CORAL
GABLES, Fla., Oct. 31,
2023 /PRNewswire/ -- MasTec, Inc. (NYSE: MTZ) today
announced 2023 third quarter financial results and updated its full
year 2023 guidance expectations. Management has elected to
accelerate the timing of its third quarter earnings call now
scheduled for Wednesday, November 1st,
2023 at 8:00 AM Eastern
Time.
Third Quarter 2023 results are as follows:
- Record Revenue of $3.26
billion
- GAAP Net Income of $15
million
- Adjusted Net Income of $76
million
- Adjusted EBITDA of $271
million
- GAAP Diluted earnings per share of $0.18
- Adjusted diluted earnings per share of $0.95
- Cash flow provided by operating activities of $294 million
- Net debt reduction of $213
million
- Liquidity of ~$1.16 billion as of
September 30, 2023
MasTec's third quarter 2023 results were impacted by continued
delays on certain Clean Energy and Infrastructure segment project
start dates. Margins in this segment remain pressured by the costs
to maintain resources for the anticipated ramp in activity. MasTec
also expects a lower level of this segment's activity in the fourth
quarter of 2023, further impacted by the recent announcement by
Li-Cycle Holdings, Corp., indicating a pause in construction on
their Rochester Hub project for which MasTec was providing
construction management services on a cost-plus basis. Over the
course of 2023 clean energy projects have been delayed due to
various factors, including interconnect agreement lead times,
supply chain issues, permitting delays and tax equity funding
uncertainty. The market and MasTec's visibility on project timing
are improving, as evidenced by approximately $500 million of new contract awards in the
segment since the end of the third quarter. MasTec expects
significant backlog growth by yearend as projects continue to move
towards full notice to proceed.
MasTec's Oil and Gas segment had a slower than anticipated ramp
in construction of the Mountain Valley Pipeline project, as hiring
the approximately 3,700 crew members took longer than initial
estimates while the project faced ongoing legal challenges in the
third quarter. All project activity planned for the fourth quarter
is now progressing as scheduled and the Company's full year
$2 billion segment revenue outlook
remains intact. MasTec now expects to complete the project in the
first half of 2024.
Lastly, the Company experienced lower than anticipated revenue
in its Communications and Power Delivery segments due to certain
customers' deferral of previously planned activity. These delays
were driven by higher financing costs and annual budgetary
limitations. MasTec expects the reduced activity to continue
through the fourth quarter until annual budget cycles are
replenished. Both segments have seen significant awards in the
fourth quarter, over $300 million
dollars respectively, comprised of territory expansion, new
services or new customers, that will flow into backlog at
yearend.
In light of these developments, MasTec is also updating its full
year guidance. The Company now expects:
- Revenue of approximately $12
billion
- GAAP Net Loss of approximately $61
million
- Adjusted Net Income of approximately $140 million
- Adjusted EBITDA of approximately $850
million
- GAAP Diluted loss per share of approximately $0.83
- Adjusted diluted earnings per share of approximately
$1.75
- Cash flow provided by operating activities of approximately
$500 million for the second half of
2023 and $400 million for the full
year
Jose Mas, MasTec's Chief
Executive Officer, commented, "While we are disappointed in our
anticipated performance for the second half of 2023, we believe our
revised full year guidance fully captures the remaining near-term
risks in our business, including the operational challenges IEA has
experienced this year. We are keenly focused on providing a clear
picture to investors, both near and longer term."
Mr. Mas continued, "Despite our challenges and the headwinds
we've faced in 2023, we continue to expect strong, although
delayed, demand for our services. Our stated awards post third
quarter and expected contract signings through yearend position us
to confidently expect mid to high single digit revenue growth in
2024 with modest EBITDA margin expansion. This expectation assumes
some continuation of the current economic environment challenges.
Our long-term outlook for our business is unchanged and we will
work hard to regain the confidence of our stakeholders."
Paul DiMarco, MasTec's Executive
Vice President and Chief Financial Officer, noted, "Despite the
underperformance in our third quarter, we did make progress in cash
flow generation, with $294 million
dollars of cash flow from operations in the quarter,
resulting in net debt reduction of $213
million. We expect this trend to continue in the fourth
quarter with net debt reduction slightly lower than the third
quarter. While the revised earnings outlook will prevent us from
reaching our 2.5x net debt leverage goal by the end of this year,
we believe the path to that level is achievable in 2024 with the
reasonably obtained 2024 outlook laid out by Jose. We remain very
confident in the long-term outlook for our end markets and remain
committed to operate the business below 2.5x net debt leverage in
support of our investment grade rating."
Adjusted net income, adjusted diluted earnings per share,
adjusted EBITDA and net debt, 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.
Management plans to provide more information on its third
quarter earnings call, scheduled for Wednesday, November 1, 2023 at 8:00 AM Eastern Time. The call-in number
for the live conference call is (856) 344-9221 or (888) 394-8218,
with a confirmation code of 2698200. Additionally, the call will be
broadcast live over the Internet and can be accessed, along with
any presentation materials, and replayed for 30 days 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, 2023 and
2022:
|
Consolidated
Statements of Operations
(unaudited - in
thousands, except per share information)
|
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenue
|
$ 3,257,077
|
|
$ 2,513,484
|
|
$ 8,715,851
|
|
$ 6,769,677
|
|
Costs of revenue,
excluding depreciation and amortization
|
2,857,118
|
|
2,187,835
|
|
7,701,392
|
|
5,949,262
|
|
Depreciation
|
115,033
|
|
91,291
|
|
325,318
|
|
263,487
|
|
Amortization of
intangible assets
|
42,266
|
|
27,979
|
|
126,252
|
|
81,242
|
|
General and
administrative expenses
|
180,640
|
|
125,068
|
|
520,709
|
|
404,243
|
|
Interest expense,
net
|
62,556
|
|
26,885
|
|
174,664
|
|
62,313
|
|
Equity in earnings of
unconsolidated affiliates, net
|
(6,787)
|
|
(6,059)
|
|
(23,434)
|
|
(19,423)
|
|
Other (income) expense,
net
|
(16,623)
|
|
174
|
|
(26,332)
|
|
(1,897)
|
|
Income (loss) before
income taxes
|
$
22,874
|
|
$
60,311
|
|
$
(82,718)
|
|
$
30,450
|
|
(Provision for) benefit
from income taxes
|
(7,569)
|
|
(11,089)
|
|
34,231
|
|
68
|
|
Net income (loss)
|
$
15,305
|
|
$
49,222
|
|
$
(48,487)
|
|
$
30,518
|
|
Net income
attributable to non-controlling interests
|
1,009
|
|
326
|
|
2,215
|
|
388
|
|
Net income (loss) attributable to MasTec,
Inc.
|
$
14,296
|
|
$
48,896
|
|
$
(50,702)
|
|
$
30,130
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
$
0.18
|
|
$
0.66
|
|
$
(0.65)
|
|
$
0.41
|
|
Basic weighted average
common shares outstanding
|
77,640
|
|
73,936
|
|
77,418
|
|
74,386
|
|
Diluted earnings
(loss) per share
|
$
0.18
|
|
$
0.65
|
|
$
(0.65)
|
|
$
0.38
|
|
Diluted weighted
average common shares outstanding
|
78,455
|
|
75,073
|
|
77,418
|
|
75,576
|
|
Consolidated Balance
Sheets
(unaudited - in
thousands)
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
Assets
|
|
|
|
|
Current
assets
|
$ 4,038,533
|
|
$ 3,859,127
|
|
Property and equipment,
net
|
1,729,840
|
|
1,754,101
|
|
Operating lease
right-of-use assets
|
403,070
|
|
279,534
|
|
Goodwill,
net
|
2,118,866
|
|
2,045,041
|
|
Other intangible
assets, net
|
821,329
|
|
946,299
|
|
Other long-term
assets
|
418,089
|
|
409,157
|
|
Total assets
|
$
9,529,727
|
|
$
9,293,259
|
|
Liabilities and Equity
|
|
|
|
|
Current
liabilities
|
$ 2,811,293
|
|
$ 2,496,037
|
|
Long-term debt,
including finance leases
|
3,029,939
|
|
3,052,193
|
|
Long-term operating
lease liabilities
|
279,302
|
|
194,050
|
|
Deferred income
taxes
|
455,009
|
|
571,401
|
|
Other long-term
liabilities
|
240,463
|
|
238,391
|
|
Total equity
|
2,713,721
|
|
2,741,187
|
|
Total liabilities and equity
|
$
9,529,727
|
|
$
9,293,259
|
|
Consolidated
Statements of Cash Flows
(unaudited - in
thousands)
|
|
|
For the Nine Months Ended September
30,
|
|
2023
|
|
2022
|
|
Net cash provided by
operating activities
|
$
196,572
|
|
$
118,671
|
|
Net cash used in
investing activities
|
(171,683)
|
|
(241,694)
|
|
Net cash used in
financing activities
|
(181,587)
|
|
(139,478)
|
|
Effect of currency
translation on cash
|
280
|
|
(2,559)
|
|
Net decrease in cash
and cash equivalents
|
(156,418)
|
|
(265,060)
|
|
Cash and cash
equivalents - beginning of period
|
$
370,592
|
|
$
360,736
|
|
Cash and cash equivalents - end of
period
|
$
214,174
|
|
$
95,676
|
|
Backlog by Reportable Segment (unaudited - in
millions)
|
September 30,
2023
|
|
June 30,
2023
|
|
September 30,
2022
|
|
Communications
|
$
5,299
|
|
$
5,420
|
|
$
5,024
|
|
Clean Energy and
Infrastructure
|
3,073
|
|
3,324
|
|
1,933
|
|
Oil and Gas
|
1,681
|
|
2,042
|
|
1,513
|
|
Power
Delivery
|
2,437
|
|
2,656
|
|
2,757
|
|
Other
|
—
|
|
—
|
|
—
|
|
Estimated 18-month backlog
|
$
12,490
|
|
$
13,442
|
|
$
11,227
|
Backlog is a common measurement used in our industry. Our
methodology for determining backlog may not, however, be comparable
to the methodologies used by others. Estimated backlog represents
the amount of revenue we expect to realize over the next 18 months
from future work on uncompleted construction contracts, including
new contracts under which work has not begun, as well as revenue
from change orders and renewal options. Our estimated backlog also
includes amounts under master service and other service agreements
and our proportionate share of estimated revenue from
proportionately consolidated non-controlled contractual joint
ventures. Estimated backlog for work under master service and other
service agreements is determined based on historical trends,
anticipated seasonal impacts, experience from similar projects and
estimates of customer demand based on communications with our
customers.
|
Supplemental
Disclosures and Reconciliation of Non-GAAP
Disclosures
(unaudited - in
millions, except for percentages and per share
information)
|
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
Segment Information
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenue by Reportable Segment
|
|
|
|
|
|
|
|
|
Communications
|
$
824.4
|
|
$
888.9
|
|
$
2,499.6
|
|
$
2,375.1
|
|
Clean Energy and
Infrastructure
|
1,099.9
|
|
563.2
|
|
2,894.5
|
|
1,493.5
|
|
Oil and Gas
|
672.3
|
|
375.8
|
|
1,270.6
|
|
927.9
|
|
Power
Delivery
|
665.0
|
|
688.4
|
|
2,077.1
|
|
1,985.4
|
|
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
Eliminations
|
(4.5)
|
|
(2.8)
|
|
(25.9)
|
|
(12.2)
|
|
Consolidated revenue
|
$
3,257.1
|
|
$
2,513.5
|
|
$
8,715.9
|
|
$
6,769.7
|
|
|
|
|
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
Adjusted EBITDA by Segment
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
242.7
|
|
$
206.5
|
|
$
543.5
|
|
$
437.5
|
|
|
Non-cash stock-based
compensation expense (a)
|
7.2
|
|
5.7
|
|
24.3
|
|
18.9
|
|
|
Acquisition and
integration costs (b)
|
21.1
|
|
33.3
|
|
60.9
|
|
59.4
|
|
|
Losses on fair value
of investment (a)
|
—
|
|
0.1
|
|
0.2
|
|
7.2
|
|
|
Bargain purchase gain
(a)
|
—
|
|
—
|
|
—
|
|
(0.2)
|
|
|
Adjusted EBITDA
|
$
271.1
|
|
$
245.6
|
|
$
629.0
|
|
$
522.8
|
|
|
Segment:
|
|
|
|
|
|
|
|
|
|
Communications
|
$
78.2
|
|
$
110.4
|
|
$
234.0
|
|
$
236.9
|
|
|
Clean Energy and
Infrastructure
|
57.6
|
|
24.6
|
|
117.8
|
|
30.2
|
|
|
Oil and Gas
|
97.3
|
|
50.3
|
|
188.9
|
|
137.9
|
|
|
Power
Delivery
|
57.0
|
|
83.5
|
|
163.5
|
|
185.1
|
|
|
Other
|
4.4
|
|
5.6
|
|
18.2
|
|
20.0
|
|
|
Segment
Total
|
294.5
|
|
274.4
|
|
722.4
|
|
610.1
|
|
|
Corporate
|
(23.4)
|
|
(28.8)
|
|
(93.4)
|
|
(87.3)
|
|
|
Adjusted EBITDA
|
$
271.1
|
|
$
245.6
|
|
$
629.0
|
|
$
522.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Non-cash stock-based
compensation expense, losses on the fair value of our investment in
American Virtual Cloud Technologies, Inc. ("AVCT") and the bargain
purchase gain from a fourth quarter 2021 acquisition are included
within Corporate results.
|
|
(b)
|
For the three month
period ended September 30, 2023, Communications, Clean Energy and
Infrastructure and Power Delivery EBITDA included $4.8 million,
$15.3 million and $0.5 million, respectively, of acquisition and
integration costs related to our recent acquisitions, and Corporate
EBITDA included $0.5 million of such costs, and for the nine month
period ended September 30, 2023, $18.3 million, $36.9 million, $2.5
million and $3.2 million of such costs were included in EBITDA of
the segments and Corporate, respectively. For the three month
period ended September 30, 2022, Communications, Oil and Gas, Power
Delivery and Corporate EBITDA included $0.5 million, $1.1 million,
$20.4 million and $11.2 million of such acquisition and integration
costs, respectively, and for the nine month period ended September
30, 2022, $2.4 million, $4.5 million, $34.5 million, and $18.0
million of such costs were included in EBITDA of the segments and
Corporate, respectively.
|
|
Supplemental
Disclosures and Reconciliation of Non-GAAP
Disclosures
(unaudited - in
millions, except for percentages and per share
information)
|
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Adjusted EBITDA Margin by
Segment
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
7.5 %
|
|
8.2 %
|
|
6.2 %
|
|
6.5 %
|
|
Non-cash stock-based
compensation expense (a)
|
0.2 %
|
|
0.2 %
|
|
0.3 %
|
|
0.3 %
|
|
Acquisition and
integration costs (b)
|
0.6 %
|
|
1.3 %
|
|
0.7 %
|
|
0.9 %
|
|
Losses on fair value
of investment (a)
|
— %
|
|
0.0 %
|
|
0.0 %
|
|
0.1 %
|
|
Bargain purchase gain
(a)
|
— %
|
|
— %
|
|
— %
|
|
(0.0) %
|
|
Adjusted EBITDA margin
|
8.3 %
|
|
9.8 %
|
|
7.2 %
|
|
7.7 %
|
|
Segment:
|
|
|
|
|
|
|
|
|
Communications
|
9.5 %
|
|
12.4 %
|
|
9.4 %
|
|
10.0 %
|
|
Clean Energy and
Infrastructure
|
5.2 %
|
|
4.4 %
|
|
4.1 %
|
|
2.0 %
|
|
Oil and Gas
|
14.5 %
|
|
13.4 %
|
|
14.9 %
|
|
14.9 %
|
|
Power
Delivery
|
8.6 %
|
|
12.1 %
|
|
7.9 %
|
|
9.3 %
|
|
Other
|
NM
|
|
NM
|
|
NM
|
|
NM
|
|
Segment
Total
|
9.0 %
|
|
10.9 %
|
|
8.3 %
|
|
9.0 %
|
|
Corporate
|
—
|
|
—
|
|
—
|
|
—
|
|
Adjusted EBITDA margin
|
8.3 %
|
|
9.8 %
|
|
7.2 %
|
|
7.7 %
|
|
|
|
NM - Percentage is not
meaningful
|
|
(a)
|
Non-cash stock-based
compensation expense, losses on the fair value of our investment in
AVCT and the bargain purchase gain from a fourth quarter 2021
acquisition are included within Corporate results.
|
|
(b)
|
For the three month
period ended September 30, 2023, Communications, Clean Energy and
Infrastructure and Power Delivery EBITDA included $4.8 million,
$15.3 million and $0.5 million, respectively, of acquisition and
integration costs related to our recent acquisitions, and Corporate
EBITDA included $0.5 million of such costs, and for the nine month
period ended September 30, 2023, $18.3 million, $36.9 million, $2.5
million and $3.2 million of such costs were included in EBITDA of
the segments and Corporate, respectively. For the three month
period ended September 30, 2022, Communications, Oil and Gas, Power
Delivery and Corporate EBITDA included $0.5 million, $1.1 million,
$20.4 million and $11.2 million of such acquisition and integration
costs, respectively, and for the nine month period ended September
30, 2022, $2.4 million, $4.5 million, $34.5 million, and $18.0
million of such costs were included in EBITDA of the segments and
Corporate, respectively.
|
|
Supplemental
Disclosures and Reconciliation of Non-GAAP
Disclosures
(unaudited - in
millions, except for percentages and per share
information)
|
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
EBITDA and Adjusted EBITDA
Reconciliation
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
15.3
|
|
$
49.2
|
|
$
(48.5)
|
|
$
30.5
|
|
Interest expense,
net
|
62.6
|
|
26.9
|
|
174.7
|
|
62.3
|
|
Provision for (benefit
from) income taxes
|
7.6
|
|
11.1
|
|
(34.2)
|
|
(0.1)
|
|
Depreciation
|
115.0
|
|
91.3
|
|
325.3
|
|
263.5
|
|
Amortization of
intangible assets
|
42.3
|
|
28.0
|
|
126.3
|
|
81.2
|
|
EBITDA
|
$
242.7
|
|
$
206.5
|
|
$
543.5
|
|
$
437.5
|
|
Non-cash stock-based
compensation expense
|
7.2
|
|
5.7
|
|
24.3
|
|
18.9
|
|
Acquisition and
integration costs
|
21.1
|
|
33.3
|
|
60.9
|
|
59.4
|
|
Losses on fair value
of investment
|
—
|
|
0.1
|
|
0.2
|
|
7.2
|
|
Bargain purchase
gain
|
—
|
|
—
|
|
—
|
|
(0.2)
|
|
Adjusted EBITDA
|
$
271.1
|
|
$
245.6
|
|
$
629.0
|
|
$
522.8
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
EBITDA and Adjusted EBITDA Margin
Reconciliation
|
|
|
|
|
|
|
|
|
Net income (loss)
|
0.5 %
|
|
2.0 %
|
|
(0.6) %
|
|
0.5 %
|
|
Interest expense,
net
|
1.9 %
|
|
1.1 %
|
|
2.0 %
|
|
0.9 %
|
|
Provision for (benefit
from) income taxes
|
0.2 %
|
|
0.4 %
|
|
(0.4) %
|
|
(0.0) %
|
|
Depreciation
|
3.5 %
|
|
3.6 %
|
|
3.7 %
|
|
3.9 %
|
|
Amortization of
intangible assets
|
1.3 %
|
|
1.1 %
|
|
1.4 %
|
|
1.2 %
|
|
EBITDA margin
|
7.5 %
|
|
8.2 %
|
|
6.2 %
|
|
6.5 %
|
|
Non-cash stock-based
compensation expense
|
0.2 %
|
|
0.2 %
|
|
0.3 %
|
|
0.3 %
|
|
Acquisition and
integration costs
|
0.6 %
|
|
1.3 %
|
|
0.7 %
|
|
0.9 %
|
|
Losses on fair value
of investment
|
— %
|
|
0.0 %
|
|
0.0 %
|
|
0.1 %
|
|
Bargain purchase
gain
|
— %
|
|
— %
|
|
— %
|
|
(0.0) %
|
|
Adjusted EBITDA margin
|
8.3 %
|
|
9.8 %
|
|
7.2 %
|
|
7.7 %
|
|
Supplemental
Disclosures and Reconciliation of Non-GAAP
Disclosures
(unaudited - in
millions, except for percentages and per share
information)
|
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Adjusted Net Income
Reconciliation
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
15.3
|
|
$
49.2
|
|
$
(48.5)
|
|
$
30.5
|
|
Non-cash stock-based
compensation expense
|
7.2
|
|
5.7
|
|
24.3
|
|
18.9
|
|
Amortization of
intangible assets
|
42.3
|
|
28.0
|
|
126.3
|
|
81.2
|
|
Acquisition and
integration costs
|
21.1
|
|
33.3
|
|
60.9
|
|
59.4
|
|
Losses on fair value
of investment
|
—
|
|
0.1
|
|
0.2
|
|
7.2
|
|
Bargain purchase
gain
|
—
|
|
—
|
|
—
|
|
(0.2)
|
|
Income tax effect of
adjustments (a)
|
(10.0)
|
|
(15.5)
|
|
(58.6)
|
|
(42.2)
|
|
Adjusted net income
|
$
75.9
|
|
$
100.8
|
|
$
104.7
|
|
$
154.8
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Adjusted Diluted Earnings per Share
Reconciliation
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per
share
|
$
0.18
|
|
$
0.65
|
|
$
(0.65)
|
|
$
0.38
|
|
Non-cash stock-based
compensation expense
|
0.09
|
|
0.08
|
|
0.31
|
|
0.25
|
|
Amortization of
intangible assets
|
0.54
|
|
0.37
|
|
1.61
|
|
1.07
|
|
Acquisition and
integration costs
|
0.27
|
|
0.44
|
|
0.78
|
|
0.79
|
|
Losses on fair value
of investment
|
—
|
|
0.00
|
|
0.00
|
|
0.10
|
|
Bargain purchase
gain
|
—
|
|
—
|
|
—
|
|
(0.00)
|
|
Income tax effect of
adjustments (a)
|
(0.13)
|
|
(0.21)
|
|
(0.75)
|
|
(0.56)
|
|
Adjusted diluted earnings per
share
|
$
0.95
|
|
$
1.34
|
|
$
1.31
|
|
$
2.02
|
|
|
|
(a)
|
Represents the tax
effects of the adjusted items that are subject to tax, including
the tax effects of non-cash stock-based compensation expense,
including from share-based payment awards. Tax effects are
determined based on the tax treatment of the related item, the
incremental statutory tax rate of the jurisdictions pertaining to
the adjustment, and their effects on pre-tax income.
|
|
|
|
Calculation of Net Debt
|
September 30,
2023
|
|
June 30,
2023
|
|
Current portion of
long-term debt, including finance leases
|
$
175.3
|
|
$
169.3
|
|
Long-term debt,
including finance leases
|
3,029.9
|
|
3,154.6
|
|
Total Debt
|
$
3,205.2
|
|
$
3,323.9
|
|
Less: cash and cash
equivalents
|
(214.2)
|
|
(119.9)
|
|
Net Debt
|
$
2,991.0
|
|
$
3,204.0
|
|
Supplemental
Disclosures and Reconciliation of Non-GAAP
Disclosures
(unaudited - in
millions, except for percentages and per share
information)
|
|
|
Guidance for the
Three Months Ended
December 31, 2023 Est.
|
|
For the Three
Months Ended
December 31, 2022
|
|
EBITDA and Adjusted EBITDA
Reconciliation
|
|
|
|
|
Net (loss) income
|
$
(13)
|
|
$
3.4
|
|
Interest expense,
net
|
61
|
|
49.9
|
|
(Benefit from)
provision for income taxes
|
(4)
|
|
9.2
|
|
Depreciation
|
117
|
|
107.8
|
|
Amortization of
intangible assets
|
42
|
|
54.7
|
|
EBITDA
|
$
203
|
|
$
225.0
|
|
Non-cash stock-based
compensation expense
|
8
|
|
8.6
|
|
Acquisition and
integration costs
|
10
|
|
26.6
|
|
Losses on fair value
of investment
|
—
|
|
0.4
|
|
Project results from
non-controlled joint venture
|
—
|
|
(2.8)
|
|
Adjusted EBITDA
|
$
221
|
|
$
257.9
|
|
|
|
|
|
Guidance for the
Three Months Ended
December 31, 2023 Est.
|
|
For the Three
Months Ended
December 31, 2022
|
|
EBITDA and Adjusted EBITDA Margin
Reconciliation
|
|
|
|
|
Net (loss) income
|
(0.4) %
|
|
0.1 %
|
|
Interest expense,
net
|
1.8 %
|
|
1.7 %
|
|
(Benefit from)
provision for income taxes
|
(0.1) %
|
|
0.3 %
|
|
Depreciation
|
3.6 %
|
|
3.6 %
|
|
Amortization of
intangible assets
|
1.3 %
|
|
1.8 %
|
|
EBITDA margin
|
6.2 %
|
|
7.5 %
|
|
Non-cash stock-based
compensation expense
|
0.2 %
|
|
0.3 %
|
|
Acquisition and
integration costs
|
0.3 %
|
|
0.9 %
|
|
Losses on fair value
of investment
|
— %
|
|
0.0 %
|
|
Project results from
non-controlled joint venture
|
— %
|
|
(0.1) %
|
|
Adjusted EBITDA margin
|
6.7 %
|
|
8.6 %
|
|
Supplemental
Disclosures and Reconciliation of Non-GAAP
Disclosures
(unaudited - in
millions, except for percentages and per share
information)
|
|
|
Guidance for the
Three Months Ended
December 31, 2023 Est.
|
|
For the Three
Months Ended
December 31, 2022
|
|
Adjusted Net Income
Reconciliation
|
|
|
|
|
Net (loss) income
|
$
(13)
|
|
$
3.4
|
|
Non-cash stock-based
compensation expense
|
8
|
|
8.6
|
|
Amortization of
intangible assets
|
42
|
|
54.7
|
|
Acquisition and
integration costs
|
10
|
|
26.6
|
|
Losses on fair value
of investment
|
—
|
|
0.4
|
|
Project results from
non-controlled joint venture
|
—
|
|
(2.8)
|
|
Income tax effect of
adjustments (a)
|
(12)
|
|
(16.4)
|
|
Statutory tax rate
effects (b)
|
—
|
|
5.5
|
|
Adjusted net income
|
$
35
|
|
$
80.0
|
|
Guidance for the
Three Months Ended
December 31, 2023 Est.
|
|
For the Three
Months Ended
December 31, 2022
|
|
Adjusted Diluted Earnings per Share
Reconciliation
|
|
|
|
|
Diluted (loss) earnings per
share
|
$
(0.17)
|
|
$
0.04
|
|
Non-cash stock-based
compensation expense
|
0.10
|
|
0.11
|
|
Amortization of
intangible assets
|
0.54
|
|
0.70
|
|
Acquisition and
integration costs
|
0.13
|
|
0.34
|
|
Losses on fair value
of investment
|
—
|
|
0.01
|
|
Project results from
non-controlled joint venture
|
—
|
|
(0.04)
|
|
Income tax effect of
adjustments (a)
|
(0.16)
|
|
(0.21)
|
|
Statutory tax rate
effects (b)
|
—
|
|
0.07
|
|
Adjusted diluted earnings per
share
|
$
0.44
|
|
$
1.03
|
|
|
|
(a)
|
Represents the tax
effects of the adjusted items that are subject to tax, including
the tax effects of non-cash stock-based compensation expense,
including from share-based payment awards. Tax effects are
determined based on the tax treatment of the related item, the
incremental statutory tax rate of the jurisdictions pertaining to
the adjustment, and their effects on pre-tax income.
|
|
(b)
|
For the quarter ended
December 31, 2022, includes the effect of changes in state tax
rates.
|
|
Supplemental
Disclosures and Reconciliation of Non-GAAP
Disclosures
(unaudited - in
millions, except for percentages and per share
information)
|
|
|
Guidance for the Year
Ended December 31, 2023 Est.
|
|
For the Year
Ended December 31, 2022
|
|
For the Year
Ended December 31, 2021
|
|
EBITDA and Adjusted EBITDA
Reconciliation
|
|
|
|
|
|
|
Net (loss) income
|
$
(61)
|
|
$
33.9
|
|
$
330.7
|
|
Interest expense,
net
|
235
|
|
112.3
|
|
53.4
|
|
(Benefit from)
provision for income taxes
|
(38)
|
|
9.2
|
|
99.3
|
|
Depreciation
|
442
|
|
371.2
|
|
345.6
|
|
Amortization of
intangible assets
|
169
|
|
135.9
|
|
77.2
|
|
EBITDA
|
$
747
|
|
$
662.5
|
|
$
906.3
|
|
Non-cash stock-based
compensation expense
|
32
|
|
27.4
|
|
24.8
|
|
Acquisition and
integration costs
|
71
|
|
86.0
|
|
3.6
|
|
Losses on fair value
of investment
|
0
|
|
7.7
|
|
7.8
|
|
Bargain purchase
gain
|
—
|
|
(0.2)
|
|
(3.5)
|
|
Project results from
non-controlled joint venture
|
—
|
|
(2.8)
|
|
—
|
|
Adjusted EBITDA
|
$
850
|
|
$
780.6
|
|
$
939.1
|
|
Guidance for the Year
Ended December 31, 2023 Est.
|
|
For the Year
Ended December 31, 2022
|
|
For the Year
Ended December 31, 2021
|
|
EBITDA and Adjusted EBITDA Margin
Reconciliation
|
|
|
|
|
|
|
Net (loss) income
|
(0.5) %
|
|
0.3 %
|
|
4.2 %
|
|
Interest expense,
net
|
2.0 %
|
|
1.1 %
|
|
0.7 %
|
|
(Benefit from)
provision for income taxes
|
(0.3) %
|
|
0.1 %
|
|
1.2 %
|
|
Depreciation
|
3.7 %
|
|
3.8 %
|
|
4.3 %
|
|
Amortization of
intangible assets
|
1.4 %
|
|
1.4 %
|
|
1.0 %
|
|
EBITDA margin
|
6.2 %
|
|
6.8 %
|
|
11.4 %
|
|
Non-cash stock-based
compensation expense
|
0.3 %
|
|
0.3 %
|
|
0.3 %
|
|
Acquisition and
integration costs
|
0.6 %
|
|
0.9 %
|
|
0.0 %
|
|
Losses on fair value
of investment
|
0.0 %
|
|
0.1 %
|
|
0.1 %
|
|
Bargain purchase
gain
|
— %
|
|
(0.0) %
|
|
(0.0) %
|
|
Project results from
non-controlled joint venture
|
— %
|
|
(0.0) %
|
|
— %
|
|
Adjusted EBITDA margin
|
7.1 %
|
|
8.0 %
|
|
11.8 %
|
|
Supplemental
Disclosures and Reconciliation of Non-GAAP
Disclosures
(unaudited - in
millions, except for percentages and per share
information)
|
|
|
Guidance for the Year
Ended December 31, 2023 Est.
|
|
For the Year
Ended December 31, 2022
|
|
For the Year
Ended December 31, 2021
|
|
Adjusted Net Income
Reconciliation
|
|
|
|
|
|
|
Net (loss) income
|
$
(61)
|
|
$
33.9
|
|
$
330.7
|
|
Non-cash stock-based
compensation expense
|
32
|
|
27.4
|
|
24.8
|
|
Amortization of
intangible assets
|
169
|
|
135.9
|
|
77.2
|
|
Acquisition and
integration costs
|
71
|
|
86.0
|
|
3.6
|
|
Losses on fair value
of investment
|
0
|
|
7.7
|
|
7.8
|
|
Bargain purchase
gain
|
—
|
|
(0.2)
|
|
(3.5)
|
|
Project results from
non-controlled joint venture
|
—
|
|
(2.8)
|
|
—
|
|
Income tax effect of
adjustments (a)
|
(71)
|
|
(58.6)
|
|
(27.4)
|
|
Statutory tax rate
effects (b)
|
—
|
|
5.5
|
|
6.7
|
|
Adjusted net income
|
$
140
|
|
$
234.8
|
|
$
420.0
|
|
Guidance for the Year
Ended December 31, 2023 Est.
|
|
For the Year
Ended December 31, 2022
|
|
For the Year
Ended December 31, 2021
|
|
Adjusted Diluted Earnings per Share
Reconciliation
|
|
|
|
|
|
|
Diluted (loss) earnings per
share
|
$
(0.83)
|
|
$
0.42
|
|
$
4.45
|
|
Non-cash stock-based
compensation expense
|
0.41
|
|
0.36
|
|
0.34
|
|
Amortization of
intangible assets
|
2.15
|
|
1.78
|
|
1.04
|
|
Acquisition and
integration costs
|
0.90
|
|
1.13
|
|
0.05
|
|
Losses on fair value
of investment
|
0.00
|
|
0.10
|
|
0.11
|
|
Bargain purchase
gain
|
—
|
|
(0.00)
|
|
(0.05)
|
|
Project results from
non-controlled joint venture
|
—
|
|
(0.04)
|
|
—
|
|
Income tax effect of
adjustments (a)
|
(0.90)
|
|
(0.77)
|
|
(0.37)
|
|
Statutory tax rate
effects (b)
|
—
|
|
0.07
|
|
0.09
|
|
Adjusted diluted earnings per
share
|
$
1.75
|
|
$
3.05
|
|
$
5.65
|
|
|
|
(a)
|
Represents the tax
effects of the adjusted items that are subject to tax, including
the tax effects of non-cash stock-based compensation expense,
including from share-based payment awards. Tax effects are
determined based on the tax treatment of the related item, the
incremental statutory tax rate of the jurisdictions pertaining to
the adjustment, and their effects on pre-tax income.
|
|
|
|
(b)
|
For the years ended
December 31, 2022 and 2021, includes the effect of changes in state
tax rates.
|
The tables may contain slight summation differences due to
rounding.
MasTec uses EBITDA and Adjusted EBITDA, as well as Adjusted Net
Income, Adjusted Diluted Earnings Per Share and net debt, to
evaluate our performance, both internally and as compared with its
peers, because these measures exclude certain items that may not be
indicative of its core operating results, as well as items that can
vary widely across different industries or among companies within
the same industry. MasTec believes that these adjusted measures
provide a baseline for analyzing trends in its underlying
business. MasTec believes that these non-U.S. GAAP financial
measures provide meaningful information and help investors
understand its financial results and assess its prospects for
future performance. Because non-U.S. GAAP financial measures are
not standardized, it may not be possible to compare these financial
measures with other companies' non-U.S. GAAP financial measures
having the same or similar names. These financial measures should
not be considered in isolation from, as substitutes for, or
alternative measures of, reported net income or diluted earnings
per share or total debt, and should be viewed in conjunction with
the most comparable U.S. GAAP financial measures and the provided
reconciliations thereto. MasTec believes these non-U.S. GAAP
financial measures, when viewed together with its U.S. GAAP results
and related reconciliations, provide a more complete understanding
of its business. Investors are strongly encouraged to review the
company's consolidated financial statements and publicly filed
reports in their entirety and not rely on any single financial
measure.
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, utility and
other infrastructure, such as: power delivery services, including
transmission, distribution, environmental planning and compliance,
wireless, wireline/fiber and customer fulfillment activities; power
generation, primarily from clean energy and renewable sources;
pipeline infrastructure, including natural gas, carbon capture
sequestration, water and pipeline integrity services, heavy civil,
industrial infrastructure, including roads, bridges and rail, and
environmental remediation services. 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 and webcasts on
the Events & Presentations page in the Investors section
therein.
This presentation contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act.
Forward-looking statements include, but are not limited to,
statements relating to expectations regarding the future financial
and operational performance of MasTec; expectations regarding
MasTec's business or financial outlook; expectations regarding
MasTec's plans, strategies and opportunities; expectations
regarding opportunities, technological developments, competitive
positioning, future economic conditions and other trends in
particular markets or industries; the impact of inflation on
MasTec's costs and the ability to recover increased costs, as well
as other statements reflecting expectations, intentions,
assumptions or beliefs about future events and other statements
that do not relate strictly to historical or current facts. These
statements are based on currently available operating, financial,
economic and other information, and are subject to a number of
significant risks and uncertainties. A variety of factors in
addition to those mentioned above, many of which are beyond our
control, could cause actual future results to differ materially
from those projected in the forward-looking statements. Other
factors that might cause such a difference include, but are not
limited to: market conditions, including levels of
inflation, rising interest rates or supply chain
issues, technological developments, regulatory or
policy changes, including permitting processes and tax incentives
that affect us or our customers' industries and the effects on
markets, energy prices and our customers resulting from
geo-political events such as the military conflicts in Ukraine and Israel; the effect of federal, local, state,
foreign or tax legislation and other regulations affecting the
industries we serve and related projects and expenditures; the
effect on demand for our services of changes in the amount of
capital expenditures by our customers due to, among other things,
economic conditions, including the potential adverse effects
of potential recessionary concerns, inflationary
issues, supply chain disruptions and higher interest rates,
the availability and cost of financing, climate-related
matters, customer consolidation in the industries we serve
and/or the effects of public health matters; activity in the
industries we serve and the impact on our customers' expenditure
levels caused by fluctuations in commodity prices, including for
fuel and energy sources, and/or fluctuations in materials,
labor, supplies, equipment and other costs, or supply-related
issues that affect availability or cause delays for such
items; our ability to manage projects effectively and in
accordance with our estimates, as well as 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 estimates of the recoverability of
change orders; risks related to completed or potential
acquisitions, such as IEA, including our ability to integrate
acquired businesses within expected timeframes, including their
business operations, internal controls and/or systems, which may be
found to have material weaknesses, and our ability to achieve the
revenue, cost savings and earnings levels from such acquisitions at
or above the levels projected, as well as the risk of potential
asset impairment charges and write-downs of
goodwill; our ability to attract and retain qualified
personnel, key management and skilled employees, including from
acquired businesses, our ability to enforce any noncompetition
agreements, and our ability to maintain a workforce based upon
current and anticipated workloads; any material changes
in estimates for legal costs or case settlements or adverse
determinations on any claim, lawsuit or proceeding; the adequacy of
our insurance, legal and other reserves;the timing and
extent of fluctuations in operational, geographic and weather
factors affecting our customers, projects and the industries in
which we operate; the highly competitive nature of our industry and
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, and/or customer disputes related to our performance of
services and the resolution of unapproved change orders;
requirements of and restrictions imposed by our credit facility,
term loans, senior notes and any future loans or securities;
the effect of state and federal regulatory initiatives,
including risks related to the costs of compliance with existing
and potential future environmental, social and governance
requirements, including with respect to climate-related
matters; our dependence on a limited number of customers and
our ability to replace non-recurring projects with new
projects; risks associated with potential environmental
issues and other hazards from our operations; disputes with, or
failures of, our subcontractors to deliver agreed-upon supplies or
services in a timely fashion, and the risk of being required to pay
our subcontractors even if our customers do not pay us; any
exposure resulting from system or information technology
interruptions or data security breaches; the outcome of our plans
for future operations, growth and services, including business
development efforts, backlog, acquisitions and dispositions;
risks related to our strategic arrangements, including our
equity investments; risks associated with volatility of
our stock price or any dilution or stock price volatility that
shareholders may experience in connection with shares we may issue
as purchase consideration in connection with past or future
acquisitions, or as consideration for earn-out obligations or as a
result of other stock issuances; our ability to obtain performance
and surety bonds; risks related to our operations that employ a
unionized workforce, including labor availability, productivity and
relations, as well as risks associated with multiemployer union
pension plans, including underfunding and withdrawal liabilities;
risks associated with operating in or expanding into additional
international markets, including risks from fluctuations in foreign
currencies, foreign labor and general business conditions and risks
from failure to comply with laws applicable to our foreign
activities and/or governmental policy uncertainty; risks
associated with material weaknesses in our internal control over
financial reporting and our ability to remediate such
weaknesses; a small number of our existing shareholders have
the ability to influence major corporate decisions, as well as
other risks detailed in our filings with the Securities and
Exchange Commission. We believe these forward-looking statements
are reasonable; however, you should not place undue reliance on any
forward-looking statements, which are based on current
expectations. Furthermore, forward-looking statements speak only as
of the date they are made. If any of these risks or uncertainties
materialize, or if any of our underlying assumptions are incorrect,
our actual results may differ significantly from the results that
we express in, or imply by, any of our forward-looking statements.
These and other risks are detailed in our filings with the
Securities and Exchange Commission. We do not undertake any
obligation to publicly update or revise these forward-looking
statements after the date of this press release to reflect future
events or circumstances, except as required by applicable law. We
qualify any and all of our forward-looking statements by these
cautionary factors.
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SOURCE MasTec, Inc.