8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

August 7, 2014

Date of Report (Date of earliest event reported)

Primoris Services Corporation

(Exact name of Registrant as specified in its charter)

Delaware	001-34145	20-4743916
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer
of incorporation)		Identification No.)

2100 McKinney Avenue, Suite 1500, Dallas, Texas 75201

(Address of principal executive offices)

(Zip Code)

(214) 740-5600

Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On August 7, 2014, Primoris Services Corporation, a Delaware corporation (“Primoris”, the “Company”) issued a press release announcing its financial performance for the year and second quarter ended June 30, 2014.

The information contained in the press release attached hereto is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, and shall not be deemed incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 8.01 Other Events.

Declaration of Cash Dividend to Stockholders

On August 5, 2014, the Board of Directors declared a cash dividend of $0.04 per common share for stockholders of record as of September 30, 2014, payable on or about October 15, 2014.

Item 9.01.Financial Statements and Exhibits.

(d)   Exhibits.

Exhibit No.	Description
99.1	Press Release dated August 7, 2014

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PRIMORIS SERVICES CORPORATION
Dated: August 8, 2014	By:	/s/ Peter J. Moerbeek
		Peter J. Moerbeek
		Executive Vice President, Chief Financial Officer

3

EX-99.1

Exhibit 99.1

PRIMORIS SERVICES CORPORATION ANNOUNCES 2014 SECOND QUARTER FINANCIAL RESULTS

BOARD OF DIRECTORS INCREASES QUARTERLY CASH DIVIDEND BY 14%

Q2 2014 Financial Highlights

·Revenue of $515 million in the second quarter of 2014 compared to $470 million in the first quarter of 2014

·Net income attributable to Primoris of $16.0 million, or $0.31 per diluted share, in the second quarter of 2014 compared to $0.21 in the first quarter of 2014

·At June 30, 2014:

·$162 million in cash, cash equivalents and short-term investments

·Total backlog of $1.83 billion

Dallas, TX — August 7, 2014— Primoris Services Corporation (NASDAQ GS: PRIM) (“Primoris” or “Company”) today announced financial results for its second quarter ended June 30, 2014.

The Company also announced that on August 5, 2014, the Board of Directors authorized a 14.3% increase in the quarterly cash dividend to $0.04 per share from $0.035 per share.  The cash dividend will be paid to stockholders of record on September 30, 2014 and is payable on or about October 15, 2014.

Brian Pratt, Chairman, President and Chief Executive Officer of Primoris commented, “We had a solid second quarter, with strong revenue growth in several of our end markets, especially our operations on the Gulf Coast.  Our revenue growth was accompanied by increased gross margin, operating income and net income compared to last quarter, and I am expecting our traditionally strong second half of the year.

Mr. Pratt continued, “Environmental constraints, such as a longer permitting process, continue to affect the energy business and have delayed a significant number of our projects.  The tailwinds driving our business remain strong, and the abundance of shale gas and its impact is driving the need for new energy and petrochemical infrastructure. Our business units continue to be preferred providers of the services our customers need to facilitate their growth.  The opportunities are there, and we will make the most of them.”

2014 SECOND QUARTER RESULTS OVERVIEW

Revenue for the 2014 second quarter increased by 15.8% to $515.3 million, compared to the same period last year.  Revenue increased by $102.7 million in the East Construction Services segment and $1.4 million in the Engineering segment and decreased by $33.8 million in the West Construction Services segment.

From an end-market perspective for the three months ended June 30, 2014, compared to the second quarter 2013, our industrial business increased by $63.0 million, our heavy civil work increased by $16.5 million, and our engineering business increased by $1.4 million.  Our other end-market (primarily our parking structures business) decreased by $6.2 million.

Gross profit increased by $1.7 million, or 2.8%, compared to the same period last year.  A reduction in gross profit as a percentage of revenues from the second quarter of 2013 to the second quarter of 2014 reduced the benefit of the increased revenue.  The primary reason for the reduction in the gross profit as a percentage of revenues was the increase in revenue in the East, which are traditionally lower-margin revenues than in the West.

SEGMENT RESULTS

·East Construction Services — The East Construction Services segment includes the James Construction Group (“JCG”) and Primoris Energy Services (“PES”) construction business, located primarily in the southeastern United States and in the Gulf Coast region of the United States.  The operations of Cardinal Contractors, Inc. and BW Primoris are included in this segment.

·West Construction Services — The West Construction Services segment includes the construction services performed by ARB, Inc., ARB Structures, Inc., Rockford, Q3 Contracting, Inc., and Vadnais, acquired in June 2014.  Most of the entities perform work primarily in California; however, Rockford operates throughout the Unites States and Q3C operates in the upper Midwest United States.  The segment also includes the operations of the Blythe Power Constructors joint venture.

·Engineering — The Engineering segment includes the results of OnQuest, Inc. and OnQuest Canada, ULC.

Segment Revenues

(in thousands, except %)

	For the three months ended June 30,
	2014Unaudited				2013Unaudited
			% of				% of
			Segment				Segment
Segment	Revenue		Revenue		Revenue		Revenue
East Construction Services	$	278,066	54.0	%	$	175,398	39.4	%
West Construction Services	224,391		43.5	%	258,194		58.0	%
Engineering	12,834		2.5	%	11,421		2.6	%
Total	$	515,291	100.0	%	$	445,013	100.0	%

	For the six months ended June 30,
	2014Unaudited				2013Unaudited
			% of				% of
			Segment				Segment
Segment	Revenue		Revenue		Revenue		Revenue
East Construction Services	$	501,138	50.9	%	$	365,609	42.8	%
West Construction Services	458,417		46.5	%	465,880		54.4	%
Engineering	25,810		2.6	%	23,519		2.8	%
Total	$	985,365	100.0	%	$	855,008	100.0	%

Segment Gross Margin

(in thousands, except %)

	For the three months ended June 30,
	2014Unaudited				2013Unaudited
			% of				% of
	Gross		Segment		Gross		Segment
Segment	Profit		Revenue		Profit		Revenue
East Construction Services	$	21,309	7.7	%	$	15,215	8.7	%
West Construction Services	37,809		16.9	%	41,926		16.2	%
Engineering	2,076		16.2	%	2,396		21.0	%
Total	$	61,194	10.6	%	$	59,537	13.4	%

	For the six months ended June 30,
	2014Unaudited				2013Unaudited
			% of				% of
	Gross		Segment		Gross		Segment
Segment	Profit		Revenue		Profit		Revenue
East Construction Services	$	37,325	7.5	%	$	30,210	8.3	%
West Construction Services	69,483		15.2	%	70,675		15.2	%
Engineering	4,143		16.1	%	4,748		20.2	%
Total	$	110,951	11.3	%	$	105,633	12.4	%

East Construction Services:  Revenue increased by $102.7 million in the 2014 second quarter compared to the same period last year.  Revenue at the PES Sprint Pipeline division increased by $30.4 million from pipeline projects in south Texas, and at the PES James Industrial Contractors division revenue increased by $50.0 million from petrochemical projects in Louisiana and Texas.  Revenue for the PES Saxon Construction division increased by $3.1 million as a result of a petrochemical project in Texas.  JCG’s Heavy Civil division revenue increased by $17.2 million as increases of $23.0 million from TXDOT projects and $7.5 million from Mississippi projects were offset by a decrease of $13.3 million from LADOT projects.  Revenue at the JCG Infrastructure & Maintenance division increased by $2.0 million.  Gross profit increased by $6.1 million in the 2014 second quarter compared to the same period last year.  The gross profit increase was primarily at the PES James Industrial Contractors division, which increased $5.0 million due to increased volume.

West Construction Services:  Revenue decreased by $33.8 million in the 2014 second quarter compared to the same period last year.  Decreases in revenue of $22.4 million at the ARB Underground division, primarily from gas utility projects, and of $34.4 million at Rockford were partially offset by increases at Q3C of $21.5 million.  Gross profit decreased by $4.1 million in the 2014 second quarter compared to the same period last year.  The decreases in gross profit at the ARB Underground division of $4.0 million and of $8.5 million at the ARB Industrial division were partially offset by a gross profit increase of $7.3 million at Q3C and at Rockford of $1.2 million.  Profit at Rockford increased, despite a decrease in revenue, due to project close-outs.

Engineering: Revenue increased by $1.4 million in the 2014 second quarter compared to the same quarter last year.  The increase is mainly due to the increase in revenue from two new LNG plant projects.  Gross profit declined by $0.3 million.  The decline results from the lower margins on the LNG plant projects associated with their beginning stages.

Selling, general and administrative expenses (“SG&A”) were $33.2 million, or 6.5% of revenue for the second quarter of 2014, compared to $31.6 million, or 7.1% of revenue for the second quarter of 2013, an increase of $1.7 million.  The increase in SG&A was primarily as a result of increased compensation and compensation-related expenses of $1.3 million and increased expenses of $0.4 million for legal, consulting and other SG&A expenses.

Operating income for the 2014 second quarter was $28.0 million, or 5.4% of total revenue, compared to $28.0 million, or 6.3% of total revenue, for the same period last year.

Net other income and expenses in the 2014 second quarter was an expense of $1.4 million, a $0.7 million decrease from net other expense of $2.1 million in the 2013 second quarter.

The provision for income taxes for the 2014 second quarter was $10.6 million, or an effective tax rate on net income attributable to Primoris of 39.9%, compared to $10.0 million, or an effective tax rate on net income attributable to Primoris of 39.1%, in the prior year quarter.

Net income attributable to Primoris for the 2014 second quarter was $16.0 million, or $0.31 per diluted share, compared to net income attributable to Primoris of $15.6 million, or $0.30 per diluted share, in the same period in 2013.

Fully diluted weighted average shares outstanding for the 2014 second quarter increased by 0.3% to 51.8 million from 51.6 million in last year’s second quarter.

OTHER FINANCIAL INFORMATION

Primoris’ balance sheet at June 30, 2014 included cash, cash equivalents, and short-term investments of $162.5 million, working capital of $226.3 million, total debt and capital leases secured by equipment of $219.9 million, and stockholders’ equity of $423.7 million.  The balance sheet included a $5.4 million liability representing the estimated fair value for unpaid earnout amounts from acquisitions.

BACKLOG

	Backlog at June 30, 2014 (in millions)
Segment	Fixed Backlog		MSA Backlog		Total Backlog
East Construction Services	$	1,079	$	91	$	1,170
West Construction Services	194		389		583
Engineering	81		—		81
Total	$	1,354	$	480	$	1,834

At June 30, 2014, Fixed Backlog was $1.35 billion, compared to $1.48 billion at December 31, 2013.  In the first six months of 2014, approximately $199.2 million of revenue was recognized by non-Fixed Backlog projects.

At June 30, 2014, MSA Backlog was $480.1 million, compared to $460.3 million at December 31, 2013.  As previously discussed, MSA Backlog includes estimated MSA revenue for the next four quarters.

Total Backlog at June 30, 2014 was $1.83 billion, compared to $1.94 billion at December 31, 2013.  We expect that during the next four quarters, we will recognize as revenue approximately 50% of the East Construction Services segment Total Backlog, approximately 93% of the West Construction Services segment Total Backlog, and approximately 40% of the Engineering segment Total Backlog.

Backlog, including estimated MSA revenues, should not be considered a comprehensive indicator of future revenue, as a portion of Primoris’ revenue is still derived from projects that are not part of backlog, including time-and-equipment, time-and-materials, and cost-reimbursable-plus-fee contracts.  Projects that are considered a part of Total Backlog may be still be cancelled by our customers.

CONFERENCE CALL

Brian Pratt, Chairman, President and Chief Executive Officer, and Peter J. Moerbeek, Executive Vice President and Chief Financial Officer will host a conference call today, Thursday, August 7 at 11:30 am Eastern Time / 10:30 am Central Time to discuss the results.

Interested parties may participate in the call by dialing:

·(877) 407-8293 (Domestic)

·(201) 689-8349 (International)

If you are unable to participate in the live call, a replay may be accessed by dialing (877) 660-6853, passcode 13587472, and will be available for approximately two weeks. The conference call will also be broadcast live over the Internet and can be accessed and replayed through the Investor Relations section of Primoris’s website at www.prim.com. Once at the Investor Relations section, please click on “Events & Presentations”.

ABOUT PRIMORIS

Founded in 1946, Primoris, through various subsidiaries, has grown to become one of the largest construction service enterprises in the United States. Serving diverse end markets, Primoris provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to major public utilities, petrochemical companies, energy companies, municipalities, and other customers. The Company’s national footprint extends from Florida, along the Gulf Coast, through California, into the Pacific Northwest and Canada.  For additional information, please visit www.prim.com.

FORWARD LOOKING STATEMENTS

This press release contains certain forward-looking statements, including with regard to the Company’s future performance. Words such as “estimated,” “believes,” “expects,” “projects,” “may,” and “future” or similar expressions are intended to identify forward-looking statements.  Forward-looking statements inherently involve known and unknown risks, uncertainties, and other factors, including without limitation, those described in this press release and those detailed in the “Risk Factors” section and other portions of our Annual Report on Form 10-K for the period ended December 31, 2013, and other filings with the Securities and Exchange Commission.  Given these uncertainties, you should not place undue reliance on forward-looking statements.  Primoris does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Company Contact
Peter J. Moerbeek	Kate Tholking
Executive Vice President, Chief Financial Officer	Director of Investor Relations
(214) 740-5602	(214) 740-5615
pmoerbeek@prim.com	ktholking@prim.com

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenue	$	515,291		$	445,013		$	985,365		$	855,008
Cost of revenue	454,097			385,476			874,414			749,375
Gross profit	61,194			59,537			110,951			105,633
Selling, general and administrative expenses	33,213			31,560			62,925			60,179
Operating income	27,981			27,977			48,026			45,454
Other income (expense):
Income (loss) from non-consolidated entities	—			(213		)	14			56
Foreign exchange gain (loss)	149			(29		)	175			(88		)
Other expense	(327		)	(377		)	(441		)	(433		)
Interest income	14			23			66			63
Interest expense	(1,196		)	(1,498		)	(2,864		)	(2,922		)
Income before provision for income taxes	26,621			25,883			44,976			42,130
Provision for income taxes	(10,618		)	(9,990		)	(17,708		)	(16,197		)
Net income	16,003			15,893			27,268			25,933
Net income attributable to noncontrolling interests	—			(329		)	(432		)	(599		)
Net income attributable to Primoris	$	16,003		$	15,564		$	26,836		$	25,334
Earnings per share:
Basic:	$	0.31		$	0.30		$	0.52		$	0.49
Diluted:	$	0.31		$	0.30		$	0.52		$	0.49
Weighted average common shares outstanding:
Basic	51,655			51,562			51,631			51,510
Diluted	51,804			51,626			51,759			51,547

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Amounts)

(Unaudited)

	June 30,			December 31,
	2014			2013
ASSETS
Current assets:
Cash and cash equivalents	$	160,177		$	196,077
Short-term investments	2,280			18,686
Customer retention deposits and restricted cash	56			5,304
Accounts receivable, net	311,321			304,955
Costs and estimated earnings in excess of billings	88,111			57,146
Inventory and uninstalled contract materials	61,230			51,829
Deferred tax assets	13,133			13,133
Prepaid expenses and other current assets	12,003			12,654
Total current assets	648,311			659,784
Property and equipment, net	245,342			226,512
Intangible assets, net	42,345			45,303
Goodwill	118,626			118,626
Other long-term assets	382			468
Total assets	$	1,055,006		$	1,050,693
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	130,575		$	127,302
Billings in excess of costs and estimated earnings	158,097			173,365
Accrued expenses and other current liabilities	93,258			91,079
Dividends payable	1,808			1,805
Current portion of capital leases	2,230			3,288
Current portion of long-term debt	30,683			28,475
Current portion of contingent earnout liabilities	5,403			5,000
Total current liabilities	422,054			430,314
Long-term capital leases, net of current portion	1,386			2,295
Long-term debt, net of current portion	185,570			191,051
Deferred tax liabilities	10,092			10,092
Long-term contingent earnout liabilities, net of current portion	—			4,233
Other long-term liabilities	12,192			14,260
Total liabilities	631,294			652,245
Stockholders’ equity
Common stock	5			5
Additional paid-in capital	162,322			159,196
Retained earnings	261,437			238,216
Noncontrolling interests	(52		)	1,031
Total stockholders’ equity	423,712			398,448
Total liabilities and stockholders’ equity	$	1,055,006		$	1,050,693