Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 28, 2017 | Jun. 30, 2016 | |
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, 2016 | ||
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 | $ 780.9 | ||
Entity Common Stock, Shares Outstanding | 51,564,658 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 135,823 | $ 161,122 |
Customer retention deposits | 481 | 2,598 |
Accounts receivable, net | 388,000 | 320,588 |
Costs and estimated earnings in excess of billings | 138,618 | 116,455 |
Inventory and uninstalled contract materials | 49,201 | 67,796 |
Prepaid expenses and other current assets | 19,258 | 18,265 |
Total current assets | 731,381 | 686,824 |
Property and equipment, net | 277,346 | 283,545 |
Deferred tax asset - long-term | 1,075 | |
Intangible assets, net | 32,841 | 36,438 |
Goodwill | 127,226 | 124,161 |
Other long-term assets | 2,004 | 211 |
Total assets | 1,170,798 | 1,132,254 |
Current liabilities: | ||
Accounts payable | 168,110 | 124,450 |
Billings in excess of costs and estimated earnings | 112,606 | 139,875 |
Accrued expenses and other current liabilities | 108,006 | 93,596 |
Dividends payable | 2,839 | 2,842 |
Current portion of capital leases | 188 | 974 |
Current portion of long-term debt | 58,189 | 54,436 |
Total current liabilities | 449,938 | 416,173 |
Long-term capital leases, net of current portion | 15 | 22 |
Long-term debt, net of current portion | 203,381 | 219,853 |
Deferred tax liabilities | 9,830 | |
Other long-term liabilities | 9,064 | 12,741 |
Total liabilities | 672,228 | 648,789 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock—$.0001 par value; 90,000,000 shares authorized; 51,576,442 and 51,676,140 issued and outstanding at December 31, 2016 and December 31, 2015 | 5 | 5 |
Additional paid-in capital | 162,128 | 163,344 |
Retained earnings | 335,218 | 319,899 |
Noncontrolling interests | 1,219 | 217 |
Total stockholders' equity | 498,570 | 483,465 |
Total liabilities and stockholders' equity | $ 1,170,798 | $ 1,132,254 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
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 | 51,576,442 | 51,676,140 |
Common stock, shares outstanding | 51,576,442 | 51,676,140 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Revenues | $ 1,996,948 | $ 1,929,415 | $ 2,086,194 |
Cost of revenues | 1,795,641 | 1,709,542 | 1,850,154 |
Gross profit | 201,307 | 219,873 | 236,040 |
Selling, general and administrative expenses | 140,842 | 151,703 | 132,248 |
Impairment of goodwill | 2,716 | 401 | |
Operating income | 57,749 | 67,769 | 103,792 |
Other income (expense): | |||
Income (loss) from non-consolidated entities | 5,264 | ||
Foreign exchange gain (loss) | 202 | (763) | 374 |
Other income (expense) | (315) | 1,723 | (757) |
Interest income | 149 | 56 | 88 |
Interest expense | (8,914) | (7,688) | (6,433) |
Income before provision for income taxes | 48,871 | 61,097 | 102,328 |
Provision for income taxes | (21,146) | (23,946) | (38,646) |
Net income | 27,725 | 37,151 | 63,682 |
Less net income attributable to noncontrolling interests | (1,002) | (279) | (526) |
Net income attributable to Primoris | $ 26,723 | $ 36,872 | $ 63,156 |
Earnings per share: | |||
Basic (in dollars per share) | $ 0.52 | $ 0.71 | $ 1.22 |
Diluted (in dollars per share) | $ 0.51 | $ 0.71 | $ 1.22 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 51,762 | 51,647 | 51,607 |
Diluted (in shares) | 51,989 | 51,798 | 51,747 |
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, 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 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | |||||
Net income | 26,723 | 1,002 | 27,725 | ||
Issuance of shares to employees and directors | 2,133 | 2,133 | |||
Issuance of shares to employees and directors (in shares) | 108,102 | ||||
Amortization of Restricted Stock Units | 1,627 | 1,627 | |||
Dividend equivalent Units accrued - Restricted Stock Units | 23 | (23) | |||
Repurchase of stock | (4,999) | (4,999) | |||
Repurchase of stock (in shares) | (207,800) | ||||
Dividends | (11,381) | (11,381) | |||
Balance at Dec. 31, 2016 | $ 5 | $ 162,128 | $ 335,218 | $ 1,219 | $ 498,570 |
Balance (in shares) at Dec. 31, 2016 | 51,576,442 | ||||
Increase (Decrease) in Stockholders' Equity Roll Forward | |||||
Dividend equivalent Units accrued – Restricted Stock Units | 1,693 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 27,725 | $ 37,151 | $ 63,682 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation | 61,433 | 58,408 | 50,918 |
Amortization of intangible assets | 6,597 | 6,793 | 7,504 |
Goodwill and intangible asset impairment | 2,716 | 401 | |
Stock-based compensation expense | 1,627 | 1,050 | 934 |
Gain on sale of property and equipment | (4,677) | (2,116) | (1,895) |
Income from non-consolidated entities | (5,264) | ||
Net deferred tax liabilities (assets) | 10,905 | (7,004) | 8,970 |
Changes in assets and liabilities: | |||
Customer retention deposits | 2,117 | (2,117) | 4,823 |
Accounts receivable | (65,806) | 19,528 | (29,659) |
Costs and estimated earnings in excess of billings | (22,163) | (47,499) | (11,508) |
Other current assets | 17,665 | 4,949 | (25,767) |
Other long-term assets | (1,792) | 189 | 72 |
Accounts payable | 42,934 | (5,086) | 921 |
Billings in excess of costs and estimated earnings | (27,519) | (19,619) | (14,770) |
Contingent earnout liabilities | (6,722) | (4,145) | |
Accrued expenses and other current liabilities | 14,492 | 11,729 | (7,354) |
Other long-term liabilities | (3,677) | (1,658) | (1,361) |
Net cash provided by operating activities | 62,577 | 48,377 | 36,101 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (58,027) | (67,097) | (87,954) |
Proceeds from sale of property and equipment | 9,603 | 9,889 | 5,814 |
Purchase of short-term investments | (33,770) | ||
Sale of short-term investments | 30,992 | 21,464 | |
Cash received for the sale of equity method investments | 6,439 | ||
Cash paid for acquisitions | (10,997) | (22,302) | (14,596) |
Net cash used in investing activities | (59,421) | (48,518) | (102,603) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 45,000 | 75,278 | 58,519 |
Repayment of capital leases | (793) | (1,336) | (3,276) |
Repayment of long-term debt | (57,719) | (43,927) | (35,107) |
Proceeds from issuance of common stock purchased by management under long-term incentive plan | 1,440 | 1,621 | 1,671 |
Cash distribution to non-controlling interest holder | (29) | (1,590) | |
Repurchase of common stock | (4,999) | (2,844) | |
Dividends paid | (11,384) | (9,809) | (7,483) |
Net cash provided by (used in) financing activities | (28,455) | 21,798 | 9,890 |
Net change in cash and cash equivalents | (25,299) | 21,657 | (56,612) |
Cash and cash equivalents at beginning of the period | 161,122 | 139,465 | 196,077 |
Cash and cash equivalents at end of the period | 135,823 | 161,122 | 139,465 |
Cash paid during the period for: | |||
Interest | 8,819 | 7,688 | 6,432 |
Income taxes, net of refunds received | 8,624 | 18,696 | 57,613 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||
Obligations incurred for the acquisition of property and equipment | 25 | ||
Dividends declared and not yet paid | $ 2,839 | $ 2,842 | $ 2,062 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2016 | |
Nature of Business | |
Nature of Business | PRIMORIS SERVICES CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Dollars in thousands, except share and per share amounts 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 Segments —The Company segregates its business into three reportable segments: the West Construction Services segment (“West segment”), the East Construction Services segment (“East segment”) and the Energy segment (“Energy segment”). See Note 17 — “ Reportable Segments” . The following table lists the Company’s primary operating subsidiaries and their reportable segments: Subsidiary Reportable Segment ARB, Inc. (“ARB”) West ARB Structures, Inc. West Q3 Contracting, Inc. (“Q3C”) West Rockford Corporation (“Rockford”) West Vadnais Trenchless Services, Inc. (“Vadnais”) West Cardinal Contractors, Inc. East BW Primoris, LLC (“BWP”) East James Construction Group, LLC (“JCG”): East JCG Heavy Civil Division East JCG Infrastructure and Maintenance Division East Primoris Energy Services Corporation (“PES”) Energy PES Pipeline Services Energy PES Industrial Division Energy OnQuest, Inc. Energy OnQuest Canada, ULC Energy Primoris Aevenia, Inc. (“Aevenia”) Energy 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 gas-fired power 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 2018 and the Wilmington project in 2018. Financial information for the joint ventures is presented in Note 13— “Noncontrolling Interests” . 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. During the third quarter of 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. 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. Aevenia is an energy and electrical construction company that 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. On January 29, 2016, the Company acquired the net assets of Mueller Concrete Construction Company (“Mueller”) for $4.1 million and on November 18, 2016, acquired the net assets of Northern Energy & Power (“Northern”) for $6.9 million. Both Mueller and Northern operate as divisions of Aevenia. 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, 2016 | |
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”). 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. 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 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, 2016 and 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 — 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 is not passed to the state agency until the materials are installed. 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. 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 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. During the third quarter 2016, the Company made a decision to divest its Texas heavy civil business unit, a division of JCG within the East segment. The Company will continue to operate the division while actively seeking a buyer. In accordance with ASC Topic 350, the event of the planned divestiture triggered an analysis of goodwill in the JCG reporting unit, resulting in a pretax, non-cash goodwill impairment charge of approximately $2.7 million. See Note 16 — “ Planned Divestiture of Texas Heavy Civil Business Unit” . In the fourth quarter of 2015, an impairment expense of $401 was recorded relating to the goodwill attributed to Cardinal Contractors, Inc., which is part of the East Segment. There was no impairment of goodwill for the year ended December 31, 2014. 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, 2016, the Company had operations in Canada with assets aggregating approximately $11,823, compared to $14,111 at December 31, 2015. The Canadian operations had revenues of $11,158 and income before tax of $774 for the year ended December 31, 2016; revenues of $17,763 and income before tax of $252 for the year ended December 31, 2015, and revenues of $19,840 and income before tax of $3,183 for the year ended December 31, 2014. 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 gains of $202 in 2016, losses of $763 in 2015 and gains of $374 in 2014 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 — “Noncontrolling 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. Cash concentration — The Company places its cash in short term U.S. Treasury bonds and certificates of deposit (“CDs”). At December 31, 2016 and 2015, the Company had cash balances of $135.8 million and $161.1 million, respectively. At December 31, 2016, the $135.8 million of cash consisted of $100.5 million in U.S. Treasury bill funds, backed by the federal government, and the remaining $35.3 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, 2015, the $161.1 million of cash consisted of $131.2 million held in U.S. Treasury bill funds and $29.9 million with high credit quality financial institutions. Collective bargaining agreements — Approximately 32% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2016. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 84 collective bargaining agreements to which the Company is a party to, 62 will require renegotiation during 2017. 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 $28,006 and $26,779 at December 31, 2016 and 2015, 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 no margin, where revenue is 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 can also be caused by non-customer-caused changes, such as weather delays or rain. Claims are included in the calculation of revenues when realization is probable and amounts can be reliably determined. 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 and recognized as an “accrued loss provision” which 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, 2016 and 2015 was $1,030 and $480, 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. During the year ended December 31, 2016, certain contracts had revisions in cost estimates from those projected at December 31, 2015. If the revised estimates had been applied in the prior year, the gross profit earned on these contracts would have resulted in a decrease of approximately $1,685 in gross profit in 2015. Similarly, had the revised estimates as of December 31, 2015 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. The revised estimates for the year ended December 31, 2014 would have resulted in a gross profit increase of approximately $17,266 in the year 2013. The following table presents the approximate financial impact of the changes in estimates that would have been reflected in the prior years 2015 and 2014 had the revised estimates been applied to the particular year. Net impact of change in estimate for the years ended December 31, 2015 2014 Revised estimates in 2016 that impact 2015 $ $ — Revised estimates in 2015 that impact 2014 Revised estimates in 2014 that impact 2013 — Net impact to gross margin $ $ EPS impact to year $ $ During the third quarter 2016, the Company settled a dispute with a customer on collection of a receivable of $17.9 million, receiving $38 million in cash. Prior to settlement, the Company recorded revenues with zero margin. The Company recognized the settlement as a change in accounting estimate which resulted in recognizing revenues of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016. The settlement of this project dispute was not included in the table above. 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 18 — “ 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 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, 2016 and 2015, 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 21 — “Deferred Compensation Agreements and Stock-Based Compensation” and in Note 25— “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) ”, with several clarifying updates issued during 2016. The new standard is effective for reporting periods beginning after December 15, 2017. The new standard will supersede all current revenue recognition standards and guidance. Revenue recognition will occur when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled to in exchange for those goods or services. The mandatory 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 standard permits two implementation approaches at the beginning of 2018: the “full retrospective method” that requires restatement of prior years and the “modified retrospective method” that requires prospective application of the new standard as a cumulative-effect adjustment. The Company expects to adopt this new standard using the modified retrospective method that will result in a cumulative-effect adjustment to retained earnings as of the date of adoption. The adoption will only apply to customer contracts that are not substantially complete as of January 1, 2018. The Company is currently evaluating the impact of adopting the standard on the Company’s financial position, results of operations, cash flows and related disclosures. Although it is early in our evaluation process, we do not expect Topic 606 to have a material impact on our financial statements, though internal documentation and record keeping may be significantly impacted. The impact to our results is not believed to be material because Topic 606 generally supports the recognition of revenue over time under the cost-to-cost method for the majority of our contracts, which is consistent with our current percentage of completion revenue recognition model. In most of our fixed price contracts, the customer typically controls the work in process as evidenced either by contractual termination clauses or by our rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. The Company does not expect the new standard to materially affect the total revenue that can be recognized over the life of a construction project; however, the revenue recognized on a quarterly basis during the construction period may change. We believe that Topic 606 is likely to be more impactful to certain of our lump sum projects as a result of the following potential changes from our current practices: § Performance obligations – Topic 606 requires a review of contracts and contract modifications to determine whether there are multiple performance obligations. Each separate performance obligation must be accounted for as a distinct project, which could impact the timing of revenue recognition. There is a potential that some of our contracts may have multiple performance obligations which may affect the timing of revenue recognition § Variable consideration – In accordance with Topic 606, revenue recognition must account for variable consideration, including potential liquidated damages and customer discounts. Currently, we assess the impact of liquidated damages as an estimated cost of the project. The adoption of the new standard may affect the timing of the recognition of revenue for both liquidated damages and discounts. § Mobilization costs – Mobilization costs typically include costs to provide labor, equipment and facilities to a project site and they are recorded currently as project costs as incurred. Topic 606 requires these costs to be capitalized as an asset and amortized over the duration of the project. § Significant components – For some projects, we may purchase equipment from a third part |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 and 2015: Fair Value Measurements at Reporting Date Significant Amount Quoted Prices Other Significant Recorded in Active Markets Observable Unobservable on Balance for Identical Assets Inputs Inputs Sheet (Level 1) (Level 2) (Level 3) Assets as of December 31, 2016: Cash and cash equivalents $ $ — — Liabilities as of December 31, 2016: None Assets as of December 31, 2015: Cash and cash equivalents $ $ — — Liabilities as of December 31, 2015: None 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, 2016 and 2015: Significant Unobservable Inputs (Level 3) Contingent Consideration Liability 2016 2015 Beginning balance, January 1, 2016 and 2015 $ — $ Additions to contingent consideration liability: Change in fair value of contingent consideration liability during year — Reductions in the contingent consideration liability: Payment to Q3C sellers for meeting performance targets — Reduction due to non-attainment of performance target – Surber, Ram Fab and Vadnais — Ending balance, December 31, 2016 and 2015 $ — $ — 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, 2016 | |
Business Combinations | |
Business Combinations | Note 4—Business Combinations 2016 Acquisitions On January 29, 2016, the Company’s subsidiary, Aevenia, acquired certain assets and liabilities of Mueller Concrete Construction Company ("Mueller") for $4.1 million. The purchase was accounted for using the acquisition method of accounting. During the second quarter of 2016, the Company finalized its estimate of fair value of the acquired assets of Mueller, which included $2.0 million of fixed assets, $2.0 million of goodwill and $0.1 million of inventory. Mueller operates as a division of Aevenia. On June 24, 2016, the Company’s subsidiary, Vadnais, purchased property, plant and equipment from Pipe Jacking Unlimited, Inc., consisting of specialty directional drilling and tunneling equipment for $13.4 million in cash. The Company determined this purchase did not meet the definition of a business as defined under ASC 805. The purchase price approximated the estimated fair value of the equipment. The Company believes the purchase of the equipment will aid in the Company’s pipeline construction projects and enhance the work provided to our utility clients. On November 18, 2016, the Company’s subsidiary, Aevenia, acquired certain assets and liabilities of Northern Energy & Power ("Northern") for $6.9 million. Northern serves the renewable energy sector with a specific focus on Solar Photovoltaic (PV) installations in the United States (projects range from 1 MW to 200 MW Direct Current - target projects are from $1.5 million to as large as $150 million). The purchase was accounted for using the acquisition method of accounting. The assets were purchased for their estimated fair value and consisted of $3.0 million of intangible assets, $3.8 million of goodwill and $0.1 million of net working capital. Northern operates as a division of Aevenia. Legal and other costs related to the acquisitions during 2016 were immaterial and were expensed during 2016. 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 plains 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. From 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. The fair value of the assets acquired and the liabilities assumed for the 2016 and 2015 acquisitions is detailed in the section below “Schedule of Assets Acquired and Liabilities Assumed” . Summary of Cash Paid for Acquisitions The following table summarizes the cash paid for acquisitions for the years ended December 31, 2016 and 2015. Year ended December 31, 2016 2015 Northern — purchased November 18, 2016 $ $ — Mueller — purchased January 29, 2016 — Aevenia — purchased February 28, 2015 — Cash paid $ $ Schedule of Assets Acquired and Liabilities Assumed The following table summarizes the fair value of the assets acquired and the liabilities assumed at the acquisition date: Year ended December 31, 2016 2015 Acquisitions Acquisition Accounts receivable $ $ Inventory and other assets Prepaid expenses — Property, plant and equipment 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 used the assistance of an independent third party valuation specialist to estimate the fair value of the intangible assets acquired for the acquisitions. 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 2016 2015 Period Fair Value Fair Value Non-compete agreements 2 to 5 years $ — $ Customer relationships 5 to 10 years Total $ $ 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 Northern is derived from the expected benefits of services in the renewable energy sector with a specific focus on Solar Photovoltaic (PV) installations in the United States. 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 also includes the value of the assembled workforce of the various acquired businesses. The goodwill and other intangible assets associated with the acquisitions are deductible for income tax purposes over a fifteen-year period. Supplemental Unaudited Pro Forma Information The following pro forma information for the twelve months ended December 31, 2016 and 2015 presents the results of operations of the Company as if the 2016 acquisitions of Mueller and Northern, and the 2015 acquisition of Aevenia had occurred at the beginning of 2015. 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 purchase price allocations; and · the pro forma tax effect of both the income before income taxes and the pro forma adjustments, calculated using a tax rate of 40.0% for the years ended December 31, 2016 and 2015. 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, 2015. 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. 2016 2015 (unaudited) (unaudited) Revenues $ $ Income before provision for income taxes $ $ Net income attributable to Primoris $ $ Weighted average common shares outstanding: Basic Diluted Earnings per share: Basic $ $ Diluted $ $ |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable. | |
Accounts Receivable | Note 5—Accounts Receivable The following is a summary of accounts receivable at December 31: 2016 2015 Contracts receivable, net of allowance for doubtful accounts of $1,030 at December 31, 2016 and $480 at December 31, 2015, respectively $ $ Retention receivable Other accounts receivable $ $ |
Costs and Estimated Earnings on
Costs and Estimated Earnings on Uncompleted Contracts | 12 Months Ended |
Dec. 31, 2016 | |
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: 2016 2015 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: 2016 2015 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, 2016 | |
Property and Equipment | |
Property and Equipment | Note 7—Property and Equipment The following is a summary of property and equipment at December 31: 2016 2015 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 Property and equipment, net $ $ |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investments. | |
Equity Method Investments | Note 8—Equity Method Investments WesPac Energy LLC and WesPac Midstream LLC In 2010, the Company acquired a 50% membership interest in WesPac Energy LLC, a limited liability company that developed pipeline and terminal projects, primarily for the oil and gas industry. This membership interest was later formed into WesPac Midstream LLC, a Delaware limited liability company. In 2014, the Company’s ownership interest in Midstream was sold for $5,250 in cash, which was recorded as income from non-consolidated entities. 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, 2016 | |
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 2016 2015 Rockford West $ $ Q3C West JCG (includes JCG Heavy Civil and Infrastructure and Maintenance divisions) 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 Period 2016 2015 Tradename 3 to 10 years $ $ Customer relationships 3 to 15 years Non-compete agreements 2 to 5 years $ $ Amortization expense of intangible assets was $6,597, $6,793 and $7,504 for the years ended December 31, 2016, 2015 and 2014, respectively. Estimated future amortization expense for intangible assets as of December 31, 2016 is as follows: Estimated Intangible For the Years Ending Amortization December 31, Expense 2017 $ 2018 2019 2020 2021 Thereafter $ |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable and Accrued Liabilities | Note 10—Accounts Payable and Accrued Liabilities At December 31, 2016 and 2015, accounts payable included retention amounts of approximately $10,562 and $8,375, 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: 2016 2015 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, 2016 | |
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 as 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, 2016, total assets under capital leases were $2,469, accumulated depreciation was $2,332 and the net book value was $137. For 2015, total assets under capital leases were $4,874, accumulated depreciation was $4,103 and the net book value of assets was $771. 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: 2017 $ 2018 2019 2020 2021 — 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, 2016 | |
Credit Arrangements | |
Credit Arrangements | Note 12—Credit Arrangements Long-term debt and credit facilities consist of the following at December 31: Commercial Notes Payable and Mortgage Notes Payable 2016 2015 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 August 13, 2017 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 Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.83% to 2.06% per annum. Monthly principal and interest payments are due in the amount of $788 per month until the maturity dates, which range from August 15, 2021 to October 14, 2021. 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, 2017 $ 2018 2019 2020 2021 Thereafter $ Revolving Credit Facility As of December 31, 2016, 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 agreed 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 $16,182 at December 31, 2016 and $12,105 at December 31, 2015. Other than commercial letters of credit, there were no borrowings under this line of credit during the twelve months ended December 31, 2016, and available borrowing capacity at December 31, 2016 was $108,818. 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, 2016. 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, 2016 and 2015, letters of credit outstanding totaled $0 and $2,179 in Canadian dollars, respectively. At December 31, 2016, the available borrowing capacity was $8,000 in Canadian dollars. The credit facility contains a working capital restrictive covenant for our Canadian subsidiary, OnQuest Canada, ULC. At December 31, 2016, OnQuest Canada, ULC was in compliance with the covenant. |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2016 | |
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 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: 2016 2015 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, 2016. The project is expected to be completed in 2018. 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: 2016 2015 Cash $ $ Accounts receivable $ — $ Costs and estimated earnings in excess of billings $ $ — Billings in excess of costs and estimated earnings $ $ Other 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: 2016 2015 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, 2016. 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: 2016 2015 Cash $ $ Accounts receivable $ $ Billings in excess of costs and estimated earnings $ $ Other current liabilities $ $ The Blythe joint venture project has been completed; the project warranty expired in May 2015 and dissolution of the joint venture was completed in the third quarter 2015. Revenues attributable to the joint venture in 2015 were $119 and the carrying value of the assets and liabilities associated with the operations of the Blythe joint venture were immaterial at December 31, 2015. |
Contingent Earnout Liabilities
Contingent Earnout Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Contingent Earnout Liabilities | |
Contingent Earnout Liabilities | Note 14 — Contingent Earnout Liabilities 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 in March 2015. 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 Surber in July 2014 provided a contingent earnout amount 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 seller and the Company agreed 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. The August 2014 purchase of Ram-Fab provided for a contingent earnout amount of $0.2 million which 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, 2016 | |
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: Real Property For the Years Ending Real (Related Total December 31, Property Party) Equipment Commitments 2017 $ $ $ $ 2018 2019 2020 2021 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, 2016, 2015 and 2014 was $22,526, $21,815 and $14,325, respectively, including amounts paid to related parties of $1,495, $1,445 and $1,505, 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. During the first quarter of 2016, the Company received a final payment schedule. As a result of payments made and based on this schedule, the liability recorded at December 31, 2016 was $5,655. The Company has no plans to withdraw from any other labor agreements. Letters of credit — As of December 31, 2016 and 2015, the Company had total letters of credit outstanding of approximately $16,182 and $13,679, respectively. The outstanding amounts include the U.S. dollar equivalents for letters of credit issued in Canadian dollars. NTTA settlement — 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”). On February 25, 2015 the Lawsuit was settled for an expected cost to the Company of $9 million. One of the defendants paid the Company $8 million to remove all of their liability. 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. At December 31, 2016, the remaining accrual balance was $14.3 million. 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. Litigation — The Company has been engaged in dispute resolution to collect money it believes it is owed for two construction projects completed in 2014. Because of uncertainties associated with the projects, including uncertainty of the amounts that would be collected, the Company used a zero profit margin approach to recording revenues during the construction period for both projects. For one project, a cost reimbursable contract, the Company has recorded a receivable of $32.9 million with a reserve of approximately $18.3 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 initially required international arbitration; however, in the first half of 2016, the owner sought bankruptcy protection in U.S. bankruptcy court. The Company has initiated litigation against the sureties who have provided lien and stop payment release bonds for the total amount owed. For the second project, the Company had recorded a receivable of $17.9 million. During the third quarter 2016, the Company settled the dispute with an exchange of general releases and receipt of $38 million in cash. The Company has changed its zero estimate of profit and has accounted for the settlement as a change in accounting estimate which resulted in recognizing revenues of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016. 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. SEC Inquiry — The Company has been cooperating with an inquiry by the staff of the Securities and Exchange Commission which appears to be focused on certain percentage-of-completion contract revenue recognition practices of the Company during the time period 2013 and 2014. The Company is continuing to respond to the staff’s inquiries in connection with this matter. At this stage, the Company is unable to predict when the staff’s inquiry will conclude or the outcome. Bonding — As of December 31, 2016, 2015 and 2014, the Company had bid and completion bonds issued and outstanding totaling approximately $1.45 billion, $1.48 billion and $1.52 billion, respectively. Contingent Consideration — Earnouts related to acquisitions are discussed in Note 14 — “ Contingent Earnout Liabilities ”. |
Planned Divestiture of Texas He
Planned Divestiture of Texas Heavy Civil Business Unit | 12 Months Ended |
Dec. 31, 2016 | |
Planned Divestiture of Texas Heavy Civil Business Unit | |
Planned Divestiture of Texas Heavy Civil Business Unit | Note 16 –Planned Divestiture of Texas Heavy Civil Business Unit In October 2016, the Company announced that it planned to divest its Texas heavy civil business unit, which operates as a division of JCG. Until completion of a sale, the Company will continue to operate the business unit. The Company has engaged a financial advisor to assist in the sale and is actively marketing the business unit, though a sales price and other terms have not yet been established. As a result, the planned divestiture is not classified as “held for sale” under ASC Topic 360. The Company recorded a charge of $37.3 million during the third quarter 2016 for the Belton area projects, which are part of the Texas heavy civil business that the Company is planning to divest. This charge includes a reduction of the expected profitability of certain projects in the Belton, Texas area for the division and a reduction of costs and estimated earnings in excess of billings and an increase to the reserve for anticipated job losses. Revenues of $10.0 million have been recognized for these projects as a result of incurred costs associated with claims. In addition, under the provisions of ASC 350, the planned divestiture triggered an analysis of the goodwill amount recorded on the JCG books in September 2016. The analysis resulted in the Company recording a pretax, non-cash goodwill impairment charge of approximately $2.7 million in the third quarter 2016. There can be no assurance that the Company will enter into a sales transaction for the division nor is it possible to determine at this time the impact on results of operations or cash flow from a potential transaction. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2016 | |
Reportable Segments | |
Reportable Segments | Note 17—Reportable Segments The Company segregates its business into three reportable 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. 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 have also been 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. In October 2016, the Company announced that it planned to divest its Texas heavy civil business unit, which operates as a division of JCG. Until completion of a sale, the Company will continue to operate the business unit. 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 (with the 2016 acquired divisions of Mueller and Northern), 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, 2016, 2015 and 2014 was as follows: 2016 2015 2014 % of % of % of Total Total Total Reportable Segment Revenue Revenue Revenue Revenue Revenue Revenue West $ $ $ East Energy Total $ $ $ Segment Gross Profit Gross profit by segment for the years ended December 31, 2016, 2015 and 2014 was as follows: 2016 2015 2014 % of % of % of Reportable Segment Gross Profit Revenue Gross Profit Revenue Gross Profit Revenue West $ $ $ East Energy Total $ $ $ Segment Goodwill The amount of goodwill recorded by segment at December 31, 2016 and 2015 was as follows: Reportable Segment 2016 2015 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. and in the third quarter 2016, an impairment expense of $2,716 recorded as part of the Company’s decision to sell the Texas Heavy Civil operations – See Note 16 – “Planned Divestiture of Texas Heavy Civil Business Unit” . 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, 2016 approximately 1% of total assets were located outside of the United States. |
Customer Concentrations
Customer Concentrations | 12 Months Ended |
Dec. 31, 2016 | |
Customer Concentrations | |
Customer Concentrations | Note 18—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, 2016, 2015 and 2014, the Company generated 45.6%, 48.9% and 36.4%, of its revenues, respectively, from the following customers: Description of Customer’s 2016 2015 2014 Business Amount Percentage Amount Percentage Amount Percentage Chemical/Energy producer $ $ $ * * Private gas and electric utility Texas DOT Public gas and electric utility Pipeline operator * * * * Pipeline operator * * * * Gas utility * * * * Petrochemical producer * * * * Pipeline operator * * * * $ $ $ (*) Indicates a customer with less than 5% of revenues during such period. For the years ended December 31, 2016, 2015 and 2014, approximately 60.4%, 59.4% and 53.6%, 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, 2016, approximately 20.8% of the Company’s accounts receivable were due from one customer, and that customer provided 6.2% of the Company’s revenues for the year ended December 31, 2016. 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. |
Multiemployer Plans
Multiemployer Plans | 12 Months Ended |
Dec. 31, 2016 | |
Multiemployer Plans | |
Multiemployer Plans | Note 19 — 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 $34,183, $34,296 and $38,107, to multiemployer pension plans for the years ended December 31, 2016, 2015 and 2014, respectively. These costs were charged to the related construction contracts in process. Contributions during 2016 and 2015 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 labor agreements. During the last three years, the Company made annual contributions to 78 pension plans. None of the pension plans that the Company contributed to in 2016 listed the Company in the plan’s Form 5500 as providing more than 5% of the plan’s total contributions. 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 one plan was $2,180 and $457 for the second plan. One of the pension plans listed the Company on their Form 5500 as providing more than 5% of the plan’s total 2014 contributions. The contributions for the plan amounted to $5,659 for the twelve months ending December 31, 2014. Our participation in significant plans for the years ended December 31, 2016, 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: Collective FIP/RP Bargaining EIN / Pension Protection Act Zone Status Agreement Pension Plan Status Pending / Surcharge Expiration Contributions of the Company Pension Fund Name Number 2016 2015 Implemented Imposed Date 2016 2015 2014 Central Pension Fund of the International Union of Operating Engineers and Participating Employers 36-6052390/001 Green at February 1, 2015 Green at February 1, 2014 No No 6/04/2017 $ $ $ Laborers Pension Trust Fund for Northern California 94-6277608/001 Yellow at June 1, 2015 Yellow at June 1, 2014 No No 6/30/2019 Construction Laborers Pension Trust for Southern California 43-6159056/001 Green at January 1, 2015 Green at January 1, 2014 No No 6/30/2018 Pipeline Industry Benefit Fund 73-6146433/001 Green at January 1, 2015 Green at January 1, 2014 No No 6/04/2017 Southern California Pipetrades Trust Funds 51-6108443/001 Green at January 1, 2015 Green at January 1, 2014 No No 6/30/2018 Laborers International Union of North America National (Industrial) Pension Fund 52-6074345/001 Red at January 1, 2015 Red at January 1, 2014 No No 6/04/2017 Contributions to significant plans Contributions to other multiemployer plans Total contributions made $ $ $ |
Company Retirement Plans
Company Retirement Plans | 12 Months Ended |
Dec. 31, 2016 | |
Company Retirement Plans | |
Company Retirement Plans | Note 20—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 2014 through 2016. The Company’s contribution to the plan for the years ended December 31, 2016, 2015 and 2014 were $3,904, $3,702 and $3,111, respectively. Employees of the various acquisitions made by the Company from 2012 through 2016 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, 2016, 2015 and 2014 was $52, $55 and $69, respectively. The Company has no other post-retirement benefits. |
Deferred Compensation Agreement
Deferred Compensation Agreements and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Compensation Agreements and Stock-Based Compensation | |
Deferred Compensation Agreements and Stock-Based Compensation | Note 21—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, 2016 and 2015 was $4,459 and $5,220, respectively. Participants in the long term retention plan may elect to purchase Company common stock at a discounted price. For bonuses earned in 2016 and 2015, 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 January 2017 and December 2015, respectively. The 25% discount is treated as compensation to the participant. JCG Stakeholder Incentive Plan — In December 2016 and 2015, 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. At December 31, 2016, there was no deferred compensation liability under this plan, and at December 31, 2015 the liability was $278. 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. The Company’s Board of Directors has granted 249,065 Restricted Stock Units (“Units”) to executives under the Equity Plan. The grants were documented in RSU Award Agreements which provide for a vesting schedule and require continuing employment of the executive. The Units are subject to earlier acceleration, termination, cancellation or forfeiture as provided in the underlying RSU Award Agreement. At December 31, 2016, a total of 99,256 Units were vested. The vesting schedule for the remaining Units follows: Number of Units For the Years Ending December 31, to Vest 2017 2018 2019 2020 2021 — 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, 2016 and 2015, the Company recognized $1,627 and $1,050, respectively, in compensation expense. At December 31, 2016, approximately $2.1 million of unrecognized compensation expense remains for the Units, which will be recognized over the next 3.25 years through April 1, 2020. Vested Units accrue “Dividend Equivalents” (as defined in the Equity Plan) which will be accrued as additional Units. At December 31, 2016, a total of 1,693 Dividend Equivalent Units were accrued. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions | Note 22—Related Party Transactions Primoris has entered into leasing transactions with Stockdale Investment Group, Inc. (“SIGI”). Our Chairman of the Board of Directors and our largest stockholder, Brian Pratt and his family, holds a majority interest of SIGI. John M. Perisich, our Executive Vice President and General Counsel, is secretary of SIGI. The leases are for three properties used by the Company in California, with various expiration dates, with the last expiring in 2023. During the years ended December 31, 2016, 2015 and 2014, the Company paid $849, $831 and $862, respectively, in lease payments to SIGI for the use of these properties. We intend to purchase the SIGI properties in the first quarter of 2017. Primoris leases properties from other individuals that were past sellers of acquisitions or are current employees. The amounts leased are not material and each arrangement was approved by the Board of Directors. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | Note 23—Income Taxes The components of the provision for income taxes are as follows: 2016 2015 2014 Current provision (benefit) Federal $ $ $ State Foreign Deferred provision (benefit) Federal State Foreign 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: 2016 2015 2014 U.S. federal statutory income tax rate State taxes, net of federal income tax impact Foreign tax credit (0.35)% (0.50)% (0.98)% Canadian income tax Domestic production activities deduction (1.10)% (3.91)% (3.07)% Nondeductible meals & entertainment Other items (1.46)% (1.01)% (2.01)% 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 (0.91)% (0.18)% (0.19)% 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. The tax effect of temporary differences that give rise to deferred income taxes for the year ended December 31, 2016 and 2015 are as follows: 2016 2015 Deferred tax assets: Accrued compensation $ $ Accrued workers compensation Capital loss carryforward Foreign tax credit Insurance reserves Loss reserves Pension liability State income taxes Other Total deferred tax assets Deferred tax liabilities Depreciation and amortization Prepaid expenses and other Total deferred tax liabilities Net deferred tax assets (liabilities) $ $ As of December 31, 2016, the tax effects of capital loss carryforwards were $1,077; state net operating losses were $486; and foreign tax credits were $1,349. These carryforwards will begin to expire in 2019, 2021 and 2019, respectively. The Company believes it is more likely than not that it will realize the benefit of the deferred tax assets. The Company’s federal tax returns are subject to examination by the Internal Revenue Service for tax years after 2012. The statutes of limitation of state and foreign jurisdictions vary generally between 3 to 5 years. Accordingly, the tax years 2011 through 2015 remain open to examination by the state and foreign jurisdiction 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: 2016 2015 2014 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 recognizes accrued interest and penalties related to uncertain tax positions in income tax expense, which were not material for the three years presented. |
Dividends and Earnings Per Shar
Dividends and Earnings Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Dividends and Earnings Per Share | |
Dividends and Earnings Per Share | Note 24—Dividends and Earnings Per Share The Company has paid or declared cash dividends during 2015 and 2016 as follows: Declaration Date Record Date Payable Date Amount Per Share February 24, 2015 March 31, 2015 April 15, 2015 $ May 1, 2015 June 30, 2015 July 15, 2015 $ August 4, 2015 September 30, 2015 October 15, 2015 $ November 3, 2015 December 31, 2015 January 15, 2016 $ February 22, 2016 March 31, 2016 April 15, 2016 $ May 2, 2016 June 30, 2016 July 15, 2016 $ August 3, 2016 September 30, 2016 October 14, 2016 $ November 2, 2016 December 31, 2016 January 16, 2017 $ The payment of future dividends is contingent upon our revenues and earnings, capital requirements and general financial condition of the Company, as well as contractual restrictions and other considerations deemed relevant by the Board of Directors. The table below presents the computation of basic and diluted earnings per share for the years ended December 31, 2016, 2015 and 2014 follows: 2016 2015 2014 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 restricted stock units (1) 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 249,065 shares of Restricted Stock Units and 1,693 vested Dividend Equivalent Units. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity | |
Stockholders' Equity | Note 25—Stockholders’ Equity Common Stock The Company is authorized to issue 90,000,000 shares of $0.0001 par value common stock, of which 51,576,442 and 51,676,140 shares were issued and outstanding as of December 31, 2016 and 2015, respectively. As of December 31, 2016, there were 394 holders of record of our common stock. The Company issued 85,907 shares of common stock in 2016 and 96,828 shares of common stock in 2015 under the Company’s LTR Plan. The shares were purchased by the participants in the LTR Plan with payment made to the Company of $1,440 in 2016 and $1,621 in 2015. 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 2016 were for bonus amounts earned in 2015, and the number of shares was calculated at 75% of the average closing price of December 2015. 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: · 11,745 shares in August 2016, · 10,450 shares in February 2016, · 9,748 shares in August 2015, · 8,168 shares in March 2015, · 6,172 shares in August 2014, and · 6,375 shares in February 2014, The shares were fully vested upon issuance and have a one-year trading restriction. As discussed in Note 21—“ Deferred Compensation Agreements and Stock-Based Compensation ”, the Board of Directors has granted a total of 249,065 shares of Units under the Equity Plan. At December 31, 2016, there were 1,953,559 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, 2016. Share Repurchase Plan In August 2016, 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 $5 million. During the month of December 2016, the Company purchased and cancelled 207,800 shares of stock for $5.0 million at an average cost of $24.02 per share. The share repurchase program expired on December 31, 2016. 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, 2016 or 2015. Warrants At December 31, 2016 and 2015, there were no warrants outstanding. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Selected Quarterly Financial Information (Unaudited) | |
Selected Quarterly Financial Information (Unaudited) | Note 26—Selected Quarterly Financial Information (Unaudited) Selected unaudited quarterly consolidated financial information is presented in the following tables: Year Ended December 31, 2016 1st 2nd 3rd 4th (In thousands, except per share data) Quarter Quarter Quarter Quarter Revenues $ $ $ $ Gross profit Impairment of goodwill — — — 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, 2015 1st 2nd 3rd 4th (In thousands, except per share data) Quarter Quarter Quarter Quarter Revenues $ $ $ $ Gross profit Impairment of goodwill — — — 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 1st 2nd 3rd 4th (In thousands, except per share data) Quarter Quarter Quarter 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, 2016 | |
Subsequent Event | |
Subsequent Event | Note 27—Subsequent Event On February 21, 2017, the Board of Directors declared a cash dividend of $0.055 per common share for stockholders of record as of March 31, 2017, payable on or about April 14, 2017. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
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”). |
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. 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 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, 2016 and 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 | Customer retention deposits — 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 is not passed to the state agency until the materials are installed. |
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. |
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 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. During the third quarter 2016, the Company made a decision to divest its Texas heavy civil business unit, a division of JCG within the East segment. The Company will continue to operate the division while actively seeking a buyer. In accordance with ASC Topic 350, the event of the planned divestiture triggered an analysis of goodwill in the JCG reporting unit, resulting in a pretax, non-cash goodwill impairment charge of approximately $2.7 million. See Note 16 — “ Planned Divestiture of Texas Heavy Civil Business Unit” . In the fourth quarter of 2015, an impairment expense of $401 was recorded relating to the goodwill attributed to Cardinal Contractors, Inc., which is part of the East Segment. There was no impairment of goodwill for the year ended December 31, 2014. |
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, 2016, the Company had operations in Canada with assets aggregating approximately $11,823, compared to $14,111 at December 31, 2015. The Canadian operations had revenues of $11,158 and income before tax of $774 for the year ended December 31, 2016; revenues of $17,763 and income before tax of $252 for the year ended December 31, 2015, and revenues of $19,840 and income before tax of $3,183 for the year ended December 31, 2014. |
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 gains of $202 in 2016, losses of $763 in 2015 and gains of $374 in 2014 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 — “Noncontrolling 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. |
Cash concentration | Cash concentration — The Company places its cash in short term U.S. Treasury bonds and certificates of deposit (“CDs”). At December 31, 2016 and 2015, the Company had cash balances of $135.8 million and $161.1 million, respectively. At December 31, 2016, the $135.8 million of cash consisted of $100.5 million in U.S. Treasury bill funds, backed by the federal government, and the remaining $35.3 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, 2015, the $161.1 million of cash consisted of $131.2 million held in U.S. Treasury bill funds and $29.9 million with high credit quality financial institutions. |
Collective bargaining agreements | Collective bargaining agreements — Approximately 32% of the Company’s hourly employees, primarily consisting of field laborers, were covered by collective bargaining agreements in 2016. Upon renegotiation of such agreements, the Company could be exposed to increases in hourly costs and work stoppages. Of the 84 collective bargaining agreements to which the Company is a party to, 62 will require renegotiation during 2017. 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 $28,006 and $26,779 at December 31, 2016 and 2015, 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 no margin, where revenue is 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 can also be caused by non-customer-caused changes, such as weather delays or rain. Claims are included in the calculation of revenues when realization is probable and amounts can be reliably determined. 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 and recognized as an “accrued loss provision” which 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, 2016 and 2015 was $1,030 and $480, 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. During the year ended December 31, 2016, certain contracts had revisions in cost estimates from those projected at December 31, 2015. If the revised estimates had been applied in the prior year, the gross profit earned on these contracts would have resulted in a decrease of approximately $1,685 in gross profit in 2015. Similarly, had the revised estimates as of December 31, 2015 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. The revised estimates for the year ended December 31, 2014 would have resulted in a gross profit increase of approximately $17,266 in the year 2013. The following table presents the approximate financial impact of the changes in estimates that would have been reflected in the prior years 2015 and 2014 had the revised estimates been applied to the particular year. Net impact of change in estimate for the years ended December 31, 2015 2014 Revised estimates in 2016 that impact 2015 $ $ — Revised estimates in 2015 that impact 2014 Revised estimates in 2014 that impact 2013 — Net impact to gross margin $ $ EPS impact to year $ $ During the third quarter 2016, the Company settled a dispute with a customer on collection of a receivable of $17.9 million, receiving $38 million in cash. Prior to settlement, the Company recorded revenues with zero margin. The Company recognized the settlement as a change in accounting estimate which resulted in recognizing revenues of approximately $27.5 million and gross profit of approximately $26.7 million in the third quarter of 2016. The settlement of this project dispute was not included in the table above. |
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 18 — “ 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 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, 2016 and 2015, 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 21 — “Deferred Compensation Agreements and Stock-Based Compensation” and in Note 25— “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) ”, with several clarifying updates issued during 2016. The new standard is effective for reporting periods beginning after December 15, 2017. The new standard will supersede all current revenue recognition standards and guidance. Revenue recognition will occur when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled to in exchange for those goods or services. The mandatory 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 standard permits two implementation approaches at the beginning of 2018: the “full retrospective method” that requires restatement of prior years and the “modified retrospective method” that requires prospective application of the new standard as a cumulative-effect adjustment. The Company expects to adopt this new standard using the modified retrospective method that will result in a cumulative-effect adjustment to retained earnings as of the date of adoption. The adoption will only apply to customer contracts that are not substantially complete as of January 1, 2018. The Company is currently evaluating the impact of adopting the standard on the Company’s financial position, results of operations, cash flows and related disclosures. Although it is early in our evaluation process, we do not expect Topic 606 to have a material impact on our financial statements, though internal documentation and record keeping may be significantly impacted. The impact to our results is not believed to be material because Topic 606 generally supports the recognition of revenue over time under the cost-to-cost method for the majority of our contracts, which is consistent with our current percentage of completion revenue recognition model. In most of our fixed price contracts, the customer typically controls the work in process as evidenced either by contractual termination clauses or by our rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. The Company does not expect the new standard to materially affect the total revenue that can be recognized over the life of a construction project; however, the revenue recognized on a quarterly basis during the construction period may change. We believe that Topic 606 is likely to be more impactful to certain of our lump sum projects as a result of the following potential changes from our current practices: § Performance obligations – Topic 606 requires a review of contracts and contract modifications to determine whether there are multiple performance obligations. Each separate performance obligation must be accounted for as a distinct project, which could impact the timing of revenue recognition. There is a potential that some of our contracts may have multiple performance obligations which may affect the timing of revenue recognition § Variable consideration – In accordance with Topic 606, revenue recognition must account for variable consideration, including potential liquidated damages and customer discounts. Currently, we assess the impact of liquidated damages as an estimated cost of the project. The adoption of the new standard may affect the timing of the recognition of revenue for both liquidated damages and discounts. § Mobilization costs – Mobilization costs typically include costs to provide labor, equipment and facilities to a project site and they are recorded currently as project costs as incurred. Topic 606 requires these costs to be capitalized as an asset and amortized over the duration of the project. § Significant components – For some projects, we may purchase equipment from a third party, such as micro–LNG equipment, and install the equipment at the project site. Under today’s standard, the Company recognizes the associated revenue and profit for the equipment. Depending on the terms of the contract, under the new standard, revenue may be recognized without profit. We do not expect Topic 606 to have a material impact on our consolidated balance sheets, though we expect certain reclassifications among financial statement accounts to align with the new standard. We also expect significant expanded disclosures relating to revenue recognized during each period. 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 standard 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). The standard is effective for annual and interim periods ending after December 15, 2016. The Company adopted this guidance effective January 1, 2016. It had no effect on the Company’s financial statements. 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. As of January 1, 2016, the Company adopted this ASU, which did not have a material impact on the Company’s consolidated financial statements. In February 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 standard is effective for fiscal years beginning after December 15, 2018. The Company will establish procedures to adopt the ASU. In March 2016, the FASB issued ASU 2016-09 “ Compensation — Stock Compensation (Topic 718) — Improvements to Employee Share-Based Payment Accounting ”. The ASU modifies the accounting for excess tax benefits and tax deficiencies associated with share-based payments by requiring that excess tax benefits or deficiencies be included in the income statement rather than in equity. Additionally, the tax benefits for dividends on share-based payment awards will also be reflected in the income statement. As a result of these modifications, the ASU requires that the tax-related cash flows resulting from share-based payments will be shown on the cash flow statement as operating activities rather than as financing activities. This guidance is effective for annual periods beginning after December 15, 2016, with early adoption permitted. Adoption of this ASU is not expected to have a material effect on the Company’s consolidated financial statements. In January 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-04, " Simplifying the Test for Goodwill Impairment ". ASU 2017-04 removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2019 and will be applied prospectively. Management does not expect the adoption of ASU 2017-04 to have an impact on the Company's financial position, results of operations or cash flows. In January 2017, the FASB issued ASU 2017-01, " Business Combinations (Topic 805): Clarifying the Definition of a Business " which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. ASU 2017-01 requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Management does not expect the adoption of ASU 2017-01 to have any impact on the company's financial position, results of operations or cash flows. In the first quarter of 2016, the company adopted ASU 2015-15, " Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update) ", which clarifies the presentation and measurement of debt issuance costs incurred in connection with line of credit arrangements. The adoption of ASU 2015-15 did not have an impact on the company's financial position, results of operations or cash flows. Other new pronouncements issued but not effective until after December 31, 2016 are not expected to have a material impact on the consolidated results of operations, financial position or cash flows of the Company. |
Nature of Business (Tables)
Nature of Business (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Nature of Business | |
Schedule of list of primary operating subsidiaries and their reportable segment | Subsidiary Reportable Segment ARB, Inc. (“ARB”) West ARB Structures, Inc. West Q3 Contracting, Inc. (“Q3C”) West Rockford Corporation (“Rockford”) West Vadnais Trenchless Services, Inc. (“Vadnais”) West Cardinal Contractors, Inc. East BW Primoris, LLC (“BWP”) East James Construction Group, LLC (“JCG”): East JCG Heavy Civil Division East JCG Infrastructure and Maintenance Division East Primoris Energy Services Corporation (“PES”) Energy PES Pipeline Services Energy PES Industrial Division Energy OnQuest, Inc. Energy OnQuest Canada, ULC Energy Primoris Aevenia, Inc. (“Aevenia”) Energy |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 | Net impact of change in estimate for the years ended December 31, 2015 2014 Revised estimates in 2016 that impact 2015 $ $ — Revised estimates in 2015 that impact 2014 Revised estimates in 2014 that impact 2013 — Net impact to gross margin $ $ EPS impact to year $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Schedule of financial assets and liabilities which are required to be measured at fair value | Fair Value Measurements at Reporting Date Significant Amount Quoted Prices Other Significant Recorded in Active Markets Observable Unobservable on Balance for Identical Assets Inputs Inputs Sheet (Level 1) (Level 2) (Level 3) Assets as of December 31, 2016: Cash and cash equivalents $ $ — — Liabilities as of December 31, 2016: None Assets as of December 31, 2015: Cash and cash equivalents $ $ — — Liabilities as of December 31, 2015: None |
Schedule of changes to the Company's contingent consideration liability Level 3 fair value measurements | Significant Unobservable Inputs (Level 3) Contingent Consideration Liability 2016 2015 Beginning balance, January 1, 2016 and 2015 $ — $ Additions to contingent consideration liability: Change in fair value of contingent consideration liability during year — Reductions in the contingent consideration liability: Payment to Q3C sellers for meeting performance targets — Reduction due to non-attainment of performance target – Surber, Ram Fab and Vadnais — Ending balance, December 31, 2016 and 2015 $ — $ — |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations | |
Summary of the cash paid for acquisitions | Year ended December 31, 2016 2015 Northern — purchased November 18, 2016 $ $ — Mueller — purchased January 29, 2016 — Aevenia — purchased February 28, 2015 — Cash paid $ $ |
Summary of the fair value of assets acquired and the liabilities assumed | Year ended December 31, 2016 2015 Acquisitions Acquisition Accounts receivable $ $ Inventory and other assets Prepaid expenses — Property, plant and equipment Intangible assets Goodwill Accounts payable Accrued expenses Total $ $ |
Schedule of the acquired intangible assets categories, fair value and average amortization periods | Amortization 2016 2015 Period Fair Value Fair Value Non-compete agreements 2 to 5 years $ — $ Customer relationships 5 to 10 years Total $ $ |
Schedule of pro forma results | 2016 2015 (unaudited) (unaudited) Revenues $ $ Income before provision for income taxes $ $ Net income attributable to Primoris $ $ Weighted average common shares outstanding: Basic Diluted Earnings per share: Basic $ $ Diluted $ $ |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable. | |
Summary of accounts receivable | 2016 2015 Contracts receivable, net of allowance for doubtful accounts of $1,030 at December 31, 2016 and $480 at December 31, 2015, respectively $ $ Retention receivable Other accounts receivable $ $ |
Costs and Estimated Earnings 40
Costs and Estimated Earnings on Uncompleted Contracts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Costs and Estimated Earnings on Uncompleted Contracts | |
Schedule of costs and estimated earnings on uncompleted contracts | 2016 2015 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 | 2016 2015 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, 2016 | |
Property and Equipment | |
Summary of property and equipment | 2016 2015 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 Property and equipment, net $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets | |
Schedule of goodwill by reporting unit | Reporting Unit Segment 2016 2015 Rockford West $ $ Q3C West JCG (includes JCG Heavy Civil and Infrastructure and Maintenance divisions) 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 Period 2016 2015 Tradename 3 to 10 years $ $ Customer relationships 3 to 15 years Non-compete agreements 2 to 5 years $ $ |
Schedule of estimated future amortization expense for intangible assets | Estimated Intangible For the Years Ending Amortization December 31, Expense 2017 $ 2018 2019 2020 2021 Thereafter $ |
Accounts Payable and Accrued 43
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities | |
Summary of accrued expenses and other current liabilities | 2016 2015 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, 2016 | |
Capital Leases | |
Schedule of future minimum lease payments required under capital leases together with their present value | 2017 $ 2018 2019 2020 2021 — 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, 2016 | |
Credit Arrangements | |
Schedule of credit facilities and long-term debt | 2016 2015 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 August 13, 2017 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 Commercial equipment notes payable to various commercial equipment finance companies and banks with interest rates that range from 1.83% to 2.06% per annum. Monthly principal and interest payments are due in the amount of $788 per month until the maturity dates, which range from August 15, 2021 to October 14, 2021. 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, 2017 $ 2018 2019 2020 2021 Thereafter $ |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Carlsbad | |
Schedule of joint venture operating activities included in the Company's consolidated statements of income | 2016 2015 Revenues $ $ Net income attributable to noncontrolling interests |
Schedule of the carrying value of the assets and liabilities included in the Company's consolidated balance sheets | 2016 2015 Cash $ $ Accounts receivable $ — $ Costs and estimated earnings in excess of billings $ $ — Billings in excess of costs and estimated earnings $ $ Other current liabilities $ $ |
Wilmington | |
Schedule of joint venture operating activities included in the Company's consolidated statements of income | 2016 2015 Revenues $ $ Net income attributable to noncontrolling interests |
Schedule of the carrying value of the assets and liabilities included in the Company's consolidated balance sheets | 2016 2015 Cash $ $ Accounts receivable $ $ Billings in excess of costs and estimated earnings $ $ Other current liabilities $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies. | |
Schedule of future minimum lease payments required under non-cancelable operating leases | Real Property For the Years Ending Real (Related Total December 31, Property Party) Equipment Commitments 2017 $ $ $ $ 2018 2019 2020 2021 Thereafter — — $ $ $ $ |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Reportable Segments | |
Schedule of revenue by segment | 2016 2015 2014 % of % of % of Total Total Total Reportable Segment Revenue Revenue Revenue Revenue Revenue Revenue West $ $ $ East Energy Total $ $ $ |
Schedule of gross profit by segment | 2016 2015 2014 % of % of % of Reportable Segment Gross Profit Revenue Gross Profit Revenue Gross Profit Revenue West $ $ $ East Energy Total $ $ $ |
Schedule of amount of goodwill recorded by segment | Reportable Segment 2016 2015 West $ $ East Energy Total $ $ |
Customer Concentrations (Tables
Customer Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Customer Concentrations | |
Schedule of revenue from customers | Description of Customer’s 2016 2015 2014 Business Amount Percentage Amount Percentage Amount Percentage Chemical/Energy producer $ $ $ * * Private gas and electric utility Texas DOT Public gas and electric utility Pipeline operator * * * * Pipeline operator * * * * Gas utility * * * * Petrochemical producer * * * * Pipeline operator * * * * $ $ $ (*) Indicates a customer with less than 5% of revenues during such period. |
Multiemployer Plans (Tables)
Multiemployer Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Multiemployer Plans | |
Schedule of the entity's contributions to different pension funds | Collective FIP/RP Bargaining EIN / Pension Protection Act Zone Status Agreement Pension Plan Status Pending / Surcharge Expiration Contributions of the Company Pension Fund Name Number 2016 2015 Implemented Imposed Date 2016 2015 2014 Central Pension Fund of the International Union of Operating Engineers and Participating Employers 36-6052390/001 Green at February 1, 2015 Green at February 1, 2014 No No 6/04/2017 $ $ $ Laborers Pension Trust Fund for Northern California 94-6277608/001 Yellow at June 1, 2015 Yellow at June 1, 2014 No No 6/30/2019 Construction Laborers Pension Trust for Southern California 43-6159056/001 Green at January 1, 2015 Green at January 1, 2014 No No 6/30/2018 Pipeline Industry Benefit Fund 73-6146433/001 Green at January 1, 2015 Green at January 1, 2014 No No 6/04/2017 Southern California Pipetrades Trust Funds 51-6108443/001 Green at January 1, 2015 Green at January 1, 2014 No No 6/30/2018 Laborers International Union of North America National (Industrial) Pension Fund 52-6074345/001 Red at January 1, 2015 Red at January 1, 2014 No No 6/04/2017 Contributions to significant plans Contributions to other multiemployer plans Total contributions made $ $ $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Schedule of units to vest for remaining restricted stock units | Number of Units For the Years Ending December 31, to Vest 2017 2018 2019 2020 2021 — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of components of the provision for income taxes | 2016 2015 2014 Current provision (benefit) Federal $ $ $ State Foreign Deferred provision (benefit) Federal State Foreign 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 | 2016 2015 2014 U.S. federal statutory income tax rate State taxes, net of federal income tax impact Foreign tax credit (0.35)% (0.50)% (0.98)% Canadian income tax Domestic production activities deduction (1.10)% (3.91)% (3.07)% Nondeductible meals & entertainment Other items (1.46)% (1.01)% (2.01)% 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 (0.91)% (0.18)% (0.19)% 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 | 2016 2015 Deferred tax assets: Accrued compensation $ $ Accrued workers compensation Capital loss carryforward Foreign tax credit Insurance reserves Loss reserves Pension liability State income taxes Other 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 | 2016 2015 2014 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 $ — $ — $ |
Dividends and Earnings Per Sh53
Dividends and Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Dividends and Earnings Per Share | |
Schedule of cash dividends paid or declared | Declaration Date Record Date Payable Date Amount Per Share February 24, 2015 March 31, 2015 April 15, 2015 $ May 1, 2015 June 30, 2015 July 15, 2015 $ August 4, 2015 September 30, 2015 October 15, 2015 $ November 3, 2015 December 31, 2015 January 15, 2016 $ February 22, 2016 March 31, 2016 April 15, 2016 $ May 2, 2016 June 30, 2016 July 15, 2016 $ August 3, 2016 September 30, 2016 October 14, 2016 $ November 2, 2016 December 31, 2016 January 16, 2017 $ |
Schedule of computation of basic and diluted earnings per share | 2016 2015 2014 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 restricted stock units (1) Weighted average shares for computation of diluted earnings per share Earnings per share attributable to Primoris: Basic $ $ $ Diluted $ $ $ Represents the effect of the grant of 249,065 shares of Restricted Stock Units and 1,693 vested Dividend Equivalent Units. |
Selected Quarterly Financial 54
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Selected Quarterly Financial Information (Unaudited) | |
Schedule of selected unaudited quarterly consolidated financial information | Year Ended December 31, 2016 1st 2nd 3rd 4th (In thousands, except per share data) Quarter Quarter Quarter Quarter Revenues $ $ $ $ Gross profit Impairment of goodwill — — — 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, 2015 1st 2nd 3rd 4th (In thousands, except per share data) Quarter Quarter Quarter Quarter Revenues $ $ $ $ Gross profit Impairment of goodwill — — — 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 1st 2nd 3rd 4th (In thousands, except per share data) Quarter Quarter Quarter 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 | Nov. 18, 2016USD ($) | Jan. 29, 2016USD ($) | Feb. 28, 2015USD ($) | Jun. 05, 2014USD ($) | Sep. 30, 2014USD ($)item | Dec. 31, 2016USD ($)segmentitem | Dec. 31, 2015USD ($) |
Nature of Business | |||||||
Number of reportable segments | segment | 3 | ||||||
Number of joint ventures | item | 2 | ||||||
Capitalized property, plant and equipment | $ 545,783 | $ 506,364 | |||||
Aevenia | |||||||
Nature of Business | |||||||
Amount of purchase of assets and liabilities | $ 22,300 | ||||||
Mueller | |||||||
Nature of Business | |||||||
Amount of purchase of assets and liabilities | $ 4,100 | ||||||
Northern | |||||||
Nature of Business | |||||||
Amount of purchase of assets and liabilities | $ 6,900 | ||||||
Surber, Ram-Fab and Williams | |||||||
Nature of Business | |||||||
Amount of purchase of assets and liabilities | $ 8,200 | ||||||
Number of small purchases made | item | 3 | ||||||
Vadnais | West | Vadnais | |||||||
Nature of Business | |||||||
Amount of purchase of assets and liabilities | $ 6,400 | ||||||
Blythe | |||||||
Nature of Business | |||||||
Ownership percentage | 50.00% | ||||||
Carlsbad | |||||||
Nature of Business | |||||||
Ownership percentage | 50.00% | ||||||
Wilmington | |||||||
Nature of Business | |||||||
Ownership percentage | 50.00% |
Summary of Significant Accoun56
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating cycle | |||||
Minimum liquidation period of assets in which significant working capital has been invested | 1 year | ||||
Goodwill impairment charge | $ 401 | $ 2,716 | $ 401 | ||
Short-term investments | |||||
Short-term investments | $ 0 | 0 | $ 0 | $ 0 | |
JCG | East | Texas Heavy Civil Business unit | |||||
Operating cycle | |||||
Goodwill impairment charge | $ 2,700 | ||||
Cardinal Contractors | East | |||||
Operating cycle | |||||
Goodwill impairment charge | $ 401 | $ 401 |
Summary of Significant Accoun57
Summary of Significant Accounting Policies - Foreign Operations (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($)$ / shares | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($)$ / shares | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Dec. 31, 2013USD ($) | |
Foreign operations | ||||||||||||||||
Assets | $ 1,170,798 | $ 1,132,254 | $ 1,170,798 | $ 1,132,254 | ||||||||||||
Revenues | 601,863 | $ 507,828 | $ 456,811 | $ 430,446 | 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | $ 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | 1,996,948 | 1,929,415 | $ 2,086,194 | |
Functional currencies and foreign currency translation | ||||||||||||||||
Foreign exchange gain (loss) | 202 | (763) | 374 | |||||||||||||
Cash concentration | ||||||||||||||||
Cash and cash equivalents | 135,823 | 161,122 | 139,465 | 135,823 | 161,122 | 139,465 | $ 196,077 | |||||||||
Treasury bill funds | 100,500 | 131,200 | 100,500 | 131,200 | ||||||||||||
Cash balances with various high credit quality financial institutions | 35,300 | 29,900 | $ 35,300 | 29,900 | ||||||||||||
Collective bargaining agreements | ||||||||||||||||
Percentage of labor force subject to collective bargaining agreements | 32.00% | |||||||||||||||
Number of collective bargaining agreements | item | 84 | |||||||||||||||
Number of collective bargaining agreements requiring renegotiation during the year | item | 62 | |||||||||||||||
Number of years without work stoppages | 20 years | |||||||||||||||
Accounts receivable | ||||||||||||||||
Allowance for doubtful accounts | 1,030 | 480 | $ 1,030 | 480 | ||||||||||||
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 | (1,685) | 1,540 | (1,685) | 1,540 | ||||||||||||
Revised estimates in current year that impact prior period | (1,540) | (17,266) | (1,540) | (17,266) | ||||||||||||
Net impact to gross margin | $ (3,225) | $ (15,726) | $ (3,225) | $ (15,726) | ||||||||||||
EPS impact to year | $ / shares | $ (0.04) | $ (0.19) | $ (0.04) | $ (0.19) | ||||||||||||
Gross profit | 68,616 | 50,129 | 43,285 | $ 39,277 | $ 63,725 | $ 71,647 | $ 46,496 | $ 38,005 | $ 49,616 | $ 75,473 | $ 61,194 | $ 49,757 | 201,307 | $ 219,873 | $ 236,040 | |
Disputed Receivables | ||||||||||||||||
Foreign operations | ||||||||||||||||
Revenues | 27,500 | |||||||||||||||
Estimated net impact of change in estimate | ||||||||||||||||
Receivable related to a dispute with a customer | 17,900 | |||||||||||||||
Receipts related to disputed receivable | 38,000 | |||||||||||||||
Gross profit | $ 26,700 | $ 0 | ||||||||||||||
Accrued Expenses and Other Current Liabilities | ||||||||||||||||
Worker's compensation insurance | ||||||||||||||||
Self insurance reserve | 28,006 | 26,779 | 28,006 | 26,779 | ||||||||||||
Canada | ||||||||||||||||
Foreign operations | ||||||||||||||||
Assets | $ 11,823 | $ 14,111 | 11,823 | 14,111 | ||||||||||||
Revenues | 11,158 | 17,763 | 19,840 | |||||||||||||
Income before tax of Canadian operations | $ 774 | $ 252 | $ 3,183 |
Summary of Significant Accoun58
Summary of Significant Accounting Policies - Customer Concentration (Details) - Revenues. - Customer concentration - Top ten customers | 12 Months Ended |
Dec. 31, 2016customeritem | |
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 Accoun59
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
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) - Recurring - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash and cash equivalents | $ 135,823 | $ 161,122 |
Amount Recorded on Balance Sheet | ||
Assets | ||
Cash and cash equivalents | $ 135,823 | $ 161,122 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration Liability (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Rollforward of contingent consideration liability level three fair value measurements | |||
Change in fair value of contingent consideration liability during year | $ (6,722) | $ (4,145) | |
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 | ||
Change in fair value of contingent consideration liability during year | 125 | ||
Balance at the end of the period | $ 6,922 | ||
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 to Q3C sellers for meeting performance targets | (5,000) | ||
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 non-attainment of performance target - Surber, Ram Fab and Vadnais | $ (2,047) |
Business Combinations (Details)
Business Combinations (Details) $ in Thousands | Nov. 18, 2016USD ($)MWh | Jun. 24, 2016USD ($) | Jan. 29, 2016USD ($) | Feb. 28, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jun. 30, 2016USD ($) |
Business combinations | ||||||||||
Operating income | $ 57,749 | $ 67,769 | $ 103,792 | |||||||
Goodwill | $ 124,161 | $ 127,226 | $ 124,161 | |||||||
Pipe Jacking Unlimited Inc | Vadnais | ||||||||||
Business combinations | ||||||||||
Purchase of property, plant and equipment | $ 13,400 | |||||||||
Aevenia | ||||||||||
Business combinations | ||||||||||
Fair value of consideration | $ 22,300 | |||||||||
Acquisition costs | 151 | |||||||||
Revenue since acquisition | 23,695 | |||||||||
Gross profit (loss) since acquisition | $ 2,378 | |||||||||
Mueller | ||||||||||
Business combinations | ||||||||||
Fair value of consideration | $ 4,100 | |||||||||
Mueller | Aevenia | ||||||||||
Business combinations | ||||||||||
Fair value of consideration | $ 4,100 | |||||||||
Plant and equipment | $ 2,000 | |||||||||
Goodwill | 2,000 | |||||||||
Fair value of inventory acquired | $ 100 | |||||||||
Northern | ||||||||||
Business combinations | ||||||||||
Fair value of consideration | $ 6,900 | |||||||||
Northern | Aevenia | ||||||||||
Business combinations | ||||||||||
Fair value of consideration | 6,900 | |||||||||
Intangibles assets | 3,000 | |||||||||
Goodwill | 3,800 | |||||||||
Net working capital | $ 100 | |||||||||
Northern | Minimum | Aevenia | ||||||||||
Business combinations | ||||||||||
Anticipated Solar Photovoltaic installations (in MW) | MWh | 1 | |||||||||
Anticipated revenue from Solor Photovoltaic projects | $ 1,500 | |||||||||
Northern | Maximum | Aevenia | ||||||||||
Business combinations | ||||||||||
Anticipated Solar Photovoltaic installations (in MW) | MWh | 200 | |||||||||
Anticipated revenue from Solor Photovoltaic projects | $ 150,000 | |||||||||
Q3 Contracting | 2014 earnout target | ||||||||||
Business combinations | ||||||||||
Cash payment made | $ 5,000 |
Business Combinations - Assets
Business Combinations - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business combinations | |||
Cash paid for acquisitions | $ 10,997 | $ 22,302 | $ 14,596 |
Fair value of the assets acquired and the liabilities assumed | |||
Intangible assets | 3,000 | 3,850 | |
Goodwill | 127,226 | 124,161 | |
2016 Acquisition | |||
Fair value of the assets acquired and the liabilities assumed | |||
Accounts receivable | 1,606 | ||
Inventory and other assets | 64 | ||
Property, plant and equipment | 2,133 | ||
Intangible assets | 3,000 | ||
Goodwill | 5,781 | ||
Accounts payable | (726) | ||
Accrued expenses | (861) | ||
Total | 10,997 | ||
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 | ||
Mueller | |||
Business combinations | |||
Cash paid for acquisitions | 4,108 | ||
Northern | |||
Business combinations | |||
Cash paid for acquisitions | $ 6,889 |
Business Combinations - Acquire
Business Combinations - Acquired Intangible Assets (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Acquired intangible assets | ||
Fair Value | $ 3,000 | $ 3,850 |
Period for which goodwill and other intangible assets are deductible for income tax purposes | 15 years | |
Pro forma results | ||
Pro forma tax rate used in calculating taxes on income from continuing operations (as a percent) | 40.00% | 40.00% |
Revenues | $ 2,026,867 | $ 1,963,754 |
Income before provision for income taxes | 54,328 | 63,827 |
Net income attributable to Primoris | $ 29,997 | $ 38,510 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 51,762 | 51,647 |
Diluted (in shares) | 51,989 | 51,798 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.58 | $ 0.75 |
Diluted (in dollars per share) | $ 0.58 | $ 0.74 |
Non-compete agreements | ||
Acquired intangible assets | ||
Fair Value | $ 1,350 | |
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 | $ 3,000 | $ 2,500 |
Customer relationships | Minimum | ||
Acquired intangible assets | ||
Amortization Period | 5 years | |
Customer relationships | Maximum | ||
Acquired intangible assets | ||
Amortization Period | 10 years |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Receivable. | ||
Contracts receivable, net of allowance for doubtful accounts of $1,030 at December 31, 2016 and $480 at December 31, 2015, respectively | $ 340,871 | $ 288,300 |
Retention receivable | 46,394 | 31,396 |
Contracts receivable and retention | 387,265 | 319,696 |
Other accounts receivable | 735 | 892 |
Accounts receivable, net | 388,000 | 320,588 |
Allowance for doubtful accounts | $ 1,030 | $ 480 |
Costs and Estimated Earnings 66
Costs and Estimated Earnings on Uncompleted Contracts (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Costs and Estimated Earnings on Uncompleted Contracts | ||
Costs incurred on uncompleted contracts | $ 5,391,124 | $ 5,413,224 |
Gross profit recognized | 456,871 | 625,280 |
Costs and Estimated Earnings on Uncompleted Contracts | 5,847,995 | 6,038,504 |
Less: billings to date | (5,821,983) | (6,061,924) |
Net cost and estimated earnings in excess of billings | 26,012 | (23,420) |
Amount included in consolidated balance sheet | ||
Costs and estimated earnings in excess of billings | 138,618 | 116,455 |
Billings in excess of costs and estimated earnings | (112,606) | (139,875) |
Net cost and estimated earnings in excess of billings | $ 26,012 | $ (23,420) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property and equipment | ||
Gross property and equipment | $ 545,783 | $ 506,364 |
Less: accumulated depreciation and amortization | (268,437) | (222,819) |
Property and equipment, net | $ 277,346 | 283,545 |
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 | $ 56,878 | 54,827 |
Useful Life | 30 years | |
Leasehold improvements | ||
Property and equipment | ||
Gross property and equipment | $ 12,147 | 11,071 |
Office equipment | ||
Property and equipment | ||
Gross property and equipment | $ 8,083 | 5,958 |
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 | $ 370,562 | 340,895 |
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 | $ 98,113 | $ 93,613 |
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 | Aug. 31, 2014 | Dec. 31, 2014 | Nov. 30, 2012 | Dec. 31, 2010 |
Equity method investments | |||||
Cash paid by 51% owner under net asset buy-out option to the entity | $ 6,439 | ||||
WesPac | |||||
Equity method investments | |||||
Membership interest (as a percent) | 50.00% | ||||
WesPac & WesPac-Midstream | |||||
Equity method investments | |||||
Cash proceeds from sale of projects | $ 5,250 | ||||
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 |
Goodwill and Intangible Asset69
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill | ||
Goodwill | $ 127,226 | $ 124,161 |
West | ||
Goodwill | ||
Goodwill | 45,239 | 45,239 |
East | ||
Goodwill | ||
Goodwill | 40,150 | 42,866 |
Energy | ||
Goodwill | ||
Goodwill | 41,837 | 36,056 |
Rockford | West | ||
Goodwill | ||
Goodwill | 32,079 | 32,079 |
Q3 Contracting | West | ||
Goodwill | ||
Goodwill | 13,160 | 13,160 |
JCG | East | ||
Goodwill | ||
Goodwill | 40,150 | 42,866 |
PES | Energy | ||
Goodwill | ||
Goodwill | 28,463 | 28,463 |
Aevenia | Energy | ||
Goodwill | ||
Goodwill | 10,933 | 5,152 |
OnQuest Canada, ULC | Energy | ||
Goodwill | ||
Goodwill | $ 2,441 | $ 2,441 |
Goodwill and Intangible Asset70
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible assets | |||
Total | $ 32,841 | $ 36,438 | |
Amortization expense of intangible assets | 6,597 | 6,793 | $ 7,504 |
Estimated future amortization expense for intangible assets | |||
2,017 | 6,673 | ||
2,018 | 6,291 | ||
2,019 | 6,111 | ||
2,020 | 3,712 | ||
2,021 | 2,805 | ||
Thereafter | 7,249 | ||
Tradename | |||
Intangible assets | |||
Total | $ 11,754 | 15,019 | |
Tradename | Minimum | |||
Intangible assets | |||
Amortization Period | 3 years | ||
Tradename | Maximum | |||
Intangible assets | |||
Amortization Period | 10 years | ||
Customer relationships | |||
Intangible assets | |||
Total | $ 20,136 | 19,995 | |
Customer relationships | Minimum | |||
Intangible assets | |||
Amortization Period | 3 years | ||
Customer relationships | Maximum | |||
Intangible assets | |||
Amortization Period | 15 years | ||
Non-compete agreements | |||
Intangible assets | |||
Total | $ 951 | $ 1,424 | |
Non-compete agreements | Minimum | |||
Intangible assets | |||
Amortization Period | 2 years | ||
Non-compete agreements | Maximum | |||
Intangible assets | |||
Amortization Period | 5 years |
Accounts Payable and Accrued 71
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Payable and Accrued Liabilities | ||
Retention amounts included in accounts payable | $ 10,562 | $ 8,375 |
Accrued expenses and other current liabilities | ||
Payroll and related employee benefits | 42,718 | 33,358 |
Insurance, including self-insurance reserves | 42,546 | 44,695 |
Reserve for estimated losses on uncompleted contracts | 12,801 | 7,261 |
Corporate income taxes and other taxes | 3,368 | 2,447 |
Accrued administrative cost | 3,791 | 1,415 |
Other | 2,782 | 4,420 |
Total accrued expenses and other current liabilities | $ 108,006 | $ 93,596 |
Capital Leases (Details)
Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Capital Leases | ||
Total assets under capital leases | $ 2,469 | $ 4,874 |
Accumulated depreciation of assets under capital leases | 2,332 | 4,103 |
Net book value of assets under capital leases | 137 | 771 |
Future minimum lease payments required under capital leases | ||
2,017 | 188 | |
2,018 | 6 | |
2,019 | 6 | |
2,020 | 5 | |
Total minimum lease payments | 205 | |
Amounts representing interest | (2) | |
Net present value of minimum lease payments | 203 | |
Less: current portion of capital lease obligations | (188) | (974) |
Long-term capital lease obligation | $ 15 | $ 22 |
Credit Arrangements (Details)
Credit Arrangements (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)loanbuilding | Dec. 31, 2015USD ($) | |
Credit arrangements | ||
Total long-term debt | $ 261,570 | $ 274,289 |
Less: current portion | (58,189) | (54,436) |
Long-term Debt, Excluding Current Maturities, Total | 203,381 | 219,853 |
Scheduled maturities of long-term debt | ||
2,017 | 58,189 | |
2,018 | 55,741 | |
2,019 | 55,246 | |
2,020 | 35,850 | |
2,021 | 22,449 | |
Thereafter | 34,095 | |
Commercial equipment notes payable, maturing range from August 13, 2017 to December 13, 2020 | ||
Credit arrangements | ||
Total long-term debt | 55,579 | 83,711 |
Monthly payment of principal and interest | $ 2,521 | $ 2,521 |
Commercial equipment notes payable, maturing range from August 13, 2017 to December 13, 2020 | Minimum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.78% | 1.78% |
Commercial equipment notes payable, maturing range from August 13, 2017 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 | $ 33,254 | $ 44,587 |
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 | $ 29,702 | $ 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% |
Commercial equipment notes payable, maturing range from August 15, 2021 To October 14, 2021 | ||
Credit arrangements | ||
Total long-term debt | $ 42,613 | |
Monthly payment of principal and interest | $ 788 | |
Commercial equipment notes payable, maturing range from August 15, 2021 To October 14, 2021 | Minimum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.83% | |
Commercial equipment notes payable, maturing range from August 15, 2021 To October 14, 2021 | Maximum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.06% | |
Secured mortgage notes, maturing on January 2031 | ||
Credit arrangements | ||
Total long-term debt | $ 7,564 | $ 7,950 |
Monthly payment of principal and interest | $ 60 | $ 60 |
Debt Instrument, Interest Rate, Stated Percentage | 4.30% | 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 | $ 92,858 | $ 100,000 |
Senior secured notes, maturing between 2022 to 2025 | Minimum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.65% | 3.65% |
Senior secured notes, maturing between 2022 to 2025 | Maximum | ||
Credit arrangements | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.60% | 4.60% |
Credit Arrangements - Backgroun
Credit Arrangements - Background (Details) CAD in Thousands, $ in Thousands | Nov. 09, 2015USD ($)payment | Jul. 25, 2013USD ($)payment | Dec. 31, 2016USD ($) | Dec. 31, 2016CAD | Dec. 31, 2016USD ($) | Dec. 31, 2015CAD | Dec. 31, 2015USD ($) | Jun. 03, 2015USD ($) | 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 | 108,818 | ||||||||
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 | $ 16,182 | $ 12,105 | |||||||
Canadian Credit Facility | Commercial letters of credit | |||||||||
Credit arrangements | |||||||||
Maximum borrowing capacity | CAD | CAD 8,000 | ||||||||
Total commercial letters of credit outstanding | CAD | 0 | CAD 2,179 | |||||||
Available borrowing capacity | CAD | CAD 8,000 | ||||||||
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) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016USD ($)item | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | 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, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Noncontrolling Interests | |||||||||||||||
Number of joint ventures | item | 2 | 2 | |||||||||||||
Revenues | $ 601,863 | $ 507,828 | $ 456,811 | $ 430,446 | $ 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | $ 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | $ 1,996,948 | $ 1,929,415 | $ 2,086,194 |
Net income attributable to noncontrolling interests | 1,002 | 279 | 526 | ||||||||||||
Tax effect on income recognized | 21,146 | 23,946 | 38,646 | ||||||||||||
Distributions to non-controlling interests | 29 | $ 1,590 | |||||||||||||
Accounts receivable | 388,000 | 320,588 | 388,000 | 320,588 | |||||||||||
Costs and estimated earnings in excess of billings | 138,618 | 116,455 | 138,618 | 116,455 | |||||||||||
Billings in excess of costs and estimated earnings | 112,606 | 139,875 | 112,606 | 139,875 | |||||||||||
Current liabilities | $ 449,938 | 416,173 | $ 449,938 | 416,173 | |||||||||||
Blythe | Primary beneficiary | |||||||||||||||
Noncontrolling Interests | |||||||||||||||
Revenues | 119 | ||||||||||||||
Carlsbad | |||||||||||||||
Noncontrolling Interests | |||||||||||||||
Ownership percentage | 50.00% | 50.00% | |||||||||||||
Carlsbad | Primary beneficiary | |||||||||||||||
Noncontrolling Interests | |||||||||||||||
Revenues | $ 7,254 | 2,887 | |||||||||||||
Net income attributable to noncontrolling interests | 325 | 172 | |||||||||||||
Distributions to partners | 0 | ||||||||||||||
Capital contributions | 0 | ||||||||||||||
Cash | $ 4,630 | 1,952 | 4,630 | 1,952 | |||||||||||
Accounts receivable | 955 | 955 | |||||||||||||
Costs and estimated earnings in excess of billings | 124 | 124 | |||||||||||||
Billings in excess of costs and estimated earnings | 3,426 | 1,311 | 3,426 | 1,311 | |||||||||||
Current liabilities | $ 332 | 1,251 | $ 332 | 1,251 | |||||||||||
Wilmington | |||||||||||||||
Noncontrolling Interests | |||||||||||||||
Ownership percentage | 50.00% | 50.00% | |||||||||||||
Billings in excess of costs and estimated earnings | $ 2,572 | 2,978 | $ 2,572 | 2,978 | |||||||||||
Wilmington | Primary beneficiary | |||||||||||||||
Noncontrolling Interests | |||||||||||||||
Revenues | 19,781 | 1,364 | |||||||||||||
Net income attributable to noncontrolling interests | 676 | 48 | |||||||||||||
Distributions to partners | 0 | ||||||||||||||
Capital contributions | 0 | ||||||||||||||
Cash | 2,415 | 2,339 | 2,415 | 2,339 | |||||||||||
Accounts receivable | 4,242 | 2,003 | 4,242 | 2,003 | |||||||||||
Current liabilities | $ 2,637 | $ 1,269 | $ 2,637 | $ 1,269 |
Contingent Earnout Liabilities
Contingent Earnout Liabilities (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||||
Dec. 31, 2015 | Sep. 30, 2015 | Mar. 31, 2015 | Aug. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2015 | Jul. 31, 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 | |||||||
Contingent earnout liabilities | |||||||
Contingent consideration in cash | $ 900 | ||||||
Performance targets ( in years) | 2 years | ||||||
Fair value of the contingent consideration | $ 679 | ||||||
Contingent consideration credited to non-operating income | $ 368 | $ 396 | |||||
Vadnais | 2015 earnout target | |||||||
Contingent earnout liabilities | |||||||
Contingent consideration in cash | 450 | ||||||
Vadnais | 2016 earnout target | |||||||
Contingent earnout liabilities | |||||||
Contingent consideration in cash | $ 450 | ||||||
Surber | Business combination contingent consideration earnout target period of 2014 through 2016 | |||||||
Contingent earnout liabilities | |||||||
Contingent consideration in cash | $ 1,400 | ||||||
Fair value of the contingent consideration | $ 1,000 | ||||||
Contingent consideration credited to non-operating income | $ 1,083 | ||||||
RamFab | |||||||
Contingent earnout liabilities | |||||||
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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Future minimum lease payments required under non-cancelable operating leases | |||
2,017 | $ 14,918 | ||
2,018 | 12,935 | ||
2,019 | 9,696 | ||
2,020 | 6,238 | ||
2,021 | 4,013 | ||
Thereafter | 1,042 | ||
Total | 48,842 | ||
Leases | |||
Total lease expense | 22,526 | $ 21,815 | $ 14,325 |
Lease payments to related party | 1,495 | $ 1,445 | $ 1,505 |
Real Property | |||
Future minimum lease payments required under non-cancelable operating leases | |||
2,017 | 4,015 | ||
2,018 | 3,436 | ||
2,019 | 2,453 | ||
2,020 | 1,345 | ||
2,021 | 793 | ||
Total | 12,042 | ||
Real Property (Related Party) | |||
Future minimum lease payments required under non-cancelable operating leases | |||
2,017 | 1,519 | ||
2,018 | 1,210 | ||
2,019 | 938 | ||
2,020 | 852 | ||
2,021 | 854 | ||
Thereafter | 1,042 | ||
Total | 6,415 | ||
Equipment | |||
Future minimum lease payments required under non-cancelable operating leases | |||
2,017 | 9,384 | ||
2,018 | 8,289 | ||
2,019 | 6,305 | ||
2,020 | 4,041 | ||
2,021 | 2,366 | ||
Total | $ 30,385 |
Commitments and Contingencies78
Commitments and Contingencies (Details) $ in Thousands | Feb. 25, 2015USD ($) | Dec. 31, 2016USD ($)item | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Nov. 30, 2012USD ($) | Nov. 30, 2011USD ($) |
Commitments and contingencies | ||||||||||||||||||
Billings in excess of costs and estimated earnings | $ 112,606 | $ 139,875 | $ 112,606 | $ 139,875 | ||||||||||||||
Revenues | 601,863 | $ 507,828 | $ 456,811 | $ 430,446 | 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | $ 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | 1,996,948 | 1,929,415 | $ 2,086,194 | |||
Gross Profit | 68,616 | 50,129 | 43,285 | $ 39,277 | 63,725 | $ 71,647 | $ 46,496 | $ 38,005 | 49,616 | $ 75,473 | $ 61,194 | $ 49,757 | 201,307 | 219,873 | 236,040 | |||
Withdrawal liability recorded | $ 5,655 | 5,655 | $ 7,585 | $ 7,500 | ||||||||||||||
Monthly payments towards the liability amount | $ 34,183 | 34,296 | 38,107 | |||||||||||||||
Disputed Receivables | ||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||
Receivable recorded relating to the project | 17,900 | |||||||||||||||||
Reduction in accounts receivables due to settlement receipts | 38,000 | |||||||||||||||||
Revenues | 27,500 | |||||||||||||||||
Gross Profit | 26,700 | $ 0 | ||||||||||||||||
Construction Projects | ||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||
Number of projects under litigation | item | 2 | 2 | ||||||||||||||||
Construction Project One | ||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||
Receivable recorded relating to the project | $ 32,900 | $ 32,900 | ||||||||||||||||
Billings in excess of costs and estimated earnings | 18,300 | 18,300 | ||||||||||||||||
Construction Project Two | Disputed Receivables | ||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||
Receivable recorded relating to the project | 17,900 | 17,900 | ||||||||||||||||
Reduction in accounts receivables due to settlement receipts | 38,000 | |||||||||||||||||
Revenues | 27,500 | |||||||||||||||||
Gross Profit | $ 26,700 | 0 | ||||||||||||||||
JCG | North Texas Tollway Authority v. James Construction Group, LLC | ||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||
Settlement | $ (9,000) | |||||||||||||||||
Defendants paid to remove the liability | 8,000 | |||||||||||||||||
Expected remediation cost | 22,400 | |||||||||||||||||
Estimated cost of remediating issues for lawsuit | 17,000 | 17,000 | ||||||||||||||||
Remaining accrual balance | $ 14,300 | $ 14,300 | ||||||||||||||||
Percentage of expected costs second defendant would pay | 20.00% | 20.00% | ||||||||||||||||
Percentage of expected costs Company would pay | 80.00% | 80.00% | ||||||||||||||||
JCG | 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 | $ 16,182 | 13,679 | $ 16,182 | 13,679 | ||||||||||||||
Bonding | ||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||
Bid and completion bonds issued and outstanding | $ 1,450,000 | $ 1,480,000 | $ 1,520,000 | $ 1,450,000 | $ 1,480,000 | $ 1,520,000 |
Planned Divestiture of Texas 79
Planned Divestiture of Texas Heavy Civil Business Unit (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Planned Divestiture | |||||
Goodwill impairment charge | $ 401 | $ 2,716 | $ 401 | ||
Revenue and gross profit | |||||
% of Revenue | 10.10% | 11.40% | 11.30% | ||
Balance sheet information | |||||
Property, plant and equipment, net | 283,545 | $ 277,346 | $ 283,545 | ||
Costs and estimated earnings in excess of billings | 116,455 | 138,618 | 116,455 | ||
Billings in excess of costs and estimated earnings | 139,875 | 112,606 | 139,875 | ||
Reserve for estimated losses on uncompleted contracts | $ 7,261 | $ 12,801 | $ 7,261 | ||
East | |||||
Revenue and gross profit | |||||
% of Revenue | (3.10%) | 6.90% | 5.30% | ||
Texas Heavy Civil Business unit | JCG | East | |||||
Planned Divestiture | |||||
Charge against income | $ 37,300 | ||||
Goodwill impairment charge | 2,716 | ||||
Texas Heavy Civil Business unit | JCG | East | Belton Texas area projects | |||||
Revenue and gross profit | |||||
Revenue | $ 10,000 |
Reportable Segments (Details)
Reportable Segments (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | 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, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment reporting information | |||||||||||||||
Number of reportable segments | segment | 3 | ||||||||||||||
Revenue | $ 601,863 | $ 507,828 | $ 456,811 | $ 430,446 | $ 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | $ 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | $ 1,996,948 | $ 1,929,415 | $ 2,086,194 |
% of Total Revenue | 100.00% | 100.00% | 100.00% | ||||||||||||
Gross Profit | 68,616 | 50,129 | $ 43,285 | $ 39,277 | 63,725 | $ 71,647 | $ 46,496 | $ 38,005 | $ 49,616 | $ 75,473 | $ 61,194 | $ 49,757 | $ 201,307 | $ 219,873 | $ 236,040 |
% of Revenue | 10.10% | 11.40% | 11.30% | ||||||||||||
Goodwill | 127,226 | 124,161 | $ 127,226 | $ 124,161 | |||||||||||
Goodwill impairment charge | 401 | 2,716 | 401 | ||||||||||||
West | |||||||||||||||
Segment reporting information | |||||||||||||||
Revenue | $ 1,041,341 | $ 913,626 | $ 964,093 | ||||||||||||
% of Total Revenue | 52.20% | 47.40% | 46.20% | ||||||||||||
Gross Profit | $ 145,239 | $ 130,255 | $ 143,468 | ||||||||||||
% of Revenue | 13.90% | 14.30% | 14.90% | ||||||||||||
Goodwill | 45,239 | 45,239 | $ 45,239 | $ 45,239 | |||||||||||
East | |||||||||||||||
Segment reporting information | |||||||||||||||
Revenue | $ 521,301 | $ 612,174 | $ 489,926 | ||||||||||||
% of Total Revenue | 26.10% | 31.70% | 23.50% | ||||||||||||
Gross Profit | $ (15,938) | $ 42,523 | $ 25,749 | ||||||||||||
% of Revenue | (3.10%) | 6.90% | 5.30% | ||||||||||||
Goodwill | 40,150 | 42,866 | $ 40,150 | $ 42,866 | |||||||||||
East | JCG | Texas Heavy Civil Business unit | |||||||||||||||
Segment reporting information | |||||||||||||||
Goodwill impairment charge | $ 2,716 | ||||||||||||||
Energy | |||||||||||||||
Segment reporting information | |||||||||||||||
Revenue | $ 434,306 | $ 403,615 | $ 632,175 | ||||||||||||
% of Total Revenue | 21.70% | 20.90% | 30.30% | ||||||||||||
Gross Profit | $ 72,006 | $ 47,095 | $ 66,823 | ||||||||||||
% of Revenue | 16.60% | 11.70% | 10.60% | ||||||||||||
Goodwill | $ 41,837 | $ 36,056 | $ 41,837 | $ 36,056 |
Reportable Segments - Revenue a
Reportable Segments - Revenue and Total Assets by Geographic Area (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
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 total assets | 1.00% | ||
Non-United States | Maximum | |||
Revenues and total assets by geographic area | |||
% of Revenue | 1.00% |
Customer Concentrations (Detail
Customer Concentrations (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | 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, 2016USD ($)customeritem | Dec. 31, 2015USD ($)customer | Dec. 31, 2014USD ($) | |
Customer concentrations | |||||||||||||||
Amount | $ 601,863 | $ 507,828 | $ 456,811 | $ 430,446 | $ 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | $ 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | $ 1,996,948 | $ 1,929,415 | $ 2,086,194 |
Revenues. | Customer concentration | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 910,007 | $ 944,223 | $ 759,319 | ||||||||||||
Percentage | 45.60% | 48.90% | 36.40% | ||||||||||||
Revenues. | Customer concentration | Chemical/Energy Producer | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 208,458 | $ 173,931 | |||||||||||||
Percentage | 10.40% | 9.00% | |||||||||||||
Revenues. | Customer concentration | Chemical/Energy Producer | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | ||||||||||||||
Revenues. | Customer concentration | Private gas and electric utility | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 201,443 | $ 173,232 | $ 145,677 | ||||||||||||
Percentage | 10.10% | 9.00% | 7.00% | ||||||||||||
Revenues. | Customer concentration | Texas DOT | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 193,049 | $ 183,847 | $ 183,221 | ||||||||||||
Percentage | 9.70% | 9.50% | 8.80% | ||||||||||||
Revenues. | Customer concentration | Public gas and electric utility | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 184,002 | $ 120,507 | $ 144,567 | ||||||||||||
Percentage | 9.20% | 6.20% | 6.90% | ||||||||||||
Revenues. | Customer concentration | Pipeline Operator | |||||||||||||||
Customer concentrations | |||||||||||||||
Amount | $ 123,055 | ||||||||||||||
Percentage | 6.20% | ||||||||||||||
Revenues. | Customer concentration | Pipeline Operator | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.00% | |||||||||||||
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 | ||||||||||||||
Percentage | 6.60% | ||||||||||||||
Revenues. | Customer concentration | Gas utility | Maximum | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 5.00% | 5.00% | |||||||||||||
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 | ||||||||||||||
Percentage | 5.80% | ||||||||||||||
Revenues. | Customer concentration | Pipeline Operator | 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 | 60.40% | 59.40% | 53.60% | ||||||||||||
Number of top customers | customer | 10 | ||||||||||||||
Revenues. | Customer concentration | One customer | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 6.20% | 9.00% | |||||||||||||
Accounts receivable | Customer concentration | One customer | |||||||||||||||
Customer concentrations | |||||||||||||||
Percentage | 20.80% | 15.70% | |||||||||||||
Number of customers | customer | 1 | 1 |
Multiemployer Plans (Details)
Multiemployer Plans (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)item | |
Multiemployer plans | |||
Number of pension plans in which annual contribution was made by the entity during last three years | item | 78 | ||
Number of pension plans in which the entity contributed | item | 0 | 2 | 1 |
Contributions for significant plans | $ 19,482 | $ 21,126 | $ 23,071 |
Contributions to other multiemployer plans | 14,701 | 13,170 | 15,036 |
Total contributions made | 34,183 | 34,296 | 38,107 |
One Plan | |||
Multiemployer plans | |||
Contributions for specified plans | 2,180 | 5,659 | |
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 | 5,373 | 5,659 | 6,204 |
Laborers Pension Trust Fund for Northern California | |||
Multiemployer plans | |||
Contributions for significant plans | 3,598 | 3,150 | 3,116 |
Construction Laborers Pension Trust for Southern California | |||
Multiemployer plans | |||
Contributions for significant plans | 2,742 | 3,067 | 2,444 |
Pipeline Industry Benefit Fund | |||
Multiemployer plans | |||
Contributions for significant plans | 2,740 | 3,783 | 2,686 |
Southern California Pipetrades Trust Funds | |||
Multiemployer plans | |||
Contributions for significant plans | 2,614 | 2,180 | 5,239 |
Laborers International Union of North America National (Industrial) Pension Fund | |||
Multiemployer plans | |||
Contributions for significant plans | $ 2,415 | $ 3,287 | $ 3,382 |
Company Retirement Plans (Detai
Company Retirement Plans (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
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 | $ 3,904 | 3,702 | 3,111 |
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 | $ 52 | $ 55 | $ 69 |
Deferred Compensation Agreeme85
Deferred Compensation Agreements and Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | 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 | $ 4,459 | $ 5,220 | |
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 | $ 0 | $ 278 | |
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 Agreeme86
Deferred Compensation Agreements and Stock-Based Compensation - Restricted Stock Units (Details) - USD ($) $ in Thousands | May 03, 2013 | Dec. 31, 2016 | Dec. 31, 2015 |
Stock-based compensation | |||
Accrued dividend equivalent units | 1,693 | ||
Restricted Stock Units | |||
Stock-based compensation | |||
Units granted | 249,065 | ||
Number of Units to Vest | 149,809 | ||
Restricted Stock Units | 2017 | |||
Stock-based compensation | |||
Number of Units to Vest | 74,394 | ||
Restricted Stock Units | 2018 | |||
Stock-based compensation | |||
Number of Units to Vest | 25,138 | ||
Restricted Stock Units | 2019 | |||
Stock-based compensation | |||
Number of Units to Vest | 48,219 | ||
Restricted Stock Units | 2020 | |||
Stock-based compensation | |||
Number of Units to Vest | 2,058 | ||
Equity Plan | Restricted Stock Units | |||
Stock-based compensation | |||
Units granted | 249,065 | ||
Number of vested units | 99,256 | ||
Compensation expense recognized | $ 1,627 | $ 1,050 | |
Unrecognized compensation expense | $ 2,100 | ||
Period to recognize unrecognized compensation expense | 3 years 3 months | ||
Accrued dividend equivalent units | 1,693 | ||
Executives | Equity Plan | Restricted Stock Units | |||
Stock-based compensation | |||
Units granted | 249,065 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)property | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Related party transactions | |||
Number of leased properties | property | 3 | ||
Lease payments to related party | $ 1,495 | $ 1,445 | $ 1,505 |
SIGI | |||
Related party transactions | |||
Lease payments to related party | $ 849 | $ 831 | $ 862 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current provision (benefit) | |||
Federal | $ 4,726 | $ 26,948 | $ 28,203 |
State | 5,423 | 3,640 | 5,398 |
Foreign | 92 | 362 | 1,074 |
Total | 10,241 | 30,950 | 34,675 |
Deferred provision (benefit) | |||
Federal | 11,560 | (7,099) | 3,586 |
State | (727) | 155 | 457 |
Foreign | 72 | (60) | (72) |
Total | 10,905 | (7,004) | 3,971 |
Total | $ 21,146 | $ 23,946 | $ 38,646 |
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) | 6.38% | 4.20% | 4.66% |
Foreign tax credit (as a percent) | (0.35%) | (0.50%) | (0.98%) |
Canadian income tax (as a percent) | 0.35% | 0.50% | 0.98% |
Domestic production activities deduction (as a percent) | (1.10%) | (3.91%) | (3.07%) |
Nondeductible meals & entertainment (as a percent) | 5.36% | 5.09% | 3.38% |
Other items (as a percent) | (1.46%) | (1.01%) | (2.01%) |
Effective tax rate on income before provision for income taxes excluding income attributable to noncontrolling interests (as a percent) | 44.18% | 39.37% | 37.96% |
Impact of income from noncontrolling interests on effective tax rate (as a percent) | (0.91%) | (0.18%) | (0.19%) |
Effective tax rate on income before provision for income taxes and noncontrolling interests (as a percent) | 43.27% | 39.19% | 37.77% |
Deferred tax assets: | |||
Accrued compensation | $ 5,804 | $ 9,673 | |
Accrued workers compensation | 9,855 | 10,058 | |
Capital loss carryforward | 1,077 | 1,800 | |
Foreign tax credit | 1,349 | 1,293 | |
Insurance reserves | 3,248 | 5,489 | |
Loss reserves | 4,841 | 2,887 | |
Pension liability | 1,979 | 2,805 | |
State income taxes | 2,011 | 469 | |
Other | 288 | 882 | |
Total deferred tax assets | 30,452 | 35,356 | |
Deferred tax liabilities | |||
Depreciation and amortization | (38,327) | (33,304) | |
Prepaid expense and other | (1,955) | (977) | |
Total deferred tax liabilities | (40,282) | (34,281) | |
Net deferred tax assets (liabilities) | 1,075 | ||
Net deferred tax assets (liabilities) | $ (9,830) | ||
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 | |
Settlements and effective settlements with tax authorities | $ (456) | (4,878) | |
Lapse of statute of limitations | (48) | ||
Total | $ 456 | ||
State | |||
Deferred tax liabilities | |||
Net operating loss | $ 486 |
Dividends and Earnings Per Sh89
Dividends and Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Nov. 02, 2016 | Aug. 03, 2016 | May 02, 2016 | Feb. 22, 2016 | Nov. 03, 2015 | Aug. 04, 2015 | May 01, 2015 | Feb. 24, 2015 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | 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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Earnings Per Share | |||||||||||||||||||||||
Cash dividend declared (in dollars per share) | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.040 | $ 0.22 | $ 0.205 | $ 0.15 | ||||||||||||
Total dividend paid | $ 11,384 | $ 9,809 | $ 7,483 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income | $ 14,766 | $ 4,756 | $ 5,287 | $ 2,916 | $ 12,708 | $ 19,079 | $ 3,692 | $ 1,672 | $ 9,024 | $ 27,390 | $ 16,003 | $ 11,265 | 27,725 | 37,151 | 63,682 | ||||||||
Net income attributable to noncontrolling interests | (1,002) | (279) | (526) | ||||||||||||||||||||
Net income attributable to Primoris | $ 14,470 | $ 4,504 | $ 5,056 | $ 2,693 | $ 12,555 | $ 19,007 | $ 3,638 | $ 1,672 | $ 8,930 | $ 27,390 | $ 16,003 | $ 10,833 | $ 26,723 | $ 36,872 | $ 63,156 | ||||||||
Denominator (shares in thousands): | |||||||||||||||||||||||
Weighted average shares for computation of basic earnings per share | 51,771 | 51,780 | 51,772 | 51,725 | 51,676 | 51,672 | 51,666 | 51,572 | 51,561 | 51,606 | 51,655 | 51,610 | 51,762 | 51,647 | 51,607 | ||||||||
Dilutive effect of shares issued to independent directors | 3 | 2 | 2 | ||||||||||||||||||||
Dilutive effect of restricted stock units | 224 | 149 | 138 | ||||||||||||||||||||
Weighted average shares for computation of diluted earnings per share | 52,021 | 52,034 | 52,022 | 51,881 | 51,825 | 51,824 | 51,815 | 51,726 | 51,710 | 51,759 | 51,804 | 51,714 | 51,989 | 51,798 | 51,747 | ||||||||
Earnings per share attributable to Primoris: | |||||||||||||||||||||||
Basic earnings per share (in dollars per share) | $ 0.28 | $ 0.09 | $ 0.10 | $ 0.05 | $ 0.24 | $ 0.37 | $ 0.07 | $ 0.03 | $ 0.17 | $ 0.53 | $ 0.31 | $ 0.21 | $ 0.52 | $ 0.71 | $ 1.22 | ||||||||
Diluted earnings per share (in dollars per share) | $ 0.28 | $ 0.09 | $ 0.10 | $ 0.05 | $ 0.24 | $ 0.37 | $ 0.07 | $ 0.03 | $ 0.17 | $ 0.53 | $ 0.31 | $ 0.21 | $ 0.51 | $ 0.71 | $ 1.22 |
Dividends and Earnings Per Sh90
Dividends and Earnings Per Share - Dilutive Effect (Details) - shares | May 03, 2013 | Dec. 31, 2016 |
Earnings per share | ||
Accrued Dividend Equivalent Units | 1,693 | |
Restricted Stock Units | ||
Earnings per share | ||
Units granted | 249,065 | |
Equity Plan | Restricted Stock Units | ||
Earnings per share | ||
Units granted | 249,065 | |
Accrued Dividend Equivalent Units | 1,693 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | May 03, 2013shares | Dec. 31, 2016USD ($)$ / sharesshares | Aug. 31, 2016USD ($)shares | Feb. 29, 2016shares | Aug. 31, 2015shares | Mar. 31, 2015shares | Aug. 31, 2014shares | Feb. 28, 2014USD ($)shares | Sep. 30, 2014USD ($)$ / sharesshares | Dec. 31, 2016USD ($)item$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares |
Common Stock | |||||||||||
Common stock, shares authorized | 90,000,000 | 90,000,000 | 90,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Common stock, shares issued | 51,576,442 | 51,576,442 | 51,676,140 | ||||||||
Common stock, shares outstanding | 51,576,442 | 51,576,442 | 51,676,140 | ||||||||
Number of holders of common stock | item | 394 | ||||||||||
Shares of common stock issued as a part of quarterly compensation of non-employee members of the Board of Directors | 11,745 | 10,450 | 9,748 | 8,168 | 6,172 | 6,375 | |||||
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 | ||||||||||
Accrued Dividend Equivalent Units | 1,693 | 1,693 | |||||||||
Aggregate purchase price up to which shares can be acquired under share repurchase program | $ | $ 5,000 | $ 23,000 | |||||||||
Number of shares purchased and cancelled under the share repurchase program | 207,800 | 100,000 | |||||||||
Amount paid for shares purchased and cancelled under share repurchase program | $ | $ 5,000 | $ 2,800 | |||||||||
Average cost of repurchased shares of stock (in dollars per share) | $ / shares | $ 24.02 | $ 28.44 | |||||||||
Preferred Stock | |||||||||||
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||
Par value of preferred stock (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||||||
Warrants | |||||||||||
Warrants outstanding (in shares) | 0 | 0 | 0 | ||||||||
Restricted Stock Units | |||||||||||
Common Stock | |||||||||||
Units granted | 249,065 | ||||||||||
LTR Plan | |||||||||||
Common Stock | |||||||||||
Shares of common stock issued under the long-term incentive plan | 85,907 | 96,828 | |||||||||
Amount received in exchange for shares of common stock under a long term incentive plan | $ | $ 1,440 | $ 1,621 | |||||||||
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% | ||||||||||
Equity Plan | Restricted Stock Units | |||||||||||
Common Stock | |||||||||||
Units granted | 249,065 | ||||||||||
Accrued Dividend Equivalent Units | 1,693 | 1,693 | |||||||||
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 | 1,953,559 | 1,953,559 |
Selected Quarterly Financial 92
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | 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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Selected Quarterly Financial Information | |||||||||||||||
Revenues | $ 601,863 | $ 507,828 | $ 456,811 | $ 430,446 | $ 497,145 | $ 555,945 | $ 483,545 | $ 392,780 | $ 487,592 | $ 613,237 | $ 515,291 | $ 470,074 | $ 1,996,948 | $ 1,929,415 | $ 2,086,194 |
Gross Profit | 68,616 | 50,129 | 43,285 | 39,277 | 63,725 | 71,647 | 46,496 | 38,005 | 49,616 | 75,473 | 61,194 | 49,757 | 201,307 | 219,873 | 236,040 |
Impairment of goodwill | 401 | 2,716 | 401 | ||||||||||||
Net income | 14,766 | 4,756 | 5,287 | 2,916 | 12,708 | 19,079 | 3,692 | 1,672 | 9,024 | 27,390 | 16,003 | 11,265 | 27,725 | 37,151 | 63,682 |
Net income attributable to Primoris | $ 14,470 | $ 4,504 | $ 5,056 | $ 2,693 | $ 12,555 | $ 19,007 | $ 3,638 | $ 1,672 | $ 8,930 | $ 27,390 | $ 16,003 | $ 10,833 | $ 26,723 | $ 36,872 | $ 63,156 |
Earnings per share: | |||||||||||||||
Basic earnings per share (in dollars per share) | $ 0.28 | $ 0.09 | $ 0.10 | $ 0.05 | $ 0.24 | $ 0.37 | $ 0.07 | $ 0.03 | $ 0.17 | $ 0.53 | $ 0.31 | $ 0.21 | $ 0.52 | $ 0.71 | $ 1.22 |
Diluted earnings per share (in dollars per share) | $ 0.28 | $ 0.09 | $ 0.10 | $ 0.05 | $ 0.24 | $ 0.37 | $ 0.07 | $ 0.03 | $ 0.17 | $ 0.53 | $ 0.31 | $ 0.21 | $ 0.51 | $ 0.71 | $ 1.22 |
Weighted average common shares outstanding: | |||||||||||||||
Basic (in shares) | 51,771 | 51,780 | 51,772 | 51,725 | 51,676 | 51,672 | 51,666 | 51,572 | 51,561 | 51,606 | 51,655 | 51,610 | 51,762 | 51,647 | 51,607 |
Diluted (in shares) | 52,021 | 52,034 | 52,022 | 51,881 | 51,825 | 51,824 | 51,815 | 51,726 | 51,710 | 51,759 | 51,804 | 51,714 | 51,989 | 51,798 | 51,747 |
Subsequent Event (Details)
Subsequent Event (Details) - $ / shares | Feb. 21, 2017 | Nov. 02, 2016 | Aug. 03, 2016 | May 02, 2016 | Feb. 22, 2016 | Nov. 03, 2015 | Aug. 04, 2015 | May 01, 2015 | Feb. 24, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Event | ||||||||||||
Cash dividend declared (in dollars per share) | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.055 | $ 0.040 | $ 0.22 | $ 0.205 | $ 0.15 | |
Subsequent Event. | ||||||||||||
Subsequent Event | ||||||||||||
Cash dividend declared (in dollars per share) | $ 0.055 |