MASTEC, INC. CORAL GABLES, Fla., Nov. 2, 2017 /PRNewswire/ -- MasTec, Inc. (NYSE: MTZ) today announced strong third quarter financial results and increased 2017 guidance.
-- Record third quarter 2017 revenue was $1.96 billion, a 23% increase
compared with $1.59 billion for the same period last year.
-- Record third quarter 2017 GAAP net income increased 14% to $64.2
million, or $0.77 per diluted share, compared to $56.5 million, or $0.69
per diluted share, in the third quarter of 2016.
-- Record third quarter 2017 adjusted net income, adjusted diluted earnings
per share and adjusted EBITDA, all non-GAAP measures, were as follows:
-- Adjusted net income was $68.0 million, compared to $66.3 million in
the same period of the prior year. Adjusted diluted earnings per
share was $0.82, compared to $0.81 in the third quarter of 2016.
-- Adjusted EBITDA was $180 million, compared to $165 million in the
third quarter of 2016.
Adjusted net income, adjusted diluted earnings per share and adjusted EBITDA, which are all non-GAAP measures, exclude certain items which are detailed and reconciled to the most comparable GAAP-reported measures in the attached Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures.
Jose Mas, MasTec's Chief Executive Officer, commented, "We had strong third quarter results and are pleased to increase our full year 2017 annual guidance for the third consecutive quarter. Since the end of the third quarter, we have received significant amounts of project awards across multiple segments and expect that our year end 2017 backlog will be at record levels, exceeding $6 billion, with increasing demand and backlog growth across all of our segments."
George Pita, MasTec's Executive Vice President and Chief Financial Officer, noted, "We are proud of our year-to-date performance, including strong cash flow from operations. Our capital structure and ample liquidity give us full financial flexibility to support the significant growth opportunities that exist across the multiple end markets we serve."
Based on the information available today, the Company is increasing 2017 annual guidance, and providing fourth quarter guidance. The Company currently estimates 2017 annual revenue of approximately $6.3 billion. 2017 annual GAAP net income is expected to increase 60% over 2016 to approximately $215 million with GAAP diluted earnings per share expected to be $2.59, a 61% increase over 2016. 2017 annual adjusted EBITDA, a non-GAAP measure, is expected to increase 32% over 2016 to $630 million with adjusted diluted earnings per share, a non-GAAP measure, expected to be $2.80, a 47% increase over 2016.
For the fourth quarter of 2017, the Company expects revenue of approximately $1.3 billion. Fourth quarter 2017 GAAP net income is expected to approximate $26 million with GAAP diluted earnings per share expected to approximate $0.32. Fourth quarter 2017 adjusted EBITDA, a non-GAAP measure, is expected to approximate $113 million with adjusted diluted earnings per share, a non-GAAP measure, expected to approximate $0.36.
Management will hold a conference call to discuss these results on Friday, November 3, 2017 at 9:00 a.m. Eastern Time. The call-in number for the conference call is (719) 457-2617 and the replay phone number is (719) 457-0820 with a pass code of 6754317. The replay will be available for 30 days. Additionally, the call will be broadcast live over the Internet and can be accessed and replayed through the Investors section of the Company's website at www.mastec.com.
The following tables set forth the financial results for the periods ended September 30, 2017 and 2016:
Condensed Unaudited Consolidated Statements of Operations
(In thousands, except per share amounts)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2017 2016 2017 2016
---- ---- ---- ----
Revenue $1,955,752 $1,586,181 $5,004,116 $3,792,811
Costs of revenue, excluding depreciation and amortization 1,726,173 1,368,988 4,323,642 3,321,571
Depreciation and amortization 50,101 42,584 138,384 122,249
General and administrative expenses 66,397 67,131 202,001 195,031
Interest expense, net 17,578 13,097 44,966 37,895
Equity in (earnings) losses of unconsolidated affiliates (7,399) 6 (15,105) (3,549)
Other income, net (4,677) (971) (4,102) (12,803)
------ ---- ------ -------
Income before income taxes $107,579 $95,346 $314,330 $132,417
Provision for income taxes (43,378) (38,816) (126,170) (54,331)
------- ------- -------- -------
Net income $64,201 $56,530 $188,160 $78,086
------- ------- -------- -------
Net income attributable to non-controlling interests 449 253 1,770 414
Net income attributable to MasTec, Inc. $63,752 $56,277 $186,390 $77,672
======= ======= ======== =======
Earnings per share
Basic earnings per share $0.79 $0.70 $2.31 $0.97
----- ----- ----- -----
Basic weighted average common shares outstanding 80,953 80,462 80,859 80,323
------ ------ ------ ------
Diluted earnings per share $0.77 $0.69 $2.27 $0.96
----- ----- ----- -----
Diluted weighted average common shares outstanding 82,386 81,545 82,281 81,241
------ ------ ------ ------
Condensed Unaudited Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2017 2016
---- ----
Assets
Current assets $1,747,747 $1,402,486
Property and equipment, net 691,430 549,084
Goodwill and other intangibles, net 1,330,904 1,175,585
Other long-term assets 172,094 55,977
Total assets $3,942,175 $3,183,132
========== ==========
Liabilities and Equity
Current liabilities $1,002,151 $839,990
Long-term debt 1,192,311 961,379
Deferred income taxes 274,465 178,355
Other long-term liabilities 170,203 99,774
Total equity 1,303,045 1,103,634
Total liabilities and equity $3,942,175 $3,183,132
========== ==========
Condensed Unaudited Consolidated Statements of Cash Flows
(In thousands)
For the Nine Months Ended September 30,
2017 2016
---- ----
Net cash provided by operating activities $178,625 $127,141
Net cash used in investing activities (249,429) (94,061)
Net cash provided by (used in) financing activities 75,622 (27,629)
Effect of currency translation on cash 237 (1,008)
Net increase in cash and cash equivalents 5,055 4,443
----- -----
Cash and cash equivalents - beginning of period $38,767 $4,984
Cash and cash equivalents - end of period $43,822 $9,427
======= ======
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures - Unaudited
(In millions, except for percentages and per share amounts)
For the Three Months For the Nine Months
Ended September 30, September 30,
Segment Information 2017 2016 2017 2016
---- ---- ---- ----
Revenue by Reportable Segment
Communications $610.5 $624.3 $1,762.2 $1,728.0
Oil and Gas 1,161.0 736.0 2,757.2 1,454.3
Electrical Transmission 81.8 101.7 277.3 283.6
Power Generation and Industrial 96.9 123.6 204.1 324.7
Other 10.6 7.6 14.2 14.9
Eliminations (5.0) (7.0) (10.9) (12.7)
Corporate - - - -
Consolidated revenue $1,955.8 $1,586.2 $5,004.1 $3,792.8
======== ======== ======== ========
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2017 2016 2017 2016
---- ---- ---- ----
EBITDA $175.3 $151.0 $497.7 $292.6
Non-cash stock-based compensation expense 3.4 3.9 10.5 11.3
Restructuring charges - 4.7 0.6 13.8
Project results from non-controlled joint venture 0.4 5.1 7.4 5.1
Charges (recoveries) from multi-employer pension plan withdrawals 0.6 - 0.6 -
Adjusted EBITDA $179.6 $164.8 $516.7 $322.8
====== ====== ====== ======
Adjusted EBITDA by Reportable Segment
Communications $65.5 $63.0 $173.6 $191.4
Oil and Gas 108.1 118.0 356.1 194.1
Electrical Transmission 4.5 (3.8) 11.8 (34.7)
Power Generation and Industrial 9.3 6.1 14.8 13.9
Other 10.5 2.1 19.0 2.6
Corporate (18.3) (20.6) (58.6) (44.4)
Adjusted EBITDA $179.6 $164.8 $516.7 $322.8
====== ====== ====== ======
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2017 2016 2017 2016
---- ---- ---- ----
EBITDA Margin 9.0% 9.5% 9.9% 7.7%
Non-cash stock-based compensation expense 0.2% 0.2% 0.2% 0.3%
Restructuring charges - % 0.3% 0.0% 0.4%
Project results from non-controlled joint venture 0.0% 0.3% 0.1% 0.1%
Charges (recoveries) from multi-employer pension plan withdrawals 0.0% - % 0.0% - %
--- ---
Adjusted EBITDA margin 9.2% 10.4% 10.3% 8.5%
=== ==== ==== ===
Adjusted EBITDA Margin by Reportable Segment
Communications 10.7% 10.1% 9.9% 11.1%
Oil and Gas 9.3% 16.0% 12.9% 13.3%
Electrical Transmission 5.5% (3.7)% 4.3% (12.2)%
Power Generation and Industrial 9.6% 4.9% 7.3% 4.3%
Other 98.9% 27.2% 133.3% 17.2%
Corporate NA NA NA NA
Adjusted EBITDA margin 9.2% 10.4% 10.3% 8.5%
=== ==== ==== ===
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures - Unaudited
(In millions, except for percentages and per share amounts)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2017 2016 2017 2016
---- ---- ---- ----
EBITDA and Adjusted EBITDA Reconciliation
Net income $64.2 $56.5 $188.2 $78.1
Interest expense, net 17.6 13.1 45.0 37.9
Provision for income taxes 43.4 38.8 126.2 54.3
Depreciation and amortization 50.1 42.6 138.4 122.2
---- ---- ----- -----
EBITDA $175.3 $151.0 $497.7 $292.6
------ ------ ------ ------
Non-cash stock-based compensation expense 3.4 3.9 10.5 11.3
Restructuring charges - 4.7 0.6 13.8
Project results from non-controlled joint venture 0.4 5.1 7.4 5.1
Charges (recoveries) from multi-employer pension plan withdrawals 0.6 - 0.6 -
Adjusted EBITDA $179.6 $164.8 $516.7 $322.8
====== ====== ====== ======
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2017 2016 2017 2016
---- ---- ---- ----
EBITDA and Adjusted EBITDA Margin Reconciliation
Net income 3.3% 3.6% 3.8% 2.1%
Interest expense, net 0.9% 0.8% 0.9% 1.0%
Provision for income taxes 2.2% 2.4% 2.5% 1.4%
Depreciation and amortization 2.6% 2.7% 2.8% 3.2%
EBITDA margin 9.0% 9.5% 9.9% 7.7%
--- --- --- ---
Non-cash stock-based compensation expense 0.2% 0.2% 0.2% 0.3%
Restructuring charges - % 0.3% 0.0% 0.4%
Project results from non-controlled joint venture 0.0% 0.3% 0.1% 0.1%
Charges (recoveries) from multi-employer pension plan withdrawals 0.0% - % 0.0% - %
--- ---
Adjusted EBITDA margin 9.2% 10.4% 10.3% 8.5%
=== ==== ==== ===
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures - Unaudited
(In millions, except for percentages and per share amounts)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2017 2016 2017 2016
---- ---- ---- ----
Adjusted Net Income Reconciliation
Net income $64.2 $56.5 $188.2 $78.1
Non-cash stock-based compensation expense 3.4 3.9 10.5 11.3
Restructuring charges - 4.7 0.6 13.8
Project results from non-controlled joint venture 0.4 5.1 7.4 5.1
Charges (recoveries) from multi-employer pension plan withdrawals 0.6 - 0.6 -
Income tax effect of adjustments (a) (0.6) (4.0) (4.1) (10.6)
Adjusted net income $68.0 $66.3 $203.1 $97.7
===== ===== ====== =====
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2017 2016 2017 2016
---- ---- ---- ----
Adjusted Diluted EPS Reconciliation
Diluted earnings per share $0.77 $0.69 $2.27 $0.96
Non-cash stock-based compensation expense 0.04 0.05 0.13 0.14
Restructuring charges - 0.06 0.01 0.17
Project results from non-controlled joint venture 0.00 0.06 0.09 0.06
Charges (recoveries) from multi-employer pension plan withdrawals 0.01 - 0.01 -
Income tax effect of adjustments (a) (0.01) (0.05) (0.05) (0.13)
Adjusted diluted earnings per share $0.82 $0.81 $2.45 $1.20
===== ===== ===== =====
(a) Represents the tax effect of the adjusted items that are subject to tax, including the tax effects of share-based compensation expense. Tax effects are determined based on the tax treatment of the related items, the incremental statutory tax rate of the jurisdictions pertaining to each adjustment,
and taking into consideration their effect on pre-tax income.
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures - Unaudited
(In millions, except for percentages and per share amounts)
Guidance for the For the
Three Months Ended Three Months Ended
December 31, 2017 Est. December 31, 2016
---------------------- -----------------
EBITDA and Adjusted EBITDA Reconciliation
Net income $26 $55.9
Interest expense, net 16 12.8
Provision for income taxes 18 37.5
Depreciation and amortization 50 42.7
--- ----
EBITDA $110 $148.9
---- ------
Non-cash stock-based compensation expense 3 3.8
Restructuring charges - 1.4
Adjusted EBITDA $113 $154.1
==== ======
Guidance for the For the
Three Months Ended Three Months Ended
December 31, 2017 Est. December 31, 2016
---------------------- -----------------
EBITDA and Adjusted EBITDA Margin Reconciliation
Net income 2.0% 4.2%
Interest expense, net 1.2% 1.0%
Provision for income taxes 1.4% 2.8%
Depreciation and amortization 3.9% 3.2%
EBITDA margin 8.5% 11.1%
--- ----
Non-cash stock-based compensation expense 0.3% 0.3%
Restructuring charges - % 0.1%
Adjusted EBITDA margin 8.7% 11.5%
=== ====
Guidance for the For the
Three Months Ended Three Months Ended
December 31, 2017 Est. December 31, 2016
---------------------- -----------------
Adjusted Net Income Reconciliation
Net income $26 $55.9
Non-cash stock-based compensation expense 3 3.8
Restructuring charges - 1.4
Income tax effect of adjustments (a) (0) (1.2)
Adjusted net income $29 $60.0
=== =====
Guidance for the For the
Three Months Ended Three Months Ended
December 31, 2017 Est. December 31, 2016
---------------------- -----------------
Adjusted Diluted EPS Reconciliation
Diluted earnings per share $0.32 $0.66
Non-cash stock-based compensation expense 0.04 0.05
Restructuring charges - 0.02
Income tax effect of adjustments (a) (0.00) (0.01)
Adjusted diluted earnings per share $0.36 $0.70
===== =====
(a) Represents the tax effect of the adjusted items that are subject to tax, including the tax effects of share-based compensation expense. Tax effects are determined based on the tax treatment of the related items, the
incremental statutory tax rate of the jurisdictions pertaining to each adjustment, and taking into consideration their effect on pre-tax income.
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures - Unaudited
(In millions, except for percentages and per share amounts)
Guidance for the For the For the
Year Ended Year Ended Year Ended
December 31, 2017 Est. December 31, 2016 December 31, 2015
---------------------- ----------------- -----------------
EBITDA and Adjusted EBITDA Reconciliation
Net income $215 $134.0 $(79.7)
Interest expense, net 60 50.7 48.1
Provision for income taxes 144 91.8 12.0
Depreciation and amortization 188 164.9 169.7
--- ----- -----
EBITDA $608 $441.5 $150.0
---- ------ ------
Non-cash stock-based compensation expense 14 15.1 12.4
Restructuring charges 1 15.2 -
Goodwill and intangible asset impairment - - 78.6
Acquisition integration costs - - 17.8
Audit Committee investigation related costs - - 16.5
Project results from non-controlled joint venture 7 5.1 16.3
Court mandated mediation settlement - - 12.2
Loss on equity investee interest rate swaps - - 4.4
Charges (recoveries) from multi-employer pension plan withdrawals 1 - -
--- --- ---
Adjusted EBITDA $630 $476.9 $308.1
==== ====== ======
Guidance for the For the For the
Year Ended Year Ended Year Ended
December 31, 2017 Est. December 31, 2016 December 31, 2015
---------------------- ----------------- -----------------
EBITDA and Adjusted EBITDA Margin Reconciliation
Net income 3.4% 2.6% (1.9)%
Interest expense, net 1.0% 1.0% 1.1%
Provision for income taxes 2.3% 1.8% 0.3%
Depreciation and amortization 3.0% 3.2% 4.0%
EBITDA margin 9.6% 8.6% 3.6%
--- --- ---
Non-cash stock-based compensation expense 0.2% 0.3% 0.3%
Restructuring charges 0.0% 0.3% - %
Goodwill and intangible asset impairment - % - % 1.9%
Acquisition integration costs - % - % 0.4%
Audit Committee investigation related costs - % - % 0.4%
Project results from non-controlled joint venture 0.1% 0.1% 0.4%
Court mandated mediation settlement - % - % 0.3%
Loss on equity investee interest rate swaps - % - % 0.1%
Charges (recoveries) from multi-employer pension plan withdrawals 0.0% - % - %
Adjusted EBITDA margin 10.0% 9.3% 7.3%
==== === ===
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures - Unaudited
(In millions, except for percentages and per share amounts)
Guidance for the For the For the
Year Ended Year Ended Year Ended
December 31, 2017 Est. December 31, 2016 December 31, 2015
---------------------- ----------------- -----------------
Adjusted Net Income Reconciliation
Net income $215 $134.0 $(79.7)
Non-cash stock-based compensation expense 14 15.1 12.4
Restructuring charges 1 15.2 -
Goodwill and intangible asset impairment - - 78.6
Acquisition integration costs - - 17.8
Audit Committee investigation related costs - - 17.4
Project results from non-controlled joint venture 7 5.1 16.3
Court mandated mediation settlement - - 12.2
Loss on equity investee interest rate swaps - - 4.4
Impact of Alberta tax law change - - 2.8
Charges (recoveries) from multi-employer pension plan withdrawals 1 - -
Income tax effect of adjustments (a) (5) (11.7) (30.8)
Adjusted net income $232 $157.7 $51.4
==== ====== =====
Guidance for the For the For the
Year Ended Year Ended Year Ended
December 31, 2017 Est. December 31, 2016 December 31, 2015
---------------------- ----------------- -----------------
Adjusted Diluted EPS Reconciliation
Diluted earnings per share $2.59 $1.61 $(0.98)
Non-cash stock-based compensation expense 0.17 0.19 0.15
Restructuring charges 0.01 0.19 -
Goodwill and intangible asset impairment - - 0.97
Acquisition integration costs - - 0.22
Audit Committee investigation related costs - - 0.21
Project results from non-controlled joint venture 0.09 0.06 0.20
Court mandated mediation settlement - - 0.15
Loss on equity investee interest rate swaps - - 0.05
Impact of Alberta tax law change - - 0.03
Charges (recoveries) from multi-employer pension plan withdrawals 0.01 - -
Income tax effect of adjustments (a) (0.06) (0.14) (0.38)
Adjusted diluted earnings per share $2.80 $1.90 $0.64
===== ===== =====
(a) Represents the tax effect of the adjusted items that are subject to tax, including the tax effects of share-based compensation expense. Tax effects are determined based on the tax treatment of the related items, the incremental statutory tax rate of the jurisdictions pertaining to each
adjustment, and taking into consideration their effect on pre-tax income.
The tables may contain slight summation differences due to rounding.
MasTec, Inc. is a leading infrastructure construction company operating mainly throughout North America across a range of industries. The Company's primary activities include the engineering, building, installation, maintenance and upgrade of communications, energy and utility infrastructure, such as: wireless, wireline/fiber, satellite communications and customer fulfillment activities; petroleum and natural gas pipeline infrastructure; electrical utility transmission and distribution; power generation; and industrial infrastructure. MasTec's customers are primarily in these industries. The Company's corporate website is located at www.mastec.com. The Company's website should be considered as a recognized channel of distribution, and the Company may periodically post important, or supplemental, information regarding contracts, awards or other related news on the Presentations/Webcasts page in the Investors section therein.
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 trends in oil, natural gas, electricity and other energy source prices; volatility in capital expenditures by our customers, financing availability and cost, customer consolidation and technological and regulatory changes in the industries we serve; our ability to accurately estimate the costs associated with our fixed price and other contracts, including any material changes in estimates for completion of projects, and performance on such projects; our ability to manage projects effectively and in accordance with our estimates; the effect of economic conditions on demand for our services; market conditions, technological developments and regulatory changes that affect us or our customers' industries; the highly competitive nature of our industry; risks related to our strategic arrangements, including our cost and equity investees; fluctuations in foreign currencies; risks associated with operating in or expanding into additional international markets, which could restrict our ability to expand globally and harm our business and prospects or any failure to comply with laws applicable to our foreign activities; customer disputes related to our performance of services; disputes with, or failures of, our subcontractors to deliver agreed-upon supplies or services in a timely fashion; 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; the timing and extent of fluctuations in geographic, weather, equipment and operational factors affecting the industries in which we operate; our ability to attract and retain qualified personnel, key management and skilled employees, including from acquired businesses, and our ability to enforce any noncompetition agreements, integrate acquired businesses within expected timeframes and achieve the revenue, cost savings and earnings levels from such acquisitions at or above the levels projected, including the risk of potential asset impairment charges, including write-downs of goodwill; any exposure related to divested businesses; any exposure resulting from system or information technology interruptions or data security breaches; risks related to the restatement of certain of our fiscal year 2014 interim financial statements; the impact of U.S. federal, local or state tax legislation and other regulations affecting corporate income taxes, as well as, those 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; 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, the 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 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, and any future loans or securities; our ability to obtain performance and surety bonds; 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 that shareholders may experience in connection with shares we may issue as consideration for earn-out obligations or as purchase consideration in connection with past or future acquisitions, or other stock issuances; as well as other risks detailed in our filings with the Securities and Exchange Commission. Actual results may differ significantly from results expressed or implied in these statements. We do not undertake any obligation to update forward-looking statements.
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