- Record Revenue CORAL GABLES, Fla., Nov. 5 /PRNewswire-FirstCall/
-- MasTec, Inc. (NYSE: MTZ) today announced that third quarter
earnings increased 94% while revenue was at all-time record levels
and up 49% from last year. Revenue for the quarter ended September
30th was $398 million compared to $267 million a year ago. Third
quarter net income was $24.1 million, or $0.35 earnings per diluted
share, compared to pro forma income from continuing operations of
$12.4 million, or $0.18 earnings per diluted share, a year ago.
Third quarter 2007 pro forma income from continuing operations
excludes a $39.1 million charge for various legacy legal cases,
claims and other disputes. Jose R. Mas, MasTec's President and
Chief Executive Officer, commented, "We had a terrific third
Quarter. Revenue, earnings and cash flow from operations for the
quarter were all up sharply. Our results benefited from our
acquisition and diversification strategy, as well as from
productivity gains which positively impacted profits and margins. I
am excited about what our growth in wind farm, natural gas and
wireless infrastructure construction is doing for MasTec. In
addition, our balance sheet and financial condition remain strong.
Despite the current economic uncertainties, I am optimistic about
the rest of this year and 2009." Efforts to grow MasTec's business
with utilities customers paid off as third quarter revenue from
these customers more than doubled over last year. Utilities
customers now make up 32% of revenue compared to 20% a year ago.
MasTec's wireless business also impacted the third quarter,
evidenced by the 256% growth of AT&T revenue compared to the
prior year quarter. This growth was in large part due to the
Company's recent Nsoro acquisition. Growth in the utility and
wireless markets reduced the concentration of our largest customer,
which decreased from 44% in the third quarter of 2007 to 30% in the
quarter just ended. Margin improvement, one of the Company's key
stated goals in recent quarters, also continues to improve. Gross
margin for the third quarter of 2008 was up 210 basis points to
15.6% compared with 13.5% in the prior year quarter. The
improvement was driven by growth of higher margin businesses,
business mix and increased productivity. The Company's financial
position remains strong with cash, securities available for sale
and availability under the Company's credit facility of $151
million. Additionally, third quarter cash provided by operating
activities was up 71% from the prior year to $29 million. Due to
delays in closing the Wanzek acquisition, the Company is adjusting
its revenue expectations for 2008 by excluding any Wanzek related
revenue. MasTec now expects 2008 revenue to be between $1.325
billion and $1.345 billion. MasTec is again increasing diluted
earnings per share guidance to between $0.93 and $0.96 per share
for 2008. MasTec's updated guidance today assumes a 4.8% to 4.9%
pre-tax margin for 2008, compared with 4.4% for 2007. The 4.4% for
2007 reflects the pro forma impact of adding back the $39 million
legacy litigation charge that the Company has been using in all of
the comparisons. The Company's guidance assumes continuation of
today's soft economy and is not dependent on a fourth quarter
recovery. Guidance also does not include any additional impact of
legacy litigation, or any mark-to-market valuation adjustments on
auction rate securities, either positive or negative. Management
will hold a conference call to discuss results of operations for
the quarter ended September 30, 2008 on Thursday, November 6, 2008
at 9:00 a.m. Eastern time. The call-in number for the conference
call is (913) 312-1300 and the replay number is (719) 457-0820,
with a pass code of 5469033. The replay will run for 30 days.
Additionally, the call will be broadcast live over the Internet and
can be accessed and replayed through the investor relations section
of the Company's website at http://www.mastec.com/. Summary
financials for the quarters are as follows: Condensed Unaudited
Consolidated Statement of Operations (In thousands, except per
share amounts) For the Three Months Ended September 30, 2008 2007
Revenue $397,754 $266,864 Costs of revenue, excluding depreciation
335,569 230,867 Depreciation and amortization 7,839 4,579 General
and administrative expenses, including non-cash stock compensation
expense of $798 and $2,746, respectively, in 2008 and $1,099 and
$4,566, respectively, in 2007 26,376 55,569 Interest expense, net
of interest income 3,963 2,220 Other (income) expense, net (391)
(228) Income (loss) from continuing operations before provision for
income taxes and minority interest 24,398 (26,143) Provision for
income taxes (102) - Minority interest - (597) Income (loss) from
continuing operations 24,296 (26,740) Income (loss) from
discontinued operations (182) (5,416) Net income (loss) $24,114
$(32,156) Basic net income (loss) per share: Continuing operations
$0.36 $(0.40) Discontinued operations - (0.08) Total basic net
income (loss) per share $0.36 $(0.48) Basic weighted average common
shares outstanding 67,578 66,408 Diluted net income (loss) per
share: Continuing operations $0.36 $(0.40) Discontinued operations
(0.01) (0.08) Total diluted net income (loss) per share $0.35
$(0.48) Diluted weighted average common shares outstanding 68,567
66,408 Condensed Unaudited Balance Sheets (In thousands) September
30, December 31, 2008 2007 (Unaudited) (Audited) Assets Total
current assets: $399,526 $367,407 Property and equipment, net
123,175 81,939 Goodwill and other intangibles, net 245,031 202,829
Deferred taxes, net 46,677 30,386 Securities available for sale
25,352 - Other assets 26,936 28,188 Total assets $866,697 $710,749
Liabilities and Shareholders' Equity Current liabilities $282,257
$203,595 Other liabilities 27,461 32,310 Long-term debt 187,809
160,279 Total shareholders' equity 369,170 314,565 Total
liabilities and shareholders' equity $866,697 $710,749 Condensed
Unaudited Statements of Cash Flows (In thousands) For the Nine
Months Ended September 30, 2008 2007 Cash flows from operating
activities: Net cash provided by operating activities $42,668
$44,106 Net cash used in investing activities (90,157) (20,295) Net
cash provided by financing activities 18,348 30,921 Net increase
(decrease) in cash and cash equivalents (29,141) 54,732 Net effect
of currency translation on cash (24) 9 Cash and cash equivalents -
beginning of period 74,288 35,282 Cash and cash equivalents - end
of period $45,123 $90,023 MasTec, Inc. Reconciliation of Non-GAAP
Disclosures - Unaudited Three Months Ended September 30, 2007 (in
millions) Per Diluted Share GAAP - Income from continuing
operations $ (26.7) $ (0.40) Charge for settlement of litigation,
claims and other disputes 39.1 $0.58 Income from continuing
operations, excluding charge for settlement of litigation, claims
and other disputes $ 12.4 $ 0.18 For the Year Ended December 31,
2007 (in millions) GAAP - Income from continuing operations $ 6.4
Income tax provision - Charge for settlement of litigation, claims
and other disputes 39.3 Income from continuing operations,
excluding charge for settlement of litigation, claims and other
disputes $ 45.7 Revenue $ 1,037.8 Pre-tax operating margin 4.4%
Years Ended EBITDA Reconciliation (in millions) 2007 2008 Net
Income (loss) (7) $63-65 Loss from discontinued operations, net of
taxes 14 - Income from continuing operations $7 $63-65 Interest,
net 9 14-15 Income tax provision - 1 Amortization 1 3 Depreciation
17 24-25 Earnings from continuing operations before interest,
taxes, amortization and depreciation (EBITDA) 34 $105-109 Excluded
charges for settlement of litigation, claims and other disputes 39
EBITDA, excluding legacy legal settlements $73 MasTec is a leading
specialty contractor operating mainly throughout the United States
across a range of industries. The Company's core activities are the
building, installation, maintenance and upgrade of communication
and utility infrastructure systems. The Company's corporate website
is located at http://www.mastec.com/. This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act. These statements are based on our
current expectations and are subject to risks, uncertainties, and
other factors, some of which are beyond our control, that are
difficult to predict, and could cause actual results to differ
materially from those expressed or forecasted in the
forward-looking statements. Important factors that could cause
actual results to differ materially from those in forward-looking
statements include; our ability to obtain financing or otherwise
consummate the Wanzek acquisition on a timely basis or at all,
retain qualified personnel and key management, integrate Wanzek and
Nsoro with MasTec within the expected timeframes and achieve the
revenue, cost savings and earnings levels from the acquisitions at
or above the levels projected; that in connection with the
acquisition of Nsoro, we will be able to maintain and grow the
customer relationship with Nsoro's principal customer; our ability
to raise the funds necessary to purchase Wanzek on terms at least
at as favorable as those assumed in our financing plans; economic
downturns, reduced capital expenditures, reduced financing
availability, consolidation and technological and regulatory
changes in the industries we serve; public response to and the
potential expiration or extension of the federal production tax
credit and any similar local or state regulations affecting
renewable energy projects; increases in fuel, maintenance,
materials and other costs; any liquidity issues related to our
securities held for sale; adverse determinations on any claim,
lawsuit or proceeding; the highly competitive nature of our
industry; our dependence on a limited number of customers; the
ability of our and Wanzek's customers to terminate or reduce the
amount of work, or in some cases prices paid for services under
many of our contracts; the adequacy of our insurance, legal and
other reserves and allowances for doubtful accounts; any exposure
related to our divested state Department of Transportation projects
and assets; the restrictions imposed by our credit facility, senior
notes and any future loans or securities; the outcome of our plans
for future operations, growth and services, including backlog and
acquisitions; any dilution or stock price volatility which
shareholders may experience in connection with shares we may issue
as consideration for earn-out obligations entered into in
connection with past or future acquisitions; and the other factors
referenced in the reports we furnish to and file with the SEC. We
do not undertake any obligation to update forward-looking
statements. DATASOURCE: MasTec, Inc. CONTACT: J. Marc Lewis, Vice
President-Investor Relations of MasTec, Inc., +1-305-406-1815,
+1-305-406-1886 fax, Web site: http://www.mastec.com/
Copyright
