Centuri (CTRI) Q2 2024 earnings summary

Executive summary

• Completed IPO and private placement in April 2024, raising $328 million in net proceeds, primarily used to reduce debt and acquire remaining interest in Linetec Services.

• Leadership transition: Bill Fehrman stepped down as CEO, with Paul Caudill appointed interim CEO, maintaining strategic focus.

• Secured over $400 million in new and extended MSAs and strategic bid awards, with backlog at $4.7 billion.

• Deployed over 2,200 employees for storm restoration, generating $45.6 million in YTD revenue and $22 million in Q3 storm restoration revenue by late July.

• Initiated cost-saving programs expected to yield $29 million in annualized run-rate savings in 2025 through overhead and supply chain initiatives.

Financial highlights

• Q2 2024 revenue was $672.1 million, down 16.6% year-over-year; net income attributable to common stock was $11.7 million.

• Adjusted EBITDA was $68.6 million (10.2% margin), down from $92.9 million (11.5%) year-over-year.

• Adjusted net income was $17 million ($0.20 EPS), down from $25 million ($0.35 EPS) year-over-year.

• Free cash flow for Q2 was $48.6 million (conversion 70.8%).

• Six-month revenue was $1.2 billion, down 17.7% year-over-year, with a net loss of $13.4 million.

Outlook and guidance

• FY 2024 revenue guidance: $2.5–$2.7 billion; adjusted EBITDA margin expected between 9.0% and 9.6%.

• Net capital expenditures guidance: $90–$99 million.

• Year-end leverage expected in the mid-threes; continued focus on deleveraging and cost savings.

• Management expects separation-related costs to continue through at least FY2025.

• Backlog at June 30, 2024 was $4.7 billion, down from $5.1 billion at year-end.