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Primoris' Unit Wins $91.9M Contract

Zacks Equity Research

Rockford Corporation, a unit of the West Construction Services segment of Primoris Services Corporation (PRIM), has secured a construction work contract worth $91.9 million. The deal covers five contracts for new pipeline construction in Pennsylvania, West Virginia and Washington.

These contracts include the expansion of the ongoing Rockford operations in both the Marcellus region of Pennsylvania and the Pacific Northwest which are expected to be completed in 2013.

Of these projects, the construction of 50 miles of 12” steel pipeline for the transportation of natural gas liquids (NGLs) that runs from Washington, Pa., to near Moundsville, W. Va., has the maximum volume of work involved. This work is slated to commence in mid June.

The second project is located near Clarksburg, W. Va., which includes 7.6 miles of 20” steel pipeline and 12.1 miles of 24” HDPE pipeline for natural gas and water transportation. Work on this project began in May.

The remaining three projects include two natural gas gathering projects near Montrose, Pa., and one natural gas replacement project near Pullman, Wash. These projects are also expected to begin in mid June.

Primoris, which belongs to the building and heavy construction industry along with Orion Marine Group, Inc. (ORN), Chicago Bridge & Iron Company N.V. (CBI) and Dycom Industries Inc. (DY), has recently secured a three-year contract from Xcel Energy. The contract covers gas distribution work in the Denver area. It will result in a net revenue increase of over $80 million over the next three year period and includes an option for an additional two years.

West Construction Services segment of Primoris recorded sales of $207.7 million in first-quarter 2013, up 31% from the year-ago quarter, led by increased revenues at Rockford, partly offset by a revenue decline in the ARB Industrial division.

For full-year 2013, Primoris expects substantial contributions from the recent acquisitions. The company remains optimistic about its business lines for the near term as well as the long term.

Dallas, Tex.-based Primoris is a specialty contractor and infrastructure company which serves diverse end markets. The company also 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.

Primoris currently retains a short-term Zacks Rank #2 (Buy).

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