• Consolidated Revenue: Increased by 7.8% in Q4 2024.
• Gross Profit Margin: 9.9% in Q4 2024, up from 8.1% in Q4 2023.
• Full Year Revenue: $2.64 billion for 2024, within the guidance range of $2.5 billion to $2.7 billion.
• Net Income: $10.3 million in Q4 2024, compared to a net loss of $210.7 million in Q4 2023.
• Adjusted EBITDA: $70.7 million in Q4 2024, a 22.9% increase from $57.5 million in Q4 2023.
• Adjusted EBITDA Margin: 9.9% in Q4 2024, up from 8.6% in Q4 2023.
• Adjusted Net Income: $18.4 million in Q4 2024, up from $4.9 million in Q4 2023.
• US Gas Segment Revenue: $327.2 million in Q4 2024, a 5.4% increase year over year.
• Union Electric Segment Revenue: $193.8 million in Q4 2024, a 5.5% decline year over year.
• Non-Union Electric Segment Revenue: $139.3 million in Q4 2024, a 49.7% increase year over year.
• Storm Restoration Revenue: $137 million for 2024, above the prior three-year average of $75 million.
• Net CapEx: $89.4 million for 2024, down from $94.9 million in 2023.
• Free Cash Flow: $69 million for 2024, slightly down from $73 million in 2023.
• Net Debt to Adjusted EBITDA Ratio: Improved to 3.6 times in December 2024 from 4 times in December 2023.
• 2025 Revenue Outlook: Expected between $2.6 billion and $2.8 billion.
• 2025 Adjusted EBITDA Outlook: Expected between $240 million and $275 million.
• 2025 Capital Expenditures Outlook: Forecasted net spend between $65 million and $80 million.

• Warning! GuruFocus has detected 2 Warning Sign with CTRI.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Centuri Holdings Inc (NYSE:CTRI) reported a 7.8% increase in consolidated revenues for the fourth quarter of 2024.
• The company achieved a 32% increase in consolidated gross profit compared to the prior year period.
• Centuri Holdings Inc (NYSE:CTRI) secured $221 million in new awards during the quarter, indicating strong business development efforts.
• The company experienced a record year for storm restoration work, with revenues significantly exceeding historical averages.
• Centuri Holdings Inc (NYSE:CTRI) anticipates double-digit EBITDA growth in its core business for 2025.

Negative Points

• Gas margins during 2024 were below expectations due to rate case approvals and competitive forces.
• The company faced challenges in optimizing crew counts and resource utilization in response to customer slowdowns.
• Offshore wind revenues were down 75% year over year due to the expected wind down of project work.
• Gross profit margins in the US gas segment decreased to 6.2% in the fourth quarter of 2024 from 7.8% in the prior year period.
• Centuri Holdings Inc (NYSE:CTRI) is not currently focusing on offshore wind projects due to unpredictability and lack of capital allocation.

Q & A Highlights

Q: Can you provide an update on the strategic review and when we can expect its outcome? A: Christian Brown, President & CEO: The next 3 to 6 months will focus on business development and organic sales to understand our pipeline's potential. We aim to roll out a 3 to 5-year strategy by the end of the year, prioritizing growth in our core business and exploring long-term opportunities.

Q: Regarding the guidance for this year, what factors could influence reaching the high or low end of the range? A: Gregory A. Izenstark, CFO: High-end factors include crew growth opportunities and successful business development. The downside could be influenced by project delays or cancellations. Storm activity is also a variable that could impact the range.

Q: What modifications are you seeking on gas MSAs, and how are negotiations progressing? A: Gregory A. Izenstark, CFO: We are exiting or renegotiating underperforming contracts. We have a high renewal rate for MSAs and are optimistic about improving volumes and pricing during renewals. Christian Brown added that there is no concern about market opportunities, with a 30% growth in pipeline opportunities.

Q: How should we view the seasonality of 2025, and is there any backlog for offshore wind in 2026? A: Gregory A. Izenstark, CFO: Expect the first quarter to be consistent with last year, with growth accelerating in the second half. For offshore wind, we have $40 million in backlog for 2025 and $25 million for 2026, with no additional pipeline related to offshore wind.

Q: Do you see historical double-digit margins as a realistic goal, and how are you addressing underperforming MSAs? A: Christian Brown, President & CEO: The focus is on driving profitable growth rather than margin expansion, except for expected improvements in the gas segment. We are renegotiating underperforming contracts and reallocating resources for better productivity.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.