Centuri Holdings, Inc.(CTRI) - 2024 Q1 - Quarterly Report

IPO and Financial Position - Centuri Group completed its IPO on April 22, 2024, selling 14,260,000 shares at an initial price of $21.00 per share, resulting in net proceeds of approximately$ 329.3 million after expenses[106]. - The company received total net proceeds of $329.3 million from the Centuri IPO, with$ 316.0 million used to pay down existing debt[154]. - As of March 31, 2024, the maximum amount outstanding on the combined credit facility was $1.117 billion, with$ 991.4 million on the term loan portion[162]. - The company amended its revolving credit facility to increase the maximum net leverage ratio to 5.75 to 1.00 through March 31, 2024[163]. Revenue and Segment Performance - Consolidated revenue for the first fiscal three months of 2024 was $528,023, a decrease of$ 125,270 or 19.2% compared to $653,293 in the same period of 2023[127]. - U.S. Gas segment revenue decreased by$ 32.8 million, or 12.6%, primarily due to unfavorable winter weather and the completion of a large project[129]. - Canadian Gas segment revenue decreased by $4.7 million, or 11.8%, attributed to a reduction in net volumes under existing MSAs[130]. - Union Electric segment revenue decreased by$ 41.8 million, or 20.3%, driven by a decline in offshore wind revenue and unfavorable winter weather conditions[131]. - Non-Union Electric segment revenue decreased by $40.0 million, or 29.3%, primarily due to a reduction in storm restoration services revenue[132]. - Revenue from Canadian operations accounted for approximately 8% of total revenue for both the fiscal three months ended March 31, 2024, and April 2, 2023[161]. Profitability and Expenses - Consolidated gross profit was$ 13,279, a decrease of $28,670 or 68.3% compared to$ 41,949 in the prior year[134]. - Selling, general and administrative expenses increased by $5.0 million, or 21.3%, due to higher strategic review and severance costs[138]. - Interest expense increased by$ 1,723, or 7.7%, primarily due to higher interest rates on variable-rate borrowings[140]. - Net loss attributable to common stock was $(25,058), an increase of$ 16,214 or 183.3% compared to $(8,844) in the prior year[127]. - For the fiscal three months ended March 31, 2024, the net loss was$ 25.2 million, compared to a net loss of $7.1 million for the same period in 2023, representing an increase in net loss of 254.8%[149]. - Adjusted EBITDA for the fiscal three months ended March 31, 2024, was$ 20.2 million, down from $49.2 million for the same period in 2023, reflecting a decrease of 58.9%[149]. - Adjusted EBITDA Margin as a percentage of revenue decreased to 3.8% for the fiscal three months ended March 31, 2024, compared to 7.5% for the same period in 2023[149]. Cash Flow and Capital Expenditures - Cash and cash equivalents decreased to$ 18.4 million as of March 31, 2024, from $33.4 million as of April 2, 2023[154]. - Net cash used in operating activities was$ 22.2 million for the fiscal three months ended March 31, 2024, compared to net cash provided of $51.9 million for the same period in 2023, a decrease of$ 74.1 million or 142.8%[158]. - Capital expenditures for the fiscal three months ended March 31, 2024, were $30.5 million, up from$ 23.2 million for the same period in 2023, an increase of 31.4%[159]. Operational Challenges and Market Position - Rising fuel, labor, and material costs have negatively impacted operations, with the company unable to fully pass these costs to customers[112]. - Inflationary pressures may impact operations, with the company attempting to recover costs through price adjustments in contracts[123]. - Seasonal demand fluctuations affect revenue, with typically lower revenue in the first quarter due to winter weather conditions[122]. - The company is positioned to benefit from increased demand for utility infrastructure services due to aging infrastructure and regulatory mandates[111]. - Centuri's services support environmental goals, including reducing methane emissions and enhancing electric infrastructure resilience[119]. - The company anticipates ongoing separation-related costs through at least fiscal year 2025 following its separation from Southwest Gas Holdings[108]. - The company has taken steps to secure equipment availability, mitigating potential disruptions in service delivery[115].