MasTec Announces Record Third Quarter Results with Increased Revenue, Earnings and Margins
October 31, 2013
CORAL GABLES, Fla.,
- Q3 Revenue of
$1.27 Billion -An Increase of 19% - Q3 Continuing Operations Adjusted EBITDA of
$135 Million -An Increase of 32% - Q3 Continuing Operations Adjusted EBITDA of 10.6%-A 100 Basis Point Improvement
- Q3 Continuing Operations Adjusted Diluted EPS of
$0.61 -An Increase of 13% - Q3 Cash Flow from Operations of
$110 Million - Full-Year 2013 Earnings Guidance Reaffirmed
Third quarter 2013 continuing operations diluted earnings per share was
For full year 2013, we are raising our revenue guidance to
The 2013 guidance above excludes the previously disclosed first quarter 2013 loss on extinguishment of debt, the second quarter 2013 legacy
Management will hold a conference call to discuss these results on
Summary financial statements for the quarters are as follows:
Condensed Unaudited Consolidated Statements of Operations (In thousands, except per share amounts)
|
|||||||
For the Three Months Ended September 30, |
|||||||
2013 |
2012 |
||||||
Revenue |
$ |
1,269,385 |
$ |
1,067,300 |
|||
Costs of revenue, excluding depreciation and amortization |
1,081,132 |
924,304 |
|||||
Depreciation and amortization |
37,756 |
22,645 |
|||||
General and administrative expenses |
58,976 |
42,514 |
|||||
Interest expense, net |
12,666 |
9,446 |
|||||
Other (income) expense, net |
(2,778) |
8,815 |
|||||
Income from continuing operations before provision for income taxes |
$ |
81,633 |
$ |
59,576 |
|||
Provision for income taxes |
(31,698) |
(23,478) |
|||||
Income from continuing operations before non-controlling interests |
$ |
49,935 |
$ |
36,098 |
|||
Discontinued operations: |
|||||||
Loss from discontinued operations, net of tax, including impairment charges and loss on disposal |
$ |
(3,735) |
$ |
(9,281) |
|||
Net income |
$ |
46,200 |
$ |
26,817 |
|||
Net income (loss) attributable to non-controlling interests |
62 |
(4) |
|||||
Net income attributable to MasTec, Inc. |
$ |
46,138 |
$ |
26,821 |
|||
Earnings per share: |
|||||||
Basic earnings (loss) per share: |
|||||||
Continuing operations |
$ |
0.65 |
$ |
0.47 |
|||
Discontinued operations |
(0.05) |
(0.12) |
|||||
Total basic earnings per share |
$ |
0.60 |
$ |
0.35 |
|||
Basic weighted average common shares outstanding |
77,093 |
76,194 |
|||||
Diluted earnings (loss) per share: |
|||||||
Continuing operations |
$ |
0.59 |
$ |
0.45 |
|||
Discontinued operations |
(0.04) |
(0.12) |
|||||
Total diluted earnings per share |
$ |
0.54 |
$ |
0.34 |
|||
Diluted weighted average common shares outstanding |
85,464 |
79,526 |
Condensed Unaudited Consolidated Balance Sheets (In thousands)
|
||||
September 30, 2013 |
December 31, 2012 |
|||
Assets |
||||
Current assets, including discontinued operations |
$ 1,332,316 |
$ 1,049,641 |
||
Property and equipment, net |
504,313 |
350,192 |
||
Goodwill and other intangibles, net |
1,064,099 |
961,973 |
||
Other long-term assets, including discontinued operations |
53,610 |
54,160 |
||
Total assets |
$ 2,954,338 |
$ 2,415,966 |
||
Liabilities and Shareholders' Equity |
||||
Current liabilities, including discontinued operations |
$ 882,229 |
$ 713,793 |
||
Acquisition-related contingent consideration, net of current portion |
119,502 |
135,712 |
||
Long-term debt |
779,920 |
546,323 |
||
Long-term deferred tax liabilities, net |
151,044 |
119,388 |
||
Other liabilities |
42,556 |
38,875 |
||
Shareholders' equity |
979,087 |
861,875 |
||
Total liabilities and shareholders' equity |
$ 2,954,338 |
$ 2,415,966 |
Condensed Unaudited Consolidated Statements of Cash Flows (In thousands)
|
||||
Nine Months Ended September 30, |
||||
2013 |
2012 |
|||
Net cash provided by operating activities |
$ |
124,991 |
$ |
114,670 |
Net cash (used in) provided by investing activities |
(253,050) |
35,425 |
||
Net cash provided by (used in) financing activities |
104,258 |
(159,327) |
||
Net decrease in cash and cash equivalents |
(23,801) |
(9,232) |
||
Net effect of currency translation on cash |
(118) |
135 |
||
Cash and cash equivalents-beginning of period |
26,767 |
20,279 |
||
Cash and cash equivalents-end of period |
2,848 |
11,182 |
||
Cash and cash equivalents of discontinued operations |
- |
710 |
||
Cash and cash equivalents of continuing operations |
$ |
2,848 |
$ |
10,472 |
Reconciliation of Non-GAAP Disclosures and Supplemental Disclosures – Unaudited (In millions, except for percentages and per share amounts)
|
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
March 31, 2013 |
June 30, 2013 |
September 30, 2013 |
September 30, 2013 |
|||||
EBITDA and Adjusted EBITDA Reconciliation |
||||||||
Income from continuing operations before non-controlling interests |
$ |
19.3 |
$ |
35.5 |
$ |
49.9 |
$ |
104.8 |
Interest expense, net - continuing operations |
10.0 |
11.8 |
12.7 |
34.5 |
||||
Provision for income taxes - continuing operations |
12.3 |
21.8 |
31.7 |
65.8 |
||||
Depreciation and amortization - continuing operations |
31.8 |
33.6 |
37.8 |
103.1 |
||||
EBITDA - continuing operations |
$ |
73.5 |
$ |
102.7 |
$ |
132.1 |
$ |
308.3 |
Sintel litigation settlement expense |
- |
2.8 |
- |
2.8 |
||||
Non-cash stock compensation expense |
2.4 |
4.3 |
3.0 |
9.6 |
||||
Loss on extinguishment of debt |
5.6 |
- |
- |
5.6 |
||||
Adjusted EBITDA - continuing operations |
$ |
81.4 |
$ |
109.8 |
$ |
135.1 |
$ |
326.3 |
EBITDA and Adjusted EBITDA Margin Reconciliation |
||||||||
Income from continuing operations before non-controlling interests |
2.1% |
3.6% |
3.9% |
3.3% |
||||
Interest expense, net - continuing operations |
1.1% |
1.2% |
1.0% |
1.1% |
||||
Provision for income taxes - continuing operations |
1.3% |
2.3% |
2.5% |
2.1% |
||||
Depreciation and amortization - continuing operations |
3.5% |
3.4% |
3.0% |
3.3% |
||||
EBITDA margin - continuing operations |
8.0% |
10.5% |
10.4% |
9.7% |
||||
Sintel litigation settlement expense |
- |
0.3% |
- |
0.1% |
||||
Non-cash stock compensation expense |
0.3% |
0.4% |
0.2% |
0.3% |
||||
Loss on extinguishment of debt |
0.6% |
- |
- |
0.2% |
||||
Adjusted EBITDA margin - continuing operations |
8.9% |
11.2% |
10.6% |
10.3% |
Three Months Ended |
Nine Months Ended |
|||||||||||
March 31, 2012 |
June 30, 2012 |
September 30, 2012 |
September 30, 2012 |
|||||||||
EBITDA and Adjusted EBITDA Reconciliation |
||||||||||||
Income from continuing operations before non-controlling interests |
$ |
11.7 |
$ |
31.2 |
$ |
36.1 |
$ |
79.0 |
||||
Interest expense, net - continuing operations |
9.0 |
9.5 |
9.4 |
27.9 |
||||||||
Provision for income taxes - continuing operations |
7.8 |
19.9 |
23.5 |
51.2 |
||||||||
Depreciation and amortization - continuing operations |
20.7 |
21.8 |
22.6 |
65.1 |
||||||||
EBITDA - continuing operations |
$ |
49.2 |
$ |
82.4 |
$ |
91.7 |
$ |
223.2 |
||||
Sintel litigation settlement expense |
- |
- |
9.6 |
9.6 |
||||||||
Non-cash stock compensation expense |
1.0 |
1.2 |
1.2 |
3.4 |
||||||||
Adjusted EBITDA - continuing operations |
$ |
50.2 |
$ |
83.5 |
$ |
102.5 |
$ |
236.2 |
||||
EBITDA and Adjusted EBITDA Margin Reconciliation |
||||||||||||
Income from continuing operations before non-controlling interests |
1.6% |
3.2% |
3.4% |
2.8% |
||||||||
Interest expense, net - continuing operations |
1.2% |
1.0% |
0.9% |
1.0% |
||||||||
Provision for income taxes - continuing operations |
1.1% |
2.0% |
2.2% |
1.8% |
||||||||
Depreciation and amortization - continuing operations |
2.8% |
2.2% |
2.1% |
2.3% |
||||||||
EBITDA margin - continuing operations |
6.7% |
8.3% |
8.6% |
8.0% |
||||||||
Sintel litigation settlement expense |
- |
- |
0.9% |
0.3% |
||||||||
Non-cash stock compensation expense |
0.1% |
0.1% |
0.1% |
0.1% |
||||||||
Adjusted EBITDA margin - continuing operations |
6.8% |
8.4% |
9.6% |
8.5% |
||||||||
Reconciliation of Non-GAAP Disclosures and Supplemental Disclosures – Unaudited (In millions, except for percentages and per share amounts)
|
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
March 31, 2013 |
June 30, 2013 |
September 30, 2013 |
September 30, 2013 |
|||||
Adjusted Net Income Reconciliation |
||||||||
Income from continuing operations before non-controlling interests |
$ |
19.3 |
$ |
35.5 |
$ |
49.9 |
$ |
104.8 |
Sintel litigation settlement expense, net of tax |
- |
1.7 |
- |
1.7 |
||||
Non-cash stock compensation expense, net of tax |
1.4 |
2.6 |
1.8 |
5.9 |
||||
Loss on extinguishment of debt, net of tax |
3.4 |
- |
- |
3.5 |
||||
Adjusted income from continuing operations |
$ |
24.2 |
$ |
39.9 |
$ |
51.8 |
$ |
115.9 |
Loss from discontinued operations, net of tax |
(0.9) |
(0.5) |
(3.7) |
(5.2) |
||||
Adjusted net income |
$ |
23.2 |
$ |
39.4 |
$ |
48.0 |
$ |
110.7 |
Adjusted Diluted EPS Reconciliation |
||||||||
Diluted earnings per share – continuing operations |
$ |
0.23 |
$ |
0.42 |
$ |
0.59 |
$ |
1.24 |
Sintel litigation settlement expense, net of tax |
- |
0.02 |
- |
0.02 |
||||
Non-cash stock compensation expense, net of tax |
0.02 |
0.03 |
0.02 |
0.07 |
||||
Loss on extinguishment of debt, net of tax |
0.04 |
- |
- |
0.04 |
||||
Adjusted diluted earnings per share - continuing operations |
$ |
0.29 |
$ |
0.47 |
$ |
0.61 |
$ |
1.37 |
Diluted loss per share – discontinued operations |
(0.01) |
(0.01) |
(0.04) |
(0.06) |
||||
Adjusted diluted earnings per share |
$ |
0.28 |
$ |
0.47 |
$ |
0.56 |
$ |
1.31 |
Three Months Ended |
Nine Months Ended |
|||||||
March 31, 2012 |
June 30, 2012 |
September 30, 2012 |
September 30, 2012 |
|||||
Adjusted Net Income Reconciliation |
||||||||
Income from continuing operations before non-controlling interests |
$ |
11.7 |
$ |
31.2 |
$ |
36.1 |
$ |
79.0 |
Sintel litigation settlement expense, net of tax |
- |
- |
5.8 |
5.8 |
||||
Non-cash stock compensation expense, net of tax |
0.6 |
0.7 |
0.7 |
2.0 |
||||
Adjusted income from continuing operations |
$ |
12.3 |
$ |
31.9 |
$ |
42.7 |
$ |
86.8 |
Income (loss) from discontinued operations, net of tax |
2.5 |
(1.1) |
(9.3) |
(7.9) |
||||
Adjusted net income |
$ |
14.8 |
$ |
30.8 |
$ |
33.4 |
$ |
78.9 |
Adjusted Diluted EPS Reconciliation |
||||||||
Diluted earnings per share – continuing operations |
$ |
0.14 |
$ |
0.38 |
$ |
0.45 |
$ |
0.97 |
Sintel litigation settlement expense, net of tax |
- |
- |
0.07 |
0.07 |
||||
Non-cash stock compensation expense, net of tax |
0.01 |
0.01 |
0.01 |
0.02 |
||||
Adjusted diluted earnings per share - continuing operations |
$ |
0.15 |
$ |
0.39 |
$ |
0.54 |
$ |
1.06 |
Diluted earnings (loss) per share – discontinued operations |
0.03 |
(0.01) |
(0.12) |
(0.10) |
||||
Adjusted diluted earnings per share |
$ |
0.18 |
$ |
0.37 |
$ |
0.42 |
$ |
0.97 |
Reconciliation of Non-GAAP Disclosures and Supplemental Disclosures – Unaudited (In millions, except for percentages and per share amounts)
|
||||
Guidance for Three Months Ended December 31, |
Three Months Ended December 31, |
|||
2013 Est. |
2012 |
|||
Guidance, EBITDA and Adjusted EBITDA Reconciliation |
||||
Income from continuing operations before non-controlling interests |
$ |
42 |
$ |
37.7 |
Interest expense, net - continuing operations |
12 |
9.5 |
||
Provision for income taxes - continuing operations |
26 |
24.9 |
||
Depreciation and amortization - continuing operations |
39 |
26.8 |
||
EBITDA - continuing operations |
$ |
119 |
$ |
98.9 |
Non-cash stock compensation expense |
3 |
1.1 |
||
Adjusted EBITDA - continuing operations |
$ |
122 |
$ |
99.9 |
Guidance, EBITDA and Adjusted EBITDA Margin Reconciliation |
||||
Income from continuing operations before non-controlling interests |
3.8% |
4.0% |
||
Interest expense, net - continuing operations |
1.1% |
1.0% |
||
Provision for income taxes - continuing operations |
2.4% |
2.7% |
||
Depreciation and amortization - continuing operations |
3.6% |
2.9% |
||
EBITDA margin - continuing operations |
11.0% |
10.6% |
||
Non-cash stock compensation expense |
0.3% |
0.1% |
||
Adjusted EBITDA margin - continuing operations |
11.3% |
10.7% |
||
Guidance for Three Months Ended December 31, |
Three Months Ended December 31, |
|||
2013 Est. |
2012 |
|||
Guidance, Adjusted Income from Continuing Operations and Diluted EPS Reconciliation |
||||
Adjusted Income from Continuing Operations Reconciliation |
||||
Income from continuing operations before non-controlling interests |
$ |
42 |
$ |
37.7 |
Non-cash stock compensation expense, net of tax |
2 |
0.7 |
||
Adjusted income from continuing operations |
$ |
44 |
$ |
38.3 |
Adjusted Diluted EPS Reconciliation |
||||
Diluted earnings per share – continuing operations |
$ |
0.49 |
$ |
0.46 |
Non-cash stock compensation expense, net of tax |
0.02 |
0.01 |
||
Adjusted diluted earnings per share - continuing operations |
$ |
0.51 |
$ |
0.47 |
Reconciliation of Non-GAAP Disclosures and Supplemental Disclosures – Unaudited (In millions, except for percentages and per share amounts)
|
||||||||||
Guidance for Year Ended December 31, |
Year Ended December 31, |
|||||||||
2013 Est. |
2012 |
|||||||||
Guidance, EBITDA and Adjusted EBITDA Reconciliation |
||||||||||
Income from continuing operations before non-controlling interests |
$ |
146 |
$ |
116.6 |
||||||
Interest expense, net - continuing operations |
47 |
37.4 |
||||||||
Provision for income taxes - continuing operations |
92 |
76.1 |
||||||||
Depreciation and amortization - continuing operations |
142 |
92.0 |
||||||||
EBITDA - continuing operations |
$ |
427 |
$ |
322.1 |
||||||
Sintel litigation settlement expense |
3 |
9.6 |
||||||||
Non-cash stock compensation expense |
13 |
4.4 |
||||||||
Loss on extinguishment of debt |
6 |
- |
||||||||
Adjusted EBITDA - continuing operations |
$ |
448 |
$ |
336.1 |
||||||
Guidance, EBITDA and Adjusted EBITDA Margin Reconciliation |
||||||||||
Income from continuing operations before non-controlling interests |
3.4% |
3.1% |
||||||||
Interest expense, net - continuing operations |
1.1% |
1.0% |
||||||||
Provision for income taxes - continuing operations |
2.2% |
2.0% |
||||||||
Depreciation and amortization - continuing operations |
3.3% |
2.5% |
||||||||
EBITDA margin - continuing operations |
10.0% |
8.6% |
||||||||
Sintel litigation settlement expense |
0.1% |
0.3% |
||||||||
Non-cash stock compensation expense |
0.3% |
0.1% |
||||||||
Loss on extinguishment of debt |
0.1% |
- |
||||||||
Adjusted EBITDA margin - continuing operations |
10.5% |
9.0% |
Guidance for Year Ended December 31, |
Year Ended December 31, |
||||||
2013 Est. |
2012 |
||||||
Guidance, Adjusted Income from Continuing Operations and Diluted EPS Reconciliation |
|||||||
Adjusted Income from Continuing Operations Reconciliation |
|||||||
Income from continuing operations before non-controlling interests |
$ |
146 |
$ |
116.6 |
|||
Sintel litigation settlement expense, net of tax |
2 |
5.8 |
|||||
Non-cash stock compensation expense, net of tax |
8 |
2.7 |
|||||
Loss on extinguishment of debt, net of tax |
3 |
- |
|||||
Adjusted income from continuing operations |
$ |
160 |
$ |
125.1 |
|||
Adjusted Diluted EPS Reconciliation |
|||||||
Diluted earnings per share – continuing operations |
$ |
1.73 |
$ |
1.43 |
|||
Sintel litigation settlement expense, net of tax |
0.02 |
0.07 |
|||||
Non-cash stock compensation expense, net of tax |
0.09 |
0.03 |
|||||
Loss on extinguishment of debt, net of tax |
0.04 |
- |
|||||
Adjusted diluted earnings per share - continuing operations |
$ |
1.88 |
$ |
1.53 |
Tables may contain differences due to rounding.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to a number of risks, uncertainties, and assumptions, including the effect on demand for our services of further or continued economic downturns, reduced capital expenditures by our customers, reduced financing availability, customer consolidation and technological and regulatory changes in the industries we serve; market conditions, technological developments and regulatory changes that affect us or our customers' industries; trends in oil and natural gas prices; our ability to accurately estimate the costs associated with our fixed-price and other contracts and performance on such projects; customer disputes related to our performance of services; any material changes in estimates for legal costs or case settlements or adverse determinations on any claim, lawsuit or proceeding; our ability to replace non-recurring projects with new projects; our ability to attract and retain qualified personnel, key management and skilled employees, including from acquired businesses, enforce any noncompetition agreements, integrate acquired businesses within the expected timeframes and achieve the revenue, cost savings and earnings levels from such acquisitions at or above the levels projected; the impact of U.S. federal, local or state tax legislation and other regulations affecting renewable energy, electricity prices, electrical transmission, oil and gas production, broadband and related projects and expenditures; the effect of state and federal regulatory initiatives, including costs of compliance with existing and future environmental requirements; increases in fuel, maintenance, materials, labor and other costs; fluctuations in foreign currencies; the timing and extent of fluctuations in geographic, weather, equipment and operational factors affecting the industries in which we operate; the highly competitive nature of our industry; our dependence on a limited number of customers; the ability of our customers, including our largest customers, to terminate or reduce the amount of work, or in some cases prices paid for services on short or no notice under our contracts; the impact of any unionized workforce on our operations, including labor availability and relations; liabilities associated with multi-employer union pension plans, including underfunding and withdrawal liabilities, for our operations that employ unionized workers; the adequacy of our insurance, legal and other reserves and allowances for doubtful accounts; restrictions imposed by our credit facility, senior notes, convertible notes and any future loans or securities; the outcome of our plans for future operations, growth and services, including business development efforts, backlog, acquisitions and dispositions; any dilution or stock price volatility which shareholders may experience in connection with shares we may issue as consideration for earn-out obligations in connection with past or future acquisitions, or as a result of conversions of convertible notes or other stock issuances; as well as other risks detailed in our filings with the
SOURCE
J. Marc Lewis, Vice President-Investor Relations, 305-406-1815, 305-406-1886 fax, marc.lewis@mastec.com