PR Newswire
CORAL GABLES, Fla., Aug. 3, 2023
- Record Second Quarter 2023 Revenue Increased 25% Over Same Quarter Last Year to $2.9 Billion
- Second Quarter 2023 Results Include GAAP Net Income of $16.8 Million with Adjusted Net Income of $70.7 Million
- Adjusted EBITDA Increased 43% to $255.4 Million, Diluted Earnings Per Share of $0.20 and Adjusted Diluted Earnings Per Share of $0.89, with Adjusted Diluted Earnings Per Share Exceeding Guidance Expectations by $0.03.
- Annual 2023 Guidance Range Updated to Revenue of $12.7 Billion to $13.0 Billion, GAAP Net Income of $111 Million to $141 Million, Adjusted EBITDA of $1.05 Billion to $1.10 Billion, Diluted Earnings Per Share of $1.38 to $1.77 and Adjusted Diluted Earnings Per Share of $3.75 to $4.19
CORAL GABLES, Fla., Aug. 3, 2023 /PRNewswire/ -- MasTec, Inc. (NYSE: MTZ) today announced 2023 second quarter financial results and updated its full year 2023 guidance range expectation.
Second quarter 2023 revenue was up 25% to $2.87 billion, compared to $2.30 billion for the second quarter of 2022. GAAP net income was $16.8 million, or $0.20 per diluted share, compared to net income of $16.3 million, or $0.20 per diluted share, in the second quarter of 2022. Second quarter results include acquisition and integration costs of $22.7 million related primarily to 2022 acquisition activity.
Second quarter 2023 adjusted net income and adjusted diluted earnings per share, both non-GAAP measures, were $70.7 million and $0.89, respectively, as compared to adjusted net income and adjusted diluted earnings per share of $56.0 million and $0.73, respectively, in the second quarter of 2022. Second quarter 2023 adjusted EBITDA, also a non-GAAP measure, increased 43% to $255.4 million, compared to $178.5 million in the second quarter of 2022. Second quarter 2023 results reflect the impact of strong sequential and year over year financial performance improvement over the comparable period last year and the impact of the acquisition of IEA.
18-month backlog as of June 30, 2023, was $13.4 billion, up 22% compared to last year's second 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, "All of our segments showed improved margin performance this quarter compared to the comparable quarter last year. Our Clean Energy and Infrastructure segment showed the most improvement with an approximately 400 basis point sequential improvement in adjusted EBITDA margin in the second quarter and an approximately 600 basis point improvement over the second quarter last year. While margins improved as expected, we did begin to see tighter management of CAPEX by a number of customers. We also expect revenue at recently acquired IEA to be impacted in the second half because of project delays, with revenue being pushed into 2024."
Mr. Mas continued, "We have strong growth potential in all of our markets, and we are well-positioned to capitalize on these opportunities in all of our segments. While we are disappointed with the second half revenue expectations, our focus on improving margins has materialized and we expect this to continue in the second half of 2023 and we expect to enter 2024 with significant revenue growth and margin expansion."
Paul DiMarco, MasTec's Executive Vice President and Chief Financial Officer, noted, "MasTec had record revenue and adjusted EBITDA for the second quarter. Additionally, we made progress on our collections with DSO improving by 4 days. We remain on track to meet our year-end net debt leverage goal of low 2 times. The balance sheet remains strong with approximately $900 million in liquidity, and we are ready to support the strong growth expected in all segments."
Based on the information available today, the Company is providing third quarter and updating full year 2023 guidance. The Company currently expects full year 2023 revenue to range from $12.7 billion to $13.0 billion. GAAP net income and diluted earnings per share for full year 2023 are expected to range between $111 million and $141 million and $1.38 and $1.77, respectively. Full year 2023 adjusted EBITDA is expected to range between $1.05 billion and $1.10 billion, representing between 8.2% and 8.5% of revenue, and adjusted diluted earnings per share is expected to range between $3.75 and $4.19.
For the third quarter of 2023, the Company expects revenue to range from $3.8 billion to $3.9 billion. Third quarter 2023 GAAP net income is expected to range between $101 million and $122 million, with GAAP diluted earnings per share expected to range between $1.27 and $1.55. Third quarter 2023 adjusted EBITDA is expected to approximate $360 million to $390 million or 9.6% to 10.1% of revenue, with adjusted diluted earnings per share expected to be $1.85 to $2.13.
Management will hold a conference call to discuss these results on Friday, August 4, 2023 at 9:00 a.m. Eastern Time. The call-in number for the conference call is (856) 344-9221 or (888) 394-8218 with a pass code of 3225603. 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. Presentation materials in support of the call, along with a guidance summary document, are also available adjacent to the webcast link.
The following tables set forth the financial results for the periods ended June 30, 2023 and 2022:
Consolidated Statements of Operations | |||||||
(unaudited - in thousands, except per share information) | |||||||
For the Three Months Ended | For the Six Months Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Revenue | $ 2,874,115 | $ 2,301,792 | $ 5,458,774 | $ 4,256,192 | |||
Costs of revenue, excluding depreciation and amortization | 2,484,780 | 2,028,111 | 4,844,274 | 3,761,427 | |||
Depreciation | 103,038 | 87,001 | 210,285 | 172,195 | |||
Amortization of intangible assets | 42,043 | 27,673 | 83,987 | 53,263 | |||
General and administrative expenses | 176,155 | 133,785 | 340,069 | 279,175 | |||
Interest expense, net | 59,415 | 19,387 | 112,108 | 35,428 | |||
Equity in earnings of unconsolidated affiliates, net | (7,496) | (6,587) | (16,648) | (13,364) | |||
Other income, net | (3,508) | (5,825) | (9,709) | (2,071) | |||
Income (loss) before income taxes | $ 19,688 | $ 18,247 | $ (105,592) | $ (29,861) | |||
(Provision for) benefit from income taxes | (2,934) | (1,992) | 41,800 | 11,157 | |||
Net income (loss) | $ 16,754 | $ 16,255 | $ (63,792) | $ (18,704) | |||
Net income attributable to non-controlling interests | 1,212 | 43 | 1,206 | 62 | |||
Net income (loss) attributable to MasTec, Inc. | $ 15,542 | $ 16,212 | $ (64,998) | $ (18,766) | |||
Earnings (loss) per share: | |||||||
Basic earnings (loss) per share | $ 0.20 | $ 0.22 | $ (0.84) | $ (0.25) | |||
Basic weighted average common shares outstanding | 77,635 | 74,445 | 77,306 | 74,615 | |||
Diluted earnings (loss) per share | $ 0.20 | $ 0.20 | $ (0.84) | $ (0.27) | |||
Diluted weighted average common shares outstanding | 78,372 | 75,537 | 77,306 | 74,647 | |||
Consolidated Balance Sheets | |||
(unaudited - in thousands) | |||
June 30, | December 31, | ||
Assets | |||
Current assets | $ 3,829,004 | $ 3,859,127 | |
Property and equipment, net | 1,753,667 | 1,754,101 | |
Operating lease right-of-use assets | 347,060 | 279,534 | |
Goodwill, net | 2,079,522 | 2,045,041 | |
Other intangible assets, net | 862,775 | 946,299 | |
Other long-term assets | 415,792 | 409,157 | |
Total assets | $ 9,287,820 | $ 9,293,259 | |
Liabilities and Equity | |||
Current liabilities | $ 2,440,835 | $ 2,496,037 | |
Long-term debt, including finance leases | 3,154,576 | 3,052,193 | |
Long-term operating lease liabilities | 235,977 | 194,050 | |
Deferred income taxes | 520,820 | 571,401 | |
Other long-term liabilities | 247,192 | 238,391 | |
Total equity | 2,688,420 | 2,741,187 | |
Total liabilities and equity | $ 9,287,820 | $ 9,293,259 | |
Consolidated Statements of Cash Flows | |||
(unaudited - in thousands) | |||
For the Six Months Ended | |||
2023 | 2022 | ||
Net cash (used in) provided by operating activities | $ (97,910) | $ 1,541 | |
Net cash used in investing activities | (141,460) | (220,021) | |
Net cash used in financing activities | (12,155) | (2,984) | |
Effect of currency translation on cash | 838 | (343) | |
Net decrease in cash and cash equivalents | (250,687) | (221,807) | |
Cash and cash equivalents - beginning of period | $ 370,592 | $ 360,736 | |
Cash and cash equivalents - end of period | $ 119,905 | $ 138,929 | |
Backlog by Reportable Segment (unaudited - in millions) | June 30, | March 31, | June 30, | ||
Communications | $ 5,420 | $ 5,602 | $ 5,031 | ||
Clean Energy and Infrastructure | 3,324 | 3,546 | 1,896 | ||
Oil and Gas | 2,042 | 2,013 | 1,456 | ||
Power Delivery | 2,656 | 2,731 | 2,622 | ||
Other | — | — | — | ||
Estimated 18-month backlog | $ 13,442 | $ 13,892 | $ 11,005 |
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 | For the Six Months Ended | ||||||
Segment Information | 2023 | 2022 | 2023 | 2022 | |||
Revenue by Reportable Segment | |||||||
Communications | $ 868.7 | $ 822.0 | $ 1,675.2 | $ 1,486.2 | |||
Clean Energy and Infrastructure | 969.7 | 494.5 | 1,794.6 | 930.4 | |||
Oil and Gas | 341.8 | 341.2 | 598.3 | 552.2 | |||
Power Delivery | 702.6 | 646.5 | 1,412.0 | 1,296.9 | |||
Other | — | — | — | — | |||
Eliminations | (8.7) | (2.4) | (21.3) | (9.5) | |||
Consolidated revenue | $ 2,874.1 | $ 2,301.8 | $ 5,458.8 | $ 4,256.2 | |||
For the Three Months Ended | For the Six Months Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Adjusted EBITDA by Segment | |||||||
EBITDA | $ 224.2 | $ 152.3 | $ 300.8 | $ 231.0 | |||
Non-cash stock-based compensation expense (a) | 8.6 | 6.8 | 17.1 | 13.2 | |||
Acquisition and integration costs (b) | 22.7 | 12.5 | 39.8 | 26.1 | |||
Losses on fair value of investment (a) | — | 7.1 | 0.2 | 7.1 | |||
Bargain purchase gain (a) | — | (0.2) | — | (0.2) | |||
Adjusted EBITDA | $ 255.4 | $ 178.5 | $ 357.9 | $ 277.2 | |||
Segment: | |||||||
Communications | $ 94.1 | $ 85.3 | $ 155.8 | $ 126.5 | |||
Clean Energy and Infrastructure | 49.7 | (5.2) | 60.2 | 5.6 | |||
Oil and Gas | 77.0 | 64.1 | 91.6 | 87.6 | |||
Power Delivery | 57.4 | 48.4 | 106.5 | 101.5 | |||
Other | 6.7 | 7.4 | 13.8 | 14.4 | |||
Segment Total | 284.9 | 200.0 | 427.9 | 335.6 | |||
Corporate | (29.5) | (21.5) | (70.0) | (58.4) | |||
Adjusted EBITDA | $ 255.4 | $ 178.5 | $ 357.9 | $ 277.2 | |||
Note: The Communications, Clean Energy and Infrastructure, and Power Delivery segments represent the "non-Oil & Gas" segments. | |
(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 June 30, 2023, Communications, Clean Energy and Infrastructure and Power Delivery EBITDA included $4.6 million, $16.4 million and $0.3 million, respectively, of acquisition and integration costs related to our recent acquisitions, and Corporate EBITDA included $1.4 million of such costs, and for the six month period ended June 30, 2023, $13.5 million, $21.7 million, $1.9 million and $2.7 million of such costs were included in EBITDA of the segments and Corporate, respectively. For the three month period ended June 30, 2022, Communications, Oil and Gas, Power Delivery and Corporate EBITDA included $1.1 million, $1.4 million, $7.0 million and $3.0 million of such acquisition and integration costs, respectively, and for the six month period ended June 30, 2022, $1.9 million, $3.3 million, $14.1 million, and $6.8 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 | For the Six Months Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Adjusted EBITDA Margin by Segment | |||||||
EBITDA Margin | 7.8 % | 6.6 % | 5.5 % | 5.4 % | |||
Non-cash stock-based compensation expense (a) | 0.3 % | 0.3 % | 0.3 % | 0.3 % | |||
Acquisition and integration costs (b) | 0.8 % | 0.5 % | 0.7 % | 0.6 % | |||
Losses on fair value of investment (a) | — % | 0.3 % | 0.0 % | 0.2 % | |||
Bargain purchase gain (a) | — % | (0.0) % | — % | (0.0) % | |||
Adjusted EBITDA margin | 8.9 % | 7.8 % | 6.6 % | 6.5 % | |||
Segment: | |||||||
Communications | 10.8 % | 10.4 % | 9.3 % | 8.5 % | |||
Clean Energy and Infrastructure | 5.1 % | (1.1) % | 3.4 % | 0.6 % | |||
Oil and Gas | 22.5 % | 18.8 % | 15.3 % | 15.9 % | |||
Power Delivery | 8.2 % | 7.5 % | 7.5 % | 7.8 % | |||
Other | NM | ||||||
