On November 6, 2024, Centuri Holdings Inc (CTRI, Financial) released its 8-K filing detailing its financial performance for the third quarter of 2024. Centuri Holdings Inc is a North American utility infrastructure services company that collaborates with regulated utilities to maintain and expand energy networks. The company operates primarily through its Gas Utility Services and Electric Utility Services segments.
Performance Overview and Challenges
Centuri Holdings Inc reported a third-quarter revenue of $720.1 million, marking a decline from the previous year. The company faced a net loss attributable to common stock of $3.7 million, translating to a diluted loss per share of $0.04. Despite these challenges, the company achieved an adjusted net income of $5.3 million and an adjusted EBITDA of $78.8 million, with an adjusted EBITDA margin of 10.9%.
The decline in revenue was attributed to several factors, including reduced offshore wind activities and cost pressures in the U.S. Gas segment. Additionally, spending among major gas customers remained subdued, impacting overall performance. The company also faced higher self-insurance costs and increased rental and equipment repair expenses.
Financial Achievements and Strategic Moves
Despite the challenges, Centuri Holdings Inc secured customer awards with a multi-year estimated revenue potential of approximately $350 million. The company exited the third quarter with a backlog totaling $4.3 billion, 87% of which is related to Master Service Agreement (MSA) revenue. This backlog underscores the company's ability to secure long-term contracts in a dynamic energy market.
Centuri Holdings Inc also entered into a $125.0 million three-year accounts receivable securitization facility, primarily to repay amounts outstanding under its existing term loan. This strategic financial move is aimed at improving liquidity and reducing leverage.
Segment Performance and Key Metrics
The company's U.S. Gas segment reported a revenue of $366.1 million, a decrease of 7.5% compared to the prior year. The Canadian Gas segment also saw a decline in revenue, totaling $50.4 million, down 7.8%. The Union Electric segment experienced a significant revenue drop of 15.9%, while the Non-Union Electric segment saw a revenue increase of 16.4%, driven by storm restoration services.
| Segment | Revenue (Q3 2024) | Change (%) |
|---|---|---|
| U.S. Gas | $366.1 million | -7.5% |
| Canadian Gas | $50.4 million | -7.8% |
| Union Electric | $171.7 million | -15.9% |
| Non-Union Electric | $128.8 million | +16.4% |
Management Commentary and Outlook
“Throughout the third quarter, we saw improvement in our core electric business and a higher volume of storm restoration services, which continued its momentum into early 4Q, driven by Hurricanes Helene and Milton,” said Interim President & CEO Paul Caudill. "We have invested significant effort into developing and training a safe, highly qualified workforce to make storm response a core customer offering."
Centuri Holdings Inc remains optimistic about its full-year 2024 outlook, reiterating its revenue guidance of $2.5 to $2.7 billion and an adjusted EBITDA margin percentage outlook of 9.0 to 9.6%. The company continues to focus on diversifying its customer and business mix while strengthening its core MSA-based businesses.
Conclusion
Centuri Holdings Inc's third-quarter performance reflects the challenges faced in the utility infrastructure sector, including cost pressures and reduced customer spending. However, the company's strategic initiatives, such as securing long-term contracts and improving liquidity, position it well for future growth. Investors and stakeholders will be keen to see how Centuri navigates these challenges and capitalizes on emerging opportunities in the energy sector.
Explore the complete 8-K earnings release (here) from Centuri Holdings Inc for further details.
