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Financial report summary
?Risks
- The highly competitive nature of our industries could affect our profitability by reducing our revenues or profit margins.
- We generate a significant portion of our revenues under fixed price contracts. The estimates we use in placing bids and changes in commodity and labor costs could have an adverse effect on our ability to maintain our profitability.
- Our inability to carry out plans and strategies as expected, including our inability to identify and complete acquisitions and investments that meet our investment criteria in furtherance of our corporate strategy or the subsequent underperformance of those acquisitions and investments, may adversely impact our future growth and profitability.
- Backlog may not be realized or may not result in profits.
- We may fail to adequately recover on contract change orders.
- The COVID-19 pandemic has adversely impacted our business, and this pandemic, along with other potential public health emergencies, could have a future materially adverse impact on our business, including our financial condition, cash flows and results of operations.
- The availability and cost of surety bonds affect our ability to enter into new contracts and our margins on those engagements.
- We are subject to risks associated with seasonality, adverse weather conditions, and climate change.
- We may experience difficulties in managing our billings and collections.
- Our operations are subject to numerous physical hazards. If an accident occurs, it could result in an adverse effect on our business.
- Litigation and claims can cause unexpected losses.
- The loss of a group or several key personnel, either at the corporate or operating level, or general labor constraints could adversely affect our business.
- Negative conditions in the credit and capital markets may adversely impact our ability to operate our business.
- We have adopted tax positions that a taxing authority may view differently. If a taxing authority differs with our tax positions, our results may be adversely affected.
- To fund our working capital requirements, complete acquisitions and service any debt we may incur, we may require a significant amount of cash. Our ability to generate cash depends on many factors that are beyond our control.
- We have restrictions and covenants under our credit agreement and the failure to meet these covenants, including liquidity and other financial requirements, could result in a default under our credit agreement.
- Our use of percentage-of-completion accounting could result in a reduction or elimination of previously reported profits, and we may be adversely impacted by new accounting, control and operating procedures.
- Our reported operating results could be adversely affected as a result of goodwill impairment charges.
- Existence of a controlling shareholder.
- We may issue additional shares of common stock, preferred stock or convertible securities that will dilute the percentage ownership interest of existing stockholders and may dilute the book value per share of our common stock.
- Our bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could increase the costs for our shareholders to bring claims, discourage our shareholders from bringing claims, or limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our current or former directors, officers, employees or shareholders in such capacity.
- Our internal controls over financial reporting and our disclosure controls and procedures may not prevent all possible errors that could occur. Internal controls over financial reporting and disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objective will be met.
Management Discussion
- Consolidated revenues for the three months ended December 31, 2023, were $59.6 million higher than for the three months ended December 31, 2022, an increase of 10.4%, with increases at our Communications, Infrastructure Solutions and Commercial & Industrial operating segments, slightly offset by a decrease at our Residential segment. See further discussion below of changes in revenues for our individual segments.
- Consolidated gross profit for the three months ended December 31, 2023 increased $48.4 million compared to the three months ended December 31, 2022. Our overall gross profit percentage was 22.7% during the three months ended December 31, 2023, as compared to 16.6% during the three months ended December 31, 2022. Gross profit as a percentage of revenue increased at all four of our operating segments. See further discussion below of changes in gross margin for our individual segments.
- Selling, general and administrative expenses include costs not directly associated with performing work for our customers. These costs consist primarily of compensation and benefits related to corporate, segment and branch management (including incentive-based compensation), occupancy and utilities, training, professional services, information technology costs, consulting fees, travel and certain types of depreciation and amortization. We allocate certain corporate selling, general and administrative costs across our segments as we believe this more accurately reflects the costs associated with operating each segment.