MYR GROUP INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS MYR GROUP INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) June 30, 2024 December 31, 2023 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,869 $ 24,899 Accounts receivable, net of allowances of $ 898 and $ 1,987 , respectively 554,822 521,893 Contract assets, net of allowances of $ 619 and $ 610 , respectively 402,301 420,616 Current portion of receivable for insurance claims in excess of deductibles 8,349 8,267 Refundable income taxes 14,093 4,034 Prepaid expenses and other current assets 35,871 46,535 Total current assets 1,017,305 1,026,244 Property and equipment, net of accumulated depreciation of $ 387,375 and $ 380,465 , respectively 278,099 268,978 Operating lease right-of-use assets 40,396 35,012 Goodwill 115,372 116,953 Intangible assets, net of accumulated amortization of $ 32,688 and $ 30,534 , respectively 79,855 83,516 Receivable for insurance claims in excess of deductibles 33,687 33,739 Investment in joint ventures 12,861 8,707 Other assets 5,667 5,597 Total assets $ 1,583,242 $ 1,578,746 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 6,617 $ 7,053 Current portion of operating lease obligations 10,472 9,237 Current portion of finance lease obligations 2,168 2,039 Accounts payable 344,130 359,363 Contract liabilities 256,622 240,411 Current portion of accrued self-insurance 24,190 28,269 Accrued income taxes — 237 Other current liabilities 103,244 100,593 Total current liabilities 747,443 747,202 Deferred income tax liabilities 47,647 48,230 Long-term debt 38,448 29,188 Accrued self-insurance 51,700 51,796 Operating lease obligations, net of current maturities 29,897 25,775 Finance lease obligations, net of current maturities 1,645 314 Other liabilities 33,120 25,039 Total liabilities 949,900 927,544 Commitments and contingencies Shareholders’ equity: Preferred stock—$ 0.01 par value per share; 4,000,000 authorized shares; none issued and outstanding at June 30, 2024 and December 31, 2023 — — Common stock—$ 0.01 par value per share; 100,000,000 authorized shares; 16,648,028 and 16,684,492 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively 166 167 Additional paid-in capital 160,001 162,386 Accumulated other comprehensive loss ( 7,525 ) ( 3,880 ) Retained earnings 480,700 492,529 Total shareholders’ equity 633,342 651,202 Total liabilities and shareholders’ equity $ 1,583,242 $ 1,578,746 The accompanying notes are an integral part of these consolidated financial statements. 2 Table of Contents MYR GROUP INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Three months ended June 30, Six months ended June 30, (in thousands, except per share data) 2024 2023 2024 2023 Contract revenues $ 828,890 $ 888,616 $ 1,644,452 $ 1,700,232 Contract costs 788,047 798,489 1,517,366 1,525,713 Gross profit 40,843 90,127 127,086 174,519 Selling, general and administrative expenses 61,839 57,775 124,072 114,739 Amortization of intangible assets 1,217 1,229 2,445 2,455 Gain on sale of property and equipment ( 1,506 ) ( 1,315 ) ( 2,995 ) ( 2,539 ) Income (loss) from operations ( 20,707 ) 32,438 3,564 59,864 Other income (expense): Interest income 81 193 223 514 Interest expense ( 1,241 ) ( 1,154 ) ( 2,295 ) ( 1,740 ) Other income (expense), net ( 270 ) 120 ( 533 ) 30 Income (loss) before provision for income taxes ( 22,137 ) 31,597 959 58,668 Income tax expense (benefit) ( 6,860 ) 9,324 ( 2,703 ) 13,232 Net income (loss) $ ( 15,277 ) $ 22,273 $ 3,662 $ 45,436 Income (loss) per common share: —Basic $ ( 0.91 ) $ 1.33 $ 0.22 $ 2.73 —Diluted $ ( 0.91 ) $ 1.33 $ 0.22 $ 2.70 Weighted average number of common shares and potential common shares outstanding: —Basic 16,756 16,707 16,734 16,662 —Diluted 16,809 16,809 16,820 16,817 Net income (loss) $ ( 15,277 ) $ 22,273 $ 3,662 $ 45,436 Other comprehensive income (loss): Foreign currency translation adjustment ( 1,173 ) 2,140 ( 3,645 ) 2,276 Other comprehensive income (loss) ( 1,173 ) 2,140 ( 3,645 ) 2,276 Total comprehensive income (loss) $ ( 16,450 ) $ 24,413 $ 17 $ 47,712 The accompanying notes are an integral part of these consolidated financial statements. 3 Table of Contents MYR GROUP INC. UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY Preferred Common Stock Additional Paid-In Accumulated Other Comprehensive Retained (in thousands) Stock Shares Amount Capital Income (Loss) Earnings Total Balance at December 31, 2022 $ — 16,564 $ 165 $ 161,427 $ ( 6,300 ) $ 404,908 $ 560,200 Net income — — — — — 23,163 23,163 Stock issued under compensation plans, net — 211 2 18 — — 20 Stock-based compensation expense — — — 1,982 — — 1,982 Shares repurchased related to tax withholding for stock-based compensation — ( 76 ) — ( 7,194 ) — ( 742 ) ( 7,936 ) Other comprehensive income — — — — 136 — 136 Balance at March 31, 2023 — 16,699 167 156,233 ( 6,164 ) 427,329 577,565 Net income — — — — — 22,273 22,273 Stock issued under compensation plans, net — 11 — — — — — Stock-based compensation expense — — — 2,322 — — 2,322 Other comprehensive income — — — — 2,140 — 2,140 Balance at June 30, 2023 $ — 16,710 $ 167 $ 158,555 $ ( 4,024 ) $ 449,602 $ 604,300 Balance at December 31, 2023 $ — 16,684 $ 167 $ 162,386 $ ( 3,880 ) $ 492,529 $ 651,202 Net income — — — — — 18,939 18,939 Stock issued under compensation plans, net — 114 1 ( 1 ) — — — Stock-based compensation expense — — — 1,917 — — 1,917 Shares repurchased related to tax withholding for stock-based compensation — ( 36 ) ( 1 ) ( 5,511 ) — ( 354 ) ( 5,866 ) Other comprehensive loss — — — — ( 2,472 ) — ( 2,472 ) Balance at March 31, 2024 — 16,762 167 158,791 ( 6,352 ) 511,114 663,720 Net loss — — — — — ( 15,277 ) ( 15,277 ) Stock issued under compensation plans, net — 3 — — — — — Stock-based compensation expense — — — 2,331 — — 2,331 Share repurchases under share repurchase program — ( 117 ) ( 1 ) ( 1,121 ) — ( 15,137 ) ( 16,259 ) Other comprehensive loss — — — — ( 1,173 ) — ( 1,173 ) Balance at June 30, 2024 $ — 16,648 $ 166 $ 160,001 $ ( 7,525 ) $ 480,700 $ 633,342 The accompanying notes are an integral part of these consolidated financial statements. 4 Table of Contents MYR GROUP INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended June 30, (in thousands) 2024 2023 Cash flows from operating activities: Net income $ 3,662 $ 45,436 Adjustments to reconcile net income to net cash flows provided by operating activities: Depreciation and amortization of property and equipment 29,659 26,040 Amortization of intangible assets 2,445 2,455 Stock-based compensation expense 4,248 4,304 Gain on sale of property and equipment ( 2,995 ) ( 2,539 ) Other non-cash items 1,266 ( 221 ) Changes in operating assets and liabilities: Accounts receivable, net ( 34,139 ) ( 1,714 ) Contract assets, net 17,057 ( 81,243 ) Receivable for insurance claims in excess of deductibles ( 30 ) 459 Other assets ( 3,507 ) 3,147 Accounts payable ( 10,336 ) 23,004 Contract liabilities 16,514 1,468 Accrued self-insurance ( 4,161 ) ( 1,962 ) Other liabilities 10,688 ( 2,790 ) Net cash flows provided by operating activities 30,371 15,844 Cash flows from investing activities: Proceeds from sale of property and equipment 3,380 3,331 Purchases of property and equipment ( 45,961 ) ( 41,730 ) Net cash flows used in investing activities ( 42,581 ) ( 38,399 ) Cash flows from financing activities: Borrowings under revolving lines of credit 290,907 185,330 Repayments under revolving lines of credit ( 279,488 ) ( 178,247 ) Payment of principal obligations under equipment notes ( 2,595 ) ( 2,512 ) Payment of principal obligations under finance leases ( 549 ) ( 584 ) Proceeds from exercise of stock options — 20 Repurchase of common stock ( 14,251 ) — Debt refinancing costs ( 33 ) ( 2,120 ) Payments related to tax withholding for stock-based compensation ( 5,866 ) ( 7,936 ) Other financing activities 1,600 — Net cash flows used in financing activities ( 10,275 ) ( 6,049 ) Effect of exchange rate changes on cash ( 545 ) 414 Net decrease in cash and cash equivalents ( 23,030 ) ( 28,190 ) Cash and cash equivalents: Beginning of period 24,899 51,040 End of period $ 1,869 $ 22,850 Supplemental cash flow information: Noncash financing activities: Share repurchases not settled $ 2,008 $ — The accompanying notes are an integral part of these consolidated financial statements. 5 Table of Contents MYR GROUP INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. Organization, Business and Basis of Presentation Organization and Business MYR Group Inc. (the “Company”) is a holding company of specialty electrical construction service providers conducting operations through wholly owned subsidiaries. The Company performs construction services in two business segments: Transmission and Distribution (“T&D”), and Commercial and Industrial (“C&I”). T&D customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. T&D provides a broad range of services on electric transmission, distribution networks, substation facilities, clean energy projects and electric vehicle charging infrastructure. T&D services include design, engineering, procurement, construction, upgrade, maintenance and repair services. C&I customers include general contractors, commercial and industrial facility owners, government agencies and developers. C&I provides a broad range of services, which include the design, installation, maintenance and repair of commercial and industrial wiring. Typical C&I contracts cover electrical contracting services for airports, hospitals, data centers, hotels, stadiums, commercial and industrial facilities, clean energy projects, manufacturing plants, processing facilities, water/waste-water treatment facilities, mining facilities, intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure. Basis of Presentation Interim Consolidated Financial Information The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The Company believes that the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position, results of operations, comprehensive income (loss), shareholders’ equity and cash flows with respect to the interim consolidated financial statements, have been included. The consolidated balance sheet as of December 31, 2023 has been derived from the audited financial statements as of that date. The results of operations and comprehensive income (loss) are not necessarily indicative of the results for the full year or the results for any future periods. These financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on February 28, 2024 (the "2023 Annual Report"). Joint Ventures and Noncontrolling Interests The Company accounts for investments in joint ventures using the proportionate consolidation method for income statement reporting and under the equity method for balance sheet reporting, unless the Company has a controlling interest causing the joint venture to be consolidated with equity owned by other joint venture partners recorded as noncontrolling interests. As of June 30, 2024, the Company did not have a controlling interest in any current joint venture partnerships. Under the proportionate consolidation method, joint venture activity is allocated to the appropriate line items found on the consolidated statements of operations in proportion to the percentage of participation the Company has in the joint venture. Under the equity method the net investment in joint ventures is stated as a single item on the Company’s consolidated balance sheets. If an investment in a joint venture contains a recourse or unfunded commitments to provide additional equity, distributions and/or losses in excess of the investment, a liability is recorded in other current liabilities on the Company’s consolidated balance sheets. 6 Table of Contents For joint ventures in which the Company does not have a controlling interest, the Company’s share of any profits and assets and its share of any losses and liabilities are recognized based on the Company’s stated percentage partnership interest in the joint venture and are typically recorded by the Company one month in arrears. The investments in joint ventures are recorded at cost and the carrying amounts are adjusted to recognize the Company’s proportionate share of cumulative income or loss, additional contributions made and dividends and capital distributions received. The Company records the effect of any impairment or any other-than-temporary decrease in the value of the joint venture investment as incurred, which may or may not be one month in arrears, depending on when the Company obtains the joint venture activity information. Additionally, the Company continually assesses the fair value of its investment in unconsolidated joint ventures despite using information that is one month in arrears for regular reporting purposes. The Company includes only its percentage ownership of each joint venture in its backlog. Foreign Currency The functional currency for the Company’s Canadian operations is the Canadian dollar. Assets and liabilities denominated in Canadian dollars are translated into U.S. dollars at the end-of-period exchange rate. Revenues and expenses are translated using average exchange rates for the periods reported. Equity accounts are translated at historical rates. Cumulative translation adjustments are included as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity. Foreign currency transaction gains and losses, arising primarily from changes in exchange rates on short-term monetary assets and liabilities, and intercompany loans that are not deemed long-term investment accounts are recorded in the “other income (expense), net” line on the Company’s consolidated statements of operations. Foreign currency losses and gains, recorded in other income (expense), net, for the six months ended June 30, 2024 and 2023 were no t significant. Foreign currency translation gains and losses, arising from intercompany loans that are deemed long-term investment accounts, are recorded in the foreign currency translation adjustment line on the Company’s consolidated statements of comprehensive income. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Actual results could differ from those estimates. The most significant estimates are related to estimates of costs to complete contracts, pending change orders and claims, shared savings, insurance reserves, income tax reserves, estimates surrounding stock-based compensation, acquisition-related contingent earn-out consideration liabilities, the recoverability of goodwill and intangibles and allowance for doubtful accounts. The Company estimates a cost accrual every quarter that represents costs incurred but not invoiced for services performed or goods delivered during the period, and estimates revenue from the contract cost portion of these accruals based on current gross margin rates to be consistent with its cost method of revenue recognition. As of June 30, 2024 and December 31, 2023, the Company had recognized revenues of $ 92.8 million and $ 76.5 million, respectively, related to large change orders and/or claims that had been included as contract price adjustments on certain contracts, some of which are multi-year projects. These change orders and/or claims are in the process of being negotiated in the normal course of business, and a portion of these recognized revenues had been included in multiple periods. The cost-to-cost method of accounting requires the Company to make estimates about the expected revenue and gross profit on each of its contracts in process. During the three months ended June 30, 2024, changes in estimates pertaining to certain projects decreased consolidated gross margin by 7.2 %, which resulted in decreases in operating income (loss) of $ 59.7 million, net income (loss) of $ 40.2 million and diluted earnings per common share of $ 2.39 . During the six months ended June 30, 2024, changes in estimates pertaining to certain projects decreased consolidated gross margin by 4.2 % and resulted in decreases in operating income of $ 68.4 million, net income of $ 46.1 million and diluted earnings per common share of $ 2.74 . Additional discussion on the impact of these estimate changes can be found in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Consolidated Results of Operations.” During the three months ended June 30, 2023, changes in estimates pertaining to certain projects decreased consolidated gross margin by 1.3 %, which resulted in decreases in operating income of $ 11.5 million, net income of $ 8.0 million and diluted earnings per common share of $ 0.48 . During the six months ended June 30, 2023, changes in estimates pertaining to certain projects decreased consolidated gross margin by 1.0 % and resulted in decreases in operating income of $ 17.8 million, net income of $ 12.4 million and diluted earnings per common share of $ 0.74 . 7 Table of Contents Recent Accounting Pronouncements Changes to U.S. GAAP are typically established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs. The Company, based on its assessment, determined that any recently issued or proposed ASUs not listed below are either not applicable to the Company or will have minimal impact on its financial statements when adopted. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant reportable segment expenses and other disclosure requirements. The update is effective for annual reporting periods beginning after December 15, 2023, with early adoption permitted. The guidance requires application on a retrospective basis. The Company is currently evaluating the impact of the new standard on its consolidated financial statements and disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The guidance also includes certain other amendments intended to improve the effectiveness of income tax disclosures. The update is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The amendments in this pronouncement should be applied on a prospective basis, with the option to apply them retrospectively. The Company is currently evaluating the impact of the new standard on the Company’s income tax disclosures. 2. Contract Assets and Liabilities Contracts with customers usually stipulate the timing of payment, which is defined by the terms found within the various contracts under which work was performed during the period. Therefore, contract assets and liabilities are created when the timing of costs incurred on work performed does not coincide with the billing terms. These contracts frequently include retention provisions contained in each contract. The Company’s consolidated balance sheets present contract assets, which contain unbilled revenue and contract retainages associated with contract work that has been completed and billed but not paid by customers, pursuant to retainage provisions, that are generally due once the job is completed and approved. The allowance for doubtful accounts associated with contract assets was $ 0.6 million as of June 30, 2024 and December 31, 2023. Contract assets consisted of the following: (in thousands) June 30, 2024 December 31, 2023 Change Unbilled revenue, net $ 189,354 $ 217,083 $ ( 27,729 ) Contract retainages, net 212,947 203,533 9,414 Contract assets, net $ 402,301 $ 420,616 $ ( 18,315 ) The Company’s consolidated balance sheets present contract liabilities that contain deferred revenue and an accrual for contracts in a loss provision. Contract liabilities consisted of the following: (in thousands) June 30, 2024 December 31, 2023 Change Deferred revenue $ 243,710 $ 231,604 $ 12,106 Accrued loss provision 12,912 8,807 4,105 Contract liabilities $ 256,622 $ 240,411 $ 16,211 8 Table of Contents The following table provides information about contract assets and contract liabilities from contracts with customers: (in thousands) June 30, 2024 December 31, 2023 Change Contract assets, net $ 402,301 $ 420,616 $ ( 18,315 ) Contract liabilities ( 256,622 ) ( 240,411 ) ( 16,211 ) Net contract assets $ 145,679 $ 180,205 $ ( 34,526 ) The difference between the opening and closing balances of the Company’s contract assets and contract liabilities primarily results from the timing of the Company’s billings in relation to its performance of work. The amounts of revenue recognized in the period that were included in the opening contract liability balances were $ 57.8 million and $ 99.7 million for the three and six months ended June 30, 2024. The amounts of revenue recognized in the period that were included in the opening contract liability balances were $ 17.3 million and $ 107.0 million for the three and six months ended June 30, 2023, respectively. This revenue consists primarily of work performed on previous billings to customers. The net asset position for contracts in process consisted of the following: (in thousands) June 30, 2024 December 31, 2023 Costs and estimated earnings on uncompleted contracts $ 6,793,525 $ 6,716,990 Less: billings to date 6,847,881 6,731,511 $ ( 54,356 ) $ ( 14,521 ) The net asset position for contracts in process is included within the contract asset and contract liability in the accompanying consolidated balance sheets as follows: (in thousands) June 30, 2024 December 31, 2023 Unbilled revenue $ 189,354 $ 217,083 Deferred revenue ( 243,710 ) ( 231,604 ) $ ( 54,356 ) $ ( 14,521 ) 3. Lease Obligations From time to time, the Company enters into non-cancelable leases for some of our facility, vehicle and equipment needs. These leases allow the Company to conserve cash by paying a monthly lease rental fee for the use of facilities, vehicles and equipment rather than purchasing them. The Company’s leases have remaining terms ranging from one to nine years , some of which may include options to extend the leases for up to ten years , and some of which may include options to terminate the leases within one year . Currently, all the Company’s leases contain fixed payment terms. The Company may decide to cancel or terminate a lease before the end of its term, in which case we are typically liable to the lessor for the remaining lease payments under the term of the lease. Additionally, all of the Company's month-to-month leases are cancelable, by the Company or the lessor, at any time and are not included in our right-of-use asset or liability. At June 30, 2024, the Company had several leases with residual value guarantees. Typically, the Company has purchase options on the equipment underlying its long-term leases and many of its short-term rental arrangements. The Company may exercise some of these purchase options when the need for equipment is ongoing and the purchase option price is attractive. Leases are accounted for as operating or finance leases, depending on the terms of the lease. 9 Table of Contents The following is a summary of the lease-related assets and liabilities recorded: June 30, 2024 December 31, 2023 (in thousands) Classification on the Consolidated Balance Sheet Assets Operating lease right-of-use assets Operating lease right-of-use assets $ 40,396 $ 35,012 Finance lease right-of-use assets Property and equipment, net of accumulated depreciation 4,069 2,363 Total right-of-use lease assets $ 44,465 $ 37,375 Liabilities Current Operating lease obligations Current portion of operating lease obligations $ 10,472 $ 9,237 Finance lease obligations Current portion of finance lease obligations 2,168 2,039 Total current obligations 12,640 11,276 Non-current Operating lease obligations Operating lease obligations, net of current maturities 29,897 25,775 Finance lease obligations Finance lease obligations, net of current maturities 1,645 314 Total non-current obligations 31,542 26,089 Total lease obligations $ 44,182 $ 37,365 The following is a summary of the lease terms and discount rates: June 30, 2024 December 31, 2023 Weighted-average remaining lease term - finance leases 3.4 years 0.9 years Weighted-average remaining lease term - operating leases 3.9 years 4.0 years Weighted-average discount rate - finance leases 3.8 % 3.1 % Weighted-average discount rate - operating leases 4.0 % 4.0 % The following is a summary of certain information related to the lease costs for finance and operating leases: (in thousands) Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Lease cost: Finance lease cost: Amortization of right-of-use assets $ 233 $ 266 $ 432 $ 534 Interest on lease liabilities 22 22 39 45 Operating lease cost 3,764 3,558 7,478 7,148 Variable lease costs 91 83 184 172 Total lease cost $ 4,110 $ 3,929 $ 8,133 $ 7,899 10 Table of Contents The following is a summary of other information and supplemental cash flow information related to finance and operating leases: Six months ended June 30, (in thousands) 2024 2023 Other information: Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 7,195 $ 7,259 Right-of-use asset obtained in exchange for new operating lease obligations $ 9,958 $ 3,366 Right-of-use asset obtained in exchange for new finance lease obligations $ 2,255 $ — The future undiscounted minimum lease payments, as reconciled to the discounted minimum lease obligation indicated on the Company’s consolidated balance sheets, under financial leases, less interest, and under operating leases, less imputed interest, as of June 30, 2024 were as follows: (in thousands) Finance Lease Obligations Operating Lease Obligations Total Lease Obligations Remainder of 2024 $ 1,768 $ 7,358 $ 9,126 2025 870 13,650 14,520 2026 560 11,092 11,652 2027 560 6,286 6,846 2028 233 4,888 5,121 2029 — 2,966 2,966 Thereafter — 883 883 Total minimum lease payments 3,991 47,123 51,114 Financing component ( 178 ) ( 6,754 ) ( 6,932 ) Net present value of minimum lease payments 3,813 40,369 44,182 Less: current portion of finance and operating lease obligations ( 2,168 ) ( 10,472 ) ( 12,640 ) Long-term finance and operating lease obligations $ 1,645 $ 29,897 $ 31,542 The financing component for finance lease obligations represents the interest component of finance leases that will be recognized as interest expense in future periods. The financing component for operating lease obligations represents the effect of discounting the lease payments to their present value. Certain subsidiaries of the Company have operating leases for facilities from third party companies that are owned, in whole or part, by employees of the subsidiaries. The terms and rental rates of these leases are at or below market rental rates. Lease expense associated with these leases was $ 0.6 million and $ 1.3 million for the three and six months ended June 30, 2024 and $ 0.6 million and $ 1.2 million for the three and six months ended 2023. As of June 30, 2024, the minimum lease payments required under these leases totaled $ 11.4 million, which are due over the next 5.2 years. 4. Fair Value Measurements The Company uses the three-tier hierarchy of fair value measurement, which prioritizes the inputs used in measuring fair value based upon their degree of availability in external active markets. These tiers include: Level 1 (the highest priority), defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 (the lowest priority), defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. 11 Table of Contents As of June 30, 2024 and December 31, 2023, the Company determined that the carrying value of cash and cash equivalents approximated fair value based on Level 1 inputs. As of June 30, 2024 and December 31, 2023, the fair value of the Company’s long-term debt and finance lease obligations was based on Level 2 inputs. The Company’s long-term debt was based on variable and fixed interest rates at June 30, 2024 and December 31, 2023, for new issues with similar remaining maturities, and approximated carrying value. In addition, based on borrowing rates currently available to the Company for borrowings with similar terms, the carrying value of the Company’s finance lease obligations also approximated fair value. As of June 30, 2024, the fair value of the Company’s contingent earn-out consideration liability associated with the acquisition of Powerline Plus Ltd. and its affiliate PLP Redimix Ltd. (collectively, the “Powerline Plus Companies") on January 4, 2022, was based on Level 3 inputs. The contingent earn-out consideration recorded represents the estimated fair value of future amounts potentially payable to the former owners of the acquired Powerline Plus Companies, if the Powerline Plus Companies achieve certain performance targets over a three-year post-acquisition period. The fair value was initially determined using a Monte Carlo simulation valuation methodology based on probability-weighted performance projections and other inputs, including a discount rate and an expected volatility factor. The fair value of this contingent earn-out consideration liability will be evaluated on an ongoing basis by management. Accordingly, the level of inputs used for these fair value measurements is the lowest level (Level 3). Significant changes in any of these assumptions could result in a significantly higher or lower potential liability. As of the acquisition date, the fair value of the contingent earn-out consideration was $ 0.9 million. As of June 30, 2024 and December 31, 2023, the fair value of the contingent earn-out consideration was zero . The future payout of the contingent earn-out consideration, if any, is unlimited and could be significantly higher than the acquisition date fair value. If the minimum thresholds of the performance targets are achieved the contingent earn-out consideration payment will be approximately $ 16.4 million. There were no changes in contingent earn-out consideration during the three and six months ended June 30, 2024 and 2023. Any changes in contingent earn-out consideration are recorded in other income. 5. Debt The table below reflects the Company’s total debt, including borrowings under its credit agreement and master loan agreements for equipment notes: (dollar amounts in thousands) Inception Date Stated Interest Rate (per annum) Payment Frequency Term (years) Outstanding Balance as of June 30, 2024 Outstanding Balance as of December 31, 2023 Credit Agreement Revolving loans 5/31/2023 Variable Variable 5 $ 24,620 $ 13,201 Equipment Notes Equipment Note 8 12/27/2019 2.75 % Semi-annual 5 2,345 2,871 Equipment Note 10 8/26/2022 4.32 % Semi-annual 5 18,063 20,125 Other equipment note 4/11/2022 4.55 % Monthly 5 37 44 20,445 23,040 Total debt 45,065 36,241 Less: current portion of long-term debt ( 6,617 ) ( 7,053 ) Long-term debt $ 38,448 $ 29,188 12 Table of Contents Credit Agreement On May 31, 2023, the Company entered into a five-year third amended and restated credit agreement (the “Credit Agreement”) with a syndicate of banks led by JPMorgan Chase Bank, N.A. and Bank of America, N.A. that provides for a $ 490 million revolving credit facility (the “Facility”), subject to certain financial covenants as defined in the Credit Agreement. The Facility allows for revolving loans in Canadian dollars and other non-US currencies, up to the U.S. dollar equivalent of $ 150 million. Up to $ 75 million of the Facility may be used for letters of credit, with an additional $ 75 million available for letters of credit, subject to the sole discretion of each issuing bank. The Facility also allows for $ 15 million to be used for swingline loans. The Company has an expansion option to increase the commitments under the Facility or enter into incremental term loans, subject to certain conditions, by up to an additional $ 200 million upon receipt of additional commitments from new or existing lenders. Subject to certain exceptions, the Facility is secured by substantially all of the assets of the Company and its domestic subsidiaries, and by a pledge of substantially all of the capital stock of the Company’s domestic subsidiaries and 65 % of the capital stock of the direct foreign subsidiaries of the Company. Additionally, subject to certain exceptions, the Company’s domestic subsidiaries also guarantee the repayment of all amounts due under the Credit Agreement. The Credit Agreement provides for customary events of default. If an event of default occurs and is continuing, on the terms and subject to the conditions set forth in the Credit Agreement, amounts outstanding under the Facility may be accelerated and may become or be declared immediately due and payable. Borrowings under the Credit Agreement are used to refinance existing indebtedness, and to provide for future working capital, capital expenditures, acquisitions and other general corporate purposes. Amounts borrowed under the Credit Agreement bear interest, at the Company’s option, at a rate equal to either (1) the Alternate Base Rate (as defined in the Credit Agreement), plus an applicable margin ranging from 0.25 % to 1.00 %; or (2) the Term Benchmark Rate (as defined in the Credit Agreement) plus an applicable margin ranging from 1.25 % to 2.00 %. The applicable margin is determined based on the Company’s Net Leverage Ratio (as defined in the Credit Agreement). Letters of credit issued under the Facility are subject to a letter of credit fee of 1.25 % to 2.00 % for non-performance letters of credit or 0.625 % to 1.00 % for performance letters of credit, based on the Company’s Net Leverage Ratio. The Company is subject to a commitment fee of 0.20 % to 0.30 %, based on the Company’s Net Leverage Ratio, on any unused portion of the Facility. The Credit Agreement restricts certain types of payments when the Company’s Net Leverage Ratio, after giving pro forma effect thereto, exceeds 2.75 . The weighted average interest rate on borrowings outstanding on the Facility for the six months ended June 30, 2024, was 7.30 % per annum. Under the Credit Agreement, the Company is subject to certain financial covenants including a maximum Net Leverage Ratio of 3.0 and a minimum Interest Coverage Ratio (as defined in the Credit Agreement) of 3.0 . The Credit Agreement also contains covenants including limitations on asset sales, investments, indebtedness and liens. The Company was in compliance with all of its financial covenants under the Credit Agreement as of June 30, 2024. As of June 30, 2024, the Company had $ 24.6 million of borrowings outstanding under the Facility and letters of credit outstanding under the Facility of $ 38.1 million, including $ 27.1 million related to the Company's payment obligation under its insurance programs and $ 11.0 million related to contract performance obligations. As of December 31, 2023, the Company had $ 13.2 million of borrowings outstanding under the Facility and letters of credit outstanding under the Facility of $ 34.4 million, including $ 27.1 million related to the Company's payment obligation under its insurance programs and $ 7.3 million related to contract performance obligations. The Company had remaining deferred debt issuance costs totaling $ 2.0 million as of June 30, 2024, related to the line of credit. As permitted, debt issuance costs have been deferred and are presented as an asset within other assets, which is amortized as interest expense over the term of the line of credit. Equipment Notes The Company has entered into Master Equipment Loan and Security Agreements (the “Master Loan Agreements”) with multiple finance companies. The Master Loan Agreements may be used for the financing of equipment between the Company and the lenders pursuant to one or more equipment notes ("Equipment Note"). Each Equipment Note executed under the Master Loan Agreements constitutes a separate, distinct and independent financing of equipment and a contractual obligation of the Company, which may contain prepayment clauses. 13 Table of Contents As of June 30, 2024, the Company had two Equipment Notes outstanding under the Master Loan Agreements that are collateralized by equipment and vehicles owned by the Company. As of June 30, 2024, the Company had one other equipment note outstanding that is collateralized by a vehicle owned by the Company. The following table sets forth our remaining principal payments for all of the Company’s outstanding equipment notes as of June 30, 2024: (in thousands) Future Equipment Notes Principal Payments Remainder of 2024 $ 4,458 2025 4,364 2026 4,554 2027 7,069 2028 — 2029 — Total future principal payments 20,445 Less: current portion of equipment notes ( 6,617 ) Long-term principal obligations $ 13,828 6. Revenue Recognition Disaggregation of Revenue A majority of the Company’s revenues are earned through contracts with customers that normally provide for payment upon completion of specified work or units of work as identified in the contract. Although there is considerable variation in the terms of these contracts, they are primarily structured as fixed-price contracts, under which the Company agrees to perform a defined scope of a project for a fixed amount, or unit-price contracts, under which the Company agrees to do the work at a fixed price per unit of work as specified in the contract. The Company also enters into time-and-equipment and time-and-materials contracts under which the Company is paid for labor and equipment at negotiated hourly billing rates and for other expenses, including materials, as incurred at rates agreed to in the contract. Finally, the Company sometimes enters into cost-plus contracts, where the Company is paid for costs plus a negotiated margin. On occasion, time-and-equipment, time-and-materials and cost-plus contracts require the Company to include a guarantee not-to-exceed a maximum price. Historically, fixed-price and unit-price contracts have had the highest potential margins; however, they have had a greater risk in terms of profitability because cost overruns may not be recoverable. Time-and-equipment, time-and-materials and cost-plus contracts have historically had less margin upside, but generally have had a lower risk of cost overruns. The Company also provides services under master service agreements (“MSAs”) and other variable-term service agreements. MSAs normally cover maintenance, upgrade and extension services, as well as new construction. Work performed under MSAs is typically billed on a unit-price, time-and-materials or time-and-equipment basis. MSAs are typically one to three years in duration; however, most of the Company’s contracts, including MSAs, may be terminated by the customer on short notice, typically 30 to 90 days, even if the Company is not in default under the contract. Under MSAs, customers generally agree to use the Company for certain services in a specified geographic region. Most MSAs include no obligation for the contract counterparty to assign specific volumes of work to the Company and do not require the counterparty to use the Company exclusively, although in some cases the MSA contract gives the Company a right of first refusal for certain work. Additional information related to the Company’s market types is provided in Note 10–Segment Information. 14 Table of Contents The components of the Company’s revenue by contract type for the three months ended June 30, 2024 and 2023 were as follows: Three months ended June 30, 2024 T&D C&I Total (dollars in thousands) Amount Percent Amount Percent Amount Percent Fixed price $ 214,882 46.9 % $ 306,679 82.7 % $ 521,561 62.9 % Unit price 138,127 30.1 18,803 5.1 156,930 18.9 T&E 105,200 23.0 45,199 12.2 150,399 18.2 $ 458,209 100.0 % $ 370,681 100.0 % $ 828,890 100.0 % Three months ended June 30, 2023 T&D C&I Total (dollars in thousands) Amount Percent Amount Percent Amount Percent Fixed price $ 261,348 51.9 % $ 313,409 81.4 % $ 574,757 64.7 % Unit price 139,929 27.8 23,558 6.1 163,487 18.4 T&E 102,460 20.3 47,912 12.5 150,372 16.9 $ 503,737 100.0 % $ 384,879 100.0 % $ 888,616 100.0 % The components of the Company’s revenue by contract type for the six months ended June 30, 2024 and 2023 were as follows: Six months ended June 30, 2024 T&D C&I Total (dollars in thousands) Amount Percent Amount Percent Amount Percent Fixed price $ 457,882 48.3 % $ 571,479 82.1 % $ 1,029,361 62.6 % Unit price 274,252 28.9 35,139 5.1 309,391 18.8 T&E 216,470 22.8 89,230 12.8 305,700 18.6 $ 948,604 100.0 % $ 695,848 100.0 % $ 1,644,452 100.0 % Six months ended June 30, 2023 T&D C&I Total (dollars in thousands) Amount Percent Amount Percent Amount Percent Fixed price $ 490,582 51.7 % $ 619,030 82.4 % $ 1,109,612 65.3 % Unit price 253,637 26.7 41,200 5.5 294,837 17.3 T&E 204,841 21.6 90,942 12.1 295,783 17.4 $ 949,060 100.0 % $ 751,172 100.0 % $ 1,700,232 100.0 % The components of the Company’s revenue by market type for the three months ended June 30, 2024 and 2023 were as follows: Three months ended June 30, 2024 Three months ended June 30, 2023 (dollars in thousands) Amount Percent Segment Amount Percent Segment Transmission $ 282,488 34.1 % T&D $ 322,272 36.3 % T&D Distribution 175,721 21.2 T&D 181,465 20.4 T&D Electrical construction 370,681 44.7 C&I 384,879 43.3 C&I Total revenue $ 828,890 100.0 % $ 888,616 100.0 % 15 Table of Contents The components of the Company’s revenue by market type for the six months ended June 30, 2024 and 2023 were as follows: Six months ended June 30, 2024 Six months ended June 30, 2023 (dollars in thousands) Amount Percent Segment Amount Percent Segment Transmission $ 596,414 36.3 % T&D $ 620,370 36.5 % T&D Distribution 352,190 21.4 T&D 328,690 19.3 T&D Electrical construction 695,848 42.3 C&I 751,172 44.2 C&I Total revenue $ 1,644,452 100.0 % $ 1,700,232 100.0 % Remaining Performance Obligations As of June 30, 2024, the Company had $ 2.34 billion of remaining performance obligations. The Company’s remaining performance obligations include projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions. The timing of when remaining performance obligations are recognized is evaluated quarterly and is largely driven by the estimated start date and duration of the underlying projects. The following table summarizes the amount of remaining performance obligations as of June 30, 2024 that the Company expects to be realized and the amount of the remaining performance obligations that the Company reasonably estimates will be recognized within the next twelve months, and the amount estimated to be recognized after the next twelve months. Remaining Performance Obligations at June 30, 2024 (in thousands) Total Amount estimated to be recognized within 12 months Amount estimated to be recognized after 12 months T&D $ 652,334 $ 604,209 $ 48,125 C&I 1,685,712 1,272,942 412,770 Total $ 2,338,046 $ 1,877,151 $ 460,895 The Company estimates approximately 95 % or more of the remaining performance obligations will be recognized within twenty-four months, including approximately 80 % of the remaining performance obligations estimated to be recognized within twelve months, although the timing of the Company’s performance is not always under its control. The timing of when remaining performance obligations are recognized by the Company can vary considerably and is impacted by multiple variables including, but not limited to: changes in the estimated versus actual start time of a project; the availability of labor, equipment and materials; changes in project workflow; weather; project delays and accelerations; and the timing of final contract settlements. Additionally, the difference between the remaining performance obligations and backlog is due to the exclusion of a portion of the Company’s MSAs under certain contract types from the Company’s remaining performance obligations as these contracts can be canceled for convenience at any time by the Company or the customer without considerable cost incurred by the customer. Additional information related to backlog is provided in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 7. Income Taxes The U.S. federal statutory tax rate was 21 % for each of the three and six months ended June 30, 2024 and 2023. The Company’s effective tax rate for the three and six months ended June 30, 2024 was 31.0 % and ( 281.9 %), respectively, of pretax income (loss) compared to the effective tax rate for the three and six months ended June 30, 2023 of 29.5 % and 22.6 %, respectively. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rates for the three months ended June 30, 2024 and 2023, was primarily due to state income taxes, Canadian taxes and other permanent difference items. 16 Table of Contents The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the six months ended June 30, 2024, was primarily due to lower taxes associated with a reduction in net income and a favorable impact from stock compensation excess tax benefits, partially offset by state income taxes, Canadian taxes and other permanent difference items. The difference between the U.S. federal statutory tax rate and the Company’s effective tax rate for the six months ended June 30, 2023, was primarily due to state income taxes, Canadian taxes and other permanent difference items partially offset by a favorable impact from stock compensation excess tax benefits. The Company has recorded a liability for unrecognized tax benefits of approximately $ 0.3 million and $ 0.5 million as of June 30, 2024 and December 31, 2023, respectively, which were included in other liabilities in the accompanying consolidated balance sheets. The Company’s policy is to recognize interest and penalties related to income tax liabilities as a component of income tax expense in the consolidated statements of operations. The amount of interest and penalties charged to income tax expense related to unrecognized tax benefits was no t significant for the three and six months ended June 30, 2024 and 2023. The Company is subject to taxation in various jurisdictions. The Company’s 2020 through 2022 tax returns are subject to examination by U.S. federal authorities. The Company’s tax returns are subject to examination by various state authorities for the years 2019 through 2022. 8. Commitments and Contingencies Purchase Commitments As of June 30, 2024, the Company had approximately $ 14.9 million in outstanding purchase orders for certain construction equipment, with cash payments scheduled to occur in 2024. Insurance and Claims Accruals The Company carries insurance policies, which are subject to certain deductibles and limits, for workers’ compensation, general liability, automobile liability and other insurance coverage. The deductible per occurrence for each line of coverage is up to $ 1.0 million. The Company’s health benefit plans are subject to stop-loss limits of up to $ 0.2 million for qualified individuals. Losses up to the deductible and stop-loss amounts are accrued based upon the Company’s estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported. The insurance and claims accruals are based on known facts, actuarial estimates and historical trends. While recorded accruals are based on the ultimate liability, which includes amounts in excess of the deductible, a corresponding receivable for amounts in excess of the deductible is included in current and long-term assets in the Company’s consolidated balance sheets. Performance and Payment Bonds and Parent Guarantees In certain circumstances, the Company is required to provide performance and payment bonds in connection with its future performance on certain contractual commitments. The Company has indemnified its sureties for any expenses paid out under these bonds. As of June 30, 2024, an aggregate of approximately $ 2.76 billion in original face amount of bonds issued by the Company’s sureties were outstanding. The Company estimated the remaining cost to complete these bonded projects was approximately $ 770.1 million as of June 30, 2024. From time to time, the Company guarantees the obligations of wholly owned subsidiaries, including obligations under certain contracts with customers, certain lease agreements, and, in some states, obligations in connection with obtaining contractors’ licenses. Additionally, from time to time the Company is required to post letters of credit to guarantee the obligations of wholly owned subsidiaries, which reduces the borrowing availability under the Facility. Indemnities From time to time, pursuant to its service arrangements, the Company indemnifies its customers for claims related to the services it provides under those service arrangements. These indemnification obligations may subject the Company to indemnity claims, liabilities and related litigation. The Company is not aware of any material unrecorded liabilities for asserted claims in connection with these indemnification obligations. 17 Table of Contents Collective Bargaining Agreements Most of the Company’s subsidiaries’ craft labor employees are covered by collective bargaining agreements. The agreements require the subsidiaries to pay specified wages, provide certain benefits and contribute certain amounts to multi-employer pension plans. If a subsidiary withdraws from any of the multi-employer pension plans or if the plans were to otherwise become underfunded, the subsidiary could incur liabilities for additional contributions related to these plans. Although the Company has been informed that the status of some multi-employer pension plans to which its subsidiaries contribute have been classified as “critical”, the Company is not currently aware of any potential liabilities related to this issue. Litigation and Other Legal Matters The Company is from time to time party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. The Company is routinely subject to other civil claims, litigation and arbitration, and regulatory investigations arising in the ordinary course of business. These claims, lawsuits and other proceedings include claims related to the Company’s current services and operations, as well as our historic operations. With respect to all such lawsuits, claims and proceedings, the Company records reserves when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company does not believe that any of these proceedings, separately or in the aggregate, would be expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows. 9. Stock-Based Compensation The Company maintains an equity compensation plan under which stock-based compensation has been granted: the 2017 Long-Term Incentive Plan (Amended and Restated as of April 24, 2024) (the “LTIP”). The LTIP was approved by our shareholders and provides for grants of (a) incentive stock options qualified as such under U.S. federal income tax laws, (b) stock options that do not qualify as incentive stock options, (c) stock appreciation rights, (d) restricted stock awards, (e) restricted stock units, (f) performance awards, (g) phantom stock, (h) stock bonuses, (i) dividend equivalents, or (j) any combination of such grants. The Company has outstanding grants of time-vested stock awards in the form of restricted stock units and internal metric-based and market-based performance stock units. During the six months ended June 30, 2024, the Company granted time-vested stock awards covering 40,723 shares of common stock under the LTIP, which vest ratably over three years for employee awards and after one year for non-employee director awards, at a weighted average grant date fair value of $ 171.55 . During the six months ended June 30, 2024, time-vested stock awards covering 42,554 shares of common stock vested at a weighted average grant date fair value of $ 99.52 . During the six months ended June 30, 2024, the Company granted 29,566 performance share awards under the LTIP at target, which will cliff vest, if earned, on December 31, 2026, at a weighted average grant date fair value of $ 197.89 . The number of shares ultimately earned under a performance award may vary from zero to 200 % of the target shares granted, based upon the Company’s performance compared to certain financial and other metrics. The metrics used were determined at the time of the grant by the Compensation Committee of the Board of Directors and were either based on internal measures, such as the Company’s financial performance compared to targets, or on a market-based metric, such as the Company’s stock performance compared to a peer group. Performance awards granted cliff vest following the performance period if the stated performance targets and minimum service requirements are attained and are paid in shares of the Company’s common stock. The Company recognizes stock-based compensation expense related to restricted stock units based on the grant date fair value, which was the closing price of the Company’s stock on the date of grant. The fair value is expensed over the service period, which is generally three years . 18 Table of Contents For performance awards, the Company recognizes stock-based compensation expense based on the grant date fair value of the award. The fair value of internal metric-based performance awards is determined by the closing stock price of the Company’s common stock on the date of the grant. The fair value of market-based performance awards is computed using a Monte Carlo simulation. Performance awards are expensed over the service period of approximately 2.8 years, and the Company adjusts the stock-based compensation expense related to internal metric-based performance awards according to its determination of the shares expected to vest at each reporting date. 10. Segment Information MYR Group is a holding company of specialty contractors serving electrical utility infrastructure and commercial construction markets in the United States and Canada. The Company has two reporting segments, each a separate operating segment, which are referred to as T&D and C&I. Performance measurement and resource allocation for the reporting segments are based on many factors. The primary financial measures used to evaluate the segment information are contract revenues and income (loss) from operations, excluding general corporate expenses. General corporate expenses include corporate facility and staffing costs, which include safety costs, professional fees, IT expenses and management fees. The accounting policies of the segments are the same as those described in the Note 1–Organization, Business and Significant Accounting Policies to the 2023 Annual Report. Transmission and Distribution: The T&D segment provides a broad range of services on electric transmission and distribution networks and substation facilities which include design, engineering, procurement, construction, upgrade, maintenance and repair services with a particular focus on construction, maintenance and repair. T&D services include the construction and maintenance of high voltage transmission lines, substations and lower voltage underground and overhead distribution systems, clean energy projects and electric vehicle charging infrastructure. The T&D segment also provides emergency restoration services. T&D customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. Commercial and Industrial: The C&I segment provides services such as the design, installation, maintenance and repair of commercial and industrial wiring, the installation of intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure. Typical C&I contracts cover electrical contracting services for airports, hospitals, data centers, hotels, stadiums, commercial and industrial facilities, clean energy projects, manufacturing plants, processing facilities, water/waste-water treatment facilities, mining facilities, and transportation control and management systems. The C&I segment generally provides electric construction and maintenance services as a subcontractor to general contractors in the C&I industry, but also contracts directly with facility owners. The C&I segment has a diverse customer base with many long-standing relationships. The information in the following table is derived from the segment’s internal financial reports used for corporate management purposes: Three months ended June 30, Six months ended June 30, (in thousands) 2024 2023 2024 2023 Contract revenues: T&D $ 458,209 $ 503,737 $ 948,604 $ 949,060 C&I 370,681 384,879 695,848 751,172 $ 828,890 $ 888,616 $ 1,644,452 $ 1,700,232 Income (loss) from operations: T&D $ ( 8,300 ) $ 37,734 $ 21,536 $ 70,554 C&I 1,608 12,623 13,031 23,250 General Corporate ( 14,015 ) ( 17,919 ) ( 31,003 ) ( 33,940 ) $ ( 20,707 ) $ 32,438 $ 3,564 $ 59,864 19 Table of Contents 11. Earnings Per Share The Company computes earnings per share using the treasury stock method. Under the treasury stock method, basic earnings per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period, and diluted earnings per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period plus all potentially dilutive common stock equivalents, except in cases where the effect of the common stock equivalent would be anti-dilutive. Net income (loss) and the weighted average number of common shares used to compute basic and diluted earnings per share were as follows: Three months ended June 30, Six months ended June 30, (in thousands, except per share data) 2024 2023 2024 2023 Numerator: Net income (loss) $ ( 15,277 ) $ 22,273 $ 3,662 $ 45,436 Denominator: Weighted average common shares outstanding 16,756 16,707 16,734 16,662 Weighted average dilutive securities 53 102 86 155 Weighted average common shares outstanding, diluted 16,809 16,809 16,820 16,817 Income (loss) per common share: Basic $ ( 0.91 ) $ 1.33 $ 0.22 $ 2.73 Diluted $ ( 0.91 ) $ 1.33 $ 0.22 $ 2.70 For the three and six months ended June 30, 2024 and 2023, certain common stock equivalents were excluded from the calculation of dilutive securities because their inclusion would have been anti-dilutive. The following table summarizes the shares of common stock underlying the Company’s unvested time-vested stock awards and performance awards that were excluded from the calculation of dilutive securities: Three months ended June 30, Six months ended June 30, (in thousands) 2024 2023 2024 2023 Time-vested stock awards 36 — 36 — Performance awards 30 14 30 14 Share Repurchases During the six months ended June 30, 2024 the Company repurchased 36,397 shares of stock, for approximately $ 5.9 million, from its employees to satisfy tax obligations on shares vested under the LTIP. During the six months ended June 30, 2023 the Company repurchased 76,150 shares of stock, for approximately $ 7.9 million, from its employees to satisfy tax obligations on shares vested under the LTIP. On May 6, 2024, the Company announced that its Board of Directors had authorized a new $ 75.0 million share repurchase program (the "Repurchase Program"), which became effective on May 9, 2024. The Repurchase Program will expire on November 8, 2024, or when the authorized funds are exhausted, whichever is earlier. The Company’s prior $ 75.0 million repurchase program commenced on November 9, 2023 and expired on May 8, 2024. During the six months ended June 30, 2024, the Company repurchased 117,422 shares of its common stock under the Repurchase Program at a weighted-average price of $ 138.47 per share. As of June 30, 2024, the Company had $ 58.7 million of remaining availability to repurchase shares of the Company’s common stock under the Repurchase Program. 20 Table of Contents