MasTec Announces Second Quarter Results
August 07, 2001
* Results in line with previous guidance
* Reconfirms 3rd quarter guidance
* Provides 4th quarter outlook
MIAMI, Aug. 7 /PRNewswire/ -- MasTec, Inc. (NYSE: MTZ) reported second quarter net income of $17.4 million or $0.36 per share on revenue of $330.2 million for the three months ended June 30, 2001, excluding charges and costs described below, compared to net income of $18.6 million or $0.38 per share on revenue of $297.7 million for the same period in 2000, excluding a net gain during the 2000 period related to non-core assets of $4.5 million or $0.05 per share. Net income and earnings per share including charges and costs for the current quarter ended June 30, 2001 were $1.7 million and $0.04, respectively.
The financial results for the second quarter, including the segment information below, exclude costs associated with downsizing and realigning of our Network Services unit and with redeployment efforts to limit exposure to higher risk competitive carrier clients of $10.3 million ($0.12 per share) and a $16.0 million ($0.20 per share) increase in reserves relating to receivables from clients currently experiencing financial difficulties.
For the six months ended June 30, 2001, the Company reported net income of $33.8 million or $0.70 per share on revenue of $667.4 million (excluding charges and costs of $48.3 million or $0.60 per share) compared to $30.1 million or $0.64 per share on revenue of $570.4 million for the same period of 2000, excluding a net gain related to non-core assets. Net income and earnings per share including charges and costs for the six months ended June 30, 2001, were $5.0 million and $0.10 per share, respectively.
Datacom Network Services revenue was $276.5 million in the second quarter, compared to $249.5 million in the same quarter last year. Operating margin was 11.7% in 2001 compared to 14.2% in the same quarter last year. The decline in operating margin was primarily due to adverse market conditions.
Energy Network Services revenue was $39.7 million in 2001, compared to $36.9 million in the same quarter last year. Operating margin was 10.5% in 2001, compared to 9.5% percent in the same quarter last year.
Our Brazilian operations reported revenue of $14.0 million in 2001, compared to $11.3 million in the same quarter last year and generated a loss of $300,000 in both periods.
Backlog at June 30, 2001, was $1.4 billion, including master service agreements, substantially all of which will be performed in the next 18 months.
"We will continue to work on making our core business more efficient and productive and reallocating our resources to our best long-term opportunities," said Austin Shanfelter, MasTec's recently appointed president and chief executive officer.
For the third quarter ending September 30, 2001, the company projects revenue of approximately $320 million and EPS of approximately $0.33. The third quarter projections exclude a severance charge of $9.0 million related to MasTec's former chief executive officer. This severance is in addition to approximately $1.7 million of compensation provided for during the six months ended June 30, 2001.
For the quarter ending December 31, 2001, the company anticipates revenue of $305 million to $315 million and earnings per share of approximately $0.26 to $0.28.
MasTec is a leading end-to-end communications and energy infrastructure service provider in North America. MasTec <www.mastec.com > designs, builds, installs and maintains internal and external networks supporting the Internet, Internet-related applications, e-commerce and other communications and energy facilities for leading telecommunications, cable television, energy and Fortune 1000 companies.
This press release and any accompanying documents contain forward-looking
statements, such as statements regarding MasTec's future growth and
profitability, growth strategy, and anticipated trends in the industries and
economies in which MasTec operates. These forward-looking statements are
based on MasTec's current expectations and are subject to a number of risks,
uncertainties, and assumptions, including that our revenue may differ from
that projected, that we may be further impacted by slowdowns in our clients'
businesses or in the economy in general, our reserves may be inadequate and we
may experience increased costs associated with realigning our business or may
be unsuccessful in those efforts. Should one or more of these risks or
uncertainties materialize, or should the underlying assumptions prove
incorrect, actual results may differ significantly from results expressed or
implied in any forward-looking statements made by MasTec in this press
release. These and other risks are detailed in this press release or
documents filed by MasTec with the Securities and Exchange Commission. MasTec
does not undertake any obligation to revise these forward-looking statements
to reflect future events or circumstances.
MASTEC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
Revenue :
Datacom $276,528 $249,527 $564,320 $474,536
Energy 39,726 36,891 75,743 74,254
Brazil 13,966 11,279 27,369 21,601
330,220 297,697 667,432 570,391
Costs of revenue 272,750 224,933 538,108 433,862
Depreciation 13,564 13,183 26,882 26,661
Amortization 2,771 2,675 5,648 6,176
General and administrative
expenses 36,164 21,930 84,078 45,042
Interest expense 5,152 4,303 9,864 9,859
Interest income 2,770 1,054 5,203 2,267
Other income, net 453 4,873 894 5,253
Income before provision for
income taxes and minority interest 3,042 36,600 8,949 56,311
Provision for income taxes 1,329 15,120 3,803 23,499
Minority interest 6 (138) (130) 7
Net income $ 1,719 $ 21,342 $ 5,016 $ 32,819
Pro forma earnings per share:
Basic weighted average common
shares outstanding 47,763 46,823 47,739 45,314
Basic earnings per share (1) (2) $ 0.24 $ 0.40 $ 0.57 $ 0.67
Diluted weighted average common
shares outstanding 48,933 49,055 48,980 47,445
Diluted earnings
per share (1) (2) $ 0.23 $ 0.38 $ 0.57 $ 0.64
Actual earnings per share:
Basic earnings per share $ 0.04 $ 0.46 $ 0.11 $ 0.72
Diluted earnings per share $ 0.04 $ 0.44 $ 0.10 $ 0.69
(1) Included in general and administrative expenses is a $16.0 million
($0.20 per share) and $38.0 million ($0.46 per share) in reserve
charges for the three months and six months ended June 30, 2001,
respectively.
(2) Excludes gain on sale of PCS system in Latin America of $4.5 million
($0.05 per share).
MASTEC, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2001 2000
Assets
Current assets:
Cash and cash equivalents $ 14,970 $ 18,457
Accounts receivable, unbilled
revenue and retainage, net 397,729 386,480
Inventories 21,446 19,643
Other current assets 61,048 29,184
Total current assets 495,193 453,764
Property and equipment, net 156,868 159,673
Intangibles, net 261,143 262,398
Other assets 58,334 80,510
Total assets $971,538 $956,345
Liabilities and
Shareholders' Equity
Current Liabilities:
Current maturities of debt $ 70,943 $ 5,685
Accounts payable 85,814 85,797
Other current liabilities 64,724 119,845
Total current liabilities 221,481 211,327
Other liabilities 46,106 38,530
Long-term debt 199,337 206,160
Commitments and contingencies
Shareholders' equity:
Common stock 4,778 4,770
Capital surplus 347,117 346,099
Retained earnings 171,366 166,350
Foreign currency translation adjustments (18,647) (16,891)
Total shareholders' equity 504,614 500,328
Total liabilities and
shareholders' equity $971,538 $956,345
MASTEC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Six Months Ended June 30,
2001 2000
Cash flows from operating activities:
Net income $ 5,016 $32,819
Adjustments to reconcile net income
to net cash (used in) operating activities:
Depreciation and amortization 32,530 32,837
Minority interest 130 (7)
Loss on sale or write downs of assets (484) (7,349)
Changes in assets and liabilities net
of effect of acquisitions (46,931) (68,899)
Net cash used in operating activities (9,739) (10,599)
Cash flows from investing activities
Capital expenditures (23,529) (28,252)
Cash paid for acquisitions (net of cash
acquired) and contingent consideration (26,300) (17,374)
Other investing activities (166) 11,278
Net cash used in investing activities (49,995) (34,348)
Net cash provided by financing activities 57,043 57,149
Net (decrease) increase in cash and
cash equivalents (2,691) 12,202
Net effect of translation on cash (796) 316
Cash and cash equivalents-beginning of period 18,457 27,635
Cash and cash equivalents-end of period $14,970 $40,153
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SOURCE MasTec, Inc.
Web site: http: //www.mastec.com
CONTACT: Carmen M. Sabater, Executive Vice President & CFO of MasTec, Inc., +1-305-406-1866, or csabater@mastec.com