Financial Performance - Total revenue for the fiscal year ended December 29, 2024, was 2,899,276,000 in the previous year[371]. - Gross profit for the fiscal year was 273,442,000, reflecting a gross margin of 8.4% compared to 9.4% in the prior year[371]. - The net loss attributable to common stock for the fiscal year was 186,176,000 in the previous year[374]. - Basic loss per share attributable to common stock was 2.60 per share in the prior year[371]. - Cash flows from operating activities generated 167,465,000 in the previous year[377]. - Capital expenditures for the fiscal year were 106,650,000 in the previous year[377]. - The company reported a comprehensive loss of 183,707,000 in the previous year[374]. - Cash and cash equivalents at the end of the period increased to 33,407,000 at the beginning of the period[377]. - The company recognized a goodwill impairment of 214.0 million during the fiscal year ended December 31, 2023, related to the write-down of goodwill from the August 2021 acquisition of Riggs Distler[142]. - The company faces potential liability for warranty claims and faulty engineering, which may reduce profitability[160]. - Warranty claims have historically not been material, but there is a risk of increased claims that could adversely affect results of operations and cash flows[160]. - The company may be subject to contingent tax liabilities of Southwest Gas Holdings following a Distribution, which could be substantial[187]. - The Separation Agreement includes indemnification obligations that could result in substantial liabilities for the company[192]. Market and Economic Conditions - Increased inflation has led to higher operating expenses, particularly in fuel, labor, and materials, adversely impacting profitability and cash flows[145]. - The company has experienced pressures on construction costs due to inflation, which may continue to affect project completion and profitability[146]. - Unfavorable economic conditions, including inflation and supply chain disruptions, could reduce demand for the company's services[150]. - The natural gas market's volatility, influenced by global events and legislative changes, may affect customer investment decisions and project timelines[151]. - Climate change-related events and extreme weather conditions could significantly impact the company's operations and financial results[153]. Regulatory and Compliance Risks - The company is subject to numerous environmental laws, and failure to comply could result in significant liabilities and operational impacts[168]. - Compliance with OSHA regulations incurs significant costs, and non-compliance may lead to penalties and operational delays[166]. - Regulatory constraints and budgetary limitations of customers, primarily regulated utilities, could materially impact the volume of work awarded to the company[148]. - Regulatory changes affecting natural gas and electric transmission could impact demand for the company's services and profitability[162]. - Legislative actions regarding greenhouse gas emissions could increase operational costs and impact pricing strategies[172]. - Changes in renewable energy mandates could reduce project development and impact the company's growth potential[165]. Ownership and Corporate Governance - Southwest Gas Holdings owns approximately 81% of the company's outstanding common stock, controlling significant corporate decisions[174]. - The concentrated ownership by Southwest Gas Holdings may delay or prevent favorable acquisition attempts, affecting stock price[174]. - The company is classified as a "controlled company" under NYSE rules, allowing it to qualify for exemptions from certain corporate governance requirements[188]. - The company may face challenges in negotiating terms with Southwest Gas Holdings that are as favorable as those with unaffiliated third parties[178]. - The company is subject to restrictions on actions, including issuing additional equity, until a Distribution is implemented or abandoned to avoid significant tax-related liabilities[180]. Transition and Separation - The Separation is intended to allow the company to focus on its distinct operating priorities and strategies, enhancing long-term growth opportunities[194]. - The expected benefits of the Separation may not be fully realized, potentially affecting the company's financial condition and operating results[194]. - The company may incur higher costs for certain functions previously performed by Southwest Gas Holdings, which could decrease profitability[194]. - The transition to being a separate publicly traded company may incur significant costs, including accounting, tax, and legal expenses[199]. - The company may face challenges in achieving the anticipated benefits of the Separation from Southwest Gas Holdings[199]. Revenue and Contracts - Revenue from unit-priced contracts for the year ended December 29, 2024 was 539.5 million[363]. - Master services agreements revenue decreased to 2,388.7 million in 2023, representing a decline of 11.2%[453]. - The aggregate amount of transaction price allocated to unsatisfied performance obligations for fixed-price contracts was 2,074.4 million, a decrease from 1,514.2 million, down from 555.6 million as of December 29, 2024, compared to 30.0 million as of December 29, 2024, from 281.4 million as of December 29, 2024, from $347.5 million in 2023[459]. Employee and Organizational Changes - Approximately 59% of the Company's employees were covered by collective bargaining agreements as of December 29, 2024[445]. - The Company underwent a reorganization in January 2024, realigning its reportable segments from two to four[460].
Centuri Holdings, Inc.(CTRI) - 2024 Q4 - Annual Report