MYR Group Inc. Announces Fourth-Quarter and Full Year 2023 Results

MYR Group Inc. (“MYR”) (NASDAQ: MYRG)

, a holding company of leading specialty contractors serving the electric utility infrastructure, commercial and industrial construction markets in the United States and Canada, announced today its fourth-quarter and full year 2023 financial results.

Fourth Quarter 2023 Highlights

• Record quarterly revenues of $1.00 billion
• Strong quarterly net income of $24.0 million, or $1.43 per diluted share
• Record quarterly EBITDA of $52.8 million

Full Year 2023 Highlights

• Record full-year revenues of $3.64 billion
• Record full-year net income of $91.0 million, or $5.40 per diluted share
• Record full-year EBITDA of $188.2 million
• Strong backlog of $2.51 billion  

Management CommentsRick Swartz, MYR’s President and CEO, said, “We finished 2023 with solid financial performance in the fourth quarter, and annual revenues of $3.64 billion, setting a record high for the ninth consecutive year. Fourth quarter 2023 net income was $24.0 million, a 2.2 percent decrease over the fourth quarter of 2022, with revenues, consolidated gross profit and EBITDA increasing compared to the same period of 2022. A steady backlog of $2.51 billion reflects a healthy bidding environment and the continued investment in infrastructure to meet growing electrification demands across the U.S. and Canada.” Mr. Swartz continued, “The dedication and talent of our team members contributed to our growing success in 2023. Market indicators remain positive, and by leveraging proven business strategies and remaining committed to providing customers with quality, safe, and dependable results, we believe we are well-positioned for continued growth in 2024.”

Fourth Quarter ResultsMYR reported fourth-quarter 2023 revenues of $1.00 billion, an increase of $140.2 million, or 16.2 percent, compared to the fourth quarter of 2022. Specifically, our T&D segment reported record quarterly revenues of $591.5 million, an increase of $77.8 million, or 15.2 percent, from the fourth quarter of 2022, due to an increase in revenue on transmission projects, primarily related to an increase in revenue on clean energy projects as well as an increase in revenues on distribution projects. Our C&I segment also reported record quarterly revenues of $412.7 million, an increase of $62.4 million, or 17.8 percent, from the fourth quarter of 2022, primarily due to higher revenue related to clean energy projects in certain geographical areas.

Consolidated gross profit increased to $97.5 million for the fourth quarter of 2023, compared to $96.3 million for the fourth quarter of 2022. Gross margin decreased to 9.7 percent for the fourth quarter of 2023 from 11.1 percent for the fourth quarter of 2022. The decrease in gross margin was primarily due to labor and project inefficiencies, some of which were caused by supply chain disruptions and inclement weather experienced on certain projects. Gross margin was also negatively impacted by rising costs associated with inflation and unfavorable job closeouts. These margin decreases were partially offset by better-than-anticipated productivity and favorable weather on a project. Changes in estimates of gross profit on certain projects resulted in a gross margin decrease of 2.2 percent for the fourth quarter of 2023 and were not significant for the fourth quarter of 2022.

Selling, general and administrative expenses (“SG&A”) increased to $60.0 million for the fourth quarter of 2023, compared to $58.0 million for the fourth quarter of 2022. The period-over-period increase was primarily due to an increase in employee-related expenses to support the growth in our operations and an increase in contingent compensation expense related to a prior acquisition, partially offset by a decrease in employee incentive compensation costs.

Amortization of intangible assets decreased to $1.2 million for the fourth quarter of 2023, compared to $2.2 million for the fourth quarter of 2022. The period-over-period decrease was primarily due to the one-year amortization of backlog acquired with the Powerline Plus Companies in 2022.

Interest expense increased to $1.9 million for the fourth quarter of 2023, compared to $1.3 million for the fourth quarter of 2022. The period-over-period increase was primarily attributable to higher interest rates and outstanding debt during the fourth quarter of 2023 as compared to the fourth quarter of 2022.

Income tax expense was $11.5 million for the fourth quarter of 2023, with an effective tax rate of 32.3 percent, compared to income tax expense of $11.2 million for the fourth quarter of 2022, which represented 31.3 percent of pretax income. The increase in the effective tax rate for the fourth quarter of 2023 compared to the fourth quarter of 2022 was primarily due to higher other permanent difference items.

For the fourth quarter of 2023, net income was $24.0 million, or $1.43 per diluted share, compared to $24.6 million, or $1.46 per diluted share, for the same period of 2022. Fourth-quarter 2023 EBITDA, a non-GAAP financial measure, was $52.8 million, compared to $52.0 million in the fourth quarter of 2022.

Full Year ResultsMYR reported record revenues of $3.64 billion for the full year of 2023, an increase of $635.4 million, or 21.1 percent, compared to $3.01 billion for the full year of 2022. Specifically, the T&D segment reported revenues of $2.09 billion, an increase of $343.4 million, or 19.7 percent, from the full year of 2022, related to an increase in revenue on transmission projects, primarily related to an increase in revenue on clean energy projects, and an increase in revenue on distribution projects. The C&I segment reported revenues of $1.55 billion, an increase of $291.9 million, or 23.1 percent, from the full year of 2022, primarily due to higher revenue related to clean energy projects in certain geographical areas.

Consolidated gross profit was $364.4 million for the full year of 2023, compared to $344.0 million for the full year of 2022. The increase in gross profit was due to higher revenues, partially offset by lower margins. Gross margin decreased to 10.0 percent for the full year of 2023 from 11.4 percent for the full year of 2022. The decrease in gross margin was primarily due to labor and project inefficiencies, some of which were caused by rising costs associated with supply chain disruptions, inflation and inclement weather experienced on certain projects. Gross margin was also negatively impacted by an increase in cost associated with an adjustment to sales tax accruals for prior periods in one of our operating areas. These margin decreases were partially offset by favorable change orders, better-than-anticipated productivity and favorable weather on a project. Changes in estimates of gross profit on certain projects resulted in a gross margin decreases of 1.7 percent and 0.4 percent for the full year of 2023 and 2022, respectively.

SG&A increased to $234.6 million for the full year of 2023, compared to $222.4 million for the full year of 2022. The year-over-year increase was primarily due to an increase in employee-related expenses to support the growth in our operations and an increase in contingent compensation expense related to a prior acquisition.

Amortization of intangible assets decreased to $4.9 million for the full year of 2023, compared to $9.0 million for the full year of 2022. The year-over-year decrease was primarily due to intangible amortization associated with the one-year amortization of backlog acquired with the Powerline Plus Companies in 2022.

Interest expense increased to $4.9 million for the full year of 2023, compared to $3.6 million for the full year of 2022. The year-over-year increase was primarily attributable to higher interest rates partially offset by lower average debt balances during the full year of 2023 as compared to the full year of 2022.

Income tax expense was $34.0 million for the full year of 2023, with an effective tax rate of 27.2 percent, compared to income tax expense of $30.8 million for the full year of 2022, with an effective tax rate of 27.0 percent. The increase in the tax rate for the year ended December 31, 2023 was primarily due to higher other permanent difference items, partially offset by a higher favorable impact from stock compensation excess tax benefits.

For the full year of 2023, net income was $91.0 million, or $5.40 per diluted share, compared to $83.4 million, or $4.91 per diluted share, for the same period of 2022. Full-year 2023 EBITDA, a non-GAAP financial measure, was a record $188.2 million, compared to $175.8 million for the full year of 2022.

BacklogAs of December 31, 2023, MYR's backlog was $2.51 billion, compared to $2.62 billion as of September 30, 2023. As of December 31, 2023, T&D backlog was $959.6 million and C&I backlog was $1.55 billion. Total backlog at December 31, 2023 increased $10.6 million, or 0.4 percent, from the $2.50 billion reported at December 31, 2022.

Balance SheetAs of December 31, 2023, MYR had $442.4 million of borrowing availability under our $490 million revolving credit facility.

Non-GAAP Financial MeasuresTo supplement MYR’s financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), MYR uses certain non-GAAP measures. Reconciliation to the nearest GAAP measures of all non-GAAP measures included in this press release can be found at the end of this release. MYR’s definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.

MYR believes that these non-GAAP measures are useful because they (i) provide both management and investors meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results, (ii) permit investors to view MYR’s performance using the same tools that management uses to evaluate MYR’s past performance, reportable business segments and prospects for future performance, (iii) publicly disclose results that are relevant to financial covenants included in MYR’s credit facility and (iv) otherwise provide supplemental information that may be useful to investors in evaluating MYR.

Conference CallMYR will host a conference call to discuss its fourth-quarter and full year 2023 results on Thursday, February 29, 2024 at 8:00 a.m. Mountain time. To participate via telephone and join the call live, please register in advance here: https://register.vevent.com/register/BI2cabb3d2e38b4e0d8a2efe632b6ada9d. Upon registration, telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number and a unique passcode. Participants may access the audio-only webcast of the conference call from the Investors page of MYR Group’s website at myrgroup.com. A replay of the webcast will be available for seven days.

About MYRMYR Group is a holding company of leading, specialty electrical contractors providing services throughout the United States and Canada through two business segments: Transmission & Distribution (T&D) and Commercial & Industrial (C&I). MYR Group subsidiaries have the experience and expertise to complete electrical installations of any type and size. Through their T&D segment they provide services on electric transmission, distribution networks, substation facilities, clean energy projects and electric vehicle charging infrastructure. Their comprehensive T&D services include design, engineering, procurement, construction, upgrade, maintenance and repair 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. Through their C&I segment, they provide a broad range of services which include the design, installation, maintenance and repair of commercial and industrial wiring generally 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. C&I customers include general contractors, commercial and industrial facility owners, government agencies and developers. For more information, visit myrgroup.com.

Forward-Looking StatementsVarious statements in this announcement, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenue, income, capital spending, segment improvements and investments. Forward-looking statements are generally accompanied by words such as “anticipate,” “believe,” “encouraged,” “estimate,” “expect,” “intend,” “likely,” “may,” “objective,” “outlook,” “plan,” “possible,” “potential,” “project,” “remain confident,” “should,” “unlikely,” or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this announcement speak only as of the date of this announcement; we disclaim any obligation to update these statements (unless required by securities laws), and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. No forward-looking statement can be guaranteed and actual results may differ materially from those projected. Forward-looking statements in this announcement should be evaluated together with the many uncertainties that affect MYR's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of MYR's Annual Report on Form 10-K, and in any risk factors or cautionary statements contained in MYR's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

MYR Group Inc. Contact:Kelly M. Huntington, Chief Financial Officer, 847-290-1891, [e-mail] 

Investor Contact:David Gutierrez, Dresner Corporate Services, 312-780-7204, [e-mail] 

Financial tables follow…

MYR GROUP INC.Consolidated Balance SheetsAs of December 31, 2023 and 2022
(in thousands, except share and per share data)	December 31,2023				December 31,2022
ASSETS
Current assets
Cash and cash equivalents	$	24,899			$	51,040
Accounts receivable, net of allowances of $1,987 and $2,073, respectively		521,893				472,543
Contract assets, net of allowances of $610 and $499, respectively		420,616				300,615
Current portion of receivable for insurance claims in excess of deductibles		8,267				9,325
Refundable income taxes		4,034				8,944
Prepaid expenses and other current assets		46,535				47,824
Total current assets		1,026,244				890,291
Property and equipment, net of accumulated depreciation of  $380,465 and $351,753, respectively		268,978				233,175
Operating lease right-of-use assets		35,012				30,544
Goodwill		116,953				115,847
Intangible assets, net of accumulated amortization of  $30,534 and $25,439, respectively		83,516				87,557
Receivable for insurance claims in excess of deductibles		33,739				34,210
Investment in joint venture		8,707				3,697
Other assets		5,597				3,537
Total assets	$	1,578,746			$	1,398,858
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt	$	7,053			$	5,074
Current portion of operating lease obligations		9,237				9,711
Current portion of finance lease obligations		2,039				1,127
Accounts payable		359,363				315,323
Contract liabilities		240,411				227,055
Current portion of accrued self-insurance		28,269				28,752
Accrued income taxes		237				—
Other current liabilities		100,593				79,918
Total current liabilities		747,202				666,960
Deferred income tax liabilities		48,230				45,775
Long-term debt		29,188				35,479
Accrued self-insurance		51,796				51,287
Operating lease obligations, net of current maturities		25,775				20,845
Finance lease obligations, net of current maturities		314				2,313
Other liabilities		25,039				15,999
Total liabilities		927,544				838,658
Commitments and contingencies
Shareholders’ equity
Preferred stock – $0.01 par value per share; 4,000,000 authorized shares; none issued and outstanding at December 31, 2023 and December 31, 2022		—				—
Common stock – $0.01 par value per share; 100,000,000 authorized shares; 16,684,492 and 16,563,767 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively		167				165
Additional paid-in capital		162,386				161,427
Accumulated other comprehensive loss		(3,880	)			(6,300	)
Retained earnings		492,529				404,908
Total shareholders’ equity		651,202				560,200
Total liabilities and shareholders’ equity	$	1,578,746			$	1,398,858

MYR GROUP INC.Consolidated Statements of OperationsThree Months and Twelve Months Ended December 31, 2023 and 2022
	Three months endedDecember 31,								For the year endedDecember 31,
(in thousands, except per share data)		2023				2022				2023				2022
Contract revenues	$	1,004,197			$	863,956			$	3,643,905			$	3,008,542
Contract costs		906,702				767,687				3,279,508				2,664,580
Gross profit		97,495				96,269				364,397				343,962
Selling, general and administrative expenses		59,993				57,953				234,611				222,424
Amortization of intangible assets		1,221				2,162				4,907				9,009
Gain on sale of property and equipment		(921	)			(631	)			(4,214	)			(2,378	)
Income from operations		37,202				36,785				129,093				114,907
Other income (expense):
Interest income		148				129				888				187
Interest expense		(1,880	)			(1,328	)			(4,939	)			(3,563	)
Other income (expense), net		23				188				(38	)			2,673
Income before provision for income taxes		35,493				35,774				125,004				114,204
Income tax expense		11,451				11,201				34,014				30,823
Net income	$	24,042			$	24,573			$	90,990			$	83,381
Income per common share:
– Basic	$	1.44			$	1.48			$	5.45			$	4.98
– Diluted	$	1.43			$	1.46			$	5.40			$	4.91
Weighted average number of common shares and potential common shares outstanding:
– Basic		16,695				16,575				16,682				16,760
– Diluted		16,838				16,787				16,837				16,980

MYR GROUP INC.Consolidated Statements of Cash FlowsTwelve Months Ended December 31, 2023 and 2022
	For the year endedDecember 31,
(in thousands)		2023				2022
Cash flows from operating activities:
Net income	$	90,990			$	83,381
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization of property and equipment		54,231				49,161
Amortization of intangible assets		4,907				9,009
Stock-based compensation expense		8,376				7,922
Deferred income taxes		2,056				9,573
Gain on sale of property and equipment		(4,214	)			(2,378	)
Other non-cash items		96				2,294
Changes in operating assets and liabilities:
Accounts receivable, net		(48,527	)			(86,939	)
Contract assets, net		(119,246	)			(64,421	)
Receivable for insurance claims in excess of deductibles		1,529				(14	)
Prepaid expenses and other assets		560				1,640
Accounts payable		37,250				109,008
Contract liabilities		13,151				58,001
Accrued self-insurance		17				4,999
Other liabilities		29,840				(13,752	)
Net cash flows provided by operating activities		71,016				167,484
Cash flows from investing activities:
Proceeds from sale of property and equipment		5,608				1,990
Cash paid for acquisitions, net of cash acquired		—				(110,660	)
Purchases of property and equipment		(84,736	)			(77,056	)
Net cash flows used in investing activities		(79,128	)			(185,726	)
Cash flows from financing activities:
Borrowings under revolving lines of credit		562,901				198,697
Repayments under revolving lines of credit		(562,615	)			(185,782	)
Payment of principal obligations under equipment notes		(4,598	)			(1,047	)
Payment of principal obligations under finance leases		(1,143	)			(1,592	)
Borrowings under equipment notes		—				24,184
Proceeds from exercise of stock options		20				40
Debt refinancing costs		(2,129	)			—
Repurchase of common stock		(2,868	)			(36,981	)
Payments related to tax withholding for stock-based compensation		(7,936	)			(6,791	)
Net cash flows used in financing activities		(18,368	)			(9,272	)
Effect of exchange rate changes on cash		339				(3,538	)
Net decrease in cash and cash equivalents		(26,141	)			(31,052	)
Cash and cash equivalents:
Beginning of period		51,040				82,092
End of period	$	24,899			$	51,040

MYR GROUP INC.Unaudited Consolidated Selected Data,Unaudited Performance Measure and Reconciliation of Non-GAAP MeasureFor the Three and Twelve Months Ended December 31, 2023 and 2022 andAs of December 31, 2023, 2022, 2021 and 2020
	Three months ended December 31,								Twelve months ended December 31,
(dollars in thousands, except share and per share data)		2023				2022				2023				2022
Summary Statement of Operations Data:
Contract revenues	$	1,004,197			$	863,956			$	3,643,905			$	3,008,542
Gross profit	$	97,495			$	96,269			$	364,397			$	343,962
Income from operations	$	37,202			$	36,785			$	129,093			$	114,907
Income before provision for income taxes	$	35,493			$	35,774			$	125,004			$	114,204
Income tax expense	$	11,451			$	11,201			$	34,014			$	30,823
Net income	$	24,042			$	24,573			$	90,990			$	83,381
Effective tax rate		32.3	%			31.3	%			27.2	%			27.0	%
Per Share Data:
Income per common share:
– Basic	$	1.44			$	1.48			$	5.45			$	4.98
– Diluted	$	1.43			$	1.46			$	5.40			$	4.91
Weighted average number of common shares and potential common shares outstanding:
– Basic		16,695				16,575				16,682				16,760
– Diluted		16,838				16,787				16,837				16,980

 

(in thousands)	December 31,2023			December 31,2022			December 31,2021			December 31,2020
Summary Balance Sheet Data:
Total assets	$	1,578,746		$	1,398,858		$	1,121,092		$	995,859
Total shareholders’ equity	$	651,202		$	560,200		$	519,102		$	429,288
Goodwill and intangible assets	$	200,469		$	203,404		$	115,119		$	117,430
Total funded debt (1)	$	36,241		$	40,553		$	4,503		$	29,420

	Three months ended December 31,														Twelve months ended December 31,
(dollars in thousands)		2023							2022							2023							2022
Segment Results:	Amount				Percent			Amount				Percent			Amount				Percent			Amount				Percent
Contract revenues:
Transmission & Distribution	$	591,541			58.9	%		$	513,687			59.5	%		$	2,089,196			57.3	%		$	1,745,792			58.0	%
Commercial & Industrial		412,656			41.1				350,269			40.5				1,554,709			42.7				1,262,750			42.0
Total	$	1,004,197			100.0	%		$	863,956			100.0	%		$	3,643,905			100.0	%		$	3,008,542			100.0	%
Operating income (loss):
Transmission & Distribution	$	42,886			7.2	%		$	41,331			8.0	%		$	149,703			7.2	%		$	138,886			8.0	%
Commercial & Industrial		8,707			2.1				12,681			3.6				45,889			3.0				43,159			3.4
Total		51,593			5.1				54,012			6.3				195,592			5.3				182,045			6.0
Corporate		(14,391	)		(1.4	)			(17,227	)		(2.0	)			(66,499	)		(1.8	)			(67,138	)		(2.2	)
Consolidated	$	37,202			3.7	%		$	36,785			4.3	%		$	129,093			3.5	%		$	114,907			3.8	%

See notes at the end of this earnings release

MYR GROUP INC.Unaudited Performance Measures and Reconciliation of Non-GAAP MeasuresThree and Twelve Months Ended December 31, 2023 and 2022
	Three months ended December 31,								Twelve months ended December 31,
(in thousands, except share, per share data, ratios and percentages)		2023				2022				2023				2022
Financial Performance Measures (2):
EBITDA (3)	$	52,829			$	51,979			$	188,193			$	175,750
EBITDA per Diluted Share (4)	$	3.14			$	3.09			$	11.17			$	10.35
EBIA, net of taxes (5)	$	26,041			$	26,882			$	97,511			$	92,422
Free Cash Flow (6)	$	21,679			$	65,224			$	(13,720	)		$	90,428
Book Value per Period End Share (7)									$	38.67			$	33.38
Tangible Book Value (8)									$	450,733			$	356,796
Tangible Book Value per Period End Share (9)									$	26.77			$	21.26
Funded Debt to Equity Ratio (10)										0.1				0.1
Asset Turnover (11)										2.60				2.68
Return on Assets (12)										6.5	%			7.4	%
Return on Equity (13)										16.2	%			16.1	%
Return on Invested Capital (14)										16.1	%			18.6	%
Reconciliation of Non-GAAP Measures:
Reconciliation of Net Income to EBITDA:
Net income	$	24,042			$	24,573			$	90,990			$	83,381
Interest expense, net		1,732				1,199				4,051				3,376
Income tax expense		11,451				11,201				34,014				30,823
Depreciation and amortization		15,604				15,006				59,138				58,170
EBITDA (3)	$	52,829			$	51,979			$	188,193			$	175,750
Reconciliation of Net Income per Diluted Share to EBITDA per Diluted Share:
Net income per share	$	1.43			$	1.46			$	5.40			$	4.91
Interest expense, net, per share		0.10				0.07				0.24				0.20
Income tax expense per share		0.68				0.67				2.02				1.82
Depreciation and amortization per share		0.93				0.89				3.51				3.42
EBITDA per Diluted Share (4)	$	3.14			$	3.09			$	11.17			$	10.35
Reconciliation of Non-GAAP measure:
Net income	$	24,042			$	24,573			$	90,990			$	83,381
Interest expense, net		1,732				1,199				4,051				3,376
Amortization of intangible assets		1,221				2,162				4,907				9,009
Tax impact of interest and amortization of intangible assets		(954	)			(1,052	)			(2,437	)			(3,344	)
EBIA, net of taxes (5)	$	26,041			$	26,882			$	97,511			$	92,422
Calculation of Free Cash Flow:
Net cash flow from operating activities	$	42,624			$	93,758			$	71,016			$	167,484
Less: cash used in purchasing property and equipment		(20,945	)			(28,534	)			(84,736	)			(77,056	)
Free Cash Flow (6)	$	21,679			$	65,224			$	(13,720	)		$	90,428

See notes at the end of this earnings release.

MYR GROUP INC.Unaudited Performance Measures and Reconciliation of Non-GAAP MeasuresAs of December 31, 2023, 2022 and 2021
(in thousands)	December 31, 2023				December 31, 2022
Reconciliation of Book Value to Tangible Book Value:
Book value (total shareholders' equity)	$	651,202			$	560,200
Goodwill and intangible assets		(200,469	)			(203,404	)
Tangible Book Value (8)	$	450,733			$	356,796
Reconciliation of Book Value per Period End Share to Tangible Book Value per Period End Share:
Book value per period end share	$	38.67			$	33.38
Goodwill and intangible assets per period end share		(11.90	)			(12.12	)
Tangible Book Value per Period End Share (9)	$	26.77			$	21.26
Calculation of Period End Shares:
Shares outstanding		16,684				16,564
Plus: common equivalents		155				220
Period End Shares (15)		16,839				16,784

(in thousands)		December 31, 2023				December 31, 2022				December 31, 2021
Reconciliation of Invested Capital to Shareholders Equity:
Book value (total shareholders' equity)		$	651,202			$	560,200			$	519,102
Plus: total funded debt			36,241				40,553				4,503
Less: cash and cash equivalents			(24,899	)			(51,040	)			(82,092	)
Invested Capital		$	662,544			$	549,713			$	441,513
Average Invested Capital (16)			606,129				495,613

See notes at the end of this earnings release.

(1) Funded debt includes borrowings under our revolving credit facility and the outstanding balances of our outstanding equipment notes.(2) These financial performance measures are provided as supplemental information to the financial statements. These measures are used by management to evaluate our past performance, our prospects for future performance and our ability to comply with certain material covenants as defined within our credit agreement, and to compare our results with those of our peers. In addition, we believe that certain of the measures, such as book value, tangible book value, free cash flow, asset turnover, return on equity and debt leverage are measures that are monitored by sureties, lenders, lessors, suppliers and certain investors. Our calculation of each measure is described in the following notes; our calculation may not be the same as the calculations made by other companies.(3) EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is not recognized under GAAP and does not purport to be an alternative to net income as a measure of operating performance or to net cash flows provided by operating activities as a measure of liquidity. Certain material covenants contained within our credit agreement are based on EBITDA with certain additional adjustments, including our interest coverage ratio and leverage ratio, which we must comply with to avoid potential immediate repayment of amounts borrowed or additional fees to seek relief from our lenders. In addition, management considers EBITDA a useful measure because it provides MYR Group Inc. and its investors with an additional tool to compare MYR Group Inc. operating performance on a consistent basis by removing the impact of certain items that management believes to not directly reflect the company’s core operations. Management further believes that EBITDA is useful to investors and other external users of MYR Group Inc. financial statements in evaluating the company’s operating performance and cash flow because EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, useful lives placed on assets, capital structure and the method by which assets were acquired.(4) EBITDA per diluted share is calculated by dividing EBITDA by the weighted average number of diluted shares outstanding for the period. EBITDA per diluted share is not recognized under GAAP and does not purport to be an alternative to income per diluted share.(5) EBIA, net of taxes is defined as net income plus net interest plus amortization of intangible assets, less the tax impact of net interest and amortization of intangible assets. The tax impact of net interest and amortization of intangible assets is computed by multiplying net interest and amortization of intangible assets by the effective tax rate. Management uses EBIA, net of taxes, to measure our results exclusive of the impact of financing and amortization of intangible assets costs.(6) Free cash flow, which is defined as cash flow provided by operating activities minus cash flow used in purchasing property and equipment, is not recognized under GAAP and does not purport to be an alternative to net income , cash flow from operations or the change in cash on the balance sheet. Management views free cash flow as a measure of operational performance, liquidity and financial health.(7) Book value per period end share is calculated by dividing total shareholders’ equity at the end of the period by the period end shares outstanding.(8) Tangible book value is calculated by subtracting goodwill and intangible assets at the end of the period from shareholders’ equity at the end of the period. Tangible book value is not recognized under GAAP and does not purport to be an alternative to book value or shareholders’ equity.(9) Tangible book value per period end share is calculated by dividing tangible book value at the end of the period by the period end number of shares outstanding. Tangible book value per period end share is not recognized under GAAP and does not purport to be an alternative to income per diluted share.(10) The funded debt to equity ratio is calculated by dividing total funded debt at the end of the period by total shareholders’ equity at the end of the period.(11) Asset turnover is calculated by dividing the current period revenue by total assets at the beginning of the period.(12) Return on assets is calculated by dividing net income for the period by total assets at the beginning of the period.(13) Return on equity is calculated by dividing net income for the period by total shareholders’ equity at the beginning of the period.(14) Return on invested capital is calculated by dividing EBIA, net of taxes, less any dividends, by average invested capital. Return on invested capital is not recognized under GAAP, and is a key metric used by management to determine our executive compensation.(15) Period end shares is calculated by adding average common stock equivalents for the quarter to the period end balance of common shares outstanding. Period end shares is not recognized under GAAP and does not purport to be an alternative to diluted shares. Management views period end shares as a better measure of shares outstanding as of the end of the period.(16) Average invested capital is calculated by adding net funded debt (total funded debt less cash and marketable securities) to total shareholders’ equity and calculating the average of the beginning and ending of each period.