under capital leases | (442 | ) | — | ||||
| Increase in outstanding checks | 2,540 | — | |||||
| Proceeds from exercise of stock options | 2,080 | 1,823 | |||||
| Debt issuance costs | (1,006 | ) | — | ||||
| Excess tax benefit from stock-based awards | 480 | 1,676 | |||||
| Repurchase of common shares | (101,483 | ) | (9,240 | ) | |||
| Other financing activities | 63 | 28 | |||||
| Net cash flows used in financing activities | (64,361 | ) | (5,713 | ) | |||
| Effect of exchange rate changes on cash | 55 | — | |||||
| Net decrease in cash and cash equivalents | (39,213 | ) | (47,207 | ) | |||
| Cash and cash equivalents: | |||||||
| Beginning of period | 39,797 | 77,636 | |||||
| End of period | $ | 584 | $ | 30,429 | |||
| Supplemental cash flow information: | |||||||
| Noncash investing activities: | |||||||
| Acquisition of property and equipment acquired under capital lease arrangements | $ | 5,580 | $ | — | |||
| Noncash financing activities: | |||||||
| Capital lease obligations initiated | $ | 5,580 | $ | — | |||
| MYR GROUP INC. Unaudited Consolidated Selected Data and Net Income Per Share Three and Twelve Months Ended September 30, 2016 and 2015 | ||||||||||||||||||||||||||
| Three months ended | Last twelve months ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| (in thousands, except shares and per share data) | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||
| Summary Statement of Operations Data: | ||||||||||||||||||||||||||
| Contract revenues | $ | 283,259 | $ | 269,861 | $ | 1,070,011 | $ | 1,041,476 | ||||||||||||||||||
| Gross profit | $ | 34,063 | $ | 28,620 | $ | 125,390 | $ | 131,812 | ||||||||||||||||||
| Income from operations | $ | 11,139 | $ | 9,919 | $ | 33,889 | $ | 57,010 | ||||||||||||||||||
| Income before provision for income taxes | $ | 10,314 | $ | 10,185 | $ | 32,332 | $ | 56,662 | ||||||||||||||||||
| Income Tax Expense | $ | 4,168 | $ | 4,010 | $ | 12,818 | $ | 21,114 | ||||||||||||||||||
| Net income | $ | 6,146 | $ | 6,175 | $ | 19,514 | $ | 35,548 | ||||||||||||||||||
| Effective Tax Rate | 40.4 | % | 39.4 | % | 39.6 | % | 37.3 | % | ||||||||||||||||||
| Per Share Data: | ||||||||||||||||||||||||||
| Income per common share: | ||||||||||||||||||||||||||
| - Basic | $ | 0.39 | $ | 0.30 | $ | 1.10 | (1 | ) | $ | 1.72 | (1 | ) | ||||||||||||||
| - Diluted | $ | 0.38 | $ | 0.29 | $ | 1.08 | (1 | ) | $ | 1.68 | (1 | ) | ||||||||||||||
| Weighted average number of common shares | ||||||||||||||||||||||||||
| and potential common shares outstanding : | ||||||||||||||||||||||||||
| - Basic | 15,805 | 20,788 | 18,171 | (2 | ) | 20,670 | (2 | ) | ||||||||||||||||||
| - Diluted | 16,177 | 21,214 | 18,518 | (2 | ) | 21,159 | (2 | ) | ||||||||||||||||||
| September 30, | December 31, | September 30, | September 30, | |||||||||||||||||||||||
| (in thousands) | 2016 | 2015 | 2015 | 2014 | ||||||||||||||||||||||
| Summary Balance Sheet Data: | ||||||||||||||||||||||||||
| Total assets | $ | 499,609 | $ | 524,925 | $ | 559,706 | $ | 528,699 | ||||||||||||||||||
| Total stockholders' equity (book value) | $ | 248,673 | $ | 329,880 | $ | 341,254 | $ | 311,311 | ||||||||||||||||||
| Goodwill and intangible assets | $ | 57,798 | $ | 58,486 | $ | 58,281 | $ | 56,548 | ||||||||||||||||||
| Total debt | $ | 38,562 | $ | — | $ | — | $ | — | ||||||||||||||||||
| Last twelve months ended | ||||||||||||||||||||||||||
| September 30, | ||||||||||||||||||||||||||
| 2016 | 2015 | |||||||||||||||||||||||||
| Financial Performance Measures (3): | ||||||||||||||||||||||||||
| Reconciliation of Non-GAAP measures: | ||||||||||||||||||||||||||
| Net income | $ | 19,514 | $ | 35,548 | ||||||||||||||||||||||
| Interest expense, net | 1,021 | 695 | ||||||||||||||||||||||||
| Tax impact of interest | (404 | ) | (259 | ) | ||||||||||||||||||||||
| EBIT, net of taxes (4) | $ | 20,131 | $ | 35,984 | ||||||||||||||||||||||
| See notes at the end of this earnings release. | ||||||||||||||||||||||||||
| MYR GROUP INC. Unaudited Performance Measures and Reconciliation of Non-GAAP Measures Three and Twelve Months Ended September 30, 2016 and 2015 | |||||||||||||||||||||
| Three months ended | Last twelve months ended | ||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| (in thousands, except shares, per share data, ratios and percentages) | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Financial Performance Measures (3): | |||||||||||||||||||||
| EBITDA (5) | $ | 20,470 | $ | 20,056 | $ | 72,802 | $ | 93,997 | |||||||||||||
| EBITDA per Diluted Share (6) | $ | 1.27 | $ | 0.95 | $ | 3.93 | $ | 4.44 | |||||||||||||
| Free Cash Flow (7) | $ | (11,676 | ) | $ | (11,398 | ) | $ | 51,050 | $ | (13,801 | ) | ||||||||||
| Book Value per Period End Share (8) | $ | 15.13 | $ | 16.07 | |||||||||||||||||
| Tangible Book Value (9) | $ | 190,875 | $ | 282,973 | |||||||||||||||||
| Tangible Book Value per Period End Share (10) | $ | 11.61 | $ | 13.33 | |||||||||||||||||
| Debt to Equity Ratio (11) | 0.2 | 0.0 | |||||||||||||||||||
| Asset Turnover (12) | 1.91 | 1.97 | |||||||||||||||||||
| Return on Assets (13) | 3.5 | % | 6.7 | % | |||||||||||||||||
| Return on Equity (14) | 5.7 | % | 11.4 | % | |||||||||||||||||
| Return on Invested Capital (17) | 6.5 | % | 14.6 | % | |||||||||||||||||
| Reconciliation of Non-GAAP Measures: | |||||||||||||||||||||
| Reconciliation of Net Income to EBITDA: | |||||||||||||||||||||
| Net income | $ | 6,146 | $ | 6,175 | $ | 19,514 | $ | 35,548 | |||||||||||||
| Interest expense, net | 408 | 172 | 1,021 | 695 | |||||||||||||||||
| Provision for income taxes | 4,168 | 4,010 | 12,818 | 21,114 | |||||||||||||||||
| Depreciation and amortization | 9,748 | 9,699 | 39,449 | 36,640 | |||||||||||||||||
| EBITDA (5) | $ | 20,470 | $ | 20,056 | $ | 72,802 | $ | 93,997 | |||||||||||||
| Reconciliation of Net Income per Diluted Share | |||||||||||||||||||||
| to EBITDA per Diluted Share: | |||||||||||||||||||||
| Net Income per share: | $ | 0.38 | $ | 0.29 | $ | 1.08 | $ | 1.68 | |||||||||||||
| Interest expense, net, per share | 0.03 | 0.01 | 0.05 | 0.03 | |||||||||||||||||
| Provision for income taxes per share | 0.26 | 0.19 | 0.68 | 1.00 | |||||||||||||||||
| Depreciation and amortization per share | 0.60 | 0.46 | 2.12 | 1.73 | |||||||||||||||||
| EBITDA per Diluted Share (6) | $ | 1.27 | $ | 0.95 | $ | 3.93 | $ | 4.44 | |||||||||||||
| Calculation of Free Cash Flow: | |||||||||||||||||||||
| Net cash flow from operating activities | $ | (5,965 | ) | $ | 1,666 | $ | 72,802 | $ | 32,047 | ||||||||||||
| Less: cash used in purchasing property and equipment | (5,711 | ) | (13,064 | ) | (21,752 | ) | (45,848 | ) | |||||||||||||
| Free Cash Flow (7) | $ | (11,676 | ) | $ | (11,398 | ) | $ | 51,050 | $ | (13,801 | ) | ||||||||||
| Reconciliation of Book Value to Tangible Book Value: | |||||||||||||||||||||
| Book value (total stockholders' equity) | $ | 248,673 | $ | 341,254 | |||||||||||||||||
| Goodwill and intangible assets | (57,798 | ) | (58,281 | ) | |||||||||||||||||
| Tangible Book Value (9) | $ | 190,875 | $ | 282,973 | |||||||||||||||||
| Reconciliation of Book Value per Period End Share | |||||||||||||||||||||
| to Tangible Book Value per Period End Share: | |||||||||||||||||||||
| Book value per period end share: | $ | 15.13 | $ | 16.07 | |||||||||||||||||
| Goodwill and intangible assets per period end share | (3.52 | ) | (2.74 | ) | |||||||||||||||||
| Tangible Book Value per Period End Share (10) | $ | 11.61 | $ | 13.33 | |||||||||||||||||
| Calculation of Period End Shares: | |||||||||||||||||||||
| Shares Outstanding | 16,065 | 20,805 | |||||||||||||||||||
| Plus: Common Equivalents | 372 | 426 | |||||||||||||||||||
| Period End Shares (15) | 16,437 | 21,231 | |||||||||||||||||||
| September 30, | September 30, | September 30, | |||||||||||||||||||
| 2016 | 2015 | 2014 | |||||||||||||||||||
| Reconciliation of Invested Capital to Shareholders Equity: | |||||||||||||||||||||
| Book value (total stockholders' equity) | $ | 248,673 | $ | 341,254 | $ | 311,311 | |||||||||||||||
| Plus: Total Debt | 38,562 | — | — | ||||||||||||||||||
| Less: Cash and cash equivalents | (584 | ) | (30,429 | ) | (64,609 | ) | |||||||||||||||
| Invested Capital (16) | $ | 286,651 | $ | 310,825 | $ | 246,702 | |||||||||||||||
| See notes at the end of this earnings release. | |||||||||||||||||||||
(1) Last-twelve-months earnings per share is the sum of earnings per share reported in the last four quarters.
(2) Last-twelve-months average basic and diluted shares were determined by adding the average shares reported for the last four quarters and dividing by four.
(3) These financial performance measures are provided as supplemental information to the financial statements. These measures are used by management to evaluate our past performance and prospects for future performance, to evaluating our ability to comply with certain material covenants as defined within our credit agreement and to compare our results with those of our peers. In addition, we believe that certain of the measures, such as book value, tangible book value, free cash flow, asset turnover, return on equity and debt leverage are measures that are monitored by sureties, lenders, lessors, suppliers and certain investors. Our calculation of each measure is described in the following notes; our calculation may not be the same as the calculations made by other companies.
(4) EBIT, net of taxes is defined as net income plus net interest, less the tax impact of net interest. The tax impact of net interest is computed by multiplying net interest by the effective tax rate. Management uses EBIT, net of taxes, to measure our results exclusive of the impact of financing costs.
(5) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is not recognized under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to net cash flows provided by operating activities as a measure of liquidity. EBITDA is a component of the debt to EBITDA covenant, as defined in our credit agreement, which we must report to our bank on a quarterly basis. In addition, management considers EBITDA a useful measure because it eliminates differences which are caused by different capital structures as well as different tax rates and depreciation schedules when comparing our measures to our peers’ measures.
(6) EBITDA per share is calculated by dividing EBITDA by the weighted average number of diluted shares outstanding for the period. EBITDA per diluted share is not recognized under GAAP and does not purport to be an alternative to income per diluted share.
(7) Free cash flow, which is defined as cash flow provided by operating activities minus cash flow used in purchasing property and equipment, is not recognized under GAAP and does not purport to be an alternative to net income, cash flow from operations or the change in cash on the balance sheet. Management views free cash flow as a measure of operational performance, liquidity and financial health.
(8) Book value per period end share is calculated by dividing total stockholders’ equity at the end of the period by the period end shares outstanding.
(9) Tangible book value is calculated by subtracting goodwill and intangible assets outstanding at the end of the period from stockholders’ equity outstanding at the end of the period. Tangible book value is not recognized under GAAP and does not purport to be an alternative to book value or stockholders’ equity.
(10) Tangible book value per period end share is calculated by dividing tangible book value at the end of the period by the period end number of shares outstanding. Tangible book value per period end share is not recognized under GAAP and does not purport to be an alternative to income per diluted share.
(11) The debt to equity ratio is calculated by dividing total debt at the end of the period by total stockholders’ equity at the end of the period.
(12) Asset turnover is calculated by dividing the current period revenue by total assets at the beginning of the period.
(13) Return on assets is calculated by dividing net income for the period by total assets at the beginning of the period.
(14) Return on equity is calculated by dividing net income for the period by total stockholders’ equity at the beginning of the period.
(15) Period end shares is calculated by adding average common stock equivalents for the quarter to period end balance of common stock outstanding. Period end shares is not recognized under GAAP and does not purport to be an alternative to diluted shares. Management views period end shares as a better measure of shares outstanding as of the end of the period.
(16) Invested capital is calculated by adding net debt (total debt less cash and marketable securities) to total stockholders’ equity.
(17) Return on invested capital is calculated by dividing EBIT, net of taxes, less any dividends, by invested capital at the beginning of the period. Return on invested capital is not recognized under GAAP, and is a key metric used by management to determine our executive compensation.