8-K
MASTEC INC (MTZ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2023
MASTEC, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Florida | 001-08106 | 65-0829355 |
|---|---|---|
| (State or Other Jurisdiction<br> <br>of Incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
800 S. Douglas Road, 12th Floor
Coral Gables, Florida 33134
(Address of Principal Executive Office)
Registrant’s telephone number, including area code (305) 599-1800
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock, $0.10 Par Value | MTZ | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.02 | Results of Operations and Financial Condition. |
|---|
The information contained in Item 7.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.02.
| ITEM 7.01 | Regulation FD Disclosure. |
|---|
On May 4, 2023, MasTec, Inc., a Florida corporation (the “Company”), announced its financial results for the quarter ended March 31, 2023. In addition, the Company issued guidance for the quarter ending June 30, 2023 and year ending December 31, 2023, in each case as set forth in the earnings press release. A copy of the Company’s earnings press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference in this Item 7.01. The information contained in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.
| ITEM 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| Exhibit<br>Number | Description |
|---|---|
| 99.1 | Press Release, May 4, 2023 |
| 101.INS | Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase |
| 104 | The cover page of MasTec, Inc.’s Current Report on Form 8-K, formatted in Inline XBRL (included with the Exhibit 101 attachments). |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MASTEC, INC. | ||
|---|---|---|
| Date: May 4, 2023 | By: | /s/ Alberto de Cardenas |
| Alberto de Cardenas | ||
| Executive Vice President, General Counsel and Secretary |
EX-99.1
Exhibit 99.1
| Contact:<br> <br>J. Marc Lewis, Vice<br>President-Investor Relations<br> <br>305-406-1815<br><br><br>marc.lewis@mastec.com | 800 S. Douglas Road, 12^th^ Floor<br> <br>Coral Gables, Florida 33134<br><br><br>Tel: 305-599-1800<br><br><br>www.mastec.com |
|---|
For Immediate Release
MasTec Announces First Quarter 2023 Financial Results with Record Backlog and Updates Guidance for the Year
| • | First Quarter 2023 Revenue Increased 32% Over Same Quarter Last Year |
|---|---|
| • | First Quarter 2023 Results Include GAAP Net Loss of $80.5 Million, Adjusted EBITDA of $102.5 Million,Diluted Loss Per Share of $1.05 and Adjusted Diluted Loss Per Share of $0.54, Exceeding Guidance Expectations by $0.07 and $0.03 Per Share, Respectively |
| --- | --- |
| • | Record 18-month Backlog as ofMarch 31, 2023 of $13.9 Billion, a 31% increase Over the Same Quarter Last Year |
| --- | --- |
| • | Annual 2023 Guidance Range Includes Revenue of $13.0 to $13.2 Billion, GAAP Net Income of $165 to $200Million, Adjusted EBITDA of $1.10 to $1.15 Billion, Diluted Earnings Per Share of $2.11 to $2.55 and Adjusted Diluted Earnings Per Share of $4.35 to $4.85 |
| --- | --- |
Coral Gables , FL **** (May 4, 2023) — MasTec, Inc. (NYSE: MTZ) today announced 2023 first quarter financial results and updated its full year 2023 guidance range expectation.
First quarter 2023 revenue was up 32.2% to $2.58 billion, compared to $1.95 billion for the first quarter of 2022. GAAP net loss was $80.5 million, or $1.05 per diluted share, compared to a net loss of $35.0 million, or $0.47 per diluted share, in the first quarter of 2022. First quarter results include acquisition and integration costs of $17.1 million related to recent acquisition activity.
First quarter 2023 adjusted net loss and adjusted diluted loss per share, both non-GAAP measures, were $41.9 million and $0.54, respectively, as compared to adjusted net loss and adjusted diluted loss per share of $2.0 million and $0.03, respectively, in the first quarter of 2022. First quarter 2023 adjusted EBITDA, also a non-GAAP measure, was $102.5 million, compared to $98.7 million in the first quarter of 2022. As expected, first quarter 2023 results reflect the impact of project inefficiencies, primarily at acquired entities, and relatively low volume in our Clean Energy and Oil & Gas segments that reduced fixed cost leverage. The Company’s overall performance reflects the expected significant shift in 2023 operations to non-Oil & Gas segments, as evidenced by record first quarter backlog in the non-Oil & Gas segments as of March 31, 2023.
18-month backlog as of March 31, 2023, was $13.9 billion, up 7% sequentially from the fourth quarter of 2022, and up 31% compared to last year’s first quarter.
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, “As we begin a new year, I am excited and proud of how we have positioned MasTec to participate in some of the fastest growing areas of our economy. Our evolution over the last few years to focus on our nation’s energy transition, coupled with our strength in fiber and wireless construction, uniquely positions us in these high-demand markets.”
Mr. Mas continued, “Our first quarter was in line with our prior expectations and the year is shaping up as we anticipated. I expect 2023 to be not only a great year, but one in which our diversification strategy is clearly evidenced in our financial results.”
Paul DiMarco, MasTec’s Executive Vice President and Chief Financial Officer, noted, “We continue to maintain a strong balance sheet and liquidity profile to support the expected growth in all of our segments. Additionally, we are committed to improve leverage metrics in 2023 through the combination of strong cash flow, improved operating performance and moderated levels of capital expenditures and strategic investments. Maintaining our Investment Grade rating is a priority. We’ve had good dialogue with the rating agencies on our expected leverage reduction, as evidenced by Standard and Poor’s recent affirmative action.”
Based on the information available today, the Company is providing second quarter and updating full year 2023 guidance. The Company currently expects full year 2023 revenue to range from $13.0 to $13.2 billion. GAAP net income and diluted earnings per share for full year 2023 are expected to range between $165 million and $200 million and $2.11 and $2.55, respectively. Full year 2023 adjusted EBITDA is expected to range between $1.10 billion and $1.15 billion, representing between 8.5% and 8.7% of revenue, and adjusted diluted earnings per share is expected to range between $4.35 and $4.85.
For the second quarter of 2023, the Company expects revenue of approximately $3.0 billion. Second quarter 2023 GAAP net income is expected to approximate $19 million, with GAAP diluted earnings per share expected to be $0.24. Second quarter 2023 adjusted EBITDA is expected to approximate $250 million or 8.3% of revenue, with adjusted diluted earnings per share expected to be $0.86.
Management will hold a conference call to discuss these results on Friday, May 5, 2023 at 9:00 a.m. Eastern Time. The call-in number for the conference call is (856) 344-9221 or (888) 254-3590 with a pass code of 9075337. Additionally, the call will be broadcast live over the Internet and can be accessed and replayed for 60 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 March 31, 2023 and 2022:
Consolidated Statements of Operations
(unaudited - in thousands, except per share information)
| For the Three Months EndedMarch 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Revenue | $ | 2,584,659 | $ | 1,954,400 | ||
| Costs of revenue, excluding depreciation and amortization | 2,359,494 | 1,733,316 | ||||
| Depreciation | 107,247 | 85,194 | ||||
| Amortization of intangible assets | 41,944 | 25,589 | ||||
| General and administrative expenses | 163,914 | 145,390 | ||||
| Interest expense, net | 52,693 | 16,041 | ||||
| Equity in earnings of unconsolidated affiliates, net | (9,152 | ) | (6,777 | ) | ||
| Other (income) expense, net | (6,201 | ) | 3,754 | |||
| Loss before income taxes | $ | (125,280 | ) | $ | (48,107 | ) |
| Benefit from income taxes | 44,734 | 13,148 | ||||
| Net loss | $ | (80,546 | ) | $ | (34,959 | ) |
| Net (loss) income attributable to non-controlling<br>interests | (6 | ) | 19 | |||
| Net loss attributable to MasTec, Inc. | $ | (80,540 | ) | $ | (34,978 | ) |
| Loss per share: | ||||||
| Basic and diluted loss per share | $ | (1.05 | ) | $ | (0.47 | ) |
| Basic and diluted weighted average common shares outstanding | 76,984 | 74,789 |
Consolidated Balance Sheets
(unaudited - in thousands)
| March 31,2023 | December 31,2022 | |||
|---|---|---|---|---|
| Assets | ||||
| Current assets | $ | 3,656,663 | $ | 3,859,127 |
| Property and equipment, net | 1,730,602 | 1,754,101 | ||
| Operating lease<br>right-of-use assets | 276,231 | 279,534 | ||
| Goodwill, net | 2,065,602 | 2,045,041 | ||
| Other intangible assets, net | 904,412 | 946,299 | ||
| Other long-term assets | 421,826 | 409,157 | ||
| Total assets | $ | 9,055,336 | $ | 9,293,259 |
| Liabilities and Equity | ||||
| Current liabilities | $ | 2,378,535 | $ | 2,496,037 |
| Long-term debt, including finance leases | 3,045,526 | 3,052,193 | ||
| Long-term operating lease liabilities | 190,132 | 194,050 | ||
| Deferred income taxes | 535,531 | 571,401 | ||
| Other long-term liabilities | 257,980 | 238,391 | ||
| Total equity | 2,647,632 | 2,741,187 | ||
| Total liabilities and equity | $ | 9,055,336 | $ | 9,293,259 |
Consolidated Statements of Cash Flows
(unaudited - in thousands)
| For the Three MonthsEnded March 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Net cash (used in) provided by operating activities | $ | (86,371 | ) | $ | 131,518 | |
| Net cash used in investing activities | (89,486 | ) | (101,361 | ) | ||
| Net cash used in financing activities | (53,442 | ) | (158,016 | ) | ||
| Effect of currency translation on cash | 267 | 256 | ||||
| Net decrease in cash and cash equivalents | (229,032 | ) | (127,603 | ) | ||
| Cash and cash equivalents - beginning of period | $ | 370,592 | $ | 360,736 | ||
| Cash and cash equivalents - end of period | $ | 141,560 | **** | $ | 233,133 | **** |
| Backlog by Reportable Segment (unaudited - in millions) | March 31,<br>2023 | December 31,<br>2022 | March 31,<br>2022 | |||
| --- | --- | --- | --- | --- | --- | --- |
| Communications | $ | 5,602 | $ | 5,303 | $ | 4,920 |
| Clean Energy and Infrastructure | 3,546 | 3,227 | 1,693 | |||
| Oil and Gas | 2,013 | 1,740 | 1,382 | |||
| Power Delivery | 2,731 | 2,709 | 2,650 | |||
| Other | — | — | — | |||
| Estimated 18-month backlog | $ | 13,892 | $ | 12,979 | $ | 10,645 |
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 ofNon-GAAP Disclosures
(unaudited - in millions, except for percentages and per share information)
| For the Three MonthsEnded March 31, | ||||||
|---|---|---|---|---|---|---|
| Segment Information | 2023 | 2022 | ||||
| Revenue by Segment | ||||||
| Communications | $ | 806.6 | $ | 664.2 | ||
| Clean Energy and Infrastructure | 824.9 | 435.9 | ||||
| Oil and Gas | 256.5 | 211.0 | ||||
| Power Delivery | 709.4 | 650.5 | ||||
| Other | — | — | ||||
| Eliminations | (12.7 | ) | (7.2 | ) | ||
| Consolidated revenue | $ | 2,584.7 | **** | $ | 1,954.4 | **** |
| For the Three MonthsEnded March 31, | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| 2023 | 2022 | |||||
| Adjusted EBITDA by Segment | ||||||
| EBITDA | $ | 76.6 | **** | $ | 78.7 | **** |
| Non-cash stock-based compensation expense ^(a)^ | 8.5 | 6.3 | ||||
| Acquisition and integration costs<br>^(b)^ | 17.1 | 13.6 | ||||
| Losses on fair value of investment<br>^(a)^ | 0.2 | — | ||||
| Adjusted EBITDA | $ | 102.5 | **** | $ | 98.7 | **** |
| Segment: | ||||||
| Communications | $ | 61.7 | $ | 41.1 | ||
| Clean Energy and Infrastructure | 10.5 | 10.9 | ||||
| Oil and Gas | 14.5 | 23.5 | ||||
| Power Delivery | 49.1 | 53.2 | ||||
| Other | 7.1 | 6.9 | ||||
| Segment Total | 142.9 | 135.6 | ||||
| Corporate | (40.4 | ) | (36.9 | ) | ||
| Adjusted EBITDA | $ | 102.5 | **** | $ | 98.7 | **** |
| (a) | Non-cash stock-based compensation expense and losses on the fair value<br>of our investment in AVCT are included within Corporate results. | |||||
| --- | --- | |||||
| (b) | For the three month period ended March 31, 2023, Communications, Clean Energy and Infrastructure and Power<br>Delivery EBITDA included $8.9 million, $5.2 million and $1.7 million, respectively, of acquisition and integration costs related to our recent acquisitions, and Corporate EBITDA included $1.3 million of such costs. For the three<br>month period ended March 31, 2022, Communications, Oil and Gas and Power Delivery EBITDA included $0.8 million, $2.0 million and $7.0 million, respectively, of such acquisition and integration costs, and Corporate EBITDA included<br>$3.8 million. | |||||
| --- | --- |
Supplemental Disclosures and Reconciliation ofNon-GAAP Disclosures
(unaudited - in millions, except for percentages and per share information)
| For the Three MonthsEnded March 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Adjusted EBITDA Margin by Segment | ||||||
| EBITDA Margin | **** | 3.0 | % | **** | 4.0 | % |
| Non-cash stock-based compensation expense ^(a)^ | 0.3 | % | 0.3 | % | ||
| Acquisition and integration costs<br>^(b)^ | 0.7 | % | 0.7 | % | ||
| Losses on fair value of investment<br>^(a)^ | 0.0 | % | — | % | ||
| Adjusted EBITDA margin | **** | 4.0 | % | **** | 5.0 | % |
| Segment: | ||||||
| Communications | 7.7 | % | 6.2 | % | ||
| Clean Energy and Infrastructure | 1.3 | % | 2.5 | % | ||
| Oil and Gas | 5.7 | % | 11.1 | % | ||
| Power Delivery | 6.9 | % | 8.2 | % | ||
| Other | NM | NM | ||||
| Segment Total | 5.5 | % | 6.9 | % | ||
| Corporate | — | — | ||||
| Adjusted EBITDA margin | **** | 4.0 | % | **** | 5.0 | % |
NM - Percentage is not meaningful
Note: The Communications, Clean Energy and Infrastructure, and Power Delivery segments represent the “non-Oil & Gas” segments.
| (a) | Non-cash stock-based compensation expense and losses on the fair value<br>of our investment in AVCT are included within Corporate results. |
|---|---|
| (b) | For the three month period ended March 31, 2023, Communications, Clean Energy and Infrastructure and Power<br>Delivery EBITDA included $8.9 million, $5.2 million and $1.7 million, respectively, of acquisition and integration costs related to our recent acquisitions, and Corporate EBITDA included $1.3 million of such costs. For the three<br>month period ended March 31, 2022, Communications, Oil and Gas and Power Delivery EBITDA included $0.8 million, $2.0 million and $7.0 million, respectively, of such acquisition and integration costs, and Corporate EBITDA included<br>$3.8 million. |
| --- | --- |
Supplemental Disclosures and Reconciliation ofNon-GAAP Disclosures
(unaudited - in millions, except for percentages and per share information)
| For the Three MonthsEnded March 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| EBITDA and Adjusted EBITDA Reconciliation | ||||||
| Net loss | $ | (80.5 | ) | $ | (35.0 | ) |
| Interest expense, net | 52.7 | 16.0 | ||||
| Benefit from income taxes | (44.7 | ) | (13.1 | ) | ||
| Depreciation | 107.2 | 85.2 | ||||
| Amortization of intangible assets | 41.9 | 25.6 | ||||
| EBITDA | $ | 76.6 | **** | $ | 78.7 | **** |
| Non-cash stock-based compensation expense | 8.5 | 6.3 | ||||
| Acquisition and integration costs | 17.1 | 13.6 | ||||
| Losses on fair value of investment | 0.2 | — | ||||
| Adjusted EBITDA | $ | 102.5 | **** | $ | 98.7 | **** |
| For the Three MonthsEnded March 31, | ||||||
| 2023 | 2022 | |||||
| EBITDA and Adjusted EBITDA Margin Reconciliation | ||||||
| Net loss | **** | (3.1 | )% | **** | (1.8 | )% |
| Interest expense, net | 2.0 | % | 0.8 | % | ||
| Benefit from income taxes | (1.7 | )% | (0.7 | )% | ||
| Depreciation | 4.1 | % | 4.4 | % | ||
| Amortization of intangible assets | 1.6 | % | 1.3 | % | ||
| EBITDA margin | **** | 3.0 | % | **** | 4.0 | % |
| Non-cash stock-based compensation expense | 0.3 | % | 0.3 | % | ||
| Acquisition and integration costs | 0.7 | % | 0.7 | % | ||
| Losses on fair value of investment | 0.0 | % | — | % | ||
| Adjusted EBITDA margin | **** | 4.0 | % | **** | 5.0 | % |
Supplemental Disclosures and Reconciliation ofNon-GAAP Disclosures
(unaudited - in millions, except for percentages and per share information)
| For the Three MonthsEnded March 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Adjusted Net Income Reconciliation | ||||||
| Net loss | $ | (80.5 | ) | $ | (35.0 | ) |
| Non-cash stock-based compensation expense | 8.5 | 6.3 | ||||
| Amortization of intangible assets | 41.9 | 25.6 | ||||
| Acquisition and integration costs | 17.1 | 13.6 | ||||
| Losses on fair value of investment | 0.2 | — | ||||
| Income tax effect of adjustments ^(a)^ | (29.2 | ) | (12.5 | ) | ||
| Adjusted net loss | $ | (41.9 | ) | $ | (2.0 | ) |
| For the Three MonthsEnded March 31, | ||||||
| 2023 | 2022 | |||||
| Adjusted Diluted Earnings per Share Reconciliation | ||||||
| Diluted loss per share | $ | (1.05 | ) | $ | (0.47 | ) |
| Non-cash stock-based compensation expense | 0.11 | 0.08 | ||||
| Amortization of intangible assets | 0.54 | 0.34 | ||||
| Acquisition and integration costs | 0.22 | 0.18 | ||||
| Losses on fair value of investment | 0.00 | — | ||||
| Income tax effect of adjustments ^(a)^ | (0.38 | ) | (0.17 | ) | ||
| Adjusted diluted loss per share | $ | (0.54 | ) | $ | (0.03 | ) |
| (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 the vesting of share-based payment awards. Tax effects are determined based on the tax treatment of the related item, the incremental statutory tax rate of<br>the jurisdictions pertaining to the adjustment, and their effects on pre-tax income. | |||||
| --- | --- | |||||
| Calculation of Net Debt | March 31,2023 | December 31,2022 | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Current portion of long-term debt, including finance leases | $ | 166.7 | $ | 171.9 | ||
| Long-term debt, including finance leases | 3,045.5 | 3,052.2 | ||||
| Less: cash and cash equivalents | (141.6 | ) | (370.6 | ) | ||
| Net Debt | $ | 3,070.6 | **** | $ | 2,853.5 | **** |
Supplemental Disclosures and Reconciliation ofNon-GAAP Disclosures
(unaudited - in millions, except for percentages and per share information)
| Guidance for theYear EndedDecember 31,2023 Est. | For the YearEnded December 31,2022 | For the YearEnded December 31,2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| EBITDA and Adjusted EBITDA Reconciliation | |||||||||
| Net income | $ | 165 - 200 | **** | $ | 33.9 | **** | $ | 330.7 | **** |
| Interest expense, net | 215 | 112.3 | 53.4 | ||||||
| Provision for income taxes | 54 - 66 | 9.2 | 99.3 | ||||||
| Depreciation | 428 | 371.2 | 345.6 | ||||||
| Amortization of intangible assets | 168 | 135.9 | 77.2 | ||||||
| EBITDA | $ | 1,030 – 1,076 | **** | $ | 662.5 | **** | $ | 906.3 | **** |
| Non-cash stock-based compensation expense | 34 | 27.4 | 24.8 | ||||||
| Acquisition and integration costs | 35 - 40 | 86.0 | 3.6 | ||||||
| Bargain purchase gain | — | (0.2 | ) | (3.5 | ) | ||||
| Losses on fair value of investment | 0 | 7.7 | 7.8 | ||||||
| Project results from non-controlled joint venture | — | (2.8 | ) | — | |||||
| Adjusted EBITDA | $ | 1,100 – 1,150 | **** | $ | 780.6 | **** | $ | 939.1 | **** |
| Guidance for theYear EndedDecember 31,2023 Est. | For the YearEnded December 31,2022 | For the YearEnded December 31,2021 | |||||||
| EBITDA and Adjusted EBITDA Margin Reconciliation | |||||||||
| Net income | **** | 1.3 - 1.5 | % | **** | 0.3 | % | **** | 4.2 | % |
| Interest expense, net | 1.6 – 1.7 | % | 1.1 | % | 0.7 | % | |||
| Provision for income taxes | 0.4 – 0.5 | % | 0.1 | % | 1.2 | % | |||
| Depreciation | 3.2 – 3.3 | % | 3.8 | % | 4.3 | % | |||
| Amortization of intangible assets | 1.3 | % | 1.4 | % | 1.0 | % | |||
| EBITDA margin | **** | 7.9 – 8.2 | % | **** | 6.8 | % | **** | 11.4 | % |
| Non-cash stock-based compensation expense | 0.3 | % | 0.3 | % | 0.3 | % | |||
| Acquisition and integration costs | 0.3 | % | 0.9 | % | 0.0 | % | |||
| Bargain purchase gain | — | % | (0.0 | )% | (0.0 | )% | |||
| Losses on fair value of investment | 0.0 | % | 0.1 | % | 0.1 | % | |||
| Project results from non-controlled joint venture | — | % | (0.0 | )% | — | % | |||
| Adjusted EBITDA margin | **** | 8.5 – 8.7 | % | **** | 8.0 | % | **** | 11.8 | % |
Supplemental Disclosures and Reconciliation ofNon-GAAP Disclosures - Unaudited
(unaudited - in millions, except for percentages and per share information)
| Guidance for theYear EndedDecember 31,2023 Est. | For the YearEnded December 31,2022 | For the YearEnded December 31,2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Adjusted Net Income Reconciliation | |||||||||
| Net income | $ | 165 - 200 | **** | $ | 33.9 | **** | $ | 330.7 | **** |
| Non-cash stock-based compensation expense | 34 | 27.4 | 24.8 | ||||||
| Amortization of intangible assets | 168 | 135.9 | 77.2 | ||||||
| Acquisition and integration costs | 35 - 40 | 86.0 | 3.6 | ||||||
| Bargain purchase gain | — | (0.2 | ) | (3.5 | ) | ||||
| Losses on fair value of investment | 0 | 7.7 | 7.8 | ||||||
| Project results from non-controlled joint venture | — | (2.8 | ) | — | |||||
| Income tax effect of adjustments ^(a)^ | (60) – (61 | ) | (58.6 | ) | (27.4 | ) | |||
| Statutory tax rate effects ^(b)^ | — | 5.5 | 6.7 | ||||||
| Adjusted net income | $ | 342 - 380 | **** | $ | 234.8 | **** | $ | 420.0 | **** |
| Guidance for theYear EndedDecember 31,2023 Est. | For the YearEnded December 31,2022 | For the YearEnded December 31,2021 | |||||||
| Adjusted Diluted Earnings per Share Reconciliation | |||||||||
| Diluted earnings per share | $ | 2.11 – 2.55 | **** | $ | 0.42 | **** | $ | 4.45 | **** |
| Non-cash stock-based compensation expense | 0.43 | 0.36 | 0.34 | ||||||
| Amortization of intangible assets | 2.14 | 1.78 | 1.04 | ||||||
| Acquisition and integration costs | 0.45 – 0.51 | 1.13 | 0.05 | ||||||
| Bargain purchase gain | — | (0.00 | ) | (0.05 | ) | ||||
| Losses on fair value of investment | 0.00 | 0.10 | 0.11 | ||||||
| Project results from non-controlled joint venture | — | (0.04 | ) | — | |||||
| Income tax effect of adjustments ^(a)^ | (0.77) – (0.78 | ) | (0.77 | ) | (0.37 | ) | |||
| Statutory tax rate effects ^(b)^ | — | 0.07 | 0.09 | ||||||
| Adjusted diluted earnings per share | $ | 4.35 – 4.85 | **** | $ | 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 the vesting of share-based payment awards. Tax effects are determined based on the tax treatment of the related item, the incremental statutory tax rate of<br>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.<br> | ||||||||
| --- | --- |
Supplemental Disclosures and Reconciliation ofNon-GAAP Disclosures
(unaudited - in millions, except for percentages and per share information)
| Guidance for theThree MonthsEnded June 30,2023 Est. | For theThree MonthsEnded June 30,2022 | |||||
|---|---|---|---|---|---|---|
| EBITDA and Adjusted EBITDA Reconciliation | ||||||
| Net income | $ | 19 | **** | $ | 16.3 | **** |
| Interest expense, net | 57 | 19.4 | ||||
| Provision for income taxes | 9 | 2.0 | ||||
| Depreciation | 105 | 87.0 | ||||
| Amortization of intangible assets | 42 | 27.7 | ||||
| EBITDA | $ | 231 | **** | $ | 152.3 | **** |
| Non-cash stock-based compensation expense | 9 | 6.8 | ||||
| Acquisition and integration costs | 10 | 12.5 | ||||
| Bargain purchase gain | — | (0.2 | ) | |||
| Losses on fair value of investment | — | 7.1 | ||||
| Adjusted EBITDA | $ | 250 | **** | $ | 178.5 | **** |
| Guidance for theThree MonthsEnded June 30,2023 Est. | For theThree MonthsEnded June 30,2022 | |||||
| EBITDA and Adjusted EBITDA Margin Reconciliation | ||||||
| Net income | **** | 0.6 | % | **** | 0.7 | % |
| Interest expense, net | 1.9 | % | 0.8 | % | ||
| Provision for income taxes | 0.3 | % | 0.1 | % | ||
| Depreciation | 3.5 | % | 3.8 | % | ||
| Amortization of intangible assets | 1.4 | % | 1.2 | % | ||
| EBITDA margin | **** | 7.7 | % | **** | 6.6 | % |
| Non-cash stock-based compensation expense | 0.3 | % | 0.3 | % | ||
| Acquisition and integration costs | 0.3 | % | 0.5 | % | ||
| Bargain purchase gain | — | % | (0.0 | )% | ||
| Losses on fair value of investment | — | % | 0.3 | % | ||
| Adjusted EBITDA margin | **** | 8.3 | % | **** | 7.8 | % |
Supplemental Disclosures and Reconciliation ofNon-GAAP Disclosures
(unaudited - in millions, except for percentages and per share information)
| Guidance for theThree MonthsEnded June 30,2023 Est. | For theThree MonthsEnded June 30,2022 | |||||
|---|---|---|---|---|---|---|
| Adjusted Net Income Reconciliation | ||||||
| Net income | $ | 19 | **** | $ | 16.3 | **** |
| Non-cash stock-based compensation expense | 9 | 6.8 | ||||
| Amortization of intangible assets | 42 | 27.7 | ||||
| Acquisition and integration costs | 10 | 12.5 | ||||
| Bargain purchase gain | — | (0.2 | ) | |||
| Losses on fair value of investment | — | 7.1 | ||||
| Income tax effect of adjustments ^(a)^ | (12 | ) | (14.2 | ) | ||
| Statutory tax rate effects | — | — | ||||
| Adjusted net income | $ | 67 | **** | $ | 56.0 | **** |
| Guidance for theThree MonthsEnded June 30,2023 Est. | For theThree MonthsEnded June 30,2022 | |||||
| Adjusted Diluted Earnings per Share Reconciliation | ||||||
| Diluted earnings per share | $ | 0.24 | **** | $ | 0.20 | **** |
| Non-cash stock-based compensation expense | 0.11 | 0.09 | ||||
| Amortization of intangible assets | 0.54 | 0.37 | ||||
| Acquisition and integration costs | 0.13 | 0.17 | ||||
| Bargain purchase gain | — | (0.00 | ) | |||
| Losses on fair value of investment | — | 0.09 | ||||
| Income tax effect of adjustments ^(a)^ | (0.16 | ) | (0.19 | ) | ||
| Statutory tax rate effects | — | — | ||||
| Adjusted diluted earnings per share | $ | 0.86 | **** | $ | 0.73 | **** |
| (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 the vesting of share-based payment awards. Tax effects are determined based on the tax treatment of the related item, the incremental statutory tax rate of<br>the jurisdictions pertaining to the adjustment, and their effects 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 and other infrastructure, such as: power delivery services, including transmission and distribution, wireless, wireline/fiber and customer fulfillment activities; power generation, primarily from clean energy and renewable sources; pipeline infrastructure, including natural gas pipeline and distribution infrastructure; heavy civil; 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 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 statementsinclude, but are not limited to, statements relating to expectations regarding the future financial and operational performance of MasTec; the projected impact and benefits of IEA on MasTec’s operating or financial results; expectationsregarding MasTec’s business or financial outlook; expectations regarding MasTec’s plans, strategies and opportunities; expectations regarding opportunities, technological developments, competitive positioning, future economic conditionsand other trends in particular markets or industries; the potential strategic benefits and synergies expected from the acquisition of IEA; the development of and opportunities with respect to future projects, including renewable and other projectsdesigned to support transition to a carbon-neutral economy; MasTec’s ability to successfully integrate the operations of IEA and related integration costs; the impact of inflation on MasTec’s costs and the ability to recover increasedcosts, 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 availableoperating, 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 futureresults 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 supplychain issues, technological developments, regulatory or policy changes, including permitting processes and tax incentives that affect us or our customers’ industries; the effect of federal, local, state, foreign or tax legislation and otherregulations 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, includingthe 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 weserve 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 inmaterials, 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 toaccurately 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 potentialacquisitions, 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 therevenue, 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, keymanagement 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 forlegal 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 affectingour 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 pricespaid 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, termloans, 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 potentialenvironmental 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 ourcustomers 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 inconnection 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 abilityto 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, includingunderfunding 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 fromfailure 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 smallnumber 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 uncertaintiesmaterialize, 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 ourfilings 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 requiredby applicable law. We qualify any and all of our forward-looking statements by these cautionary factors.