ctri-20250330

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 10-Q

_________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission file number 001-42022

_________________________

Centuri Holdings, Inc.

(Exact name of registrant as specified in its charter)

_________________________


Delaware			93-1817741
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

19820 North 7th Avenue, Suite 120, Phoenix, Arizona			85027
(Address of Principal Executive Offices)			(Zip Code)

(623) 582-1235

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.01 par value

CTRI

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o No x

As of May 2, 2025, the number of outstanding shares of Common Stock of the Registrant was 88,558,945.

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			Page
Part I - Financial Information			6
Item 1. Financial Statements (Unaudited)			6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			25
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			34

Part II - Other Information			35
Item 1. Legal Proceedings			35
Item 1A. Risk Factors			35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			35
Item 3. Defaults Upon Senior Securities			35
Item 4. Mine Safety Disclosures			35
Item 5. Other Information			35
Item 6. Exhibits			36

Signatures			37

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements included in this Quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of the U.S. federal securities laws. All statements other than historical factual information are forward-looking statements, including, without limitation, statements regarding our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of regulation and the economy, generally. Terminology such as “believe,” “anticipate,” “will,” “should,” “could,” “intend,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “forecast,” “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.

Specific forward-looking statements in this Quarterly Report on Form 10-Q include:

•Our belief that our cash and cash equivalents are managed by high credit quality financial institutions;

•Our belief that our capital resources, including existing cash balances, together with our operating cash flows and borrowings under our credit facilities, are sufficient to meet our financial obligations for at least the next 12 months;

•Our belief that the trends listed in “Factors Affecting our Results of Operations” in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations represent a significant challenge for utilities, but also an opportunity for outsourced utility infrastructure services companies to build and maintain more efficient, sustainable infrastructure that can meet the energy needs of future generations;

•Our belief that we have taken steps to secure delivery of a sufficient amount of equipment and do not anticipate any significant disruptions with respect to our fleet in the near-term;

•Our belief that we are well-positioned to serve the increased demand resulting from system integrity management programs to enhance safety pursuant to federal and state mandates;

•Our belief that we are well-positioned to support growing customer attention in achieving environmental objectives through infrastructure construction and maintenance;

•Our belief that we will continue to renegotiate some of our major contracts to address the increased costs of future work;

•Our belief that any liabilities resulting from any known legal matters, including the City of Chicago matter described in “Note 14 — Commitments and Contingencies — Legal Proceedings,” will not have a material effect on our financial position, results of operations or cash flows;

•Our expectation that we will continue to incur capital expenditures to meet anticipated needs for our services;

•Our belief that the responsibility under a guarantee could exceed the amount recoverable from the subsidiary alone and could materially and adversely affect our consolidated financial condition, results of operations and cash flows;

•Our belief that the timing of the recognition of remaining performance obligations of fixed-price contracts is largely within the control of the customer, including when the necessary equipment and materials required to complete the work will be provided by the customer;

•Our belief that fuel, labor and material costs could rise in the future resulting in a negative effect on our results of operations or that fluctuations in the price or availability of materials and equipment could impact costs to complete projects or result in the postponement of projects;

•Our belief that rising interest rates on our variable-rate debt could have a negative effect on our business, financial condition and results of operations;

•Our belief that the impacts of tariffs will not be material to our results of operations;

•Our intent to refinance or extend our revolving credit facility in the coming quarters; and

•Our belief that projects included in backlog can be subject to delays or cancellation as a result of regulatory requirements, adverse weather conditions, customer requirements and other factors that could cause actual revenue to differ significantly from the estimates, or cause revenue to be realized in periods other than originally expected.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results may differ materially as a result of a number of factors, including, among other things:

•Customer project scheduling and duration;

•Weather, and general economic conditions;

•Results of bid work, differences between actual and anticipated outcomes of bid or other fixed-price construction agreements;

•Outcomes from contract and change order negotiations;

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•Our ability to successfully procure new work and impacts from work awarded or failing to be awarded work from significant customers, the mix of work awarded, and the amount of work awarded to us following work stoppages or reduction;

•The results of productivity inefficiencies from regulatory requirements, customer supply chain challenges, or otherwise, delays in commissioning individual projects, the ability of management to successfully finance, close on and assimilate any acquired businesses, and changes in our mix of customers, projects, contracts and business;

•Regional or national and/or general economic conditions and demand for our services;

•Price, volatility, and expectations of future prices of natural gas and electricity;

•Increases in the costs to perform services caused by changing conditions;

•The termination, or expiration of existing agreements or contracts;

•Decisions of our customers as to whether to pursue capital projects due to economic impacts resulting from a pandemic or otherwise;

•The budgetary spending patterns of customers;

•Inflation and other increases in construction costs that we may be unable to pass through to our customers;

•Cost or schedule overruns on fixed-price contracts;

•Availability of qualified labor for specific projects;

•The need and availability of letters of credit, payment and performance bonds, or other security;

•Costs we incur to support growth, whether organic or through acquisitions;

•The timing and volume of work under contract;

•Losses experienced in our operations;

•The results of the review of prior period accounting on certain projects and the impact of adjustments to accounting estimates;

•Developments in governmental investigations and/or inquiries;

•Intense competition in the industries in which we operate;

•Existing or future litigation or regulatory proceedings, dispute resolution proceedings or claims, including claims for additional costs;

•Failure of our partners, suppliers or subcontractors to perform their obligations;

•Cyber-security breaches;

•Failure to maintain safe worksites;

•Risks or uncertainties associated with events outside of our control, including severe weather conditions, public health crises and pandemics, political crises or other catastrophic events, such as the conflicts in the Middle East and the ongoing war in Ukraine;

•The impact of changes to federal policies, including those with respect to taxes, trade policies and tariffs, that affect U.S. relations with the rest of the world;

•Adverse developments affecting specific financial institutions or the broader financial services industry, including liquidity shortages or bank failures;

•Client delays or defaults in making payments;

•The cost and availability of credit and restrictions imposed by our debt agreements;

•The impact of credit rating actions and conditions in the capital markets on financing costs;

•Changes in construction expenditures and financing;

•Levels of or changes in operations and maintenance expenses;

•Our ability to continue to remain within the ratios and other limits in our debt covenants;

•Failure to implement strategic and operational initiatives;

•Risks or uncertainties associated with acquisitions, dispositions and investments;

•Possible information technology interruptions or inability to protect intellectual property;

•Our failure, or the failure of our agents or partners, to comply with laws;

•Our ability to secure appropriate insurance, licenses or permits;

•New or changing legal requirements, including those relating to environmental, health, licensing and safety matters;

•The loss of one or more clients that account for a significant portion of our revenue; and

•Asset impairments.

Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, the risks and uncertainties detailed from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”), including Item 1A . Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024.

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Part I - Financial Information

Item 1. Financial Statements

Centuri Holdings, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share information)

(Unaudited)


	March 30, 2025		December 29, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	15,255	$	49,019
Accounts receivable, net	206,674		271,793
Accounts receivable, related party - parent, net	441		9,648
Contract assets	270,258		235,546
Contract assets, related party - parent	2,326		2,623
Prepaid expenses and other current assets	41,126		32,755
Total current assets	536,080		601,384
Property and equipment, net	501,053		511,314
Intangible assets, net	334,277		340,901
Goodwill, net	368,378		368,302
Right-of-use assets under finance leases	31,646		33,790
Right-of-use assets under operating leases	107,922		104,139
Other assets	113,261		114,560
Total assets	$	1,992,617	$	2,074,390
LIABILITIES, TEMPORARY EQUITY AND EQUITY
Current liabilities:
Current portion of long-term debt	$	28,932	$	30,018
Current portion of finance lease liabilities	8,558		9,331
Current portion of operating lease liabilities	19,543		18,695
Accounts payable	115,977		125,726
Accrued expenses and other current liabilities	142,105		173,584


Contract liabilities	25,364		24,975

Total current liabilities	340,479		382,329
Long-term debt, net of current portion	724,723		730,330
Line of credit	97,820		113,533
Finance lease liabilities, net of current portion	13,135		15,009
Operating lease liabilities, net of current portion	94,664		91,739
Deferred income taxes	115,117		115,114
Other long-term liabilities	65,448		66,115
Total liabilities	1,451,386		1,514,169
Commitments and contingencies (Note 14)
Temporary equity:
Redeemable noncontrolling interests	4,682		4,669
Equity:
Common stock, $0.01 par value, 850,000,000 shares authorized, 88,517,521 shares issued and outstanding at March 30, 2025 and December 29, 2024	885		885
Additional paid-in capital	717,464		718,598
Accumulated other comprehensive loss	(13,116)		(13,209)
Accumulated deficit	(168,684)		(150,722)
Total equity	536,549		555,552
Total liabilities, temporary equity and equity	$	1,992,617	$	2,074,390

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Centuri Holdings, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per-share information)

(Unaudited)


	Fiscal Three Months Ended
	March 30, 2025		March 31, 2024
Revenue	$	528,972	$	504,745
Revenue, related party - parent	21,109		23,278
Total revenue, net	550,081		528,023
Cost of revenue (including depreciation)	509,377		492,853
Cost of revenue, related party - parent (including depreciation)	20,376		21,891
Total cost of revenue	529,753		514,744
Gross profit	20,328		13,279
Selling, general and administrative expenses	26,375		28,550
Amortization of intangible assets	6,666		6,668

Operating loss	(12,713)		(21,939)
Interest expense, net	17,862		24,099
Other expense (income), net	480		(32)
Loss before income taxes	(31,055)		(46,006)
Income tax benefit	(13,131)		(20,773)
Net loss	(17,924)		(25,233)
Net income (loss) attributable to noncontrolling interests	13		(175)
Net loss attributable to common stock	$	(17,937)	$	(25,058)

Loss per share attributable to common stock:
Basic	$	(0.20)	$	(0.35)
Diluted	$	(0.20)	$	(0.35)
Shares used in computing earnings per share:
Weighted average basic shares outstanding	88,518		71,666
Weighted average diluted shares outstanding	88,518		71,666

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Centuri Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)


	Fiscal Three Months Ended
	March 30, 2025		March 31, 2024
Net loss	$	(17,924)	$	(25,233)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	93		(2,543)
Other comprehensive income (loss), net of tax	93		(2,543)
Comprehensive loss	(17,831)		(27,776)
Comprehensive income (loss) attributable to noncontrolling interests	13		(175)
Total comprehensive loss attributable to common stock	$	(17,844)	$	(27,601)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Centuri Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Fiscal Three Months Ended
	March 30, 2025		March 31, 2024
Cash flows from operating activities:
Net loss	$	(17,924)	$	(25,233)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation	27,557		27,651
Amortization of intangible assets	6,666		6,668
Amortization of debt issuance costs	1,218		1,318
Loss on debt extinguishment	404		—

Non-cash stock-based compensation expense	1,587		(588)
Gain on sale of equipment	(377)		(944)

Amortization of right-of-use assets	5,045		5,100
Deferred income taxes	(1,813)		(1,600)












Changes in assets and liabilities, net of non-cash transactions	(5,687)		(38,823)
Net cash provided by (used in) operating activities	16,676		(26,451)
Cash flows from investing activities:
Capital expenditures	(24,362)		(26,261)
Proceeds from sale of property and equipment	1,154		1,624

Net cash used in investing activities	(23,208)		(24,637)
Cash flows from financing activities:

Proceeds from line of credit borrowings	39,756		55,896
Payment of line of credit borrowings	(55,544)		(5,931)

Principal payments on long-term debt	(7,876)		(10,557)
Principal payments on finance lease liabilities	(2,648)		(2,914)


Redemption of redeemable noncontrolling interest	—		(37)

Other	(931)		(173)
Net cash (used in) provided by financing activities	(27,243)		36,284
Effects of foreign exchange translation	11		(198)
Net decrease in cash and cash equivalents	(33,764)		(15,002)
Cash and cash equivalents, beginning of period	49,019		33,407
Cash and cash equivalents, end of period	$	15,255	$	18,405

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Centuri Holdings, Inc.

Condensed Consolidated Statements of Changes in Equity

(In thousands, except share information)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Equity		Temporary Equity: Redeemable Noncontrolling Interests
	Shares	Amount










Balances as of December 31, 2023	1,000	$	—	$	374,124	$	(4,025)	$	(144,108)	$	225,991	$	99,262
Net loss	—	—		—		—		(25,058)		(25,058)		(175)
Stock-based compensation activity	—	—		(912)		—		151		(761)		—
Foreign currency translation adjustment	—	—		—		(2,543)		—		(2,543)		—

Purchase of noncontrolling interest	—	—		4,187		—		—		4,187		(97,025)
Distribution to related party - parent	—	—		(1,599)		—		—		(1,599)		—
Noncontrolling interest revaluation	—	—		(2,449)

SEC Form 10-Q filed by Centuri Holdings Inc.