Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 29, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | Primoris Services Corp | ||
Entity Central Index Key | 1,361,538 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 794.7 | ||
Entity Common Stock, Shares Outstanding | 51,752,201 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 161,122 | $ 139,465 |
Short-term investments | 30,992 | |
Customer retention deposits and restricted cash | 2,598 | 481 |
Accounts receivable, net | 320,588 | 337,382 |
Costs and estimated earnings in excess of billings | 116,455 | 68,654 |
Inventory and uninstalled contract materials | 67,796 | 58,116 |
Prepaid expenses and other current assets | 18,265 | 31,720 |
Total current assets | 686,824 | 666,810 |
Property and equipment, net | 283,545 | 271,431 |
Deferred tax asset - long-term | 1,075 | |
Intangible assets, net | 36,438 | 39,581 |
Goodwill | 124,161 | 119,410 |
Other long-term assets | 211 | 400 |
Total assets | 1,132,254 | 1,097,632 |
Current liabilities: | ||
Accounts payable | 124,450 | 128,793 |
Billings in excess of costs and estimated earnings | 139,875 | 158,595 |
Accrued expenses and other current liabilities | 93,596 | 83,401 |
Dividends payable | 2,842 | 2,062 |
Current portion of capital leases | 974 | 1,650 |
Current portion of long-term debt | 54,436 | 38,909 |
Current portion of contingent earnout liabilities | 5,901 | |
Total current liabilities | 416,173 | 419,311 |
Long-term capital leases, net of current portion | 22 | 657 |
Long-term debt, net of current portion | 219,853 | 204,029 |
Deferred tax liabilities - long-term | 5,929 | |
Long-term contingent earnout liabilities, net of current portion | 1,021 | |
Other long-term liabilities | 12,741 | 12,899 |
Total liabilities | $ 648,789 | $ 643,846 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock-$.0001 par value, 1,000,000 shares authorized, none issued and outstanding at December 31, 2015 and 2014 | ||
Common stock-$.0001 par value; 90,000,000 shares authorized; 51,676,140 and 51,561,396 issued and outstanding at December 31, 2015 and 2014, respectively | $ 5 | $ 5 |
Additional paid-in capital | 163,344 | 160,186 |
Retained earnings | 319,899 | 293,628 |
Noncontrolling interests | 217 | (33) |
Total stockholders' equity | 483,465 | 453,786 |
Total liabilities and stockholders' equity | $ 1,132,254 | $ 1,097,632 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 51,676,140 | 51,561,396 |
Common stock, shares outstanding | 51,676,140 | 51,561,396 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Revenues | $ 1,929,415 | $ 2,086,194 | $ 1,944,220 |
Cost of revenues | 1,709,542 | 1,850,154 | 1,688,205 |
Gross profit | 219,873 | 236,040 | 256,015 |
Selling, general and administrative expenses | 152,104 | 132,248 | 130,778 |
Operating income | 67,769 | 103,792 | 125,237 |
Other income (expense): | |||
Income (loss) from non-consolidated entities | 5,264 | (4,836) | |
Foreign exchange gain (loss) | (763) | 374 | 153 |
Other income (expense) | 1,723 | (757) | 4,804 |
Interest income | 56 | 88 | 110 |
Interest expense | (7,688) | (6,433) | (5,892) |
Income before provision for income taxes | 61,097 | 102,328 | 119,576 |
Provision for income taxes | (23,946) | (38,646) | (44,896) |
Net income | 37,151 | 63,682 | 74,680 |
Less net income attributable to noncontrolling interests | (279) | (526) | (5,020) |
Net income attributable to Primoris | $ 36,872 | $ 63,156 | $ 69,660 |
Dividends per common share (in dollars per share) | $ 0.205 | $ 0.150 | $ 0.135 |
Earnings per share attributable to Primoris: | |||
Basic (in dollars per share) | 0.71 | 1.22 | 1.35 |
Diluted (in dollars per share) | $ 0.71 | $ 1.22 | $ 1.35 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 51,647 | 51,607 | 51,540 |
Diluted (in shares) | 51,798 | 51,747 | 51,610 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Non Controlling Interest | Total |
Balance at Dec. 31, 2012 | $ 5 | $ 155,605 | $ 175,517 | $ 1,511 | $ 332,638 |
Balance (in shares) at Dec. 31, 2012 | 51,403,686 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | |||||
Net income | 69,660 | 5,020 | 74,680 | ||
Issuance of shares to employees and directors | 3,062 | 3,062 | |||
Issuance of shares to employees and directors (in shares) | 153,579 | ||||
Amortization of Restricted Stock Units | 366 | 366 | |||
Issuance of shares as part of Q3C acquisition | 463 | 463 | |||
Issuance of shares as part of Q3C acquisition (in shares) | 29,273 | ||||
Cancelled shares for redemption of note receivable | (300) | (300) | |||
Cancelled shares for redemption of note receivable (in shares) | (15,144) | ||||
Distribution of non-controlling entities | (5,500) | (5,500) | |||
Dividends | (6,961) | (6,961) | |||
Balance at Dec. 31, 2013 | $ 5 | 159,196 | 238,216 | 1,031 | 398,448 |
Balance (in shares) at Dec. 31, 2013 | 51,571,394 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | |||||
Net income | 63,156 | 526 | 63,682 | ||
Issuance of shares to employees and directors | 2,897 | 2,897 | |||
Issuance of shares to employees and directors (in shares) | 90,002 | ||||
Amortization of Restricted Stock Units | 934 | 934 | |||
Dividend equivalent Units accrued - Restricted Stock Units | 3 | (3) | |||
Repurchase of stock | (2,844) | (2,844) | |||
Repurchase of stock (in shares) | (100,000) | ||||
Distribution of non-controlling entities | (1,590) | (1,590) | |||
Dividends | (7,741) | (7,741) | |||
Balance at Dec. 31, 2014 | $ 5 | 160,186 | 293,628 | (33) | 453,786 |
Balance (in shares) at Dec. 31, 2014 | 51,561,396 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | |||||
Net income | 36,872 | 279 | 37,151 | ||
Issuance of shares to employees and directors | 2,096 | 2,096 | |||
Issuance of shares to employees and directors (in shares) | 114,744 | ||||
Amortization of Restricted Stock Units | 1,050 | 1,050 | |||
Dividend equivalent Units accrued - Restricted Stock Units | 12 | (12) | |||
Distribution of non-controlling entities | (29) | (29) | |||
Dividends | (10,589) | (10,589) | |||
Balance at Dec. 31, 2015 | $ 5 | $ 163,344 | $ 319,899 | $ 217 | $ 483,465 |
Balance (in shares) at Dec. 31, 2015 | 51,676,140 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 37,151 | $ 63,682 | $ 74,680 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation | 58,408 | 50,918 | 42,421 |
Amortization of intangible assets | 6,793 | 7,504 | 7,467 |
Goodwill & intangible asset impairment | 401 | 808 | |
Stock-based compensation expense | 1,050 | 934 | 367 |
Gain on sale of property and equipment | (2,116) | (1,895) | (1,406) |
(Income) from non-consolidated entities | (5,264) | (97) | |
Impairment expense for non-consolidated entities | 4,932 | ||
Other than temporary basis difference for non-consolidated entities | 3,975 | ||
Distributions received from non-consolidated entities | 2,821 | ||
Net deferred tax liabilities (assets) | (7,004) | 8,970 | (12,582) |
Changes in assets and liabilities: | |||
Customer retention deposits and restricted cash | (2,117) | 4,823 | 30,073 |
Accounts receivable | 19,528 | (29,659) | (36,860) |
Costs and estimated earnings in excess of billings | (47,499) | (11,508) | (15,445) |
Other current assets | 4,949 | (25,767) | (14,774) |
Other long-term assets | 189 | 72 | |
Accounts payable | (5,086) | 921 | (25,131) |
Billings in excess of costs and estimated earnings | (19,619) | (14,770) | 14,473 |
Contingent earnout liabilities | (6,722) | (4,145) | (14,900) |
Accrued expenses and other current liabilities | 11,729 | (7,354) | 15,824 |
Other long-term liabilities | (1,658) | (1,361) | 1,107 |
Net cash used in operating activities | 48,377 | 36,101 | 77,753 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (67,097) | (87,954) | (87,050) |
Proceeds from sale of property and equipment | 9,889 | 5,814 | 7,865 |
Purchase of short-term investments | (33,770) | (23,110) | |
Sale of short-term investments | 30,992 | 21,464 | 7,448 |
Cash received from the sale of equity method investments | 6,439 | ||
Cash paid for acquisitions | (22,302) | (14,596) | (2,273) |
Net cash used in investing activities | (48,518) | (102,603) | (97,120) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 75,278 | 58,519 | 107,609 |
Repayment of capital leases | (1,336) | (3,276) | (4,618) |
Repayment of long-term debt | (43,927) | (35,107) | (35,896) |
Proceeds from issuance of common stock purchased under a long-term incentive plan | 1,621 | 1,671 | 1,455 |
Cash distribution to non-controlling interest holder | (29) | (1,590) | (5,500) |
Repurchase of common stock | (2,844) | ||
Dividends paid | (9,809) | (7,483) | (5,157) |
Net cash provided by financing activities | 21,798 | 9,890 | 57,893 |
Net change in cash and cash equivalents | 21,657 | (56,612) | 38,526 |
Cash and cash equivalents at beginning of year | 139,465 | 196,077 | 157,551 |
Cash and cash equivalents at end of the year | 161,122 | 139,465 | 196,077 |
Cash paid during the period for: | |||
Interest | 7,688 | 6,432 | 5,532 |
Income taxes, net of refunds received | 18,696 | 57,613 | 48,126 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||
Obligations incurred for the acquisition of property and equipment | 25 | 2,637 | |
Dividends declared and not yet paid | $ 2,842 | $ 2,062 | $ 1,805 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2015 | |
Nature of Business | |
Nature of Business | Note 1—Nature of Business Organization and operations — Primoris Services Corporation is a holding company of various construction and product engineering subsidiaries. The Company’s underground and directional drilling operations install, replace and repair natural gas, petroleum, telecommunications and water pipeline systems, including large diameter pipeline systems. The Company’s industrial, civil and engineering operations build and provide maintenance services to industrial facilities including power plants, petrochemical facilities, and other processing plants; construct multi-level parking structures; and engage in the construction of highways, bridges and other environmental construction activities. The Company is incorporated in the State of Delaware, and its corporate headquarters are located at 2100 McKinney Avenue, Suite 1500, Dallas, Texas 75201. Reportable Operating Segments — The Company segregates its business into three operating segments: the West Construction Services segment (“West segment”), the East Construction Services segment (“East segment”) and the Energy segment (“Energy segment”). See Note 16 — Reportable Operating Segments. The following table lists the Company’s primary operating subsidiaries and their operating segment: Subsidiary Operating Segment ARB, Inc. (“ARB”) West ARB Structures, Inc. West Q3 Contracting, Inc. (“Q3C”) West Rockford Corporation (“Rockford”) West Vadnais Trenchless Services, Inc. (“Vadnais”); acquired in 2014 West Silva Group (“Silva”) East Cardinal Contractors, Inc. East BW Primoris, LLC (“BWP”) East James Construction Group, LLC (“JCG”): JCG Heavy Civil Division East JCG Infrastructure and Maintenance Division East Primoris Energy Services Corporation (“PES”) Energy PES Industrial Division (formerly JCG Industrial Division) Energy OnQuest, Inc. Energy OnQuest, Canada, ULC (Born Heaters Canada, ULC prior to 2013) Energy Primoris Aevenia, Inc. (“Aevenia”); acquired February 28, 2015 Energy PES acquired two subsidiaries, The Saxon Group (“Saxon”) in 2012 and Force Specialty Services, Inc. (“FSSI”) in 2013. Effective January 1, 2014, Saxon and FSSI were merged into PES along with the Industrial division of JCG. Throughout this Form 10-K, references to FSSI, Saxon and James Industrial are to the divisions of PES for 2015 and 2014, while the references for the years prior to 2014 are to the entities or divisions. The Company owned 50% of the Blythe Power Constructors joint venture (“Blythe”) created for the installation of a parabolic trough solar field and steam generation system in California, and its operations have been included as part of the West Construction Services segment. The Company determined that in accordance with FASB Topic 810, the Company was the primary beneficiary of a variable interest entity and has consolidated the results of Blythe in its financial statements. The project has been completed, the project warranty expired in May 2015 and dissolution of the joint venture was completed in the third quarter 2015. The Company owns a 50% interest in two separate joint ventures, both formed in 2015. The Carlsbad Power Constructors joint venture (“Carlsbad”) will engineer and construct a gas-fired power generation facility and a joint venture titled “ARB Inc. & B&M Engineering Co.” (“Wilmington”) will also engineer and construct a co-generation facility. Both projects are located in the Southern California area. The joint venture operations are included as part of the West segment. As a result of determining that the Company is the primary beneficiary of the two VIE’s, the results of the Carlsbad and Wilmington joint ventures are consolidated in the Company’s financial statements. The Carlsbad project is expected to be completed in 2017 and the Wilmington project in 2018. Financial information for the joint ventures is presented in “Note 13— Noncontrolling Interests ”. In January 2014, the Company created a wholly owned subsidiary, BW Primoris, LLC, a Texas limited liability company (“BWP”). BWP’s goal is to develop water projects, primarily in Texas, that will need the Company’s construction services. On January 22, 2014, BWP entered into an agreement to purchase the assets and business of Blaus Wasser, LLC, a Wyoming limited liability company, for approximately $5 million. BWP entered into an intercompany construction contract with Cardinal Contractors, Inc. to build a small water treatment facility which will be owned by BWP. Beginning in 2016, the facility will generate revenues through a take-or-pay contract with a West Texas municipal entity. All intercompany revenue and profit of the construction project was eliminated, and at December 31, 2015, a total of $13.8 million has been capitalized as property, plant and equipment, including the $5 million acquisition cost. In May 2014, the Company created a wholly owned subsidiary, Vadnais Trenchless Services, Inc., a California company (“Vadnais”), which on June 5, 2014, purchased the assets of Vadnais Corporation for $6.4 million. Vadnais Corporation was a general contractor specializing in micro-tunneling based in California. The assets purchased were primarily equipment, building and land. The purchase included a contingent earnout on meeting certain operating targets. See “Note 4— Business Combinations ” for further information. During the third quarter 2014, the Company made three small purchases totaling $8.2 million acquiring the net assets of Surber Roustabout, LLC (“Surber”), Ram-Fab, LLC (“Ram-Fab”) and Williams Testing, LLC (“Williams”). Surber and Ram-Fab operate as divisions of PES, and Williams is a division of Cardinal Contractors, Inc. Surber provides general oil and gas related construction activities in Texas; Ram-Fab is a fabricator of custom piping systems located in Arkansas; and Williams provides construction services related to sewer pipeline maintenance, rehabilitation and integrity testing in the Florida market. The Surber and Ram-Fab purchases provided for contingent earnout amounts as discussed in “Note 4— Business Combinations ”. On February 28, 2015, the Company acquired the net assets of Aevenia, Inc. for $22.3 million in cash, and established a new entity, Primoris Aevenia, Inc. (“Aevenia”), which operates as part of the Company’s Energy segment. Headquartered in Moorhead, Minnesota, Aevenia is an energy and electrical construction company. Aevenia specializes in overhead and underground line work, substations, telecom/fiber, and certain other client-specific on-demand call out services. The majority of their work is delivered under unit-price Master Services Agreements (“MSAs”). Aevenia has operations in Minnesota, North Dakota, South Dakota and Iowa. The Company believes there are opportunities for Aevenia to grow sales by performing in-house work for other Primoris subsidiaries and to expand the Company’s offerings to new geographies in the Midwest United States. See “Note 4— Business Combinations ”. Unless specifically noted otherwise, as used throughout these consolidated financial statements, “Primoris”, “the Company”, “we”, “our”, “us” or “its” refers to the business, operations and financial results of the Company and its wholly-owned subsidiaries. Seasonality — Primoris’ results of operations are subject to quarterly variations. Most of the variation is the result of weather, particularly rain, ice and snow, which can impact the Company’s ability to perform construction services. While the majority of the Company’s work is in the southern half of the United States, these seasonal impacts affect revenues and profitability since gas and other utilities defer routine replacement and repair during their period of peak demand. Any quarter can be affected either negatively or positively by atypical weather patterns in any part of the country. In addition, demand for new projects tends to be lower during the early part of the year due to clients’ internal budget cycles. As a result, the Company usually experiences higher revenues and earnings in the third and fourth quarters of the year as compared to the first two quarters, with the fourth quarter revenues and earnings usually less than the third quarter revenues and earnings but higher than the second quarter revenues and earnings. Variability — In addition to seasonality, the Company is dependent on large construction projects, which tend not to be seasonal, but can fluctuate from year to year based on general economic conditions and client requirements. Our business may be affected by declines or delays in new projects or by client project schedules. Because of the cyclical nature of our business, the financial results for any period may fluctuate from prior periods, and the Company’s financial condition and operating results may vary from quarter-to-quarter. Results from one quarter may not be indicative of its financial condition or operating results for any other quarter or for an entire year. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2—Summary of Significant Accounting Policies Basis of presentation — The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”). References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”). Certain reclassifications have been made to the prior year Consolidated Balance Sheet to conform classification of deferred tax assets and liabilities to the current year presentation as outlined on “Note 2— Summary of Significant Accounting Policies — Recently Issued Accounting Pronouncements ” and had no impact on net income or earnings per share. Principles of consolidation — The accompanying Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries and the noncontrolling interests of the Blythe, Carlsbad and Wilmington joint ventures, which are variable interest entities for which the Company is the primary beneficiary as determined under the provisions of ASC Topic 810-10-45. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates — The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. As a construction contractor, the Company uses significant estimates for costs to complete construction projects and the contract value of construction projects. These estimates have a direct effect on gross profit as reported in these consolidated financial statements. Actual results could materially differ from the Company’s estimates. Operating cycle — In the accompanying consolidated balance sheets, assets and liabilities relating to long-term construction contracts (e.g. costs and estimated earnings in excess of billings, billings in excess of costs and estimated earnings) are considered current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year. Consequently, the Company has significant working capital invested in assets that may have a liquidation period extending beyond one year. The Company has claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation, all of which may extend beyond one calendar year. Cash and cash equivalents — The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents. Short-term investments — The Company classifies as short-term investments all securities or other assets acquired which have ready marketability and can be liquidated, if necessary, within the current operating cycle and which have readily determinable fair values. Short-term investments are classified as available for sale and are recorded at fair value using the specific identification method. At December 31, 2015, the Company had no short-term investments. In prior years, the majority of the Company’s short-term investments were in short-term dollar-denominated bank deposits and U.S. Treasury Bills in order to provide government backing of the investments. Customer retention deposits and restricted cash — Customer retention deposits consist of contract retention payments made by customers into bank escrow cash accounts as required in some state jurisdictions. Investments for these amounts are limited to highly graded U.S. and municipal government debt obligations, investment grade commercial paper and CDs, which limits credit risk on these balances. Escrow cash accounts are released to the Company by customers as projects are completed in accordance with contract terms. Inventory and uninstalled contract materials — Inventory consists of expendable construction materials and small tools that will be used in construction projects and is valued at the lower of cost, using first-in, first-out method, or market. Uninstalled contract materials are certain job specific materials not yet installed, primarily for highway construction projects, which are valued using the specific identification method relating the cost incurred to a specific project. In most cases, the Company is able to invoice a state agency for the materials, but title has not yet passed to the state agency. Business combinations —Business combinations are accounted for using the acquisition method of accounting. We use the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses. The determination of fair value requires estimates and judgments of future cash flow expectations to assign fair values to the identifiable tangible and intangible assets. GAAP provides a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business. Most estimates are preliminary until the end of the measurement period. During the measurement period, any material, newly discovered information that existed at the acquisition date would be reflected as an adjustment to the initial valuations and estimates. After the measurement date, any adjustments would be recorded as a current period income or expense. Changes in deferred tax asset valuation allowances and acquired tax uncertainties after the measurement period are also recognized in current period net income. Expenses incurred in connection with a business combination are expensed as incurred. Goodwill and other intangible assets — The Company accounts for goodwill in accordance with ASC Topic 350 “ Intangibles — Goodwill and Other ”. Under ASC Topic 350, goodwill is not amortized but is subject to an annual impairment test as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist. The impairment review is performed at the reporting unit level for those units with recorded goodwill. In the fourth quarter, an impairment expense of $401 was recorded relating to the goodwill attributed to Cardinal Contractors, Inc., which is a part of the East Segment, and in December 2013, an expense of $808 was recorded relating to an FSSI intangible asset, a part of the Energy Segment, for customer relations reflecting the impairment of the asset. There were no other impairments of goodwill for the years ended December 31, 2015, 2014 and 2013. Income tax — Current income tax expense is the amount of income taxes expected to be paid for the financial results of the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. The Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC Topic 740. The difference between a tax position taken or expected to be taken on the Company’s income tax returns and the benefit recognized on our financial statements is referred to as an unrecognized tax benefit. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. Comprehensive income — The Company accounts for comprehensive income in accordance with ASC Topic 220 “ Comprehensive Income ”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). During the reported periods, the Company had no material other comprehensive income. Foreign operations — At December 31, 2015, the Company had operations in Canada with assets aggregating approximately $14,111, compared to $11,505 at December 31, 2014. The Canadian operations had revenues of $17,763 and income before tax of $252 for the year ending December 31, 2015; revenues of $19,840 and income before tax of $3,183 for the year ended December 31, 2014, and revenues of $15,993 and income before tax of $2,742 for the year ending December 31, 2013. Functional currencies and foreign currency translation — The Company uses the United States dollar as its functional currency in Canada for the Canadian operations of OnQuest Canada, as substantially all monetary transactions are made in U.S. dollars, and other significant economic facts and circumstances currently support that position. Since these factors may change, the Company periodically assesses its position with respect to the functional currency of its foreign subsidiary. Non-monetary balance sheet items and related revenue, gain, expense and loss accounts are valued using historical rates. All other items are re-measured using the current exchange rate in effect at the balance sheet date. Foreign exchange losses of $763 in 2015, gains of $374 in 2014 and gains of $153 in 2013 are included in the “other income or expense” line of the Consolidated Statements of Income. Partnerships and joint ventures — As is normal in the construction industry, the Company is periodically a member of a partnership or a joint venture. These partnerships or joint ventures are used primarily for the execution of single contracts or projects. The Company’s ownership can vary from a small noncontrolling ownership to a significant ownership interest. The Company evaluates each partnership or joint venture to determine whether the entity is considered a variable interest entity (“VIE”) as defined in ASC Topic 810, and if a VIE, whether the Company is the primary beneficiary of the VIE, which would require the Company to consolidate the VIE with the Company’s financial statements. When consolidation occurs, the Company accounts for the interests of the other parties as a noncontrolling interest and discloses the net income attributable to noncontrolling interests. See Note 13 — “ Nonconrolling Interests ” for further information Equity method of accounting — The Company accounts for its interest in an investment using the equity method of accounting per ASC Topic 323 if the Company is not the primary beneficiary of a VIE or does not have a controlling interest. The investment is recorded at cost and the carrying amount is adjusted periodically to recognize the Company’s proportionate share of income or loss, additional contributions made and dividends and capital distributions received. The Company records the effect of any impairment or an other than temporary decrease in the value of its investment. In the event a partially owned equity affiliate were to incur a loss and the Company’s cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and the Company’s proportionate share of further losses would not be recognized unless the Company committed to provide further financial support to the affiliate. The Company would resume application of the equity method once the affiliate became profitable and the Company’s proportionate share of the affiliate’s earnings equals the Company’s cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended. See Note 8 — “Equity Method Investments” regarding prior-year impairments of investments in partially owned affiliates. Cash concentration — The Company places its cash in short term U.S. Treasury bonds and certificates of deposit (“CDs”). At December 31, 2015 and 2014, the Company had cash balances of $161.1 million and $139.5 million, respectively. At December 31, 2015, the $161.1 million of cash consisted of $131.2 million in U.S. Treasury bill funds, backed by the federal government, and the remaining $29.9 million are held in high credit quality financial institutions in order to mitigate the risk of holding funds not backed by the federal government or in excess of federally backed limits. At December 31, 2014, the $139.5 million consisted of $121.5 million held in U.S. Treasury bill funds and $18.0 million with high credit quality financial institutions. Collective bargaining agreements — Approximately 24% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2015. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 83 collective bargaining agreements to which the Company is a party to, 56 will require renegotiation during 2016. The Company has not had a work stoppage in more than 20 years. Multiemployer plans — Various subsidiaries in the West segment are signatories to collective bargaining agreements. These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. Federal law requires that if the Company were to withdraw from an agreement, it would incur a withdrawal obligation. The potential withdrawal obligation may be significant. In accordance with GAAP, any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated. In November 2011, the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan, as discussed in “Note 15 — Commitments and Contingencies ”. The Company has no plans to withdraw from any other agreements. Worker’s compensation insurance — The Company self-insures worker’s compensation claims to a certain level. The Company maintained a self-insurance reserve totaling $26,779 and $22,270 at December 31, 2015 and 2014, respectively. The amount is included in “ Accrued expenses and other current liabilities ” on the accompanying Consolidated Balance Sheets. Claims administration expenses are charged to current operations as incurred. Future payments may materially differ from the reserve amounts. Fair value of financial instruments — The consolidated financial statements include financial instruments for which the fair value may differ from amounts reflected on a historical basis. Financial instruments of the Company consist of cash, accounts receivable, short-term investments, accounts payable and certain accrued liabilities. These financial instruments generally approximate fair market value based on their short-term nature. The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities. The fair value of financial instruments is measured and disclosure is made in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures”. Revenue recognition Fixed-price contracts — Historically, a substantial portion of the Company’s revenue has been generated under fixed-price contracts. For fixed-price contracts, the Company recognizes revenues primarily using the percentage-of-completion method, which may result in uneven and irregular results. In the percentage-of-completion method, estimated contract values, estimated cost at completion and total costs incurred to date are used to calculate revenues earned. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. Total estimated costs, and thus contract revenues and income, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected. The Company considers unapproved change orders to be contract variations for which it has customer approval for a change in scope but for which it does not have an agreed upon price change. Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes revenue equal to costs incurred on unapproved change orders based on an estimated probability of realization from change order approval. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers. The Company considers claims to be amounts it seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers on both scope and price changes. Claims are included in the calculation of revenues when realization is probable and amounts can be reliably determined. Revenues in excess of contract costs incurred on claims are recognized when the amounts have been agreed upon with the customer. Revenue in excess of contract costs from claims is recognized when an agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred. Other contract forms — The Company also uses unit-price, time and material, and cost reimbursable plus fee contracts. For these jobs, revenue is recognized primarily based on contractual terms. For example, time and material contract revenues are generally recognized on an input basis, based on labor hours incurred and on purchases made. Similarly, unit price contracts generally recognize revenue on an output based measurement such as the completion of specific units at a specified unit price. At any time, if an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at that time. The loss amount is recognized as an “accrued loss provision” and is included in the accrued expenses and other liabilities amount on the balance sheet. For fixed price contracts, as the percentage-of-completion method is used to calculate revenues, the accrued loss provision is changed so that the gross profit for the contract remains zero in future periods. If we anticipate that there will be a loss for unit price or cost reimbursable contracts, the projected loss is recognized in full at that time. Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are identified. In all forms of contracts, the Company estimates its collectability of contract amounts at the same time that it estimates project costs. If the Company anticipates that there may be issues associated with the collectability of the full amount calculated as revenues, the Company may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection. For example, when a cost reimbursable project exceeds the client’s expected budget amount, the client frequently requests an adjustment to the final amount. Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work. In these situations, the Company may choose to defer recognition of revenue up to the time that the client pays for the services. The caption “ Costs and estimated earnings in excess of billings ” in the Consolidated Balance Sheet represents unbilled receivables which arise when revenues have been recorded but the amount will not be billed until a later date. Balances represent: (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting which may not be billed under the terms of the contract until a later date or project milestone, (b) incurred costs to be billed under cost reimbursement type contracts, (c) amounts arising from routine lags in billing, or (d) the revenue associated with unapproved change orders or claims when realization is probable and amounts can be reliably determined. For those contracts in which billings exceed contract revenues recognized to date, the excess amounts are included in the caption “ Billings in excess of costs and estimated earnings ”. In accordance with applicable terms of certain construction contracts, retainage amounts may be withheld by customers until completion and acceptance of the project. Some payments of the retainage may not be received for a significant period after completion of our portion of a project. In some jurisdictions, retainage amounts are deposited into an escrow account. Accounts receivable — Accounts receivable and contract receivables are primarily with public and private companies and governmental agencies located in the United States. Credit terms for payment of products and services are extended to customers in the normal course of business and no interest is charged. Contract receivables are generally progress billings on projects, and as a result, are short term in nature. Generally, the Company requires no collateral from its customers, but files statutory liens or stop notices on any construction projects when collection problems are anticipated. While a project is underway, the Company estimates its collectability of contract amounts at the same time that it estimates project costs. As discussed in the “Revenue recognition” section above, realization of the eventual cash collection may be recognized as adjustments to the contract profitability, otherwise, the Company uses the allowance method of accounting for losses from uncollectible accounts. Under this method an allowance is provided based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2015 and 2014 was $480 and $540, respectively. Significant revision in contract estimate — Revenue recognition is based on the percentage-of-completion method for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate revenue. Total estimated costs, and thus contract revenues and margin, are impacted by many factors, which can cause significant changes in estimates during the life cycle of a project. For projects that were in process at the end of the prior year, there can be a difference in revenues and profits that would have been recognized in the prior year, had current year estimates of costs to complete been known at the end of the prior year. For example, unusual weather in the first half of 2015 significantly changed the estimated costs to complete for several large highway projects. The changes impacted the percentage of completion calculation and profitability in 2015. If these changes had been known in 2014, the revenue and profitability in 2014 would have been decreased. During the year ended December 31, 2015, certain contracts had revisions in cost estimates from those projected at December 31, 2014. If the revised estimates had been applied in the prior year, the gross profit earned on these contracts would have resulted in an increase of approximately $1,540 in gross profit in 2014. Similarly, had the revised estimates as of December 31, 2014 been applied in the prior year; the gross profit earned on these contracts would have resulted in an increase of approximately $17,266 in gross profit in 2013. The revised estimates for the year ended December 31, 2013 would have resulted in a gross profit increase of approximately $10,867 in the year 2012. The following table presents the financial impact of the changes in estimates that would have been reflected in the years 2014 and 2013 had the revised estimates been applied to the particular year. Estimated net impact of change in estimate for year the year ended 2014 2013 Revised estimates in 2015 that impact 2014 $ $ — Revised estimates in 2014 that impact 2013 ) Revised estimates in 2013 that impact 2012 — ) Net impact to gross margin $ ) $ EPS impact to year $ ) $ Customer concentration — The Company operates in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues; however, the group that comprise the top ten customers varies from year to year. See “Note 17 — Customer Concentrations ” for further discussion. Property and equipment — Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations. The Company assesses the recoverability of property and equipment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. We perform an undiscounted operation cash flow analysis to determine if impairment exists. The amount of property and equipment impairment, if any, is measured based on fair value and is charged to operations in the period in which property and equipment impairment is determined by management. As of December 31, 2015 and 2014, the Company’s management has not identified any material impairment of its property and equipment. Taxes collected from customers — Taxes collected from the Company’s customers are recorded on a net basis. Share-based payments and stock-based compensation — In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”) after approval of the shareholders and adoption by the Company on May 3, 2013. Detailed discussion of shares issued under the Equity Plan are included in “Note 20 — “Deferred Compensation Agreements and Stock-Based Compensation ” and in Note 24— “Stockholders’ Equity”. Such share issuances include grants of Restricted Stock Units to executives, issuance of stock to certain senior managers and executives and issuances of stock to non-employee members of the Board of Directors. Contingent Earnout Liabilities — As part of past acquisitions, the Company agreed to pay cash to the sellers upon meeting certain operating performance targets for specified periods subsequent to the acquisition date. Each quarter, the Company evaluates the fair value of the estimated contingency and records a non-operating charge for the change in the fair value. Upon meeting the target, the Company reflects the full liability on the balance sheet and records a charge to “Selling, general and administration expense” for the change in the fair value of the liability from the prior period. See “Note 14 — “Contingent Earnout Liabilities ” for further discussion. Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606)” . The new standard is effective for reporting periods beginning after December 15, 2016 and early adoption is not permitted. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption will require new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of the impact of the changes on prior years. The FASB recently deferred the effective date for the Company to January 1, 2018. The Company is currently evaluating the potential impact of adoption and the implementation approach to be used. In February 2015, the FASB issued ASU 2015-02 “ Consolidation (Topic 810): Amendment to the Consolidation Analysis ” which amends existing consolidation guidance, including amending the guidance related to determining whether an entity is a variable interest entity. The update is effective for interim and annual periods beginning after December 15, 2015, although early adoption is permitted. The guidance may be applied using a modified retrospective approach whereby the entity records a cumulative effect of adoption at the beginning of the fiscal year of initial application. A reporting entity may also apply the amendments on a full retrospective basis. The Company is currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements. In August 2014, the FASB issued ASU 2014-15 “ Presentation of Financial Statements — Going Concern (Subtopic 205-40) ” to address the diversity in practice in determining when there is substantial doubt about an entity’s ability to continue as a going concern and when and how an entity must disclose certain relevant conditions and events. This update requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued). If such conditions or events exist, an entity should disclose that there is substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued), along with the principal conditions or events that raise substantial doubt, management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations and management’s plans that are intended to mitigate those conditions or events. The guidance is effective for annual and interim periods ending after December 15, 2016. This guidance will impact the disclosure and presentation of how we report any substantial doubt about our ability to continue as a going concern, if such substantial doubt were to exist. The Company will adopt this guidance effective January 1, 2017. During November 2015, the FASB issued ASU 2015-17 “ Balance Sheet Classification of Deferred |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | Note 3—Fair Value Measurements ASC Topic 820, “ Fair Value Measurements and Disclosures ” defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements. ASC Topic 820 addresses fair value GAAP for financial assets and financial liabilities that are re-measured and reported at fair value at each reporting period and for non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis. In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are “unobservable data points” for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The following table presents, for each of the fair value hierarchy levels identified under ASC Topic 820, the Company’s financial assets and certain liabilities that are required to be measured at fair value at December 31, 2015 and 2014: Fair Value Measurements at Reporting Date Amount Recorded on Balance Sheet Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets as of December 31, 2015: Cash and cash equivalents $ $ — — Liabilities as of December 31, 2015: None Assets as of December 31, 2014: Cash and cash equivalents $ $ — — Short-term investments $ $ — — Liabilities as of December 31, 2014: Contingent consideration $ — — $ Short-term investments consist primarily of U.S. Treasury bills with various financial institutions that are backed by the federal government. There were no short-term investments at December 31, 2015. Other financial instruments of the Company not listed in the table consist of accounts receivable, accounts payable and certain accrued liabilities. These financial instruments generally approximate fair value based on their short-term nature. The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities. The following table provides changes to the Company’s contingent consideration liability Level 3 fair value measurements during the years ended December 31, 2015 and 2014: Significant Unobservable Inputs (Level 3) 2015 2014 Contingent Consideration Liability Beginning balance $ $ Additions to contingent consideration liability: Vadnais acquisition — Surber and Ram-Fab acquisitions — Change in fair value of contingent consideration liability during year Reductions in the contingent consideration liability: Payment to Q3C sellers for meeting performance targets — 2014 & 2015 ) ) Reduction due to earn-outs not acheived — Surber, Vadnais and Ram Fab ) — Ending balance $ — $ On a quarterly basis, the Company assesses the estimated fair value of the contractual obligation to pay the contingent consideration and any changes in estimated fair value are recorded as a non-operating charge in the Company’s statement of income. Fluctuations in the fair value of contingent consideration are impacted by two unobservable inputs, management’s estimate of the probability (which has ranged from 33% to 100%) of the acquired company meeting the contractual operating performance target and the estimated discount rate (a rate that approximates the Company’s cost of capital). Significant changes in either of those inputs in isolation would result in a different fair value measurement. Generally, a change in the assumption of the probability of meeting the performance target is accompanied by a directionally similar change in the fair value of contingent consideration liability, whereas a change in assumption used of the estimated discount rate is accompanied by a directionally opposite change in the fair value of contingent consideration liability. Upon meeting the target, the Company reflects the full liability on the balance sheet and records a charge to “Selling, general and administration expense” for the change in the fair value of the liability from the prior period. See “Note 14 — “Contingent Earnout Liabilities ” for further discussion. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations | |
Business Combinations | Note 4—Business Combinations 2015 Acquisitions On February 28, 2015, the Company acquired the net assets of Aevenia, Inc. for $22.3 million in cash, and established a new entity, Primoris Aevenia, Inc. (“Aevenia”), which operates as part of the Company’s Energy segment. The acquisition provides electrical construction expertise for the Company and provides a greater presence and convenient access to the central plans area of the United States. The purchase was accounted for using the acquisition method of accounting. The assets were purchased for their estimated fair value and included current assets, current liabilities, plant and equipment, intangible assets and goodwill. Since the acquisition date through December 31, 2015, Aevenia contributed revenues of $23,695 and gross margin of $2,378. Costs related to the Aevenia acquisition in the amount of $151 were expensed in 2015. 2014 Acquisitions In May 2014, the Company created a wholly-owned subsidiary, Vadnais Trenchless Services, Inc., a California corporation (“Vadnais”) and on June 5, 2014, the Company purchased certain assets from Vadnais Corporation, a general contractor specializing in micro-tunneling based in California. The assets were purchased for their estimated fair value of $6,355 in cash and included equipment, building and land. In addition, upon meeting certain operating targets, the sellers could receive a contingent earnout of $900 over a two-year period. The estimated fair value of the potential contingent consideration on the acquisition date was $679. The purchase was accounted for using the acquisition method of accounting. See Note 14 — “ Contingent Consideration ”. During the third quarter 2014, the Company made three small acquisitions totaling $8,244 acquiring the net assets of Surber, Ram-Fab, and Williams (the “Third Quarter 2014 Acquisitions”). Surber and Ram-Fab operate as divisions of PES in the Energy segment, and Williams is a division of Cardinal Contractors, Inc. in the East segment. Surber provides general oil and gas related construction activities in Texas; Ram-Fab is a fabricator of custom piping systems located in Arkansas; and Williams provides construction services related to sewer pipeline maintenance, rehabilitation and integrity testing in the Florida market. The Surber purchase provided for a contingent earnout amount of up to $1,800 over a 3-year period, based on meeting certain operating targets, which had an estimated fair value of $955 on the acquisition date. The Ram-Fab purchase included a $200 contingent earnout based on estimated earnings of a six-month operating project, which had an estimated fair value of $200 on the acquisition date. All of the purchases were accounted for using the acquisition method of accounting. See Note 14 — “ Contingent Consideration ”. From the acquisition dates for the Vadnais acquisition and the Third Quarter 2014 Acquisitions through December 31, 2014, their first partial year, they contributed revenues of $9,300 and gross loss of $45. Acquisition costs related to these 2014 acquisitions of $355 were expensed in 2014. The fair value of the assets acquired and the liabilities assumed for the 2015 and 2014 acquisitions is detailed in the section below “Schedule of Assets Acquired and Liabilities Assumed for 2015 and 2014 Acquisitions”. Summary of Cash Paid for Acquisitions for the years ended December 31, 2015 and 2014 The following table summarizes the cash paid for acquisitions for the years ended December 31, 2015 and 2014. Year ended December 31, 2015 2014 Aevenia — purchased February 28, 2015 — Vadnais — purchased June 5, 2014 — Surber — purchased July 28, 2014 — Ram-Fab — purchased August 29, 2014 — Williams — purchased September 19, 2014 — Cash paid $ $ Schedule of Assets Acquired and Liabilities Assumed for 2015 and 2014 Acquisitions The following table summarizes the fair value of the assets acquired and the liabilities assumed at the acquisition date: Year ended December 31, 2015 Acquisition 2014 Acquisitions Cash — Accounts receivable Inventory and other assets Prepaid expenses Property, plant and equipment Other assets — Intangible assets Goodwill Accounts payable ) ) Accrued expenses ) ) Total $ $ Identifiable Tangible Assets. For each of the acquisitions, significant identifiable tangible assets acquired include accounts receivable, inventory and fixed assets, consisting primarily of construction equipment. The Company determined that the recorded value of accounts receivable and inventory reflect fair value of those assets. The Company estimated the fair value of fixed assets on the effective dates of the acquisitions using a market approach, based on comparable market values for similar equipment of similar condition and age. Identifiable Intangible Assets. The Company estimated and used the assistance of an independent third party valuation specialist to determine the fair value of the intangible assets acquired for the acquisitions. The fair value measurements of the intangible assets were based primarily on significant unobservable inputs and thus represent a Level 3 measurement as defined in Note 3 — “ Fair Value Measurements ”. Based on the Company’s assessment, the acquired intangible asset categories, fair value and average amortization periods, generally on a straight-line basis, are as follows: Amortization Period 2015 Fair Value 2014 Fair Value Tradename 3 to 10 years $ — $ Non-compete agreements 2 to 5 years Customer relationships 5 to 10 years Total $ $ The fair value of the tradename was determined based on the “relief from royalty” method. A royalty rate was selected based on consideration of several factors, including external research of third party trade name licensing agreements and their royalty rate levels, and management estimates. The useful life was estimated at ten years for the Third Quarter 2014 Acquisitions based on management’s expectation for continuing value of the tradename in the future. The fair value for the non-compete agreements was valued based on a discounted “income approach” model, including estimated financial results with and without the non-compete agreements in place. The agreements were analyzed based on the potential impact of competition that certain individuals could have on the financial results, assuming the agreements were not in place. An estimate of the probability of competition was applied and the results were compared to a similar model assuming the agreements were in place. The customer relationships were valued utilizing the “excess earnings method” of the income approach. The estimated discounted cash flows associated with existing customers and projects were based on historical and market participant data. Such discounted cash flows were net of fair market returns on the various tangible and intangible assets that are necessary to realize the potential cash flows. Goodwill. Goodwill for Aevenia largely consists of expected benefits from providing electrical construction expertise for the Company and the greater presence and convenient access to the central plains area of the United States. Goodwill attributable to Surber consists largely for the expected benefits from the geographic expansion into the growing Midland/Permian Basin area of Texas and to the expansion of offerings for the Energy segment to include more pipeline and station work and a greater presence and convenient access to south Texas, the Houston ship channel and Louisiana. Goodwill also includes the value of the assembled workforce of the various acquired businesses. Based on the current tax treatment of the acquisitions, the goodwill and other intangible assets associated with them are deductible for income tax purposes over a fifteen-year period. Supplemental Unaudited Pro Forma Information In accordance with ASC 805, the following pro forma information for the twelve months ended December 31, 2015 and 2014 presents the results of operations of the Company as if the Aevenia acquisition, the Vadnais acquisition and the Third Quarter 2014 Acquisitions had all occurred at the beginning of 2014. The supplemental pro forma information has been adjusted to include: the pro forma impact of amortization of intangible assets and depreciation of property, plant and equipment, based on the fair values assigned to the purchased assets; the pro forma impact of the expense associated with the amortization of the discount for the fair value of the contingent consideration (related to the Third Quarter 2014 Acquisitions) for potential earnout liabilities that may be achieved during the years 2015 through 2017; and the pro forma tax effect of both the income before income taxes and the pro forma adjustments, calculated using a tax rate of 39.0% for the years ended 2015 and 2014. The pro forma results are presented for illustrative purposes only and are not necessarily indicative of, or intended to represent, the results that would have been achieved had the various acquisitions been completed on January 1, 2014. For example, the pro forma results do not reflect any operating efficiencies and associated cost savings that the Company might have achieved with respect to the acquisitions. 2015 2014 (unaudited) (unaudited) Revenues $ $ Income before provision for income taxes $ $ Net income attributable to Primoris $ $ Weighted average common shares outstanding: Basic Diluted Earnings per share attributable to Primoris: Basic $ $ Diluted $ $ |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable. | |
Accounts Receivable | Note 5—Accounts Receivable The following is a summary of accounts receivable at December 31: 2015 2014 Contracts receivable, net of allowance for doubtful accounts of $480 and $540 for 2015 and 2014, respectively $ $ Retention receivable Other accounts receivable $ $ |
Costs and Estimated Earnings on
Costs and Estimated Earnings on Uncompleted Contracts | 12 Months Ended |
Dec. 31, 2015 | |
Costs and Estimated Earnings on Uncompleted Contracts | |
Costs and Estimated Earnings on Uncompleted Contracts | Note 6—Costs and Estimated Earnings on Uncompleted Contracts Costs and estimated earnings on uncompleted contracts consist of the following at December 31: 2015 2014 Costs incurred on uncompleted contracts $ $ Gross profit recognized Less: billings to date ) ) $ ) $ ) This amount is included in the accompanying consolidated balance sheets at December 31 under the following captions: 2015 2014 Costs and estimated earnings in excess of billings $ $ Billings in excess of cost and estimated earnings ) ) $ ) $ ) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment | |
Property and Equipment | Note 7—Property and Equipment The following is a summary of property and equipment at December 31: 2015 2014 Useful Life Land and buildings $ $ 30 years Leasehold improvements Lease life Office equipment 3 - 5 years Construction equipment 3 - 7 years Transportation equipment 3 - 18 years Less: accumulated depreciation and amortization ) ) Net property and equipment $ $ |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments. | |
Equity Method Investments | Note 8—Equity Method Investments WesPac Energy LLC and WesPac Midstream LLC On July 1, 2010, the Company acquired a 50% membership interest in WesPac Energy LLC (“WesPac”), a Nevada limited liability company, from Kealine Holdings, LLC (“Kealine”), a Nevada limited liability company, with Kealine retaining a remaining 50% membership interest. WesPac developed pipeline and terminal projects, primarily for the oil and gas industry. On September 30, 2013, WesPac, Kealine and the Company entered into an agreement (the “Midstream Agreement”) with Highstar Capital IV, LP (“Highstar”), to form a new entity, WesPac Midstream LLC, a Delaware limited liability company (“Midstream”), with WesPac contributing project assets to Midstream and Highstar investing $6,082 in cash. The Company accounted for the investment using the equity method of accounting and recorded its proportionate share of operating expenses. During the fourth quarter of 2013, the Company determined that the investment was impaired and recorded a non-cash impairment charge and wrote-off the total value of its equity investment of $4,932. In 2014, the Company entered into negotiations with the members of Midstream, and in August 2014, the Company entered into a redemption agreement for the sale of all of the Company’s ownership in both WesPac and Midstream for a total of $5,250 in cash, which was recorded as income from non-consolidated entities. St.—Bernard Levee Partners The Company purchased a 30% interest in St.—Bernard Levee Partners (“Bernard”) in 2009 for $300 and accounted for this investment using the equity method. Bernard engaged in construction activities in Louisiana, and all work was completed in January 2013. The Company’s share of Bernard distributions for the year ended December 31, 2013 was $145. Alvah, Inc. As part of its acquisition of Q3C in November 2012, the Company acquired a 49% membership interest in Alvah, Inc., a California corporation (“Alvah”). Alvah was engaged in electrical contracting activities, primarily in Northern California. On February 5, 2014, the majority owner of Alvah, in accordance with the original investment agreement, elected to purchase the Company’s minority interest effective January 1, 2014 for a cash payment of $1,189. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 9—Goodwill and Intangible Assets Goodwill was recorded at our reporting units at December 31 as follows: Reporting Unit Segment 2015 2014 Rockford West $ $ Q3C West JCG (includes JCG Heavy Civil and Infrastructure and Maintenance divisions) East Cardinal Contractors, Inc. East — PES (includes PPS, PES Industrial, FSSI, Saxon and Surber divisions) Energy OnQuest Canada, ULC Energy Aevenia Energy — Total Goodwill $ $ The table below summarizes the intangible asset categories, amounts and the average amortization periods, which are generally on a straight-line basis, at December 31: Amortization Amount Period 2015 2014 Tradename 3 to 10 years $ $ Non-compete agreements 2 to 5 years Customer relationships 5 to 15 years Total $ $ Amortization expense of intangible assets was $6,793, $7,504 and $7,467 for the years ended December 31, 2015, 2014 and 2013, respectively. Estimated future amortization expense for intangible assets as of December 31, 2015 is as follows: For the Years Ending December 31, Estimated Intangible Amortization Expense 2016 $ 2017 2018 2019 2020 Thereafter $ |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable and Accrued Liabilities | Note 10—Accounts Payable and Accrued Liabilities At December 31, 2015 and 2014, accounts payable included retention amounts of approximately $8,375 and $9,285, respectively. These amounts due to subcontractors have been retained pending contract completion and customer acceptance of jobs. The following is a summary of accrued expenses and other current liabilities at December 31: 2015 2014 Payroll and related employee benefits $ $ Insurance, including self-insurance reserves Reserve for estimated losses on uncompleted contracts Corporate income taxes and other taxes Accrued administrative cost Other $ $ |
Capital Leases
Capital Leases | 12 Months Ended |
Dec. 31, 2015 | |
Capital Leases | |
Capital Leases | Note 11—Capital Leases The Company leases vehicles and certain equipment under capital leases. The economic substance of the leases is a financing transaction for acquisition of the vehicles and equipment, and accordingly, the leases are recorded as assets and liabilities. Included in depreciation expense is amortization of vehicles and equipment held under capital leases, amortized over their useful lives on a straight-line basis. At December 31, 2015, total assets under capital leases were $4,874, accumulated depreciation was $4,103 and the net book value was $771. For 2014, total assets under capital leases were $5,528, accumulated depreciation was $3,506 and the net book value of assets was $2,022. The following is a schedule by year of the future minimum lease payments required under capital leases together with their present value as of December 31: 2016 $ 2017 2018 2019 2020 Total minimum lease payments $ Amounts representing interest ) Net present value of minimum lease payments Less: current portion of capital lease obligations ) Long-term capital lease obligations $ |
Credit Arrangements
Credit Arrangements | 12 Months Ended |
Dec. 31, 2015 | |
Credit Arrangements | |
Credit Arrangements | Note 12—Credit Arrangements Credit facilities and long-term debt consist of the following at December 31: 2015 2014 Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.78% to 3.51% per annum. Monthly principal and interest payments are due in the amount of $2,521 per month until the maturity dates, which range from November 30, 2016 to December 13, 2020. The notes are secured by certain construction equipment of the Company $ $ Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.94% to 2.75% per annum. Monthly principal and interest payments are due in the amount of $999 per month until the maturity dates, which range from March 31, 2019 to September 24, 2021. The notes are secured by certain construction equipment assets of the Company Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 2.01% to 2.19% per annum. Monthly principal and interest payments are due in the amount of $735 per month until the maturity dates, which range from March 5, 2020 to September 24, 2020. The notes are secured by certain construction equipment assets of the Company — Two secured mortgage notes payable to a bank, with an interest rate of 4.3% per annum. Monthly principal and interest payments of $60 per month began January 1, 2016 and continue until the maturity date of January 1, 2031. The notes are secured by two buildings — Senior Secured Notes payable to an insurance finance company, with interest rates that range from 3.65% to 4.60% per annum, with quarterly interest payments. Principal repayment for the $50,000 loan starts on December 28, 2016, for the $25,000 loan on July 15, 2017 and for the second $25,000 loan on November 9, 2019, and continue until their maturity dates, which range from December 28, 2022 to November 9, 2025. The notes are secured by the assets of the Company Less: current portion ) ) Long-term debt, net of current portion $ $ Scheduled maturities of long-term debt are as follows: Year Ending December 31, 2016 $ 2017 2018 2019 2020 Thereafter $ Revolving Credit Facility As of December 31, 2015, the Company had a revolving credit facility, as amended on December 12, 2014 (the “Credit Agreement”) with The PrivateBank and Trust Company, as administrative agent (the “Administrative Agent”) and co-lead arranger, The Bank of the West, as co-lead arranger, and IBERIABANK Corporation, Branch Banking and Trust Company and UMB Bank, N.A. (the “Lenders”). The Credit Agreement is a $125 million revolving credit facility whereby the Lenders agree to make loans on a revolving basis from time to time and to issue letters of credit for up to the $125 million committed amount. The termination date of the Credit Agreement is December 28, 2017. The principal amount of any loans under the Credit Agreement will bear interest at either: (i) LIBOR plus an applicable margin as specified in the Credit Agreement (based on the Company’s senior debt to EBITDA ratio as that term is defined in the Credit Agreement), or (ii) the Base Rate (which is the greater of (a) the Federal Funds Rate plus 0.5% or (b) the prime rate as announced by the Administrative Agent). 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, with a minimum prepayment of $5 million, at any time, potentially subject to make-whole provisions. The Credit Agreement includes customary restrictive covenants for facilities of this type, as discussed below. Commercial letters of credit outstanding were $12,105 at December 31, 2015 and $4,659 at December 31, 2014. Other than commercial letters of credit, there were no borrowings under this line of credit during the twelve months ended December 31, 2015, and available borrowing capacity at December 31, 2015 was $112,895. Senior Secured Notes and Shelf Agreement On December 28, 2012, the Company entered into a $50 million Senior Secured Notes purchase (“Senior Notes”) and a $25 million private shelf agreement (the “Notes Agreement”) by and among the Company, The Prudential Investment Management, Inc. and certain Prudential affiliates (the “Noteholders”). On June 3, 2015, the Notes Agreement was amended to provide for the issuance of additional notes of up to $75 million over the next three year period ending June 3, 2018 (“Additional Senior Notes”). The Senior Notes amount was funded on December 28, 2012. The Senior Notes are due December 28, 2022 and bear interest at an annual rate of 3.65%, paid quarterly in arrears. Annual principal payments of $7.1 million are required from December 28, 2016 through December 28, 2021 with a final payment due on December 28, 2022. The principal amount may be prepaid, with a minimum prepayment of $5 million, at any time, subject to make-whole provisions. On July 25, 2013, the Company drew $25 million available under the Notes Agreement. The notes are due July 25, 2023 and bear interest at an annual rate of 3.85% paid quarterly in arrears. Seven annual principal payments of $3.6 million are required from July 25, 2017 with a final payment due on July 25, 2023. On November 9, 2015, the Company drew $25 million available under the Additional Senior Notes Agreement. The notes are due November 9, 2025 and bear interest at an annual rate of 4.6% paid quarterly in arrears. Seven annual principal payments of $3.6 million are required from November 9, 2019 with a final payment due on November 9, 2025. Loans made under both the Credit Agreement and the Notes Agreement are secured by our assets, including, among others, our cash, inventory, goods, equipment (excluding equipment subject to permitted liens) and accounts receivable. All of our domestic subsidiaries have issued joint and several guaranties in favor of the Lenders and Noteholders for all amounts under the Credit Agreement and Notes Agreement. Both the Credit Agreement and the Notes Agreement contain various restrictive and financial covenants including among others, minimum tangible net worth, senior debt/EBITDA ratio, debt service coverage requirements and a minimum balance for unencumbered net book value for fixed assets. In addition, the agreements include restrictions on investments, change of control provisions and provisions in the event the Company disposes more than 20% of its total assets. The Company was in compliance with the covenants for the Credit Agreement and Notes Agreement at December 31, 2015. Canadian Credit Facility The Company has a demand credit facility for $8,000 in Canadian dollars with a Canadian bank for purposes of issuing commercial letters of credit in Canada. The credit facility has an annual renewal and provides for the issuance of commercial letters of credit for a term of up to five years. The facility provides for an annual fee of 1% for any issued and outstanding commercial letters of credit. Letters of credit can be denominated in either Canadian or U.S. dollars. At December 31, 2015 and 2014, letters of credit outstanding totaled $2,179 and $2,563 in Canadian dollars, respectively . At December 31, 2015, the available borrowing capacity was $6,426 in Canadian dollars. The credit facility contains a working capital restrictive covenant for our Canadian subsidiary, OnQuest Canada, ULC. At December 31, 2015, OnQuest Canada, ULC was in compliance with the covenant. On October 8, 2015, the facility was renewed with substantially the same terms and conditions. |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interests | |
Noncontrolling Interests | Note 13 — Noncontrolling Interests The Company is currently involved in several joint ventures, each of which have been determined to be a variable interest entity (“VIE”) and the Company was determined to be the primary beneficiary in each as a result of its significant influence over the joint venture operations. Each joint venture is a partnership, and consequently, no tax effect was recognized for the income. The net assets of the joint ventures are restricted for use by the specific project and are not available for general operations of the Company. The Blythe joint venture operating activities are included in the Company’s consolidated statements of income as follows for the years ended December 31: 2015 2014 Revenues $ $ Net income attributable to noncontrolling interests The project has been completed and Blythe made a final distribution of $29 to the non-controlling interest and $29 to the Company during the year ended December 31, 2015. Blythe made distributions of $1,590 to the non-controlling interests and $1,590 to the Company during the year ended December 31, 2014. There were no capital contributions made during the years ended December 31, 2015 and 2014. The carrying value of the assets and liabilities associated with the operations of the Blythe joint venture were included in the Company’s consolidated balance sheets and were immaterial at December 31, 2015 and 2014. The Carlsbad joint venture operating activities began in 2015 and are included in the Company’s consolidated statements of income as follows for the years ended December 31: 2015 2014 Revenues $ $ — Net income attributable to noncontrolling interests — The Carlsbad joint venture made no distributions to the partners and the Company made no capital contributions to the Carlsbad joint venture during the year ending December 31, 2015. The project is expected to be completed in 2017. The carrying value of the assets and liabilities associated with the operations of the Carlsbad joint venture are included in the Company’s consolidated balance sheets at December 31 as follows: 2015 2014 Cash $ $ — Accounts receivable — Current liabilities — The Wilmington joint venture operating activities began in 2015 and are included in the Company’s consolidated statements of income as follows for the years ended December 31: 2015 2014 Revenues $ $ — Net income attributable to noncontrolling interests — Wilmington joint venture made no distributions to the partners and the Company made no capital contributions to the Wilmington joint venture during the year ending December 31, 2015. The project is expected to be completed in 2018. The carrying value of the assets and liabilities associated with the operations of the Wilmington joint venture are included in the Company’s consolidated balance sheets at December 31 as follows: 2015 2014 Cash $ $ — Accounts receivable — Current liabilities — |
Contingent Earnout Liabilities
Contingent Earnout Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Contingent Earnout Liabilities | |
Contingent Earnout Liabilities | Note 14 — Contingent Earnout Liabilities In both March 2014 and March 2015, the Company paid $5,000 to the sellers of Q3C based on achievement of their operating performance targets each year, as outlined in the purchase agreement. The June 2014 acquisition of Vadnais Company included an earnout of $900, with $450 payable in September 2015 and $450 payable in September 2016, contingent upon meeting a certain performance targets for each of the two periods. The estimated fair value of the contingent consideration on the acquisition date was $679. In September 2015, the Company determined that the operations of Vadnais did not meet the September 2015 performance targets. As a result, the contingent consideration balance of $396 was credited to non-operating income at September 30, 2015. In December 2015, the Company determined that the September 2016 target was not likely to be achieved, and the remaining balance of $368 was credited to non-operating income. The purchase of the Third Quarter 2014 Acquisitions provided a contingent earnout amount for Surber of up to $1.4 million that could be earned during the period 2014 through 2016. The estimated fair value for the contingent earnout was $1.0 million on the acquisition date. In the fourth quarter 2015, the Company determined that none of the targets for the Surber operations were likely to be achieved, and the remaining balance of $1,083 was credited to non-operating revenue. As part of the Third Quarter 2014 Acquisition, a contingent earnout amount for Ram-Fab of $0.2 million could be earned based on estimated earnings of a six-month operating project. Because the operating results for the Ram-Fab project were not met during the acquisition measurement period, the contingent earnout liability was reduced in June 2015 and the value of intangible assets of the acquisition was reduced by the same amount. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 15—Commitments and Contingencies Leases — The Company leases certain property and equipment under non-cancelable operating leases, which expire at various dates through 2023. The leases require the Company to pay all taxes, insurance, maintenance, and utilities and are classified as operating leases in accordance with ASC Topic 840 “Leases”. The future minimum lease payments required under non-cancelable operating leases are as follows: For the Years Ending December 31, Real Property Real Property (Related Party) Equipment Total Commitments 2016 $ $ $ $ 2017 2018 2019 2020 Thereafter — $ $ $ $ Leases identified above as related party leases represent property with entities related through common ownership by stockholders, officers, and directors of the Company. Total lease expense during the years ended December 31, 2015, 2014 and 2013 was $21,815, $14,325 and $14,533, respectively, including amounts paid to related parties of $1,445, $1,505 and $1,556, respectively. Withdrawal liability for multiemployer pension plan — In November 2011, members of the Pipe Line Contractors Association “PLCA” including ARB, Rockford and Q3C (prior to the Company’s acquisition in 2012), withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan (“Plan”). These withdrawals were made in order to mitigate additional liability in connection with the significantly underfunded Plan. The Company recorded a withdrawal liability of $7,500, which was increased to $7,585 after the acquisition of Q3C, based on information provided by the Plan. The Plan asserted that the PLCA members did not affect a proper withdrawal in 2011, and in May 2014, the Plan asserted that the total liability for the Company was $11,819. A legal proceeding commenced, and a United States District Court ruled that the withdrawal of the PLCA members in 2011 was not effective. The PLCA appealed this decision, but as required by the Plan, the Company began making monthly payments which have totaled $1,834 through December 31, 2015. The payments have been expensed. On September 2, 2015, the U.S. Court of Appeals for the 7th Circuit reversed the decision of the District Court and ruled that the withdrawal was effective in 2011 as had been asserted by the PLCA. The Company has received a revised withdrawal liability calculation from the Plan at an amount approximately equal to the company’s accrual amount. The Company and other members of the PLCA are engaged in arbitration to further reduce the amount owed. The Company is making payments while awaiting the results of the arbitration process. The Company has no plans to withdraw from any other agreements Letters of credit — As of December 31, 2015 and 2014, the Company had total letters of credit outstanding of approximately $13,679 and $6,864, respectively. The outstanding amounts include the U.S. dollar equivalents for letters of credit issued in Canadian dollars. Litigation — On February 7, 2012, the Company was sued in an action entitled North Texas Tollway Authority (“NTTA”), Plaintiff v. James Construction Group, LLC, and KBR, Inc., Defendants, v. Reinforced Earth Company, Third-Party Defendant (the “Lawsuit”). The Company participated in court-ordered mediation for 18 months, and on February 25, 2015 the Lawsuit was settled for an expected cost to the Company of $9 million which was the accrued liability balance at December 31, 2014. As part of the settlement, one of the defendants paid us $8 million to remove all of their liability. Additionally, a second defendant agreed to provide up to $5.4 million to pay for the total expected remediation cost of approximately $22.4 million. The Company will use the $17 million to pay for a third-party contractor approved by the NTTA. In the event that the total remediation costs exceed the estimated amount, the second defendant would pay 20% of the excess amount and the Company would pay for 80% of the excess amount. The Company believes that the $17 million is the best and most probable estimate for its portion of the remediation cost as of December 31, 2015. However, the Company cannot provide assurance that the final cost will not exceed the amount accrued. At December 31, 2015, the Company is engaged in dispute resolution to enforce collection for two construction projects completed by the Company in 2014. For one project, a cost reimbursable contract, the Company has recorded a receivable of $32.9 million, and for the other project, the Company has a receivable balance due of $17.9 million. At December 31, 2015, the Company has not recorded revenues in excess of cost for these two projects; however, the Company has specific reserves for both projects of approximately $26 million included in “billings in excess of costs and estimated earnings.” At this time, the Company cannot predict the amount that it will collect nor the timing of any collection. The dispute resolution for the $32.9 million receivable involves mandatory international arbitration for four separate construction projects. As part of the process of exchanging information with the owner, the Company determined in the fourth quarter of 2015 that there were no remaining claims from the owner for two of the smaller projects for which the Company had been paid in full. As a result, the Company recorded approximately $2 million in revenues and margin in the quarter. The Company is subject to other claims and legal proceedings arising out of its business. The Company provides for costs related to contingencies when a loss from such claims is probable and the amount is reasonably determinable. In determining whether it is possible to provide an estimate of loss, or range of possible loss, the Company reviews and evaluates its litigation and regulatory matters on a quarterly basis in light of potentially relevant factual and legal developments. If we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for a potential litigation loss. 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 defense to the claims and believes that the reasonably possible outcome of such claims will not, individually or in the aggregate, have a materially adverse effect on the consolidated results of operations, financial condition or cash flows of the Company. Bonding — As of December 31, 2015, 2014 and 2013, the Company had bid and completion bonds issued and outstanding totaling approximately $1,483,877, $1,518,018 and $1,458,744, respectively. Contingent Consideration — Earnouts related to acquisitions are discussed in Note 14 — “Contingent Earnout Liabilities” . |
Reportable Operating Segments
Reportable Operating Segments | 12 Months Ended |
Dec. 31, 2015 | |
Reportable Operating Segments | |
Reportable Operating Segments | Note 16—Reportable Operating Segments The Company segregates its business into three operating segments: the West Construction Services segment (“West segment”), the East Construction Services segment (“East segment”) and the Energy segment (“Energy segment”). The West segment includes the underground and industrial operations and construction services performed by ARB, ARB Structures, Inc., Rockford, Q3C, and Vadnais, acquired in June 2014. Most of the entities perform work primarily in California; however, Rockford operates throughout the United States and Q3C operates in Colorado and the upper Midwest United States. The Blythe, Carlsbad and Wilmington joint ventures are also included as part of the segment. The East segment includes the JCG Heavy Civil division, the JCG Infrastructure and Maintenance division, BW Primoris and the Cardinal Contractors, Inc. construction business, located primarily in the southeastern United States and in the Gulf Coast region of the United States. The Energy segment includes the operations of the PES pipeline and gas facility construction and maintenance operations and the PES Industrial division, whose operations are located primarily in the southeastern United States and in the Gulf Coast region. The segment also includes the Aevenia, Surber and Ram-Fab operations as well as the OnQuest, Inc. and OnQuest Canada, ULC operations, which provide for the design and installation of LNG facilities and high-performance furnaces and heaters for the oil refining, petrochemical and power generation industries. All intersegment revenues and gross profit, which were immaterial, have been eliminated in the following tables. Segment Revenues Revenue by segment for the years ended December 31, 2015, 2014 and 2013 was as follows: Year Ended December 31, 2015 2014 2013 Business Segment Revenue % of Revenue Revenue % of Revenue Revenue % of Revenue West $ % $ % $ % East % % % Energy % % % Total $ % $ % $ % Segment Gross Profit Gross profit by segment for the years ended December 31, 2015, 2014 and 2013 was as follows: Year Ended December 31, 2015 2014 2013 Business Segment Gross Profit % of Segment Revenue Gross Profit % of Segment Revenue Gross Profit % of Segment Revenue West $ % $ % $ % East % % % Energy % % % Total $ % $ % $ % Segment Goodwill The amount of goodwill recorded by segment at December 31, 2015 and 2014 was as follows: Segment 2015 2014 West $ $ East Energy Total $ $ As part of the Company’s annual review of goodwill impairment, an impairment expense of $401 was recorded in December 2015 for the goodwill attributed to Cardinal Contractors, Inc. Geographic Region — Revenues and Total Assets The majority of the Company’s revenues are derived from customers in the United States, and less than 1% is generated from sources outside of the United States. At December 31, 2015 approximately 1% of total assets were located outside of the United States. |
Customer Concentrations
Customer Concentrations | 12 Months Ended |
Dec. 31, 2015 | |
Customer Concentrations | |
Customer Concentrations | Note 17—Customer Concentrations The Company operates in multiple industry segments encompassing the construction of commercial, industrial, and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues and consist of a different group of customers in each year. During the years ended December 31, 2015, 2014 and 2013, the Company generated 48.9%, 36.4% and 35.6%, of its revenues, respectively, from the following customers: Description of Customer’s 2015 2014 2013 Business Amount Percentage Amount Percentage Amount Percentage Texas DOT $ % $ % $ % Chemical/Energy producer % * * * * Private gas and electric utility % % % Pipeline operator % * * * * Gas utility % * * % Public gas and electric utility % % % Petrochemical producer * * % * * Pipeline operator * * % * * Gas utility * * * * % $ % $ % $ % (*) Indicates a customer with less than 5% of revenues during such period. For the years ended December 31, 2015, 2014 and 2013, approximately 59.4%, 53.6% and 50.0%, respectively, of total revenues were generated from the top ten customers of the Company in that year. In each of the years, a different group of customers comprised the top ten customers by revenue. At December 31, 2015, approximately 15.7% of the Company’s accounts receivable were due from one customer, and that customer provided 9.0% of the Company’s revenues for the year ended December 31, 2015. At December 31, 2014, approximately 10.0% of the Company’s accounts receivable were due from one customer, and that customer provided 4.0% of the Company’s revenues for the year ended December 31, 2014. |
Multiemployer Plans
Multiemployer Plans | 12 Months Ended |
Dec. 31, 2015 | |
Multiemployer Plans | |
Multiemployer Plans | Note 18 — Multiemployer Plans Union Plans — Various subsidiaries in the West segment are signatories to collective bargaining agreements. These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. The Company contributed $34,296, $38,107 and $42,919, to multiemployer pension plans for the years ended December 31, 2015, 2014 and 2013, respectively. These costs were charged to the related construction contracts in process. Contributions during 2015 and 2014 decreased from the prior years as a result of a decrease in the number of man-hours worked by our union labor. For the Company, the financial risks of participating in multiemployer plans are different from single-employer plans in the following respects: Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. If a participating employer chooses to stop participating in the plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan. Under U.S. legislation regarding multiemployer pension plans, an employer is required to pay an amount that represents its proportionate share of a plan’s unfunded vested benefits in the event of withdrawal from a plan or upon plan termination. The Company participates in a number of multiemployer pension plans, and its potential withdrawal obligation may be significant. Any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP. As discussed in Note 15—“ Commitments and Contingencies ,” in 2011 the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan. The Company has no plans to withdraw from any other agreements. During the last three years, the Company made annual contributions to 82 pension plans. Two of the pension plans that the Company contributed to in 2015 listed the Company in the plan’s Form 5500 as providing more than 5% of the plan’s total contributions. The contribution to those plans for the twelve months ending December 31, 2015 were $2,180 for one plan and $457 for the second plan. One of the pension plans that the Company contributed to in 2014 listed the Company in the plan’s Form 5500 as providing more than 5% of the plan’s total contributions. The contribution to that plan was $5,659 for the twelve months ending December 31, 2014. Two pension plans listed the Company on their Form 5500 as providing more than 5% of the plan’s total 2013 contributions. The contributions for the two plans amounted to $1,427 for the twelve months ending December 31, 2013. Our participation in significant plans for the year ended December 31, 2015 and 2014 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three digit plan number. The “Zone Status” is based on the latest information that we received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The “Surcharge Imposed” column includes plans in a red zone status that require a payment of a surcharge in excess or regular contributions. The next column lists the expiration date of the Company’s collective bargaining agreement related to the plan. The table follows: EIN / Pension Plan Pension Protection Act Zone Status FIP/RP Status Pending / Surcharge Collective Bargaining Agreement Expiration Contributions of the Company Pension Fund Name Number 2015 2014 Implemented Imposed Date 2015 2014 2013 Central Pension Fund of the International Union of Operating Engineers and Participating Employers 36-6052390/001 Green as of February 1, 2014 Green as of February 1, 2013 No No 6/04/2017 $ $ $ Laborers International Union of North America National (Industrial) Pension Fund 52-6074345/001 Red as of January 1, 2014 Red as of January 1, 2013 Yes No 6/04/2017 Southern California Pipetrades Trust Funds 51-6108443/001 Green as of January 1, 2014 Green as of January 1, 2013 No No 7/30/2016 Pipeline Industry Benefit Fund 73-6146433/001 Green as of January 1, 2014 Green as of January 1, 2013 No No 6/04/2017 Laborers Pension Trust Fund for Northern California 94-6277608/001 Yellow as of June 1, 2014 Yellow as of June 1, 2013 Yes No 6/30/2019 Construction Laborers Pension Trust for Southern California 43-6159056/001 Green as of January 1, 2014 Green as of January 1, 2013 No No 6/30/2018 Contributions to significant plans $ $ $ Contributions to other multiemployer plans Total contributions made $ $ $ |
Company Retirement Plans
Company Retirement Plans | 12 Months Ended |
Dec. 31, 2015 | |
Company Retirement Plans | |
Company Retirement Plans | Note 19—Company Retirement Plans 401(k) Plan — The Company provides a 401(k) plan for its employees not covered by collective bargaining agreements. Under the plan, employees are allowed to contribute up to 100% of their compensation, within the Internal Revenue Service (“IRS”) prescribed annual limit. The Company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions, which vest immediately. The Company may, at the discretion of its Board of Directors, make an additional profit share contribution to the 401(k) plan. No such contributions were made during 2013 through 2015. The Company’s contribution to the plan for the years ended December 31, 2015, 2014 and 2013 were $3,702, $3,111 and $2,771, respectively. Employees of the various acquisitions made by the Company from 2012 through 2015 became eligible for the Company’s 401(k) plan. OnQuest Canada, ULC RRSP-DPSP Plan — The Company provides a RRSP-DPSP plan (Registered Retirement Saving Plan—Deferred Profit Sharing Plan) for its employees of OnQuest Canada, ULC. There are two components to the plan. The RRSP portion is contributed to by the employee, while the Company portion is paid to the DPSP. Under this plan, the Company makes employer match contributions of 100% of the first 3% and 50% of the next 2% of employee contributions. Vesting in the DPSP portion is one year of employment. The Company’s contribution to the DPSP during the years ended December 31, 2015, 2014 and 2013 was $55, $69 and $70, respectively. The Company has no other post-retirement benefits. |
Deferred Compensation Agreement
Deferred Compensation Agreements and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Compensation Agreements and Stock-Based Compensation | |
Deferred Compensation Agreements and Stock-Based Compensation | Note 20—Deferred Compensation Agreements and Stock-Based Compensation Primoris Long-Term Retention Plan (“LTR Plan”) — The Company adopted a long-term retention plan for certain senior managers and executives. The voluntary plan provides for the deferral of one half of the participant’s annual earned bonus for one year. Except in the case of death, disability or involuntary separation from service, the deferred compensation is vested to the participant only if actively employed by the Company on the payment date of bonus amounts the following year. The amount of compensation deferred under this plan is calculated each year. Total deferred compensation liability under this plan as of December 31, 2015 and 2014 was $5,220 and $4,779, respectively. Participants in the long term retention plan may elect to purchase Company common stock at a discounted price. For bonuses earned in 2015 and 2014, the participants could use up to one sixth of their bonus amount to purchase shares of stock, whose price was calculated as 75% of the average market closing price for the month of December 2015 and 2014, respectively. The 25% discount is treated as compensation to the participant. JCG Stakeholder Incentive Plan — In December 2015 and 2014, JCG maintained a deferred compensation plan for some senior management employees. The plan provided for annual vesting over a five-year period. Once vested and upon a triggering event, such as termination, death or disability, the deferred benefit amount plus interest is paid in equal monthly installments over three years. The amount of compensation deferred under the plan is calculated each year. In 2014, the terms of the plan were changed, and the participants were given the option of payment of accrued amounts over a three year period or payments made as part of the LTR plan with 50% of the accrued amount added to the LTR payments made in 2015 and the remainder added to LTR payments to be made in 2016. Total deferred compensation liability under this plan at December 31, 2015 and 2014 was $278 and $599, respectively. Stock-based compensation — In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”), after approval by the shareholders and adoption by the Company on May 3, 2013. On May 3, 2013, the Board of Directors granted 100,000 Restricted Stock Units (“Units”) to an executive under the Equity Plan. Commencing annually on May 10, 2014 and ending April 30, 2017, the Units vest in four equal installments subject to continuing employment of the executive. At December 31, 2015, a total of 50,000 Units were vested. On March 24, 2014, the Board of Directors granted 48,512 Units to another executive under the Equity Plan. At December 31, 2015, a total of 24,256 Units were vested. The remaining 24,256 Units will vest on March 23, 2017 subject to continuing employment of the executive. Vesting of both grants is also subject to earlier acceleration, termination, cancellation or forfeiture as provided in the underlying Primoris Restricted Stock Unit agreement (“RSU Award Agreement”). Each Unit represents the right to receive one share of the Company’s common stock when vested. Under guidance of ASC Topic 718 “ Compensation — Stock Compensation ”, stock-based compensation cost is measured at the date of grant, based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award). The fair value of the Units was based on the closing market price of our common stock on the day prior to the date of the grant. Stock compensation expense for the Units is being amortized using the straight-line method over the service period. For the twelve months ended December 31, 2015, the Company recognized $1,050 in compensation expense. At December 31, 2015, approximately $1.3 million of unrecognized compensation expense remains for the Units, which will be recognized over the next 1.3 years through April 30, 2017. Vested Units accrue “Dividend Equivalents” (as defined in the Equity Plan) which will be accrued as additional Units. At December 31, 2015, a total of 722 Dividend Equivalent Units were accrued. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Related Party Transactions | Note 21—Related Party Transactions Primoris has entered into leasing transactions with Stockdale Investment Group, Inc. (“SIGI”). Brian Pratt, our Chairman of the Board of Directors and our largest stockholder, holds a majority interest and is the chairman, president and chief executive officer and a director of SIGI. John M. Perisich, our Executive Vice President and General Counsel, is secretary of SIGI. Primoris leases properties from SIGI at the following locations: 1. Bakersfield, California (lease expires October 2022) 2. Pittsburg, California (lease expires April 2023) 3. San Dimas, California (lease expires March 2019) During the years ended December 31, 2015, 2014 and 2013, the Company paid $831, $862 and $907, respectively, in lease payments to SIGI for the use of these properties. Primoris leases a property from Roger Newnham, a former owner and current manager of our subsidiary, OnQuest Canada, ULC. The property is located in Calgary, Canada. During the years ended December 31, 2015, 2014 and 2013 Primoris paid $254, $289 and $295, respectively, in lease payments. The current term of the lease is through December 31, 2017. Primoris leases a property from Lemmie Rockford, one of the Rockford sellers, which commenced November 1, 2011. The property is located in Toledo, Washington. During the years ended December 31, 2015, 2014 and 2013, Primoris paid $90, $90 and $90, respectively, in lease payments. The lease will expire in January 2017. Primoris leases a property from Quality RE Partners, owned by three of the Q3C selling shareholders, of whom two are current employees, including Jay Osborn, an operations president in the West Construction segment. The property is located in Little Canada, Minnesota. During the years ended December 31, 2015, 2014 and 2013, the Company paid $270, $264 and $264, respectively, in lease payments to Quality RE Partners. The lease expires in October 2022. In addition, in November 2015, Q3C purchased construction equipment at fair value from Quality RE Partners for $589. Q3C also leased construction equipment from Mr. Osborn during 2015 for $36 and subsequently purchased the equipment at fair value for $145. As discussed in Note 8— “ Equity Method Investments ”, the Company owns several non-consolidated investments and has recognized revenues on work performed by the Company for those joint ventures. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | Note 22—Income Taxes The components of the provision for income taxes are as follows: 2015 2014 2013 Current provision (benefit) Federal $ $ $ State Foreign $ $ $ Deferred provision (benefit) Federal ) ) State ) Foreign ) ) ) ) Change in valuation allowance — — ) Total $ $ $ A reconciliation of income tax expense compared to the amount of income tax expense that would result by applying the U.S. federal statutory income tax rate to pre-tax income is as follows: 2015 2014 2013 U.S. federal statutory income tax rate % % % State taxes, net of federal income tax impact % % % Foreign tax credit )% )% )% Canadian income tax % % % Domestic production activities deduction )% )% )% Nondeductible meals & entertainment % % % Other items )% )% % Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests % % % Impact of income from noncontrolling interests on effective tax rate )% )% ) Effective tax rate on income before provision for income taxes and noncontrolling interests % % % Deferred income taxes are recognized for temporary differences between the financial reporting basis of the assets and liabilities and their respective tax basis and operating losses, capital losses and tax credit carry-forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based upon consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. See Note 2 — “ Summary of Significant Accounting Policies ” regarding the change in the presentation of deferred income taxes on the Consolidated Balance Sheet as of December 31, 2015. During 2009, the Company recognized a capital loss related to the sale of its equity interest in ARB Arendal. A valuation allowance of $344 was provided against the Company’s deferred tax for its capital loss carryforward as the Company believed that it was more likely than not that this capital loss would not be realized. However, in the 2012 tax year, the Company generated sufficient capital gain to utilize the capital loss carryforward, resulting in the utilization of the deferred tax asset and removal of the related valuation allowance. No valuation allowance has been provided to the Company’s deferred tax assets as the Company believes it is more likely than not that these deferred tax assets will be realized. The tax effect of temporary differences that give rise to deferred income taxes for the year ended December 31, 2015 and 2014 are as follows: 2015 2014 Deferred tax assets: Accrued workers compensation $ $ Insurance reserves Other accrued liabilities Capital loss carryforward Foreign tax credit Accrued Compensation Total deferred tax assets Deferred tax liabilities Depreciation and amortization ) ) Prepaid expenses and other ) ) Total deferred tax liabilities ) ) Net deferred tax assets (liabilities) $ $ ) In the third quarter of 2014, the Internal Revenue Service concluded an examination of our federal income tax returns for 2011 and 2012 which did not have a material impact on our financial statements. The Company’s federal income tax returns are no longer subject to examination for tax years before 2013. The statutes of limitation of state and foreign jurisdictions vary generally between 3 to 5 years. Accordingly, the tax years 2010 through 2014 generally remain open to examination by the other taxing jurisdictions in which the Company operates. A reconciliation of the beginning and ending amounts and aggregate changes in the balance of unrecognized tax benefits for each period is as follows: 2015 2014 2013 Beginning balance $ $ $ Increases in balances for tax positions taken during the current year — — Increases in balances for tax positions taken during prior years — — Settlements and effective settlements with tax authorities ) ) — Lapse of statute of limitations — ) ) Total $ — $ $ The Company settled all unrecognized tax benefits with the tax authorities in the third quarter of 2015. The Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense, which for the three years presented were not material. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share | |
Earnings Per Share | Note 23—Earnings Per Share The computation of basic and diluted earnings per share for the years ended December 31, 2015, 2014 and 2013 follows: 2015 2014 2013 Numerator: Net income $ $ $ Net income attributable to noncontrolling interests ) ) ) Net income attributable to Primoris $ $ $ Denominator (shares in thousands): Weighted average shares for computation of basic earnings per share Dilutive effect of shares issued to independent directors Dilutive effect of unvested restricted stock units (1) Dilutive effect of shares issued to Q3C sellers (2) — — Weighted average shares for computation of diluted earnings per share Earnings per share attributable to Primoris: Basic $ $ $ Diluted $ $ $ (1) Represents the effect of the grant of 100,000 shares of Restricted Stock Units on May 3, 2013 and 48,512 Units on March 24, 2014. (2) Represents the effect of the 29,273 unregistered shares of common stock issued in February 2013 as part of the purchase consideration for the Q3C acquisition in 2012. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | Note 24—Stockholders’ Equity Common Stock The Company is authorized to issue 90,000,000 shares of $0.0001 par value common stock, of which 51,676,140 and 51,561,396 shares were issued and outstanding as of December 31, 2015 and 2014, respectively. As of December 31, 2015, there were 399 holders of record of our common stock. The Company issued 96,828 shares of common stock in 2015 and 77,455 shares of common stock in 2014 under the Company’s LTR Plan. The shares were purchased by the participants of the LTR Plan with payment made to the Company of $1,621 in 2015 and $1,671 in 2014. The Company’s LTR Plan for managers and executives allows participants to use a portion of their annual bonus amount to purchase Company common stock at a discount from the market price. The shares purchased in March 2015 were for bonus amounts earned in 2014 and the number of shares was calculated at 75% of the average market price of December 2014. The Company issued shares of common stock under the Equity Plan to the non-employee members of the Board of Directors as part of the Company’s quarterly compensation provided to the Directors. Shares issued were as follows: 9,748 shares in August 2015, 8,168 shares in March 2015, 6,172 shares in August 2014, 6,375 shares in February 2014, 9,110 shares in August 2013, and 12,480 shares in March 2013, The shares were fully vested upon issuance and have a one-year trading restriction. As part of the acquisition of Q3C, the Company issued 29,273 unregistered shares of stock on January 7, 2013 based on the average December 2012 closing prices, or $14.69 per share for a total value of $430. As discussed in Note 20—“ Deferred Compensation Agreements and Stock-Based Compensation ,” the Board of Directors has granted a total of 148,512 shares of Units under the Equity Plan. At December 31, 2015, there were 2,163,907 shares of common stock reserved to provide for the grant and exercise of all future stock option grants, SARS, Units and grants of restricted shares under the Equity Plan. Other than the Units discussed above, there were no stock options, SARS or restricted shares of stock issued or outstanding at December 31, 2015. The Company was provided 15,144 shares of Primoris common stock in exchange for the payment of a $300 note receivable associated with the February 2010 sale of the Company’s Ecuador business. The note was fully reserved in 2010. The shares, valued at $19.81 per share, were cancelled by the Company and the Company recorded the transaction as non-operating income in March 2013. In February 2014, the Company’s Board of Directors authorized a share repurchase program under which the Company, from time to time and depending on market conditions, share price and other factors, could acquire shares of its common stock on the open market or in privately negotiated transactions up to an aggregate purchase price of $23 million. During the period from February 2014 through September 2014, the Company purchased and cancelled 100,000 shares of stock for $2.8 million at an average cost of $28.44 per share. This share repurchase program expired on December 31, 2014. Preferred Stock The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. No shares of Preferred Stock were outstanding at December 31, 2015 or 2014. Warrants At December 31, 2015 and 2014, there were no warrants outstanding. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Selected Quarterly Financial Information (Unaudited) | |
Selected Quarterly Financial Information (Unaudited) | Note 25—Selected Quarterly Financial Information (Unaudited) Selected unaudited quarterly consolidated financial information is presented in the following tables: Year Ended December 31, 2015 (In thousands, except per share data) 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Revenues $ $ $ $ Gross profit Net income Net income attributable to Primoris Earnings per share: Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ Weighted average shares outstanding (in thousands) Basic Diluted Year Ended December 31, 2014 (In thousands, except per share data) 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Revenues $ $ $ $ Gross profit Net income Net income attributable to Primoris Earnings per share: Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ Weighted average shares outstanding (in thousands) Basic Diluted Year Ended December 31, 2013 (In thousands, except per share data) 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Revenues $ $ $ $ Gross profit Net income Net income attributable to Primoris Earnings per share: Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ Weighted average shares outstanding (in thousands) Basic Diluted |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Event | |
Subsequent Event | Note 26—Subsequent Event On February 22, 2016, the Board of Directors declared a cash dividend of $0.055 per common share for stockholders of record as of March 31, 2016, payable on or about April 15, 2016. |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Basis of presentation | Basis of presentation — The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the financial statement rules and regulations of the Securities and Exchange Commission (“SEC”). References for Financial Accounting Standards Board (“FASB”) standards are made to the FASB Accounting Standards Codification (“ASC”). Certain reclassifications have been made to the prior year Consolidated Balance Sheet to conform classification of deferred tax assets and liabilities to the current year presentation as outlined on “Note 2— Summary of Significant Accounting Policies — Recently Issued Accounting Pronouncements ” and had no impact on net income or earnings per share. |
Principles of consolidation | Principles of consolidation — The accompanying Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries and the noncontrolling interests of the Blythe, Carlsbad and Wilmington joint ventures, which are variable interest entities for which the Company is the primary beneficiary as determined under the provisions of ASC Topic 810-10-45. All intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates — The preparation of the Company’s Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. As a construction contractor, the Company uses significant estimates for costs to complete construction projects and the contract value of construction projects. These estimates have a direct effect on gross profit as reported in these consolidated financial statements. Actual results could materially differ from the Company’s estimates. |
Operating cycle | Operating cycle — In the accompanying consolidated balance sheets, assets and liabilities relating to long-term construction contracts (e.g. costs and estimated earnings in excess of billings, billings in excess of costs and estimated earnings) are considered current assets and current liabilities, since they are expected to be realized or liquidated in the normal course of contract completion, although completion may require more than one calendar year. Consequently, the Company has significant working capital invested in assets that may have a liquidation period extending beyond one year. The Company has claims receivable and retention due from various customers and others that are currently in dispute, the realization of which is subject to binding arbitration, final negotiation or litigation, all of which may extend beyond one calendar year. |
Cash and cash equivalents | Cash and cash equivalents — The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents. |
Short-term investments | Short-term investments — The Company classifies as short-term investments all securities or other assets acquired which have ready marketability and can be liquidated, if necessary, within the current operating cycle and which have readily determinable fair values. Short-term investments are classified as available for sale and are recorded at fair value using the specific identification method. At December 31, 2015, the Company had no short-term investments. In prior years, the majority of the Company’s short-term investments were in short-term dollar-denominated bank deposits and U.S. Treasury Bills in order to provide government backing of the investments. |
Customer retention deposits and restricted cash | Customer retention deposits and restricted cash — Customer retention deposits consist of contract retention payments made by customers into bank escrow cash accounts as required in some state jurisdictions. Investments for these amounts are limited to highly graded U.S. and municipal government debt obligations, investment grade commercial paper and CDs, which limits credit risk on these balances. Escrow cash accounts are released to the Company by customers as projects are completed in accordance with contract terms. |
Inventory and uninstalled contract materials | Inventory and uninstalled contract materials — Inventory consists of expendable construction materials and small tools that will be used in construction projects and is valued at the lower of cost, using first-in, first-out method, or market. Uninstalled contract materials are certain job specific materials not yet installed, primarily for highway construction projects, which are valued using the specific identification method relating the cost incurred to a specific project. In most cases, the Company is able to invoice a state agency for the materials, but title has not yet passed to the state agency. |
Business combinations | Business combinations —Business combinations are accounted for using the acquisition method of accounting. We use the fair value of the assets acquired and liabilities assumed to account for the purchase price of businesses. The determination of fair value requires estimates and judgments of future cash flow expectations to assign fair values to the identifiable tangible and intangible assets. GAAP provides a “measurement period” of up to one year in which to finalize all fair value estimates associated with the acquisition of a business. Most estimates are preliminary until the end of the measurement period. During the measurement period, any material, newly discovered information that existed at the acquisition date would be reflected as an adjustment to the initial valuations and estimates. After the measurement date, any adjustments would be recorded as a current period income or expense. Changes in deferred tax asset valuation allowances and acquired tax uncertainties after the measurement period are also recognized in current period net income. Expenses incurred in connection with a business combination are expensed as incurred. |
Goodwill and other intangible assets | Goodwill and other intangible assets — The Company accounts for goodwill in accordance with ASC Topic 350 “ Intangibles — Goodwill and Other ”. Under ASC Topic 350, goodwill is not amortized but is subject to an annual impairment test as of the first day of the fourth quarter of each year, with more frequent testing if indicators of potential impairment exist. The impairment review is performed at the reporting unit level for those units with recorded goodwill. In the fourth quarter, an impairment expense of $401 was recorded relating to the goodwill attributed to Cardinal Contractors, Inc., which is a part of the East Segment, and in December 2013, an expense of $808 was recorded relating to an FSSI intangible asset, a part of the Energy Segment, for customer relations reflecting the impairment of the asset. There were no other impairments of goodwill for the years ended December 31, 2015, 2014 and 2013. |
Income tax | Income tax — Current income tax expense is the amount of income taxes expected to be paid for the financial results of the current year. A deferred income tax liability or asset is established for the expected future tax consequences resulting from the differences in financial reporting and tax basis of assets and liabilities between GAAP and the tax codes. A valuation allowance is provided if it is more likely than not that some or all of the deferred tax assets will not be realized. The Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement standards as set forth in ASC Topic 740. The difference between a tax position taken or expected to be taken on the Company’s income tax returns and the benefit recognized on our financial statements is referred to as an unrecognized tax benefit. Amounts for uncertain tax positions are adjusted in periods when new information becomes available or when positions are effectively settled. The Company recognizes accrued interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. |
Comprehensive income | Comprehensive income — The Company accounts for comprehensive income in accordance with ASC Topic 220 “ Comprehensive Income ”, which specifies the computation, presentation and disclosure requirements for comprehensive income (loss). During the reported periods, the Company had no material other comprehensive income. |
Foreign operations | Foreign operations — At December 31, 2015, the Company had operations in Canada with assets aggregating approximately $14,111, compared to $11,505 at December 31, 2014. The Canadian operations had revenues of $17,763 and income before tax of $252 for the year ending December 31, 2015; revenues of $19,840 and income before tax of $3,183 for the year ended December 31, 2014, and revenues of $15,993 and income before tax of $2,742 for the year ending December 31, 2013. |
Functional currencies and foreign currency translation | Functional currencies and foreign currency translation — The Company uses the United States dollar as its functional currency in Canada for the Canadian operations of OnQuest Canada, as substantially all monetary transactions are made in U.S. dollars, and other significant economic facts and circumstances currently support that position. Since these factors may change, the Company periodically assesses its position with respect to the functional currency of its foreign subsidiary. Non-monetary balance sheet items and related revenue, gain, expense and loss accounts are valued using historical rates. All other items are re-measured using the current exchange rate in effect at the balance sheet date. Foreign exchange losses of $763 in 2015, gains of $374 in 2014 and gains of $153 in 2013 are included in the “other income or expense” line of the Consolidated Statements of Income. |
Partnerships and joint ventures | Partnerships and joint ventures — As is normal in the construction industry, the Company is periodically a member of a partnership or a joint venture. These partnerships or joint ventures are used primarily for the execution of single contracts or projects. The Company’s ownership can vary from a small noncontrolling ownership to a significant ownership interest. The Company evaluates each partnership or joint venture to determine whether the entity is considered a variable interest entity (“VIE”) as defined in ASC Topic 810, and if a VIE, whether the Company is the primary beneficiary of the VIE, which would require the Company to consolidate the VIE with the Company’s financial statements. When consolidation occurs, the Company accounts for the interests of the other parties as a noncontrolling interest and discloses the net income attributable to noncontrolling interests. See Note 13 — “ Nonconrolling Interests ” for further information |
Equity method of accounting | Equity method of accounting — The Company accounts for its interest in an investment using the equity method of accounting per ASC Topic 323 if the Company is not the primary beneficiary of a VIE or does not have a controlling interest. The investment is recorded at cost and the carrying amount is adjusted periodically to recognize the Company’s proportionate share of income or loss, additional contributions made and dividends and capital distributions received. The Company records the effect of any impairment or an other than temporary decrease in the value of its investment. In the event a partially owned equity affiliate were to incur a loss and the Company’s cumulative proportionate share of the loss exceeded the carrying amount of the equity method investment, application of the equity method would be suspended and the Company’s proportionate share of further losses would not be recognized unless the Company committed to provide further financial support to the affiliate. The Company would resume application of the equity method once the affiliate became profitable and the Company’s proportionate share of the affiliate’s earnings equals the Company’s cumulative proportionate share of losses that were not recognized during the period the application of the equity method was suspended. See Note 8 — “Equity Method Investments” regarding prior-year impairments of investments in partially owned affiliates. |
Cash concentration | Cash concentration — The Company places its cash in short term U.S. Treasury bonds and certificates of deposit (“CDs”). At December 31, 2015 and 2014, the Company had cash balances of $161.1 million and $139.5 million, respectively. At December 31, 2015, the $161.1 million of cash consisted of $131.2 million in U.S. Treasury bill funds, backed by the federal government, and the remaining $29.9 million are held in high credit quality financial institutions in order to mitigate the risk of holding funds not backed by the federal government or in excess of federally backed limits. At December 31, 2014, the $139.5 million consisted of $121.5 million held in U.S. Treasury bill funds and $18.0 million with high credit quality financial institutions. |
Collective bargaining agreements | Collective bargaining agreements — Approximately 24% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2015. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 83 collective bargaining agreements to which the Company is a party to, 56 will require renegotiation during 2016. The Company has not had a work stoppage in more than 20 years. |
Multiemployer plans | Multiemployer plans — Various subsidiaries in the West segment are signatories to collective bargaining agreements. These agreements require that the Company participate in and contribute to a number of multiemployer benefit plans for its union employees at rates determined by the agreements. The trustees for each multiemployer plan determine the eligibility and allocations of contributions and benefit amounts, determine the types of benefits and administer the plan. Federal law requires that if the Company were to withdraw from an agreement, it would incur a withdrawal obligation. The potential withdrawal obligation may be significant. In accordance with GAAP, any withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated. In November 2011, the Company withdrew from the Central States Southeast and Southwest Areas Pension Fund multiemployer pension plan, as discussed in “Note 15 — Commitments and Contingencies ”. The Company has no plans to withdraw from any other agreements. |
Worker's compensation insurance | Worker’s compensation insurance — The Company self-insures worker’s compensation claims to a certain level. The Company maintained a self-insurance reserve totaling $26,779 and $22,270 at December 31, 2015 and 2014, respectively. The amount is included in “ Accrued expenses and other current liabilities ” on the accompanying Consolidated Balance Sheets. Claims administration expenses are charged to current operations as incurred. Future payments may materially differ from the reserve amounts. |
Fair value of financial instruments | Fair value of financial instruments — The consolidated financial statements include financial instruments for which the fair value may differ from amounts reflected on a historical basis. Financial instruments of the Company consist of cash, accounts receivable, short-term investments, accounts payable and certain accrued liabilities. These financial instruments generally approximate fair market value based on their short-term nature. The carrying value of the Company’s long-term debt approximates fair value based on comparison with current prevailing market rates for loans of similar risks and maturities. The fair value of financial instruments is measured and disclosure is made in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures”. |
Revenue recognition | Revenue recognition Fixed-price contracts — Historically, a substantial portion of the Company’s revenue has been generated under fixed-price contracts. For fixed-price contracts, the Company recognizes revenues primarily using the percentage-of-completion method, which may result in uneven and irregular results. In the percentage-of-completion method, estimated contract values, estimated cost at completion and total costs incurred to date are used to calculate revenues earned. Unforeseen events and circumstances can alter the estimate of the costs and potential profit associated with a particular contract. Total estimated costs, and thus contract revenues and income, can be impacted by changes in productivity, scheduling, the unit cost of labor, subcontracts, materials and equipment. Additionally, external factors such as weather, client needs, client delays in providing permits and approvals, labor availability, governmental regulation and politics may affect the progress of a project’s completion and thus the timing of revenue recognition. To the extent that original cost estimates are modified, estimated costs to complete increase, delivery schedules are delayed, or progress under a contract is otherwise impeded, cash flow, revenue recognition and profitability from a particular contract may be adversely affected. The Company considers unapproved change orders to be contract variations for which it has customer approval for a change in scope but for which it does not have an agreed upon price change. Costs associated with unapproved change orders are included in the estimated cost to complete the contracts and are treated as project costs as incurred. The Company recognizes revenue equal to costs incurred on unapproved change orders based on an estimated probability of realization from change order approval. Unapproved change orders involve the use of estimates, and it is reasonably possible that revisions to the estimated costs and recoverable amounts may be required in future reporting periods to reflect changes in estimates or final agreements with customers. The Company considers claims to be amounts it seeks, or will seek, to collect from customers or others for customer-caused changes in contract specifications or design, or other customer-related causes of unanticipated additional contract costs on which there is no agreement with customers on both scope and price changes. Claims are included in the calculation of revenues when realization is probable and amounts can be reliably determined. Revenues in excess of contract costs incurred on claims are recognized when the amounts have been agreed upon with the customer. Revenue in excess of contract costs from claims is recognized when an agreement is reached with customers as to the value of the claims, which in some instances may not occur until after completion of work under the contract. Costs associated with claims are included in the estimated costs to complete the contracts and are treated as project costs when incurred. Other contract forms — The Company also uses unit-price, time and material, and cost reimbursable plus fee contracts. For these jobs, revenue is recognized primarily based on contractual terms. For example, time and material contract revenues are generally recognized on an input basis, based on labor hours incurred and on purchases made. Similarly, unit price contracts generally recognize revenue on an output based measurement such as the completion of specific units at a specified unit price. At any time, if an estimate of total contract cost indicates a loss on a contract, the projected loss is recognized in full at that time. The loss amount is recognized as an “accrued loss provision” and is included in the accrued expenses and other liabilities amount on the balance sheet. For fixed price contracts, as the percentage-of-completion method is used to calculate revenues, the accrued loss provision is changed so that the gross profit for the contract remains zero in future periods. If we anticipate that there will be a loss for unit price or cost reimbursable contracts, the projected loss is recognized in full at that time. Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and income. These revisions are recognized in the period in which the revisions are identified. In all forms of contracts, the Company estimates its collectability of contract amounts at the same time that it estimates project costs. If the Company anticipates that there may be issues associated with the collectability of the full amount calculated as revenues, the Company may reduce the amount recognized as revenue to reflect the uncertainty associated with realization of the eventual cash collection. For example, when a cost reimbursable project exceeds the client’s expected budget amount, the client frequently requests an adjustment to the final amount. Similarly, some utility clients reserve the right to audit costs for significant periods after performance of the work. In these situations, the Company may choose to defer recognition of revenue up to the time that the client pays for the services. The caption “ Costs and estimated earnings in excess of billings ” in the Consolidated Balance Sheet represents unbilled receivables which arise when revenues have been recorded but the amount will not be billed until a later date. Balances represent: (a) unbilled amounts arising from the use of the percentage-of-completion method of accounting which may not be billed under the terms of the contract until a later date or project milestone, (b) incurred costs to be billed under cost reimbursement type contracts, (c) amounts arising from routine lags in billing, or (d) the revenue associated with unapproved change orders or claims when realization is probable and amounts can be reliably determined. For those contracts in which billings exceed contract revenues recognized to date, the excess amounts are included in the caption “ Billings in excess of costs and estimated earnings ”. In accordance with applicable terms of certain construction contracts, retainage amounts may be withheld by customers until completion and acceptance of the project. Some payments of the retainage may not be received for a significant period after completion of our portion of a project. In some jurisdictions, retainage amounts are deposited into an escrow account. |
Accounts receivable | Accounts receivable — Accounts receivable and contract receivables are primarily with public and private companies and governmental agencies located in the United States. Credit terms for payment of products and services are extended to customers in the normal course of business and no interest is charged. Contract receivables are generally progress billings on projects, and as a result, are short term in nature. Generally, the Company requires no collateral from its customers, but files statutory liens or stop notices on any construction projects when collection problems are anticipated. While a project is underway, the Company estimates its collectability of contract amounts at the same time that it estimates project costs. As discussed in the “Revenue recognition” section above, realization of the eventual cash collection may be recognized as adjustments to the contract profitability, otherwise, the Company uses the allowance method of accounting for losses from uncollectible accounts. Under this method an allowance is provided based upon historical experience and management’s evaluation of outstanding contract receivables at the end of each year. Receivables are written off in the period deemed uncollectible. The allowance for doubtful accounts at December 31, 2015 and 2014 was $480 and $540, respectively. |
Significant revision in contract estimate | Significant revision in contract estimate — Revenue recognition is based on the percentage-of-completion method for firm fixed-price contracts. Under this method, the costs incurred to date as a percentage of total estimated costs are used to calculate revenue. Total estimated costs, and thus contract revenues and margin, are impacted by many factors, which can cause significant changes in estimates during the life cycle of a project. For projects that were in process at the end of the prior year, there can be a difference in revenues and profits that would have been recognized in the prior year, had current year estimates of costs to complete been known at the end of the prior year. For example, unusual weather in the first half of 2015 significantly changed the estimated costs to complete for several large highway projects. The changes impacted the percentage of completion calculation and profitability in 2015. If these changes had been known in 2014, the revenue and profitability in 2014 would have been decreased. During the year ended December 31, 2015, certain contracts had revisions in cost estimates from those projected at December 31, 2014. If the revised estimates had been applied in the prior year, the gross profit earned on these contracts would have resulted in an increase of approximately $1,540 in gross profit in 2014. Similarly, had the revised estimates as of December 31, 2014 been applied in the prior year; the gross profit earned on these contracts would have resulted in an increase of approximately $17,266 in gross profit in 2013. The revised estimates for the year ended December 31, 2013 would have resulted in a gross profit increase of approximately $10,867 in the year 2012. The following table presents the financial impact of the changes in estimates that would have been reflected in the years 2014 and 2013 had the revised estimates been applied to the particular year. Estimated net impact of change in estimate for year the year ended 2014 2013 Revised estimates in 2015 that impact 2014 $ $ — Revised estimates in 2014 that impact 2013 ) Revised estimates in 2013 that impact 2012 — ) Net impact to gross margin $ ) $ EPS impact to year $ ) $ |
Customer concentration | Customer concentration — The Company operates in multiple industry segments encompassing the construction of commercial, industrial and public works infrastructure assets throughout primarily the United States. Typically, the top ten customers in any one calendar year generate revenues in excess of 50% of total revenues; however, the group that comprise the top ten customers varies from year to year. See “Note 17 — Customer Concentrations ” for further discussion. |
Property and equipment | Property and equipment — Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, usually ranging from three to thirty years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations. The Company assesses the recoverability of property and equipment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. We perform an undiscounted operation cash flow analysis to determine if impairment exists. The amount of property and equipment impairment, if any, is measured based on fair value and is charged to operations in the period in which property and equipment impairment is determined by management. As of December 31, 2015 and 2014, the Company’s management has not identified any material impairment of its property and equipment. |
Taxes collected from customers | Taxes collected from customers — Taxes collected from the Company’s customers are recorded on a net basis. |
Share-based payments and stock-based compensation | Share-based payments and stock-based compensation — In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”) after approval of the shareholders and adoption by the Company on May 3, 2013. Detailed discussion of shares issued under the Equity Plan are included in “Note 20 — “Deferred Compensation Agreements and Stock-Based Compensation ” and in Note 24— “Stockholders’ Equity”. Such share issuances include grants of Restricted Stock Units to executives, issuance of stock to certain senior managers and executives and issuances of stock to non-employee members of the Board of Directors. |
Contingent Earnout Liabilities | Contingent Earnout Liabilities — As part of past acquisitions, the Company agreed to pay cash to the sellers upon meeting certain operating performance targets for specified periods subsequent to the acquisition date. Each quarter, the Company evaluates the fair value of the estimated contingency and records a non-operating charge for the change in the fair value. Upon meeting the target, the Company reflects the full liability on the balance sheet and records a charge to “Selling, general and administration expense” for the change in the fair value of the liability from the prior period. See “Note 14 — “Contingent Earnout Liabilities ” for further discussion. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606)” . The new standard is effective for reporting periods beginning after December 15, 2016 and early adoption is not permitted. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption will require new qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, information about contract balances and performance obligations, and assets recognized from costs incurred to obtain or fulfill a contract. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of the impact of the changes on prior years. The FASB recently deferred the effective date for the Company to January 1, 2018. The Company is currently evaluating the potential impact of adoption and the implementation approach to be used. In February 2015, the FASB issued ASU 2015-02 “ Consolidation (Topic 810): Amendment to the Consolidation Analysis ” which amends existing consolidation guidance, including amending the guidance related to determining whether an entity is a variable interest entity. The update is effective for interim and annual periods beginning after December 15, 2015, although early adoption is permitted. The guidance may be applied using a modified retrospective approach whereby the entity records a cumulative effect of adoption at the beginning of the fiscal year of initial application. A reporting entity may also apply the amendments on a full retrospective basis. The Company is currently evaluating the potential impact of this authoritative guidance on our consolidated financial statements. In August 2014, the FASB issued ASU 2014-15 “ Presentation of Financial Statements — Going Concern (Subtopic 205-40) ” to address the diversity in practice in determining when there is substantial doubt about an entity’s ability to continue as a going concern and when and how an entity must disclose certain relevant conditions and events. This update requires an entity to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued). If such conditions or events exist, an entity should disclose that there is substantial doubt about the entity’s ability to continue as a going concern for a period of one year after the date that the financial statements are issued (or available to be issued), along with the principal conditions or events that raise substantial doubt, management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations and management’s plans that are intended to mitigate those conditions or events. The guidance is effective for annual and interim periods ending after December 15, 2016. This guidance will impact the disclosure and presentation of how we report any substantial doubt about our ability to continue as a going concern, if such substantial doubt were to exist. The Company will adopt this guidance effective January 1, 2017. During November 2015, the FASB issued ASU 2015-17 “ Balance Sheet Classification of Deferred Taxes ”, which simplifies the presentation of deferred income taxes. This ASU requires that deferred tax assets and liabilities be classified as non-current in a statement of financial position. The ASU provides for early adoption on both a prospective or retrospective basis. The ASU eliminates the need to analyze temporary differences to determine if deferred taxes should be reported as current or noncurrent. Past practice did not typically align with the time period in which deferred taxes were expected to be recovered or settled. For this reason, we early adopted ASU 2015-17 effective December 31, 2015 resulting in the classification of all deferred tax assets and liabilities as a net non-current deferred tax asset of $1,075 in our Consolidated Balance Sheet as of December 31, 2015. The ASU was adopted on a retrospective basis and accordingly, the presentation of net deferred taxes as of December 31, 2014 was conformed to the current year presentation, resulting in a net non-current deferred tax liability of $5,929, in order to provide improved comparability of deferred taxes between years. On February 25, 2016, The FASB issued ASU 2016-02 “ Leases (Topic 842) ”. The ASU will require recognition of operating leases with lease terms of more than twelve months on the balance sheet as both assets for the rights and liabilities for the obligations created by the leases. The ASU will require disclosures that provide qualitative and quantitative information for the lease assets and liabilities recorded in the financial statements. The Company will evaluate the potential impact of the ASU on our consolidated financial statements. The guidance is effective for fiscal years beginning after December 15, 2018. |
Nature of Business (Tables)
Nature of Business (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Nature of Business | |
Schedule of list of primary operating subsidiaries and their reportable operating segment | Subsidiary Operating Segment ARB, Inc. (“ARB”) West ARB Structures, Inc. West Q3 Contracting, Inc. (“Q3C”) West Rockford Corporation (“Rockford”) West Vadnais Trenchless Services, Inc. (“Vadnais”); acquired in 2014 West Silva Group (“Silva”) East Cardinal Contractors, Inc. East BW Primoris, LLC (“BWP”) East James Construction Group, LLC (“JCG”): JCG Heavy Civil Division East JCG Infrastructure and Maintenance Division East Primoris Energy Services Corporation (“PES”) Energy PES Industrial Division (formerly JCG Industrial Division) Energy OnQuest, Inc. Energy OnQuest, Canada, ULC (Born Heaters Canada, ULC prior to 2013) Energy Primoris Aevenia, Inc. (“Aevenia”); acquired February 28, 2015 Energy |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Schedule of the financial impact of the changes in estimates that would have been reflected in the prior years had the revised estimates been applied to the particular year | Estimated net impact of change in estimate for year the year ended 2014 2013 Revised estimates in 2015 that impact 2014 $ $ — Revised estimates in 2014 that impact 2013 ) Revised estimates in 2013 that impact 2012 — ) Net impact to gross margin $ ) $ EPS impact to year $ ) $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | |
Schedule of financial assets and liabilities which are required to be measured at fair value | Fair Value Measurements at Reporting Date Amount Recorded on Balance Sheet Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets as of December 31, 2015: Cash and cash equivalents $ $ — — Liabilities as of December 31, 2015: None Assets as of December 31, 2014: Cash and cash equivalents $ $ — — Short-term investments $ $ — — Liabilities as of December 31, 2014: Contingent consideration $ — — $ |
Schedule of changes to the Company's contingent consideration liability Level 3 fair value measurements | Significant Unobservable Inputs (Level 3) 2015 2014 Contingent Consideration Liability Beginning balance $ $ Additions to contingent consideration liability: Vadnais acquisition — Surber and Ram-Fab acquisitions — Change in fair value of contingent consideration liability during year Reductions in the contingent consideration liability: Payment to Q3C sellers for meeting performance targets — 2014 & 2015 ) ) Reduction due to earn-outs not acheived — Surber, Vadnais and Ram Fab ) — Ending balance $ — $ |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations | |
Summary of the cash paid for acquisitions | Year ended December 31, 2015 2014 Aevenia — purchased February 28, 2015 — Vadnais — purchased June 5, 2014 — Surber — purchased July 28, 2014 — Ram-Fab — purchased August 29, 2014 — Williams — purchased September 19, 2014 — Cash paid $ $ |
Summary of the fair value of assets acquired and the liabilities assumed | Year ended December 31, 2015 Acquisition 2014 Acquisitions Cash — Accounts receivable Inventory and other assets Prepaid expenses Property, plant and equipment Other assets — Intangible assets Goodwill Accounts payable ) ) Accrued expenses ) ) Total $ $ |
Schedule of the acquired intangible assets categories, fair value and average amortization periods | Amortization Period 2015 Fair Value 2014 Fair Value Tradename 3 to 10 years $ — $ Non-compete agreements 2 to 5 years Customer relationships 5 to 10 years Total $ $ |
Schedule of pro forma results | 2015 2014 (unaudited) (unaudited) Revenues $ $ Income before provision for income taxes $ $ Net income attributable to Primoris $ $ Weighted average common shares outstanding: Basic Diluted Earnings per share attributable to Primoris: Basic $ $ Diluted $ $ |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable. | |
Summary of accounts receivable | 2015 2014 Contracts receivable, net of allowance for doubtful accounts of $480 and $540 for 2015 and 2014, respectively $ $ Retention receivable Other accounts receivable $ $ |
Costs and Estimated Earnings 39
Costs and Estimated Earnings on Uncompleted Contracts (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Costs and Estimated Earnings on Uncompleted Contracts | |
Schedule of costs and estimated earnings on uncompleted contracts | 2015 2014 Costs incurred on uncompleted contracts $ $ Gross profit recognized Less: billings to date ) ) $ ) $ ) |
Schedule of costs and estimated earnings on uncompleted contracts included in consolidated balance sheet | 2015 2014 Costs and estimated earnings in excess of billings $ $ Billings in excess of cost and estimated earnings ) ) $ ) $ ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment | |
Summary of property and equipment | 2015 2014 Useful Life Land and buildings $ $ 30 years Leasehold improvements Lease life Office equipment 3 - 5 years Construction equipment 3 - 7 years Transportation equipment 3 - 18 years Less: accumulated depreciation and amortization ) ) Net property and equipment $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets | |
Schedule of goodwill by reporting unit | Reporting Unit Segment 2015 2014 Rockford West $ $ Q3C West JCG (includes JCG Heavy Civil and Infrastructure and Maintenance divisions) East Cardinal Contractors, Inc. East — PES (includes PPS, PES Industrial, FSSI, Saxon and Surber divisions) Energy OnQuest Canada, ULC Energy Aevenia Energy — Total Goodwill $ $ |
Summary of intangible asset categories, amounts and the average amortization periods | Amortization Amount Period 2015 2014 Tradename 3 to 10 years $ $ Non-compete agreements 2 to 5 years Customer relationships 5 to 15 years Total $ $ |
Schedule of estimated future amortization expense for intangible assets | For the Years Ending December 31, Estimated Intangible Amortization Expense 2016 $ 2017 2018 2019 2020 Thereafter $ |
Accounts Payable and Accrued 42
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Payable and Accrued Liabilities | |
Summary of accrued expenses and other current liabilities | 2015 2014 Payroll and related employee benefits $ $ Insurance, including self-insurance reserves Reserve for estimated losses on uncompleted contracts Corporate income taxes and other taxes Accrued administrative cost Other $ $ |
Capital Leases (Tables)
Capital Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Capital Leases | |
Schedule of future minimum lease payments required under capital leases together with their present value | 2016 $ 2017 2018 2019 2020 Total minimum lease payments $ Amounts representing interest ) Net present value of minimum lease payments Less: current portion of capital lease obligations ) Long-term capital lease obligations $ |
Credit Arrangements (Tables)
Credit Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Credit Arrangements | |
Schedule of credit facilities and long-term debt | 2015 2014 Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.78% to 3.51% per annum. Monthly principal and interest payments are due in the amount of $2,521 per month until the maturity dates, which range from November 30, 2016 to December 13, 2020. The notes are secured by certain construction equipment of the Company $ $ Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.94% to 2.75% per annum. Monthly principal and interest payments are due in the amount of $999 per month until the maturity dates, which range from March 31, 2019 to September 24, 2021. The notes are secured by certain construction equipment assets of the Company Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 2.01% to 2.19% per annum. Monthly principal and interest payments are due in the amount of $735 per month until the maturity dates, which range from March 5, 2020 to September 24, 2020. The notes are secured by certain construction equipment assets of the Company — Two secured mortgage notes payable to a bank, with an interest rate of 4.3% per annum. Monthly principal and interest payments of $60 per month began January 1, 2016 and continue until the maturity date of January 1, 2031. The notes are secured by two buildings — Senior Secured Notes payable to an insurance finance company, with interest rates that range from 3.65% to 4.60% per annum, with quarterly interest payments. Principal repayment for the $50,000 loan starts on December 28, 2016, for the $25,000 loan on July 15, 2017 and for the second $25,000 loan on November 9, 2019, and continue until their maturity dates, which range from December 28, 2022 to November 9, 2025. The notes are secured by the assets of the Company Less: current portion ) ) Long-term debt, net of current portion $ $ |
Schedule of maturities of long-term debt | Year Ending December 31, 2016 $ 2017 2018 2019 2020 Thereafter $ |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Blythe | |
Schedule of joint venture operating activities included in the Company's consolidated statements of income | 2015 2014 Revenues $ $ Net income attributable to noncontrolling interests |
Carlsbad | |
Schedule of joint venture operating activities included in the Company's consolidated statements of income | 2015 2014 Revenues $ $ — Net income attributable to noncontrolling interests — |
Schedule of the carrying value of the assets and liabilities associated with the operations of the Blythe joint venture included in the Company's consolidated balance sheets | 2015 2014 Cash $ $ — Accounts receivable — Current liabilities — |
Wilmington | |
Schedule of joint venture operating activities included in the Company's consolidated statements of income | 2015 2014 Revenues $ $ — Net income attributable to noncontrolling interests — |
Schedule of the carrying value of the assets and liabilities associated with the operations of the Blythe joint venture included in the Company's consolidated balance sheets | 2015 2014 Cash $ $ — Accounts receivable — Current liabilities — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies. | |
Schedule of future minimum lease payments required under non-cancelable operating leases | For the Years Ending December 31, Real Property Real Property (Related Party) Equipment Total Commitments 2016 $ $ $ $ 2017 2018 2019 2020 Thereafter — $ $ $ $ |
Reportable Operating Segments (
Reportable Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Reportable Operating Segments | |
Schedule of revenue by segment | Year Ended December 31, 2015 2014 2013 Business Segment Revenue % of Revenue Revenue % of Revenue Revenue % of Revenue West $ % $ % $ % East % % % Energy % % % Total $ % $ % $ % |
Schedule of gross profit by segment | Year Ended December 31, 2015 2014 2013 Business Segment Gross Profit % of Segment Revenue Gross Profit % of Segment Revenue Gross Profit % of Segment Revenue West $ % $ % $ % East % % % Energy % % % Total $ % $ % $ % |
Schedule of amount of goodwill recorded by segment | Segment 2015 2014 West $ $ East Energy Total $ $ |
Customer Concentrations (Tables
Customer Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Customer Concentrations | |
Schedule of revenue from customers | Description of Customer’s 2015 2014 2013 Business Amount Percentage Amount Percentage Amount Percentage Texas DOT $ % $ % $ % Chemical/Energy producer % * * * * Private gas and electric utility % % % Pipeline operator % * * * * Gas utility % * * % Public gas and electric utility % % % Petrochemical producer * * % * * Pipeline operator * * % * * Gas utility * * * * % $ % $ % $ % (*) Indicates a customer with less than 5% of revenues during such period. |
Multiemployer Plans (Tables)
Multiemployer Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Multiemployer Plans | |
Schedule of the entity's contributions to different pension funds | EIN / Pension Plan Pension Protection Act Zone Status FIP/RP Status Pending / Surcharge Collective Bargaining Agreement Expiration Contributions of the Company Pension Fund Name Number 2015 2014 Implemented Imposed Date 2015 2014 2013 Central Pension Fund of the International Union of Operating Engineers and Participating Employers 36-6052390/001 Green as of February 1, 2014 Green as of February 1, 2013 No No 6/04/2017 $ $ $ Laborers International Union of North America National (Industrial) Pension Fund 52-6074345/001 Red as of January 1, 2014 Red as of January 1, 2013 Yes No 6/04/2017 Southern California Pipetrades Trust Funds 51-6108443/001 Green as of January 1, 2014 Green as of January 1, 2013 No No 7/30/2016 Pipeline Industry Benefit Fund 73-6146433/001 Green as of January 1, 2014 Green as of January 1, 2013 No No 6/04/2017 Laborers Pension Trust Fund for Northern California 94-6277608/001 Yellow as of June 1, 2014 Yellow as of June 1, 2013 Yes No 6/30/2019 Construction Laborers Pension Trust for Southern California 43-6159056/001 Green as of January 1, 2014 Green as of January 1, 2013 No No 6/30/2018 Contributions to significant plans $ $ $ Contributions to other multiemployer plans Total contributions made $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule of components of the provision for income taxes | 2015 2014 2013 Current provision (benefit) Federal $ $ $ State Foreign $ $ $ Deferred provision (benefit) Federal ) ) State ) Foreign ) ) ) ) Change in valuation allowance — — ) Total $ $ $ |
Schedule of reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income | 2015 2014 2013 U.S. federal statutory income tax rate % % % State taxes, net of federal income tax impact % % % Foreign tax credit )% )% )% Canadian income tax % % % Domestic production activities deduction )% )% )% Nondeductible meals & entertainment % % % Other items )% )% % Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests % % % Impact of income from noncontrolling interests on effective tax rate )% )% ) Effective tax rate on income before provision for income taxes and noncontrolling interests % % % |
Schedule of tax effect of temporary differences that give rise to deferred income taxes | 2015 2014 Deferred tax assets: Accrued workers compensation $ $ Insurance reserves Other accrued liabilities Capital loss carryforward Foreign tax credit Accrued Compensation Total deferred tax assets Deferred tax liabilities Depreciation and amortization ) ) Prepaid expenses and other ) ) Total deferred tax liabilities ) ) Net deferred tax assets (liabilities) $ $ ) |
Schedule of reconciliation of the beginning and ending amounts and aggregate changes in the balance of unrecognized tax benefits | 2015 2014 2013 Beginning balance $ $ $ Increases in balances for tax positions taken during the current year — — Increases in balances for tax positions taken during prior years — — Settlements and effective settlements with tax authorities ) ) — Lapse of statute of limitations — ) ) Total $ — $ $ |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share | |
Schedule of computation of basic and diluted earnings per share | 2015 2014 2013 Numerator: Net income $ $ $ Net income attributable to noncontrolling interests ) ) ) Net income attributable to Primoris $ $ $ Denominator (shares in thousands): Weighted average shares for computation of basic earnings per share Dilutive effect of shares issued to independent directors Dilutive effect of unvested restricted stock units (1) Dilutive effect of shares issued to Q3C sellers (2) — — Weighted average shares for computation of diluted earnings per share Earnings per share attributable to Primoris: Basic $ $ $ Diluted $ $ $ (1) Represents the effect of the grant of 100,000 shares of Restricted Stock Units on May 3, 2013 and 48,512 Units on March 24, 2014. (2) Represents the effect of the 29,273 unregistered shares of common stock issued in February 2013 as part of the purchase consideration for the Q3C acquisition in 2012. |
Selected Quarterly Financial 52
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Selected Quarterly Financial Information (Unaudited) | |
Schedule of selected unaudited quarterly consolidated financial information | Year Ended December 31, 2015 (In thousands, except per share data) 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Revenues $ $ $ $ Gross profit Net income Net income attributable to Primoris Earnings per share: Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ Weighted average shares outstanding (in thousands) Basic Diluted Year Ended December 31, 2014 (In thousands, except per share data) 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Revenues $ $ $ $ Gross profit Net income Net income attributable to Primoris Earnings per share: Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ Weighted average shares outstanding (in thousands) Basic Diluted Year Ended December 31, 2013 (In thousands, except per share data) 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Revenues $ $ $ $ Gross profit Net income Net income attributable to Primoris Earnings per share: Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ Weighted average shares outstanding (in thousands) Basic Diluted |
Nature of Business (Details)
Nature of Business (Details) $ in Thousands | Feb. 28, 2015USD ($) | Jun. 05, 2014USD ($) | Jan. 22, 2014USD ($) | Sep. 30, 2014USD ($)item | Dec. 31, 2015USD ($)segmentitem | Dec. 31, 2014USD ($) |
Nature of Business | ||||||
Number of operating segments | segment | 3 | |||||
Number of Joint Ventures | item | 2 | |||||
Capitalized property, plant and equipment | $ 506,364 | $ 448,282 | ||||
Vadnais Corporation | ||||||
Nature of Business | ||||||
Purchased of assets | $ 6,355 | |||||
Aevenia | ||||||
Nature of Business | ||||||
Amount of purchase of assets and liabilities | $ 22,300 | |||||
Surber, Ram-Fab and Williams | ||||||
Nature of Business | ||||||
Amount of purchase of assets and liabilities | $ 8,244 | |||||
Number of small purchases made | item | 3 | |||||
Vadnais | West | Vadnais Corporation | ||||||
Nature of Business | ||||||
Amount of purchase of assets and liabilities | $ 6,400 | |||||
PES | ||||||
Nature of Business | ||||||
Number of subsidiaries that were merged into PES | item | 2 | |||||
Blythe | ||||||
Nature of Business | ||||||
Ownership percentage | 50.00% | |||||
Carlsbad | ||||||
Nature of Business | ||||||
Ownership percentage | 50.00% | |||||
Wilmington | ||||||
Nature of Business | ||||||
Ownership percentage | 50.00% | |||||
BWP | East | Blaus Wasser, LLC | ||||||
Nature of Business | ||||||
Amount of purchase of assets and liabilities | $ 5,000 | $ 5,000 | ||||
Capitalized property, plant and equipment | $ 13,800 |
Summary of Significant Accoun54
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating cycle | |||||
Minimum liquidation period of assets in which significant working capital has been invested | 1 year | ||||
Short-term investments | |||||
Short-term investments | $ 30,992 | ||||
FSSI acquisition | Energy | Customer relationships | |||||
Operating cycle | |||||
Intangible asset impairment | $ 808 | ||||
Cardinal Contractors | East | |||||
Operating cycle | |||||
Goodwill impairment charge | $ 401 | $ 401 |
Summary of Significant Accoun55
Summary of Significant Accounting Policies - Foreign Operations (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($)$ / shares | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($)$ / shares | Sep. 30, 2013USD ($) | Jun. 30, 2013USD ($) | Mar. 31, 2013USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)$ / shares | Dec. 31, 2013USD ($)$ / shares | Dec. 31, 2012USD ($) | |
Foreign operations | ||||||||||||||||
Assets | $ 1,132,254 | $ 1,097,632 | $ 1,132,254 | $ 1,097,632 | ||||||||||||
Revenues | 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | $ 537,879 | $ 551,333 | $ 445,013 | $ 409,995 | 1,929,415 | 2,086,194 | $ 1,944,220 | |
Functional currencies and foreign currency translation | ||||||||||||||||
Foreign exchange gain (loss) | (763) | 374 | 153 | |||||||||||||
Cash concentration | ||||||||||||||||
Cash and cash equivalents | 161,122 | 139,465 | 196,077 | 161,122 | 139,465 | 196,077 | $ 157,551 | |||||||||
Treasury bill funds | 131,200 | 121,500 | 131,200 | 121,500 | ||||||||||||
Cash balances with various high credit quality financial institutions | 29,900 | 18,000 | $ 29,900 | 18,000 | ||||||||||||
Collective bargaining agreements | ||||||||||||||||
Percentage of labor force subject to collective bargaining agreements | 24.00% | |||||||||||||||
Number of collective bargaining agreements | item | 83 | |||||||||||||||
Number of collective bargaining agreements requiring renegotiation during the year | item | 56 | |||||||||||||||
Number of years without work stoppages | 20 years | |||||||||||||||
Worker's compensation insurance | ||||||||||||||||
Self insurance reserve | 26,779 | 22,270 | $ 26,779 | 22,270 | ||||||||||||
Accounts receivable | ||||||||||||||||
Allowance for doubtful accounts | 480 | 540 | 480 | 540 | ||||||||||||
Other contract forms | ||||||||||||||||
Future gross profit on contracts due to change from accrued loss provision | 0 | |||||||||||||||
Estimated net impact of change in estimate | ||||||||||||||||
Revised estimates in current year that impact prior period | 1,540 | 17,266 | 1,540 | 17,266 | ||||||||||||
Revised estimates in current year that impact prior period | (17,266) | (10,867) | (17,266) | (10,867) | ||||||||||||
Net impact to gross margin | $ (15,726) | $ 6,399 | $ (15,726) | $ 6,399 | ||||||||||||
EPS impact to year | $ / shares | $ (0.19) | $ 0.08 | $ (0.19) | $ 0.08 | ||||||||||||
Canada | ||||||||||||||||
Foreign operations | ||||||||||||||||
Assets | $ 14,111 | $ 11,505 | 14,111 | $ 11,505 | ||||||||||||
Revenues | 17,763 | 19,840 | $ 15,993 | |||||||||||||
Income before tax of Canadian operations | $ 252 | $ 3,183 | $ 2,742 |
Summary of Significant Accoun56
Summary of Significant Accounting Policies - Customer Concentration (Details) - Revenues. - Customer concentration - Top ten customers | 12 Months Ended |
Dec. 31, 2015customeritem | |
Customer concentration | |
Number of top customers | customer | 10 |
Number of calendar years in which top customers typically generate minimum specified percentage of revenue | item | 1 |
Minimum percentage of revenues generated by top ten customers | 50.00% |
Summary of Significant Accoun57
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Recently Issued Accounting Pronouncements | ||
Deferred tax asset | $ 1,075 | |
Deferred tax liabilities | $ 5,929 | |
Minimum | ||
Property and equipment | ||
Estimated useful lives of the related assets | 3 years | |
Maximum | ||
Property and equipment | ||
Estimated useful lives of the related assets | 30 years |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||
Short-term investments | $ 30,992 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash and cash equivalents | $ 161,122 | 139,465 |
Short-term investments | 30,992 | |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Liabilities | ||
Contingent consideration | 6,922 | |
Recurring | Amount Recorded on Balance Sheet | ||
Assets | ||
Cash and cash equivalents | $ 161,122 | 139,465 |
Short-term investments | 30,992 | |
Liabilities | ||
Contingent consideration | $ 6,922 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration Liability (Details) $ in Thousands | Jun. 05, 2014USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Rollforward of contingent consideration liability level three fair value measurements | ||||
Change in fair value of contingent consideration liability during year | $ (6,722) | $ (4,145) | $ (14,900) | |
Vadnais Corporation | ||||
Rollforward of contingent consideration liability level three fair value measurements | ||||
Payment for meeting performance targets - 2014 & 2015 | $ (6,355) | |||
Contingent Consideration Liability | Significant Unobservable Inputs (Level 3) | ||||
Rollforward of contingent consideration liability level three fair value measurements | ||||
Balance at the beginning of the period | 6,922 | 9,233 | ||
Change in fair value of contingent consideration liability during year | $ 125 | 856 | ||
Balance at the end of the period | 6,922 | $ 9,233 | ||
Additional information | ||||
Number of unobservable inputs | item | 2 | |||
Minimum probability of acquired entity meeting contractual operating performance target (as a percent) | 33.00% | |||
Maximum probability of acquired entity meeting contractual operating performance target (as a percent) | 100.00% | |||
Contingent Consideration Liability | Significant Unobservable Inputs (Level 3) | Q3 Contracting | ||||
Rollforward of contingent consideration liability level three fair value measurements | ||||
Payment for meeting performance targets - 2014 & 2015 | $ (5,000) | (5,000) | ||
Contingent Consideration Liability | Significant Unobservable Inputs (Level 3) | Vadnais Corporation | ||||
Rollforward of contingent consideration liability level three fair value measurements | ||||
Additions to contingent consideration liability | 679 | |||
Contingent Consideration Liability | Significant Unobservable Inputs (Level 3) | Surber and Ramfab | ||||
Rollforward of contingent consideration liability level three fair value measurements | ||||
Additions to contingent consideration liability | $ 1,154 | |||
Contingent Consideration Liability | Significant Unobservable Inputs (Level 3) | Surber, Vadnais and Ram Fab | ||||
Rollforward of contingent consideration liability level three fair value measurements | ||||
Reduction due to earn-outs not achieved | $ (2,047) |
Business Combinations (Details)
Business Combinations (Details) $ in Thousands | Feb. 28, 2015USD ($) | Jun. 05, 2014USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2014USD ($) |
Business combinations | |||||||||
Intangible assets | $ 3,850 | $ 1,779 | $ 3,850 | $ 3,850 | |||||
Aevenia | |||||||||
Business combinations | |||||||||
Amount of purchase of assets and liabilities | $ 22,300 | ||||||||
Revenue since acquisition | 23,695 | ||||||||
Gross profit (loss) since acquisition | 2,378 | ||||||||
Acquisition costs | $ 151 | ||||||||
Vadnais Corporation | |||||||||
Business combinations | |||||||||
Cash payment made | $ 6,355 | ||||||||
Contingent performance period (in years) | 2 years | ||||||||
Contingent consideration in cash | $ 900 | $ 900 | |||||||
Fair value of the contingent consideration | $ 679 | $ 679 | |||||||
Contingent consideration credited to non-operating income | $ 368 | $ 396 | |||||||
Surber, Ram-Fab and Williams | |||||||||
Business combinations | |||||||||
Amount of purchase of assets and liabilities | $ 8,244 | ||||||||
Number of small purchases made | item | 3 | ||||||||
Vadnais & Third Quarter 2014 Acquisitions | |||||||||
Business combinations | |||||||||
Revenue since acquisition | 9,300 | ||||||||
Gross profit (loss) since acquisition | $ (45) | ||||||||
Acquisition costs | $ 355 | ||||||||
Surber | |||||||||
Business combinations | |||||||||
Contingent consideration in cash | $ 1,800 | ||||||||
Contingent earnout period (in years) | 3 years | ||||||||
Fair value of the contingent consideration | $ 955 | ||||||||
RamFab | |||||||||
Business combinations | |||||||||
Contingent consideration in cash | $ 200 | ||||||||
Contingent earnout period (in years) | 6 months | ||||||||
Fair value of the contingent consideration | $ 200 |
Business Combinations - Assets
Business Combinations - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business combinations | |||
Cash paid for acquisitions | $ 22,302 | $ 14,596 | $ 2,273 |
Fair value of the assets acquired and the liabilities assumed | |||
Intangible assets | 3,850 | 1,779 | |
Goodwill | 124,161 | 119,410 | |
2015 Acquisitions | |||
Fair value of the assets acquired and the liabilities assumed | |||
Accounts receivable | 2,734 | ||
Inventory and other assets | 1,154 | ||
Prepaid expenses | 322 | ||
Property, plant and equipment | 11,173 | ||
Intangible assets | 3,850 | ||
Goodwill | 5,152 | ||
Accounts payable | (743) | ||
Accrued expenses | (1,340) | ||
Total | 22,302 | ||
Aevenia | |||
Business combinations | |||
Cash paid for acquisitions | $ 22,302 | ||
2014 Acquisitions | |||
Fair value of the assets acquired and the liabilities assumed | |||
Cash | 3 | ||
Accounts receivable | 2,768 | ||
Inventory and other assets | 711 | ||
Prepaid expenses | 57 | ||
Property, plant and equipment | 11,802 | ||
Other assets | 4 | ||
Intangible assets | 1,779 | ||
Goodwill | 784 | ||
Accounts payable | (570) | ||
Accrued expenses | (905) | ||
Total | 16,433 | ||
Vadnais Corporation | |||
Business combinations | |||
Cash paid for acquisitions | 6,355 | ||
Surber | |||
Business combinations | |||
Cash paid for acquisitions | 3,642 | ||
RamFab | |||
Business combinations | |||
Cash paid for acquisitions | 3,569 | ||
Williams | |||
Business combinations | |||
Cash paid for acquisitions | $ 1,030 |
Business Combinations - Acquire
Business Combinations - Acquired Intangible Assets (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Acquired intangible assets | ||
Fair Value | $ 3,850 | $ 1,779 |
Pro forma results | ||
Pro forma tax rate used in calculating taxes on income from continuing operations (as a percent) | 39.00% | 39.00% |
Revenues | $ 1,932,413 | $ 2,154,440 |
Income before provision for income taxes | 59,309 | 104,745 |
Net income attributable to Primoris | $ 35,781 | $ 64,631 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 51,647 | 51,607 |
Diluted (in shares) | 51,798 | 51,747 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.69 | $ 1.25 |
Diluted (in dollars per share) | $ 0.69 | $ 1.25 |
Tradename | ||
Acquired intangible assets | ||
Fair Value | $ 650 | |
Tradename | Minimum | ||
Acquired intangible assets | ||
Amortization Period | 3 years | |
Tradename | Maximum | ||
Acquired intangible assets | ||
Amortization Period | 10 years | |
Non-compete agreements | ||
Acquired intangible assets | ||
Fair Value | $ 1,350 | 250 |
Non-compete agreements | Minimum | ||
Acquired intangible assets | ||
Amortization Period | 2 years | |
Non-compete agreements | Maximum | ||
Acquired intangible assets | ||
Amortization Period | 5 years | |
Customer relationships | ||
Acquired intangible assets | ||
Fair Value | $ 2,500 | 879 |
Customer relationships | Minimum | ||
Acquired intangible assets | ||
Amortization Period | 5 years | |
Customer relationships | Maximum | ||
Acquired intangible assets | ||
Amortization Period | 10 years | |
2015 Acquisitions | ||
Acquired intangible assets | ||
Fair Value | $ 3,850 | |
2014 Acquisitions | ||
Acquired intangible assets | ||
Fair Value | $ 1,779 | |
Vadnais Corporation | ||
Acquired intangible assets | ||
Period for which goodwill and other intangible assets are deductible for income tax purposes | 15 years | |
FSSI acquisition | ||
Acquired intangible assets | ||
Period for which goodwill and other intangible assets are deductible for income tax purposes | 15 years | |
Third Quarter Acquisition | ||
Acquired intangible assets | ||
Period for which goodwill and other intangible assets are deductible for income tax purposes | 15 years | |
Third Quarter Acquisition | Tradename | ||
Acquired intangible assets | ||
Amortization Period | 10 years |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts Receivable. | ||
Contracts receivable, net of allowance for doubtful accounts of $480 and $540 for 2015 and 2014 | $ 288,300 | $ 287,806 |
Retention receivable | 31,396 | 49,104 |
Contracts receivable and retention | 319,696 | 336,910 |
Other accounts receivable | 892 | 472 |
Accounts receivable, net | 320,588 | 337,382 |
Allowance for doubtful accounts | $ 480 | $ 540 |
Costs and Estimated Earnings 64
Costs and Estimated Earnings on Uncompleted Contracts (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Costs and Estimated Earnings on Uncompleted Contracts | ||
Costs incurred on uncompleted contracts | $ 5,413,224 | $ 5,194,769 |
Gross profit recognized | 625,280 | 613,510 |
Costs and Estimated Earnings on Uncompleted Contracts | 6,038,504 | 5,808,279 |
Less: billings to date | (6,061,924) | (5,898,220) |
Net cost and estimated earnings in excess of billings | (23,420) | (89,941) |
Amount included in consolidated balance sheet | ||
Costs and estimated earnings in excess of billings | 116,455 | 68,654 |
Billings in excess of costs and estimated earnings | (139,875) | (158,595) |
Net cost and estimated earnings in excess of billings | $ (23,420) | $ (89,941) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property and equipment | ||
Gross property and equipment | $ 506,364 | $ 448,282 |
Less: accumulated depreciation and amortization | (222,819) | (176,851) |
Net property and equipment | $ 283,545 | 271,431 |
Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Maximum | ||
Property and equipment | ||
Useful Life | 30 years | |
Land and buildings | ||
Property and equipment | ||
Gross property and equipment | $ 54,827 | 40,604 |
Useful Life | 30 years | |
Leasehold improvements | ||
Property and equipment | ||
Gross property and equipment | $ 11,071 | 11,267 |
Office equipment | ||
Property and equipment | ||
Gross property and equipment | $ 5,958 | 3,651 |
Office equipment | Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Office equipment | Maximum | ||
Property and equipment | ||
Useful Life | 5 years | |
Construction equipment | ||
Property and equipment | ||
Gross property and equipment | $ 340,895 | 308,915 |
Construction equipment | Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Construction equipment | Maximum | ||
Property and equipment | ||
Useful Life | 7 years | |
Transportation equipment | ||
Property and equipment | ||
Gross property and equipment | $ 93,613 | $ 83,845 |
Transportation equipment | Minimum | ||
Property and equipment | ||
Useful Life | 3 years | |
Transportation equipment | Maximum | ||
Property and equipment | ||
Useful Life | 18 years |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) $ in Thousands | Feb. 05, 2014 | Sep. 30, 2013 | Aug. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2012 | Jul. 01, 2010 | Dec. 31, 2009 |
Equity method investments | |||||||||
Impairment expense for non-consolidated entities | $ 4,932 | ||||||||
Share in distribution | 2,821 | ||||||||
Cash paid by 51% owner under net asset buy-out option to the entity | $ 6,439 | ||||||||
WPE and Kealine | Highstar | |||||||||
Equity method investments | |||||||||
Cash proceeds from sale of projects | $ 6,082 | ||||||||
WesPac | |||||||||
Equity method investments | |||||||||
Membership interest (as a percent) | 50.00% | ||||||||
WesPac | Kealine | |||||||||
Equity method investments | |||||||||
Membership interest (as a percent) | 50.00% | ||||||||
WesPac & WesPac-Midstream | |||||||||
Equity method investments | |||||||||
Cash proceeds from sale of projects | $ 5,250 | ||||||||
Bernard | |||||||||
Equity method investments | |||||||||
Membership interest (as a percent) | 30.00% | ||||||||
Share in distribution | $ 145 | ||||||||
Cost of investment | $ 300 | ||||||||
Alvah, Inc. | |||||||||
Equity method investments | |||||||||
Membership interest (as a percent) | 49.00% | ||||||||
Cash paid by 51% owner under net asset buy-out option to the entity | $ 1,189 | ||||||||
Midstream | |||||||||
Equity method investments | |||||||||
Impairment expense for non-consolidated entities | $ 4,932 |
Goodwill and Intangible Asset67
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill and other intangible assets | ||
Goodwill | $ 124,161 | $ 119,410 |
West | ||
Goodwill and other intangible assets | ||
Goodwill | 45,239 | 45,239 |
East | ||
Goodwill and other intangible assets | ||
Goodwill | 42,866 | 43,267 |
Energy | ||
Goodwill and other intangible assets | ||
Goodwill | 36,056 | 30,904 |
Rockford | West | ||
Goodwill and other intangible assets | ||
Goodwill | 32,079 | 32,079 |
Q3 Contracting | West | ||
Goodwill and other intangible assets | ||
Goodwill | 13,160 | 13,160 |
James Construction Group LLC | East | ||
Goodwill and other intangible assets | ||
Goodwill | 42,866 | 42,866 |
Cardinal Contractors | East | ||
Goodwill and other intangible assets | ||
Goodwill | 401 | |
PES | Energy | ||
Goodwill and other intangible assets | ||
Goodwill | 28,463 | 28,463 |
Aevenia | Energy | ||
Goodwill and other intangible assets | ||
Goodwill | 5,152 | |
OnQuest Canada, ULC | Energy | ||
Goodwill and other intangible assets | ||
Goodwill | $ 2,441 | $ 2,441 |
Goodwill and Intangible Asset68
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible assets | |||
Total | $ 36,438 | $ 39,581 | |
Amortization expense of intangible assets | 6,793 | 7,504 | $ 7,467 |
Estimated future amortization expense for intangible assets | |||
2,016 | 6,460 | ||
2,017 | 6,183 | ||
2,018 | 5,719 | ||
2,019 | 5,510 | ||
2,020 | 3,112 | ||
Thereafter | 9,454 | ||
Tradename | |||
Intangible assets | |||
Total | $ 15,019 | 18,194 | |
Tradename | Minimum | |||
Intangible assets | |||
Amortization Period | 3 years | ||
Tradename | Maximum | |||
Intangible assets | |||
Amortization Period | 10 years | ||
Non-compete agreements | |||
Intangible assets | |||
Total | $ 1,424 | 1,074 | |
Non-compete agreements | Minimum | |||
Intangible assets | |||
Amortization Period | 2 years | ||
Non-compete agreements | Maximum | |||
Intangible assets | |||
Amortization Period | 5 years | ||
Customer relationships | |||
Intangible assets | |||
Total | $ 19,995 | $ 20,313 | |
Customer relationships | Minimum | |||
Intangible assets | |||
Amortization Period | 5 years | ||
Customer relationships | Maximum | |||
Intangible assets | |||
Amortization Period | 15 years |
Accounts Payable and Accrued 69
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts Payable and Accrued Liabilities | ||
Retention amounts included in accounts payable | $ 8,375 | $ 9,285 |
Accrued expenses and other current liabilities | ||
Payroll and related employee benefits | 33,358 | 37,261 |
Insurance, including self-insurance reserves | 44,695 | 34,377 |
Reserve for estimated losses on uncompleted contracts | 7,261 | 2,363 |
Corporate income taxes and other taxes | 2,447 | 3,775 |
Accrued administrative cost | 1,415 | 1,059 |
Other | 4,420 | 4,566 |
Total accrued expenses and other current liabilities | $ 93,596 | $ 83,401 |
Capital Leases (Details)
Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Capital Leases | ||
Total assets under capital leases | $ 4,874 | $ 5,528 |
Accumulated depreciation of assets under capital leases | 4,103 | 3,506 |
Net book value of assets under capital leases | 771 | 2,022 |
Future minimum lease payments required under capital leases | ||
2,016 | 990 | |
2,017 | 7 | |
2,018 | 6 | |
2,019 | 6 | |
2,020 | 5 | |
Total minimum lease payments | 1,014 | |
Amounts representing interest | (18) | |
Net present value of minimum lease payments | 996 | |
Less: current portion of capital lease obligations | (974) | (1,650) |
Long-term capital lease obligation | $ 22 | $ 657 |
Credit Arrangements (Details)
Credit Arrangements (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)loanbuilding | Dec. 31, 2014USD ($) | |
Credit arrangements | ||
Total long-term debt | $ 274,289 | $ 242,938 |
Less: current portion | (54,436) | (38,909) |
Long-term Debt, Excluding Current Maturities, Total | 219,853 | 204,029 |
Scheduled maturities of long-term debt | ||
2,016 | 54,436 | |
2,017 | 49,862 | |
2,018 | 47,246 | |
2,019 | 46,493 | |
2,020 | 26,635 | |
Thereafter | 49,617 | |
Commercial equipment notes payable, maturing range from November 30, 2016 to December 13, 2020 | ||
Credit arrangements | ||
Total long-term debt | 83,711 | 112,420 |
Monthly payment of principal and interest | $ 2,521 | $ 2,521 |
Commercial equipment notes payable, maturing range from November 30, 2016 to December 13, 2020 | Minimum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.78% | 1.78% |
Commercial equipment notes payable, maturing range from November 30, 2016 to December 13, 2020 | Maximum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.51% | 3.51% |
Commercial equipment notes payable, maturing range from March 31, 2019 to September 24, 2021 | ||
Credit arrangements | ||
Total long-term debt | $ 44,587 | $ 55,518 |
Monthly payment of principal and interest | $ 999 | $ 999 |
Commercial equipment notes payable, maturing range from March 31, 2019 to September 24, 2021 | Minimum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.94% | 1.94% |
Commercial equipment notes payable, maturing range from March 31, 2019 to September 24, 2021 | Maximum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.75% | 2.75% |
Commercial equipment notes payable, maturing range from March 5, 2020 to September 24, 2020 | ||
Credit arrangements | ||
Total long-term debt | $ 38,041 | |
Monthly payment of principal and interest | $ 735 | $ 735 |
Commercial equipment notes payable, maturing range from March 5, 2020 to September 24, 2020 | Minimum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.01% | 2.01% |
Commercial equipment notes payable, maturing range from March 5, 2020 to September 24, 2020 | Maximum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.19% | 2.19% |
Secured mortgage notes, maturing on January 2031 | ||
Credit arrangements | ||
Total long-term debt | $ 7,950 | |
Monthly payment of principal and interest | $ 60 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.30% | |
Number of secured mortgage notes payable to a bank | loan | 2 | |
Number of assets secured | building | 2 | |
Senior secured notes, maturing between 2022 to 2025 | ||
Credit arrangements | ||
Total long-term debt | $ 100,000 | $ 75,000 |
Senior secured notes, maturing between 2022 to 2025 | Minimum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.65% | |
Senior secured notes, maturing between 2022 to 2025 | Maximum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.60% |
Credit Arrangements - Backgroun
Credit Arrangements - Background (Details) CAD in Thousands, $ in Thousands | Nov. 09, 2015USD ($)payment | Jul. 25, 2013USD ($)payment | Dec. 31, 2015USD ($) | Dec. 31, 2015CAD | Dec. 31, 2015USD ($) | Jun. 03, 2015USD ($) | Dec. 31, 2014CAD | Dec. 31, 2014USD ($) | Dec. 28, 2012USD ($) |
Senior Notes | |||||||||
Credit arrangements | |||||||||
Interest rate (as a percent) | 4.60% | 3.65% | 3.65% | ||||||
Required principal payment | $ 3,600 | $ 7,100 | |||||||
Initial principal amount | $ 25,000 | $ 50,000 | |||||||
Number of annual principal payments | payment | 7 | ||||||||
Senior Notes | Minimum | |||||||||
Credit arrangements | |||||||||
Prepayment to be paid on debt | $ 5,000 | ||||||||
Notes Agreement | |||||||||
Credit arrangements | |||||||||
Interest rate (as a percent) | 3.85% | ||||||||
Required principal payment | $ 3,600 | ||||||||
Initial principal amount | $ 25,000 | $ 25,000 | |||||||
Number of annual principal payments | payment | 7 | ||||||||
Notes Agreement | Minimum | |||||||||
Credit arrangements | |||||||||
Restrictions on investments, change of control provisions and provisions as a percentage of total assets to be disposed off | 20.00% | ||||||||
Notes Agreement | Maximum | |||||||||
Credit arrangements | |||||||||
Initial principal amount | $ 75,000 | ||||||||
Credit Agreement | |||||||||
Credit arrangements | |||||||||
Maximum borrowing capacity | $ 125,000 | ||||||||
Available borrowing capacity | 112,895 | ||||||||
Credit Agreement | Federal funds rate | |||||||||
Credit arrangements | |||||||||
Basis spread on variable rate (as a percent) | 0.50% | ||||||||
Credit Agreement | Minimum | |||||||||
Credit arrangements | |||||||||
Prepayment to be paid on debt | $ 5,000 | ||||||||
Restrictions on investments, change of control provisions and provisions as a percentage of total assets to be disposed off | 20.00% | ||||||||
Credit Agreement | Revolving line of credit | |||||||||
Credit arrangements | |||||||||
Maximum borrowing capacity | 125,000 | ||||||||
Borrowings outstanding | 0 | ||||||||
Credit Agreement | Commercial letters of credit | |||||||||
Credit arrangements | |||||||||
Total commercial letters of credit outstanding | $ 12,105 | $ 4,659 | |||||||
Canadian Credit Facility | Commercial letters of credit | |||||||||
Credit arrangements | |||||||||
Maximum borrowing capacity | CAD | CAD 8,000 | ||||||||
Total commercial letters of credit outstanding | CAD | 2,179 | CAD 2,563 | |||||||
Available borrowing capacity | CAD | CAD 6,426 | ||||||||
Annual fee (as a percent) | 1.00% | ||||||||
Canadian Credit Facility | Commercial letters of credit | Maximum | |||||||||
Credit arrangements | |||||||||
Term of credit facility | 5 years |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Noncontrolling Interests | |||||||||||||||
Revenues | $ 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | $ 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | $ 537,879 | $ 551,333 | $ 445,013 | $ 409,995 | $ 1,929,415 | $ 2,086,194 | $ 1,944,220 |
Net income attributable to noncontrolling interests | 279 | 526 | 5,020 | ||||||||||||
Tax effect on income recognized | 23,946 | 38,646 | 44,896 | ||||||||||||
Distributions to non-controlling interests | 29 | 1,590 | $ 5,500 | ||||||||||||
Accounts receivable | 320,588 | 337,382 | 320,588 | 337,382 | |||||||||||
Current liabilities | 416,173 | $ 419,311 | 416,173 | 419,311 | |||||||||||
Blythe | Primary beneficiary | |||||||||||||||
Noncontrolling Interests | |||||||||||||||
Revenues | 119 | 1,169 | |||||||||||||
Net income attributable to noncontrolling interests | 59 | 526 | |||||||||||||
Distributions to non-controlling interests | 29 | 1,590 | |||||||||||||
Distributions from joint venture | 29 | 1,590 | |||||||||||||
Capital contributions | 0 | $ 0 | |||||||||||||
Carlsbad | Primary beneficiary | |||||||||||||||
Noncontrolling Interests | |||||||||||||||
Revenues | 2,887 | ||||||||||||||
Net income attributable to noncontrolling interests | 172 | ||||||||||||||
Distributions to partners | 0 | ||||||||||||||
Capital contributions | 0 | ||||||||||||||
Cash | 1,952 | 1,952 | |||||||||||||
Accounts receivable | 955 | 955 | |||||||||||||
Current liabilities | 2,562 | 2,562 | |||||||||||||
Wilmington | Primary beneficiary | |||||||||||||||
Noncontrolling Interests | |||||||||||||||
Revenues | 1,364 | ||||||||||||||
Net income attributable to noncontrolling interests | 48 | ||||||||||||||
Distributions to partners | 0 | ||||||||||||||
Capital contributions | 0 | ||||||||||||||
Cash | 2,339 | 2,339 | |||||||||||||
Accounts receivable | 2,003 | 2,003 | |||||||||||||
Current liabilities | $ 4,247 | $ 4,247 |
Contingent Earnout Liabilities
Contingent Earnout Liabilities (Details) - USD ($) $ in Thousands | Jun. 05, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Sep. 30, 2014 |
Q3 Contracting | 2014 earnout target | ||||||||
Contingent earnout liabilities | ||||||||
Cash paid | $ 5,000 | |||||||
Q3 Contracting | 2013 earnout target | ||||||||
Contingent earnout liabilities | ||||||||
Cash paid | $ 5,000 | |||||||
Vadnais Corporation | ||||||||
Contingent earnout liabilities | ||||||||
Cash paid | $ 6,355 | |||||||
Performance targets ( in years) | 2 years | |||||||
Fair value of the contingent consideration | 679 | $ 679 | ||||||
Contingent consideration in cash | $ 900 | 900 | ||||||
Contingent consideration credited to non-operating income | $ 368 | $ 396 | ||||||
Vadnais Corporation | 2015 earnout target | ||||||||
Contingent earnout liabilities | ||||||||
Contingent consideration in cash | 450 | |||||||
Vadnais Corporation | 2016 earnout target | ||||||||
Contingent earnout liabilities | ||||||||
Contingent consideration in cash | $ 450 | |||||||
Surber | ||||||||
Contingent earnout liabilities | ||||||||
Fair value of the contingent consideration | $ 955 | |||||||
Contingent consideration in cash | $ 1,800 | |||||||
Contingent earnout period (in years) | 3 years | |||||||
Surber | Business combination contingent consideration earnout target period of 2014 through 2016 | ||||||||
Contingent earnout liabilities | ||||||||
Fair value of the contingent consideration | $ 1,000 | |||||||
Contingent consideration in cash | 1,400 | |||||||
Contingent consideration credited to non-operating income | $ 1,083 | |||||||
RamFab | ||||||||
Contingent earnout liabilities | ||||||||
Fair value of the contingent consideration | 200 | |||||||
Contingent consideration in cash | $ 200 | |||||||
Contingent earnout period (in years) | 6 months |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Future minimum lease payments required under non-cancelable operating leases | |||
2,016 | $ 11,719 | ||
2,017 | 7,630 | ||
2,018 | 6,064 | ||
2,019 | 3,379 | ||
2,020 | 2,067 | ||
Thereafter | 2,181 | ||
Total | 33,040 | ||
Leases | |||
Total lease expense | 21,815 | $ 14,325 | $ 14,533 |
Lease payments to related party | 1,445 | $ 1,505 | $ 1,556 |
Real Property | |||
Future minimum lease payments required under non-cancelable operating leases | |||
2,016 | 3,415 | ||
2,017 | 3,078 | ||
2,018 | 2,668 | ||
2,019 | 1,404 | ||
2,020 | 616 | ||
Total | 11,181 | ||
Real Property (Related Party) | |||
Future minimum lease payments required under non-cancelable operating leases | |||
2,016 | 1,477 | ||
2,017 | 1,486 | ||
2,018 | 1,156 | ||
2,019 | 882 | ||
2,020 | 795 | ||
Thereafter | 1,848 | ||
Total | 7,644 | ||
Equipment | |||
Future minimum lease payments required under non-cancelable operating leases | |||
2,016 | 6,827 | ||
2,017 | 3,066 | ||
2,018 | 2,240 | ||
2,019 | 1,093 | ||
2,020 | 656 | ||
Thereafter | 333 | ||
Total | $ 14,215 |
Commitments and Contingencies76
Commitments and Contingencies (Details) $ in Thousands | Feb. 25, 2015USD ($) | Dec. 31, 2015USD ($)projectitem | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2013USD ($) | Jun. 30, 2013USD ($) | Mar. 31, 2013USD ($) | Dec. 31, 2015USD ($)project | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($)project | Nov. 30, 2012USD ($) | Nov. 30, 2011USD ($) |
Commitments and contingencies | |||||||||||||||||||
Withdrawal liability recorded | $ 7,585 | $ 7,500 | |||||||||||||||||
Withdrawal total liability asserted by the Plan | $ 11,819 | $ 11,819 | |||||||||||||||||
Cumulative amount paid towards the withdrawal liability | $ 1,834 | ||||||||||||||||||
Revenue | $ 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | $ 537,879 | $ 551,333 | $ 445,013 | $ 409,995 | $ 1,929,415 | 2,086,194 | $ 1,944,220 | ||||
Margin | 63,725 | $ 71,647 | $ 46,496 | $ 38,005 | 49,616 | $ 75,473 | $ 61,194 | $ 49,757 | 74,917 | $ 75,465 | $ 59,537 | $ 46,096 | 219,873 | 236,040 | 256,015 | ||||
Billings in excess of costs and estimated earnings | $ 139,875 | 158,595 | $ 139,875 | 158,595 | $ 139,875 | ||||||||||||||
Construction Projects | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Number of projects under litigation | project | 2 | 2 | 2 | ||||||||||||||||
Billings in excess of costs and estimated earnings | $ 26,000 | $ 26,000 | $ 26,000 | ||||||||||||||||
Construction Project One | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Receivable recorded relating to the project | $ 32,900 | $ 32,900 | $ 32,900 | ||||||||||||||||
Number of separate construction projects involved in mandatory international arbitration | project | 4 | 4 | 4 | ||||||||||||||||
Number of smaller projects for remaining claims from owner | item | 2 | ||||||||||||||||||
Revenue | $ 2,000 | ||||||||||||||||||
Margin | 2,000 | ||||||||||||||||||
Construction Project Two | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Receivable recorded relating to the project | $ 17,900 | $ 17,900 | $ 17,900 | ||||||||||||||||
James Construction Group LLC | North Texas Tollway Authority v. James Construction Group, LLC | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Period for participating court-ordered mediation (in months) | 18 months | ||||||||||||||||||
Expected cost on settlement | $ 9,000 | ||||||||||||||||||
Defendants paid to remove the liability | 8,000 | ||||||||||||||||||
Expected remediation cost | 22,400 | ||||||||||||||||||
Percentage of expected costs second defendant would pay | 20.00% | 20.00% | 20.00% | ||||||||||||||||
Percentage of expected costs Company would pay | 80.00% | 80.00% | 80.00% | ||||||||||||||||
Estimated cost of remediating issues for lawsuit | $ 17,000 | $ 17,000 | $ 17,000 | ||||||||||||||||
James Construction Group LLC | North Texas Tollway Authority v. James Construction Group, LLC | Maximum | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Agreed payments by second defendant in expected remediation costs toward settlement | $ 5,400 | ||||||||||||||||||
Letters of credit | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Total commercial letters of credit outstanding | 13,679 | 6,864 | 13,679 | 6,864 | 13,679 | ||||||||||||||
Bonding | |||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||
Bid and completion bonds issued and outstanding | $ 1,483,877 | $ 1,518,018 | $ 1,458,744 | $ 1,483,877 | $ 1,518,018 | $ 1,458,744 | $ 1,483,877 |
Reportable Operating Segments77
Reportable Operating Segments (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2013USD ($) | Jun. 30, 2013USD ($) | Mar. 31, 2013USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment reporting information | ||||||||||||||||
Number of operating segments | segment | 3 | |||||||||||||||
Revenue | $ 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | $ 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | $ 537,879 | $ 551,333 | $ 445,013 | $ 409,995 | $ 1,929,415 | $ 2,086,194 | $ 1,944,220 | |
% of Revenue | 100.00% | 100.00% | 100.00% | |||||||||||||
Gross Profit | 63,725 | $ 71,647 | $ 46,496 | $ 38,005 | 49,616 | $ 75,473 | $ 61,194 | $ 49,757 | $ 74,917 | $ 75,465 | $ 59,537 | $ 46,096 | $ 219,873 | $ 236,040 | $ 256,015 | |
% of Segment Revenue | 11.40% | 11.30% | 13.20% | |||||||||||||
Goodwill | $ 124,161 | 124,161 | 119,410 | $ 124,161 | $ 119,410 | |||||||||||
West | ||||||||||||||||
Segment reporting information | ||||||||||||||||
Revenue | $ 913,626 | $ 964,093 | $ 1,151,433 | |||||||||||||
% of Revenue | 47.40% | 46.20% | 59.20% | |||||||||||||
Gross Profit | $ 130,255 | $ 143,468 | $ 190,747 | |||||||||||||
% of Segment Revenue | 14.30% | 14.90% | 16.60% | |||||||||||||
Goodwill | 45,239 | 45,239 | 45,239 | $ 45,239 | $ 45,239 | |||||||||||
East | ||||||||||||||||
Segment reporting information | ||||||||||||||||
Revenue | $ 612,174 | $ 489,926 | $ 430,438 | |||||||||||||
% of Revenue | 31.70% | 23.50% | 22.10% | |||||||||||||
Gross Profit | $ 42,523 | $ 25,749 | $ 24,309 | |||||||||||||
% of Segment Revenue | 6.90% | 5.30% | 5.60% | |||||||||||||
Goodwill | 42,866 | 42,866 | 43,267 | $ 42,866 | $ 43,267 | |||||||||||
East | Cardinal Contractors | ||||||||||||||||
Segment reporting information | ||||||||||||||||
Goodwill | 401 | 401 | ||||||||||||||
Goodwill impairment charge | 401 | 401 | ||||||||||||||
Energy | ||||||||||||||||
Segment reporting information | ||||||||||||||||
Revenue | $ 403,615 | $ 632,175 | $ 362,349 | |||||||||||||
% of Revenue | 20.90% | 30.30% | 18.70% | |||||||||||||
Gross Profit | $ 47,095 | $ 66,823 | $ 40,959 | |||||||||||||
% of Segment Revenue | 11.70% | 10.60% | 11.30% | |||||||||||||
Goodwill | $ 36,056 | $ 36,056 | $ 30,904 | $ 36,056 | $ 30,904 |
Reportable Operating Segments -
Reportable Operating Segments - Revenue and Total Assets by Geographic Area (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues and total assets by geographic area | |||
% of Revenue | 100.00% | 100.00% | 100.00% |
Non-United States | |||
Revenues and total assets by geographic area | |||
% of Revenue | 1.00% | ||
% of total assets | 1.00% |
Customer Concentrations (Detail
Customer Concentrations (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Sep. 30, 2013USD ($) | Jun. 30, 2013USD ($) | Mar. 31, 2013USD ($) | Dec. 31, 2015USD ($)customeritem | Dec. 31, 2014USD ($)customer | Dec. 31, 2013USD ($) | |
Customer concentrations | |||||||||||||||
Amount | $ 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | $ 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | $ 537,879 | $ 551,333 | $ 445,013 | $ 409,995 | $ 1,929,415 | $ 2,086,194 | $ 1,944,220 |
Revenues. | Customer concentration | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 944,223 | $ 759,319 | $ 692,159 | ||||||||||||
Percentage | 48.90% | 36.40% | 35.60% | ||||||||||||
Revenues. | Customer concentration | Texas DOT | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 183,847 | $ 183,221 | $ 140,458 | ||||||||||||
Percentage | 9.50% | 8.80% | 7.20% | ||||||||||||
Revenues. | Customer concentration | Chemical/Energy Producer | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 173,931 | ||||||||||||||
Percentage | 9.00% | ||||||||||||||
Revenues. | Customer concentration | Chemical/Energy Producer | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.00% | |||||||||||||
Revenues. | Customer concentration | Private gas and electric utility | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 173,232 | $ 145,677 | $ 104,828 | ||||||||||||
Percentage | 9.00% | 7.00% | |||||||||||||
Revenues. | Customer concentration | Private gas and electric utility | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.40% | ||||||||||||||
Revenues. | Customer concentration | Pipeline Operator | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 165,578 | ||||||||||||||
Percentage | 8.60% | ||||||||||||||
Revenues. | Customer concentration | Pipeline Operator | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.00% | |||||||||||||
Revenues. | Customer concentration | Gas utility | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 127,128 | $ 143,171 | |||||||||||||
Percentage | 6.60% | 7.40% | |||||||||||||
Revenues. | Customer concentration | Gas utility | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | ||||||||||||||
Revenues. | Customer concentration | Public gas and electric utility | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 120,507 | $ 144,567 | $ 153,908 | ||||||||||||
Percentage | 6.20% | 6.90% | 7.90% | ||||||||||||
Revenues. | Customer concentration | Petrochemical producer | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 164,634 | ||||||||||||||
Percentage | 7.90% | ||||||||||||||
Revenues. | Customer concentration | Petrochemical producer | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.00% | |||||||||||||
Revenues. | Customer concentration | Pipeline Operator | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 121,220 | ||||||||||||||
Revenues. | Customer concentration | Pipeline Operator | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.80% | 5.00% | ||||||||||||
Revenues. | Customer concentration | Gas utility. | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 149,794 | ||||||||||||||
Percentage | 7.70% | ||||||||||||||
Revenues. | Customer concentration | Gas utility. | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.00% | |||||||||||||
Revenues. | Customer concentration | Top ten customers | |||||||||||||||
Customer concentrations | |||||||||||||||
Number of calendar years in which top customers typically generate minimum specified percentage of revenue | item | 1 | ||||||||||||||
Minimum percentage of revenues generated by top ten customers | 50.00% | ||||||||||||||
Percentage | 59.40% | 53.60% | 50.00% | ||||||||||||
Number of top customers | customer | 10 | ||||||||||||||
Revenues. | Customer concentration | One customer | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 9.00% | 4.00% | |||||||||||||
Accounts receivable | Customer concentration | One customer | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 15.70% | 10.00% | |||||||||||||
Number of customers | customer | 1 | 1 |
Multiemployer Plans (Details)
Multiemployer Plans (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($)item | |
Multiemployer plans | |||
Number of pension plans in which annual contribution was made by the entity during last three years | item | 82 | ||
Number of pension plans in which the entity contributed | item | 2 | 1 | 2 |
Contributions for specified plans | $ 5,659 | $ 1,427 | |
Contributions for significant plans | $ 21,126 | 23,071 | 29,915 |
Contributions to other multiemployer plans | 13,170 | 15,036 | 13,004 |
Total contributions made | 34,296 | 38,107 | 42,919 |
One Plan | |||
Multiemployer plans | |||
Contributions for specified plans | 2,180 | ||
Second Plan | |||
Multiemployer plans | |||
Contributions for specified plans | 457 | ||
Central Pension Fund of the International Union of Operating Engineers and Participating Employers | |||
Multiemployer plans | |||
Contributions for significant plans | 5,659 | 6,204 | 7,286 |
Laborers International Union of North America National (Industrial) Pension Fund | |||
Multiemployer plans | |||
Contributions for significant plans | 3,287 | 3,382 | 5,025 |
Southern California Pipetrades Trust Funds | |||
Multiemployer plans | |||
Contributions for significant plans | 2,180 | 5,239 | 6,179 |
Pipeline Industry Benefit Fund | |||
Multiemployer plans | |||
Contributions for significant plans | 3,783 | 2,686 | 4,605 |
Laborers Pension Trust Fund for Northern California | |||
Multiemployer plans | |||
Contributions for significant plans | 3,150 | 3,116 | 3,869 |
Construction Laborers Pension Trust for Southern California | |||
Multiemployer plans | |||
Contributions for significant plans | $ 3,067 | $ 2,444 | $ 2,951 |
Company Retirement Plans (Detai
Company Retirement Plans (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
401(k) Plan | |||
Company retirement plans | |||
Maximum contribution by employees (as a percent) | 100.00% | ||
Employer match of employee contributions on first level of eligible compensation (as a percent) | 100.00% | ||
Percentage of eligible compensation, first level, matched by employer | 3.00% | ||
Employer match of employee contributions on the second level of eligible compensation (as a percent) | 50.00% | ||
Percentage of eligible compensation, second level, partially matched by employer | 2.00% | ||
Employer discretionary contributions | $ 0 | $ 0 | $ 0 |
Employer's contribution | $ 3,702 | 3,111 | 2,771 |
On Quest Canada, ULC RRSP-DPSP Plan | |||
Company retirement plans | |||
Number of components of the plan | item | 2 | ||
Employer match of employee contributions on first level of eligible compensation (as a percent) | 100.00% | ||
Percentage of eligible compensation, first level, matched by employer | 3.00% | ||
Employer match of employee contributions on the second level of eligible compensation (as a percent) | 50.00% | ||
Percentage of eligible compensation, second level, partially matched by employer | 2.00% | ||
Number of years of employment as a vesting period of DPSP portion | 1 year | ||
Employer's contribution | $ 55 | $ 69 | $ 70 |
Deferred Compensation Agreeme82
Deferred Compensation Agreements and Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
LTR Plan | ||
Deferred compensation agreements | ||
Percentage of participant's annual earned bonus deferred | 50.00% | |
Period of deferral of annual earned bonus | 1 year | |
Total deferred compensation liability | $ 5,220 | $ 4,779 |
Maximum percentage of participant's earned bonus amount up to which common stock can be purchased in a stock purchase plan | 16.67% | |
Percentage of average market closing prices used in determining number of common stock that could be purchased by participants | 75.00% | 75.00% |
Discounted price from the average December market price at which shares purchased by participants in LTR Plan (as a percent) | 25.00% | |
JCG Stakeholder Incentive Plan | ||
Deferred compensation agreements | ||
Total deferred compensation liability | $ 278 | $ 599 |
Vesting period | 5 years | |
Period of payment of deferred benefit amount plus interest in equal monthly installments | 3 years | 3 years |
Percentage of amounts accrued added to the 2015 payments | 50.00% |
Deferred Compensation Agreeme83
Deferred Compensation Agreements and Stock-Based Compensation - Stock-Based Comp (Details) $ in Thousands | Dec. 31, 2015USD ($)shares | Mar. 24, 2014shares | May. 03, 2013itemshares | Aug. 31, 2015shares | Mar. 31, 2015shares | Aug. 31, 2014shares | Feb. 28, 2014shares | Aug. 31, 2013shares | Mar. 31, 2013shares | Dec. 31, 2015USD ($)shares |
Stock-based compensation | ||||||||||
Shares of common stock issued as a part of quarterly compensation of non-employee members of the Board of Directors | 9,748 | 8,168 | 6,172 | 6,375 | 9,110 | 12,480 | ||||
Period of restriction on trade for shares issued to non-employee members of the board of directors under the Primoris Long-term Retention Plan | 1 year | |||||||||
Restricted Stock Units | ||||||||||
Stock-based compensation | ||||||||||
Shares granted | 48,512 | 100,000 | ||||||||
Equity Plan | Restricted Stock Units | ||||||||||
Stock-based compensation | ||||||||||
Shares granted | 148,512 | |||||||||
Number of shares of common stock issued for each unit when vested | 1 | 1 | ||||||||
Compensation expense recognized | $ | $ 1,050 | |||||||||
Unrecognized compensation expense | $ | $ 1,300 | $ 1,300 | ||||||||
Period to recognize unrecognized compensation expense | 1 year 3 months 18 days | |||||||||
Accrued dividend equivalent units | 722 | 722 | ||||||||
Equity Plan | Restricted Stock Units | Executive One | ||||||||||
Stock-based compensation | ||||||||||
Shares vested | 50,000 | |||||||||
Shares granted | 100,000 | |||||||||
Number of quarterly installments units will vest | item | 4 | |||||||||
Equity Plan | Restricted Stock Units | Executive Two | ||||||||||
Stock-based compensation | ||||||||||
Shares vested | 24,256 | |||||||||
Shares vested outstanding | 24,256 | 24,256 | ||||||||
Shares granted | 48,512 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2015USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Related party transactions | ||||
Lease payments to related party | $ 1,445 | $ 1,505 | $ 1,556 | |
SIGI | ||||
Related party transactions | ||||
Lease payments to related party | 831 | 862 | 907 | |
Roger Newnham | ||||
Related party transactions | ||||
Lease payments to related party | 254 | 289 | 295 | |
Lemmie Rockford | ||||
Related party transactions | ||||
Lease payments to related party | 90 | 90 | 90 | |
Quality RE Partners | ||||
Related party transactions | ||||
Lease payments to related party | $ 270 | $ 264 | $ 264 | |
Number of former shareholders owning leased property | item | 3 | |||
Number of current employees owning leased property | item | 2 | |||
Quality RE Partners | Q3 Contracting | ||||
Related party transactions | ||||
Fair value of the purchased construction equipment | $ 589 | |||
Jay Osborn | Q3 Contracting | ||||
Related party transactions | ||||
Lease payments to related party | $ 36 | |||
Fair value of the purchased construction equipment | $ 145 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2009 | |
Current provision (benefit) | ||||
Federal | $ 26,948 | $ 28,203 | $ 41,323 | |
State | 3,640 | 5,398 | 10,051 | |
Foreign | 362 | 1,074 | 772 | |
Total | 30,950 | 34,675 | 52,146 | |
Deferred provision (benefit) | ||||
Federal | (7,099) | 3,586 | (6,099) | |
State | 155 | 457 | (874) | |
Foreign | (60) | (72) | 67 | |
Total | (7,004) | 3,971 | (6,906) | |
Change in valuation allowance | (344) | |||
Total | $ 23,946 | $ 38,646 | $ 44,896 | |
Reconciliation of income tax expense compared to the amount of income tax expense that would result by applying U.S. federal statutory income tax rate to pre-tax income | ||||
U.S. federal statutory income tax rate (as a percent) | 35.00% | 35.00% | 35.00% | |
State taxes, net of federal income tax impact (as a percent) | 4.20% | 4.66% | 4.72% | |
Foreign tax credit (as a percent) | (0.50%) | (0.98%) | (0.73%) | |
Canadian income tax (as a percent) | 0.50% | 0.98% | 0.73% | |
Domestic production activities deduction (as a percent) | (3.91%) | (3.07%) | (3.67%) | |
Nondeductible meals & entertainment (as a percent) | 5.09% | 3.38% | 2.58% | |
Other items (as a percent) | (1.01%) | (2.01%) | 0.56% | |
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests (as a percent) | 39.37% | 37.96% | 39.19% | |
Impact of income from noncontrolling interests on effective tax rate (as a percent) | (0.18%) | (0.19%) | (1.65%) | |
Effective tax rate on income before provision for income taxes and noncontrolling interests (as a percent) | 39.19% | 37.77% | 37.54% | |
Tax effect of temporary differences that give rise to deferred income taxes | ||||
Valuation allowance | $ 0 | $ 344 | ||
Deferred tax assets: | ||||
Accrued workers compensation | 10,058 | $ 6,460 | ||
Insurance reserves | 5,489 | 3,698 | ||
Other accrued liabilities | 7,043 | 5,665 | ||
Capital loss carryforward | 1,800 | 1,139 | ||
Foreign tax credit | 1,293 | 575 | ||
Accrued Compensation | 9,673 | 10,718 | ||
Total deferred tax assets | 35,356 | 28,255 | ||
Deferred tax liabilities | ||||
Depreciation and amortization | (33,304) | (33,657) | ||
Prepaid expense and other | (977) | (527) | ||
Total deferred tax liabilities | (34,281) | (34,184) | ||
Net deferred tax assets (liabilities) | $ 1,075 | |||
Net deferred tax assets (liabilities) | (5,929) | |||
Minimum period of statute of limitations of state and foreign jurisdictions | 3 years | |||
Maximum period of statute of limitations of state and foreign jurisdictions | 5 years | |||
Reconciliation and aggregate changes for unrecognized tax benefits | ||||
Beginning balance | $ 456 | 5,382 | $ 72 | |
Increases in balances for tax positions taken during the current year | 1,340 | |||
Increases in balances for tax positions taken during prior years | 3,993 | |||
Settlements and effective settlements with tax authorities | $ (456) | (4,878) | ||
Lapse of statute of limitations | (48) | (23) | ||
Total | $ 456 | $ 5,382 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | |||||||||||||||
Net income | $ 12,708 | $ 19,079 | $ 3,692 | $ 1,672 | $ 9,024 | $ 27,390 | $ 16,003 | $ 11,265 | $ 25,554 | $ 23,193 | $ 15,893 | $ 10,040 | $ 37,151 | $ 63,682 | $ 74,680 |
Net income attributable to noncontrolling interests | (279) | (526) | (5,020) | ||||||||||||
Net income attributable to Primoris | $ 12,555 | $ 19,007 | $ 3,638 | $ 1,672 | $ 8,930 | $ 27,390 | $ 16,003 | $ 10,833 | $ 22,481 | $ 21,845 | $ 15,564 | $ 9,770 | $ 36,872 | $ 63,156 | $ 69,660 |
Denominator (shares in thousands): | |||||||||||||||
Weighted average shares for computation of basic earnings per share | 51,676 | 51,672 | 51,666 | 51,572 | 51,561 | 51,606 | 51,655 | 51,610 | 51,571 | 51,568 | 51,562 | 51,456 | 51,647 | 51,607 | 51,540 |
Dilutive effect of shares issued to independent directors | 2 | 2 | 3 | ||||||||||||
Dilutive effect of unvested restricted stock units | 149 | 138 | 66 | ||||||||||||
Dilutive effect of shares to be issued to Q3C sellers | 1 | ||||||||||||||
Weighted average shares for computation of diluted earnings per share | 51,825 | 51,824 | 51,815 | 51,726 | 51,710 | 51,759 | 51,804 | 51,714 | 51,671 | 51,671 | 51,626 | 51,467 | 51,798 | 51,747 | 51,610 |
Earnings per share attributable to Primoris: | |||||||||||||||
Basic (in dollars per share) | $ 0.24 | $ 0.37 | $ 0.07 | $ 0.03 | $ 0.17 | $ 0.53 | $ 0.31 | $ 0.21 | $ 0.44 | $ 0.42 | $ 0.30 | $ 0.19 | $ 0.71 | $ 1.22 | $ 1.35 |
Diluted (in dollars per share) | $ 0.24 | $ 0.37 | $ 0.07 | $ 0.03 | $ 0.17 | $ 0.53 | $ 0.31 | $ 0.21 | $ 0.44 | $ 0.42 | $ 0.30 | $ 0.19 | $ 0.71 | $ 1.22 | $ 1.35 |
Earnings Per Share - Shares Gra
Earnings Per Share - Shares Granted (Details) - shares | Mar. 24, 2014 | May. 03, 2013 | Jan. 07, 2013 | Feb. 28, 2013 |
Restricted Stock Units | ||||
Earnings per share | ||||
Shares granted | 48,512 | 100,000 | ||
Q3 Contracting | ||||
Earnings per share | ||||
Number of unregistered shares of common stock issued | 29,273 | 29,273 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | Mar. 24, 2014shares | May. 03, 2013shares | Jan. 07, 2013USD ($)$ / sharesshares | Aug. 31, 2015shares | Mar. 31, 2015shares | Aug. 31, 2014shares | Feb. 28, 2014USD ($)shares | Aug. 31, 2013shares | Mar. 31, 2013USD ($)$ / sharesshares | Feb. 28, 2013shares | Sep. 30, 2014USD ($)$ / sharesshares | Dec. 31, 2015USD ($)item$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares |
Common Stock | |||||||||||||
Common stock, authorized (in shares) | 90,000,000 | 90,000,000 | |||||||||||
Par value of common stock (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||||
Common stock issued (in shares) | 51,676,140 | 51,561,396 | |||||||||||
Common stock outstanding (in shares) | 51,676,140 | 51,561,396 | |||||||||||
Number of holders of common stock | item | 399 | ||||||||||||
Shares of common stock issued as a part of quarterly compensation of non-employee members of the Board of Directors | 9,748 | 8,168 | 6,172 | 6,375 | 9,110 | 12,480 | |||||||
Period of restriction on trade for shares issued to non-employee members of the board of directors under the Primoris Long-term Retention Plan | 1 year | ||||||||||||
Aggregate purchase price up to which shares can be acquired under share repurchase program | $ | $ 23,000 | ||||||||||||
Number of shares purchased and cancelled under the share repurchase program | 100,000 | ||||||||||||
Amount paid for shares purchased and cancelled under share repurchase program | $ | $ 2,800 | ||||||||||||
Average cost of repurchased shares of stock (in dollars per share) | $ / shares | $ 28.44 | ||||||||||||
Preferred Stock | |||||||||||||
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 | |||||||||||
Par value of preferred stock (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||||
Preferred stock, shares outstanding | 0 | 0 | |||||||||||
Warrants | |||||||||||||
Warrants outstanding (in shares) | 0 | 0 | |||||||||||
Ecuador business | Discontinued Operations, Disposed of by Sale | |||||||||||||
Common Stock | |||||||||||||
Price of shares issued (in dollars per share) | $ / shares | $ 19.81 | ||||||||||||
Shares provided for the payment of note receivable | 15,144 | ||||||||||||
Notes receivable | $ | $ 300 | ||||||||||||
Restricted Stock Units | |||||||||||||
Common Stock | |||||||||||||
Shares granted | 48,512 | 100,000 | |||||||||||
LTR Plan | |||||||||||||
Common Stock | |||||||||||||
Shares of common stock issued under the long-term incentive plan | 96,828 | 77,455 | |||||||||||
Amount received in exchange for shares of common stock under a long term incentive plan | $ | $ 1,621 | $ 1,671 | |||||||||||
Percentage of average market closing prices used in determining number of common stock that could be purchased by participants | 75.00% | 75.00% | |||||||||||
Equity Plan | Restricted Stock Units | |||||||||||||
Common Stock | |||||||||||||
Shares granted | 148,512 | ||||||||||||
Accrued Dividend Equivalent Units | 722 | ||||||||||||
Shares of common stock reserved for issuance upon exercise of all future stock option grants, SARS and grants of restricted shares under the 2013 Equity Plan | 2,163,907 | ||||||||||||
Q3 Contracting | |||||||||||||
Common Stock | |||||||||||||
Stock issued to sellers (in shares) | 29,273 | 29,273 | |||||||||||
Price of shares issued (in dollars per share) | $ / shares | $ 14.69 | ||||||||||||
Stock issued for acquisition | $ | $ 430 |
Selected Quarterly Financial 89
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Selected Quarterly Financial Information | |||||||||||||||
Revenues | $ 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | $ 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | $ 537,879 | $ 551,333 | $ 445,013 | $ 409,995 | $ 1,929,415 | $ 2,086,194 | $ 1,944,220 |
Gross Profit | 63,725 | 71,647 | 46,496 | 38,005 | 49,616 | 75,473 | 61,194 | 49,757 | 74,917 | 75,465 | 59,537 | 46,096 | 219,873 | 236,040 | 256,015 |
Net income | 12,708 | 19,079 | 3,692 | 1,672 | 9,024 | 27,390 | 16,003 | 11,265 | 25,554 | 23,193 | 15,893 | 10,040 | 37,151 | 63,682 | 74,680 |
Net income attributable to Primoris | $ 12,555 | $ 19,007 | $ 3,638 | $ 1,672 | $ 8,930 | $ 27,390 | $ 16,003 | $ 10,833 | $ 22,481 | $ 21,845 | $ 15,564 | $ 9,770 | $ 36,872 | $ 63,156 | $ 69,660 |
Earnings per share: | |||||||||||||||
Basic earnings per share (in dollars per share) | $ 0.24 | $ 0.37 | $ 0.07 | $ 0.03 | $ 0.17 | $ 0.53 | $ 0.31 | $ 0.21 | $ 0.44 | $ 0.42 | $ 0.30 | $ 0.19 | $ 0.71 | $ 1.22 | $ 1.35 |
Diluted earnings per share (in dollars per share) | $ 0.24 | $ 0.37 | $ 0.07 | $ 0.03 | $ 0.17 | $ 0.53 | $ 0.31 | $ 0.21 | $ 0.44 | $ 0.42 | $ 0.30 | $ 0.19 | $ 0.71 | $ 1.22 | $ 1.35 |
Weighted average common shares outstanding: | |||||||||||||||
Basic (in shares) | 51,676 | 51,672 | 51,666 | 51,572 | 51,561 | 51,606 | 51,655 | 51,610 | 51,571 | 51,568 | 51,562 | 51,456 | 51,647 | 51,607 | 51,540 |
Diluted (in shares) | 51,825 | 51,824 | 51,815 | 51,726 | 51,710 | 51,759 | 51,804 | 51,714 | 51,671 | 51,671 | 51,626 | 51,467 | 51,798 | 51,747 | 51,610 |
Subsequent Event (Details)
Subsequent Event (Details) - $ / shares | Feb. 22, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Subsequent Event | ||||
Cash dividend declared (in dollars per share) | $ 0.205 | $ 0.150 | $ 0.135 | |
Subsequent Event. | ||||
Subsequent Event | ||||
Cash dividend declared (in dollars per share) | $ 0.055 |