MasTec Announces Fourth Quarter and Annual 2023 Financial Results and Provides Initial 2024 Guidance
- Record fourth-quarter revenue of $3.3 billion in 2023, a 9% increase over the prior year.
- Full-year 2023 revenue reached $12.0 billion, a 23% increase over 2022.
- Adjusted EBITDA for 2023 was $860.3 million, up 10% from 2022.
- Issuing initial 2024 guidance with expected revenue of $12.5 billion, a 4% increase over 2023.
- Fourth-quarter cash flow from operations was almost $500 million, leading to significant net debt reduction.
- 18-month backlog as of December 31, 2023, was $12.4 billion, with sequential growth in most segments.
- GAAP net loss of $47.3 million for 2023, compared to net income in 2022.
- Adjusted diluted earnings per share for 2023 were $1.97, down from $3.05 in 2022.
- Management expects double-digit revenue and earnings growth in 2025 and beyond.
- Full-year 2024 guidance includes revenue of $12.5 billion, GAAP net income of $105 million, and adjusted EBITDA of $955 million.
- None.
Analyzing MasTec, Inc.'s financial results, the company’s record revenue growth in Q4 and FY 2023 is notable, indicating robust demand for its infrastructure services. However, the GAAP net loss for the full year juxtaposed with a significant increase in adjusted net income and adjusted EBITDA suggests a discrepancy that warrants a deeper look into non-operational factors affecting profitability. The substantial improvement in cash flow and reduction in net debt is a positive signal for financial health and operational efficiency. The initial guidance for 2024, projecting further revenue growth and a turnaround to net income profitability, suggests optimism about the company's future performance. Investors should consider the company's ability to manage costs and improve margins, as well as the potential for continued strong demand in its market segments.
The 18-month backlog growth in segments other than Oil & Gas is indicative of sustainable demand for MasTec's services, which is critical for future revenue streams. However, the decline in the Oil & Gas backlog, attributed to the nearing completion of a major project, raises questions about the segment's future contribution to the company's revenue mix. The market should also note the company's focus on capital allocation and operational tools to optimize performance, which may lead to enhanced competitiveness and shareholder value. The guidance for 2024, with a modest revenue increase, reflects cautious optimism in a competitive infrastructure market where MasTec is positioning itself for long-term growth.
The reduction in the net debt leverage ratio from 3.4 to 2.9 times is a strong indicator of MasTec's commitment to financial stability and may be viewed favorably by creditors and investors alike. The company’s ability to generate significant cash flow in Q4 2023 to facilitate this debt reduction is impressive, particularly given the challenging economic environment. The improvement in Days Sales Outstanding (DSO) to the lowest level since mid-2017 reflects efficient receivables management. Stakeholders should monitor how the company manages its debt profile against the backdrop of its 2024 guidance and the potential impact of interest rate changes on its cost of capital.
- Record Fourth Quarter and Annual Revenue of
$3.3 Billion $12.0 Billion - Full Year 2023 Cash Flow from Operations of
$687 Million 95% Increase Over Full Year 2022 - Fourth Quarter Reduction in Net Debt of
$455 Million - 2023 Results Include GAAP Net Loss of
$47.3 Million $156.7 Million $860.3 Million $0.64 $1.97 - Adjusted Diluted Earnings per Share was
$0.22 - Issuing Initial Annual 2024 Guidance Including Revenue of
$12.5 Billion 4% Increase Over 2023, GAAP Net Income of$105 Million $955 Million $1.04 $2.69
For the Fourth Quarter:
Fourth quarter 2023 revenue was up
Fourth quarter 2023 adjusted net income and adjusted diluted earnings per share, both non-GAAP measures, were
Fourth quarter 2023 adjusted EBITDA, also a non-GAAP measure, was
18-month backlog as of December 31, 2023 was
Fourth quarter Cash Flow from Operations was very strong at almost
For the Full Year:
For the year ended December 31, 2023, revenue was up
Full year 2023 adjusted net income and adjusted diluted earnings per share, both non-GAAP measures, were
Full year 2023 adjusted EBITDA, also a non-GAAP measure, was up
Adjusted net income, adjusted diluted earnings per share, adjusted EBITDA and net debt, which are all non-GAAP measures, exclude certain items that 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, "Fourth quarter results were in line with our expectations after a challenging 2023. We look forward to the opportunities we have this year and expect to deliver record levels of revenue and adjusted EBITDA in 2024. Demand is very strong for our services, and I expect 2024 will position us to deliver double digit revenue and earnings growth in 2025 and beyond."
Mr. Mas continued, "I'd once again like to thank the 34,000 men and women of MasTec who work every day to build, maintain, and improve the nation's communications, transportation, energy, and industrial infrastructure. It is hard work, and it's because of them that we have great long-term opportunities."
Paul DiMarco, MasTec's Executive Vice President, and Chief Financial Officer, noted, "I'm pleased that we were able to finish 2023 with strong cash flow generation of almost
Based on the information available today, the Company is providing both first quarter and full year 2024 guidance. The Company currently expects full year 2024 revenue will approximate
For the first quarter of 2024, the Company expects revenue of approximately
Management will hold a conference call to discuss these results on Friday, March 1, 2024 at 9:00 a.m. Eastern Time. The call-in number for the conference call is (856) 344-9221 or (888) 256-1007 with a pass code of 4316181. Additionally, the call will be broadcast live over the Internet and can be accessed and replayed through the Investors section of the Company's website at www.mastec.com. The webcast replay will be available for at least 30 days.
The following tables set forth the financial results for the periods ended December 31, 2023 and 2022:
Consolidated Statements of Operations | |||||||
(unaudited - in thousands, except per share information) | |||||||
For the Three Months Ended | For the Years Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Revenue | $ 3,280,083 | $ 3,008,361 | $ 11,995,934 | $ 9,778,038 | |||
Costs of revenue, excluding depreciation and amortization | 2,912,370 | 2,637,071 | 10,613,762 | 8,586,333 | |||
Depreciation | 108,611 | 107,753 | 433,929 | 371,240 | |||
Amortization of intangible assets | 42,981 | 54,666 | 169,233 | 135,908 | |||
General and administrative expenses | 178,190 | 155,194 | 698,899 | 559,437 | |||
Interest expense, net | 59,741 | 49,942 | 234,405 | 112,255 | |||
Equity in earnings of unconsolidated affiliates, net | (7,262) | (9,413) | (30,697) | (28,836) | |||
Other (income) expense, net | (14,562) | 539 | (40,893) | (1,358) | |||
Income (loss) before income taxes | $ 15 | $ 12,609 | $ (82,704) | $ 43,059 | |||
Benefit from (provision for) income taxes | 1,177 | (9,239) | 35,408 | (9,171) | |||
Net income (loss) | $ 1,192 | $ 3,370 | $ (47,296) | $ 33,888 | |||
Net income attributable to non-controlling interests | 439 | 146 | 2,653 | 534 | |||
Net income (loss) attributable to MasTec, Inc. | $ 753 | $ 3,224 | $ (49,949) | $ 33,354 | |||
Earnings (loss) per share: | |||||||
Basic earnings (loss) per share | $ 0.01 | $ 0.04 | $ (0.64) | $ 0.45 | |||
Basic weighted average common shares outstanding | 77,879 | 76,492 | 77,535 | 74,917 | |||
Diluted earnings (loss) per share | $ 0.01 | $ 0.04 | $ (0.64) | $ 0.42 | |||
Diluted weighted average common shares outstanding | 78,288 | 77,770 | 77,535 | 76,185 | |||
Consolidated Balance Sheets | |||
(unaudited - in thousands) | |||
December 31, | December 31, | ||
Assets | |||
Current assets | $ 3,974,253 | $ 3,859,127 | |
Property and equipment, net | 1,651,462 | 1,754,101 | |
Operating lease right-of-use assets | 418,685 | 279,534 | |
Goodwill, net | 2,126,366 | 2,045,041 | |
Other intangible assets, net | 784,260 | 946,299 | |
Other long-term assets | 418,485 | 409,157 | |
Total assets | $ 9,373,511 | $ 9,293,259 | |
Liabilities and Equity | |||
Current liabilities | $ 2,837,219 | $ 2,496,037 | |
Long-term debt, including finance leases | 2,888,058 | 3,052,193 | |
Long-term operating lease liabilities | 292,873 | 194,050 | |
Deferred income taxes | 390,399 | 571,401 | |
Other long-term liabilities | 243,701 | 238,391 | |
Total equity | 2,721,261 | 2,741,187 | |
Total liabilities and equity | $ 9,373,511 | $ 9,293,259 | |
Consolidated Statements of Cash Flows | |||
(unaudited - in thousands) | |||
For the Years Ended December 31, | |||
2023 | 2022 | ||
Net cash provided by operating activities | $ 687,277 | $ 352,297 | |
Net cash used in investing activities | (178,061) | (821,183) | |
Net cash (used in) provided by financing activities | (350,998) | 480,897 | |
Effect of currency translation on cash | 751 | (2,155) | |
Net increase in cash and cash equivalents | 158,969 | 9,856 | |
Cash and cash equivalents - beginning of period | $ 370,592 | $ 360,736 | |
Cash and cash equivalents - end of period | $ 529,561 | $ 370,592 | |
Backlog by Reportable Segment (unaudited - in millions) | December 31, | September 30, | December 31, | ||
Communications | $ 5,627 | $ 5,299 | $ 5,303 | ||
Clean Energy and Infrastructure | 3,115 | 3,073 | 3,227 | ||
Power Delivery | 2,440 | 2,437 | 2,709 | ||
Oil and Gas | 1,225 | 1,681 | 1,740 | ||
Other | — | — | — | ||
Estimated 18-month backlog | $ 12,407 | $ 12,490 | $ 12,979 |
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 Years Ended December 31, | ||||||
Segment Information | 2023 | 2022 | 2023 | 2022 | |||
Revenue by Reportable Segment | |||||||
Communications | $ 759.9 | $ 858.6 | $ 3,259.5 | $ 3,233.7 | |||
Clean Energy and Infrastructure | 1,067.4 | 1,125.0 | 3,962.0 | 2,618.6 | |||
Power Delivery | 658.0 | 739.8 | 2,735.1 | 2,725.2 | |||
Oil and Gas | 802.2 | 291.6 | 2,072.8 | 1,219.6 | |||
Other | — | — | — | — | |||
Eliminations | (7.4) | (6.7) | (33.5) | (19.1) | |||
Consolidated revenue | $ 3,280.1 | $ 3,008.4 | $ 11,995.9 | $ 9,778.0 | |||
For the Three Months Ended | For the Years Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Adjusted EBITDA by Segment | |||||||
EBITDA | $ 211.3 | $ 225.0 | $ 754.9 | $ 662.5 | |||
Non-cash stock-based compensation expense (a) | 9.0 | 8.6 | 33.3 | 27.4 | |||
Acquisition and integration costs (b) | 11.0 | 26.6 | 71.9 | 86.0 | |||
Losses, net, on fair value of investment (a) | — | 0.4 | 0.2 | 7.7 | |||
Project results from non-controlled joint venture (c) | — | (2.8) | — | (2.8) | |||
Bargain purchase gain (a) | — | — | — | (0.2) | |||
Adjusted EBITDA | $ 231.4 | $ 257.9 | $ 860.3 | $ 780.6 | |||
Segment: | |||||||
Communications | $ 57.7 | $ 94.9 | $ 291.7 | $ 331.8 | |||
Clean Energy and Infrastructure | 51.7 | 79.0 | 169.5 | 109.2 | |||
Power Delivery | 52.8 | 56.8 | 216.3 | 241.9 | |||
Oil and Gas | 95.5 | 33.6 | 284.4 | 171.5 | |||
Other | 6.8 | 9.0 | 25.0 | 29.0 | |||
Segment Total | $ 264.5 | $ 273.3 | $ 986.9 | $ 883.4 | |||
Corporate | (33.2) | (15.5) | (126.6) | (102.8) | |||
Adjusted EBITDA | $ 231.4 | $ 257.9 | $ 860.3 | $ 780.6 | |||
(a) | Non-cash stock-based compensation expense, losses, net, on the fair value of an investment and the bargain purchase gain from a prior year acquisition are included within Corporate EBITDA. |
(b) | For the year ended December 31, 2023, Communications, Clean Energy and Infrastructure and Power Delivery EBITDA included |
(c) | Project results from a non-controlled joint venture are included within Other segment results |
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 Years Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Adjusted EBITDA Margin by Segment | |||||||
EBITDA Margin | 6.4 % | 7.5 % | 6.3 % | 6.8 % | |||
Non-cash stock-based compensation expense (a) | 0.3 % | 0.3 % | 0.3 % | 0.3 % | |||
Acquisition and integration costs (b) | 0.3 % | 0.9 % | 0.6 % | 0.9 % | |||
Losses, net, on fair value of investment (a) | — % | 0.0 % | 0.0 % | 0.1 % | |||
Project results from non-controlled joint venture (c) | — % | (0.1) % | — % | (0.0) % | |||
Bargain purchase gain (a) | — % | — % | — % | (0.0) % | |||
Adjusted EBITDA margin | 7.1 % | 8.6 % | 7.2 % | 8.0 % | |||
Segment: | |||||||
Communications | 7.6 % | 11.1 % | 8.9 % | 10.3 % | |||
Clean Energy and Infrastructure | 4.8 % | 7.0 % | 4.3 % | 4.2 % | |||
Power Delivery | 8.0 % | 7.7 % | 7.9 % | 8.9 % | |||
Oil and Gas | 11.9 % | 11.5 % | 13.7 % | 14.1 % | |||
Other | NM | NM | NM | NM | |||
Segment Total | 8.1 % | 9.1 % | 8.2 % | 9.0 % | |||
Corporate | — % | — % | — % | — % | |||
Adjusted EBITDA margin | 7.1 % | 8.6 % | 7.2 % | 8.0 % | |||
NM - Percentage is not meaningful | |
(a) | Non-cash stock-based compensation expense, losses, net, on the fair value of an investment and the bargain purchase gain from a prior year acquisition are included within Corporate EBITDA. |
(b) | For the year ended December 31, 2023, Communications, Clean Energy and Infrastructure and Power Delivery EBITDA included |
(c) | Project results from a non-controlled joint venture are included within Other segment results. |
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 Years Ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
EBITDA and Adjusted EBITDA Reconciliation | |||||||
Net income (loss) | $ 1.2 | $ 3.4 | $ (47.3) | $ 33.9 | |||
Interest expense, net | 59.7 | 49.9 | 234.4 | 112.3 | |||
(Benefit from) provision for income taxes | (1.2) | 9.2 | (35.4) | 9.2 | |||
Depreciation | 108.6 | 107.8 | 433.9 | 371.2 | |||
Amortization of intangible assets | 43.0 | 54.7 | 169.2 | 135.9 | |||
EBITDA | $ 211.3 | $ 225.0 | $ 754.9 | $ 662.5 | |||
Non-cash stock-based compensation expense | 9.0 | 8.6 | 33.3 | 27.4 | |||
Acquisition and integration costs | 11.0 | 26.6 | 71.9 | 86.0 | |||
Losses, net, on fair value of investment | — | 0.4 | 0.2 | 7.7 | |||
Project results from non-controlled joint venture | — | (2.8) | — | (2.8) | |||
Bargain purchase gain | — | — | — | (0.2) | |||
Adjusted EBITDA | $ 231.4 | $ 257.9 | $ 860.3 | $ 780.6 | |||
For the Three Months Ended | For the Years Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
EBITDA and Adjusted EBITDA Margin Reconciliation | |||||||
Net income (loss) | 0.0 % | 0.1 % | (0.4) % | 0.3 % | |||
Interest expense, net | 1.8 % | 1.7 % | 2.0 % | 1.1 % | |||
(Benefit from) provision for income taxes | (0.0) % | 0.3 % | (0.3) % | 0.1 % | |||
Depreciation | 3.3 % | 3.6 % | 3.6 % | 3.8 % | |||
Amortization of intangible assets | 1.3 % | 1.8 % | 1.4 % | 1.4 % | |||
EBITDA margin | 6.4 % | 7.5 % | 6.3 % | 6.8 % | |||
Non-cash stock-based compensation expense | 0.3 % | 0.3 % | 0.3 % | 0.3 % | |||
Acquisition and integration costs | 0.3 % | 0.9 % | 0.6 % | 0.9 % | |||
Losses, net, on fair value of investment | — % | 0.0 % | 0.0 % | 0.1 % | |||
Project results from non-controlled joint venture | — % | (0.1) % | — % | (0.0) % | |||
Bargain purchase gain | — % | — % | — % | (0.0) % | |||
Adjusted EBITDA margin | 7.1 % | 8.6 % | 7.2 % | 8.0 % | |||
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 Years Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Adjusted Net Income Reconciliation | |||||||
Net income (loss) | $ 1.2 | $ 3.4 | $ (47.3) | $ 33.9 | |||
Non-cash stock-based compensation expense | 9.0 | 8.6 | 33.3 | 27.4 | |||
Amortization of intangible assets | 43.0 | 54.7 | 169.2 | 135.9 | |||
Acquisition and integration costs | 11.0 | 26.6 | 71.9 | 86.0 | |||
Losses, net, on fair value of investment | — | 0.4 | 0.2 | 7.7 | |||
Project results from non-controlled joint venture | — | (2.8) | — | (2.8) | |||
Bargain purchase gain | — | — | — | (0.2) | |||
Income tax effect of adjustments (a) | (16.8) | (16.4) | (75.3) | (58.6) | |||
Statutory and other tax rate effects (b) | 4.6 | 5.5 | 4.6 | 5.5 | |||
Adjusted net income | $ 52.0 | $ 80.0 | $ 156.7 | $ 234.8 | |||
For the Three Months Ended | For the Years Ended | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Adjusted Diluted Earnings per Share Reconciliation | |||||||
Diluted earnings (loss) per share | $ 0.01 | $ 0.04 | $ (0.64) | $ 0.42 | |||
Non-cash stock-based compensation expense | 0.11 | 0.11 | 0.43 | 0.36 | |||
Amortization of intangible assets | 0.55 | 0.70 | 2.16 | 1.78 | |||
Acquisition and integration costs | 0.14 | 0.34 | 0.92 | 1.13 | |||
Losses, net, on fair value of investment | — | 0.01 | 0.00 | 0.10 | |||
Project results from non-controlled joint venture | — | (0.04) | — | (0.04) | |||
Bargain purchase gain | — | — | — | (0.00) | |||
Income tax effect of adjustments (a) | (0.21) | (0.21) | (0.96) | (0.77) | |||
Statutory and other tax rate effects (b) | 0.06 | 0.07 | 0.06 | 0.07 | |||
Adjusted diluted earnings per share | $ 0.66 | $ 1.03 | $ 1.97 | $ 3.05 | |||
(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, 2023 and 2022, includes the effect of statutory and other tax rate changes. |
Calculation of Net Debt | December 31, | December 31, | |
Current portion of long-term debt, including finance leases | $ 177.2 | $ 171.9 | |
Long-term debt, including finance leases | 2,888.1 | 3,052.2 | |
Total Debt | $ 3,065.3 | $ 3,224.1 | |
Less: cash and cash equivalents | (529.6) | (370.6) | |
Net Debt | $ 2,535.7 | $ 2,853.5 |
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures | |||
(unaudited - in millions, except for percentages and per share information) | |||
Guidance for the | For the Three | ||
EBITDA and Adjusted EBITDA Reconciliation | |||
Net loss | $ (61) | $ (80.5) | |
Interest expense, net | 60 | 52.7 | |
Benefit from income taxes | (23) | (44.7) | |
Depreciation | 110 | 107.2 | |
Amortization of intangible assets | 34 | 41.9 | |
EBITDA | $ 121 | $ 76.6 | |
Non-cash stock-based compensation expense | 9 | 8.5 | |
Acquisition and integration costs | — | 17.1 | |
Losses, net, on fair value of investment | — | 0.2 | |
Adjusted EBITDA | $ 130 | $ 102.5 | |
Guidance for the | For the Three | ||
EBITDA and Adjusted EBITDA Margin Reconciliation | |||
Net loss | (2.3) % | (3.1) % | |
Interest expense, net | 2.3 % | 2.0 % | |
Benefit from income taxes | (0.9) % | (1.7) % | |
Depreciation | 4.2 % | 4.1 % | |
Amortization of intangible assets | 1.3 % | 1.6 % | |
EBITDA margin | 4.6 % | 3.0 % | |
Non-cash stock-based compensation expense | 0.4 % | 0.3 % | |
Acquisition and integration costs | — % | 0.7 % | |
Losses, net, on fair value of investment | — % | 0.0 % | |
Adjusted EBITDA margin | 5.0 % | 4.0 % | |
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures | |||
(unaudited - in millions, except for percentages and per share information) | |||
Guidance for the | For the Three | ||
Adjusted Net Loss Reconciliation | |||
Net loss | $ (61) | $ (80.5) | |
Non-cash stock-based compensation expense | 9 | 8.5 | |
Amortization of intangible assets | 34 | 41.9 | |
Acquisition and integration costs | — | 17.1 | |
Losses, net, on fair value of investment | — | 0.2 | |
Income tax effect of adjustments (a) | (12) | (29.2) | |
Adjusted net loss | $ (29) | ||
Guidance for the | For the Three | ||
Adjusted Diluted Loss per Share Reconciliation | |||
Diluted loss per share | $ (0.88) | $ (1.05) | |
Non-cash stock-based compensation expense | 0.12 | 0.11 | |
Amortization of intangible assets | 0.43 | 0.54 | |
Acquisition and integration costs | — | 0.22 | |
Losses, net, on fair value of investment | — | 0.00 | |
Income tax effect of adjustments (a) | (0.15) | (0.38) | |
Adjusted diluted loss per share | $ (0.48) | ||
(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. |
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures | |||||
(unaudited - in millions, except for percentages and per share information) | |||||
Guidance for the | For the Year | For the Year | |||
EBITDA and Adjusted EBITDA Reconciliation | |||||
Net income (loss) | $ 105 | $ (47.3) | $ 33.9 | ||
Interest expense, net | 210 | 234.4 | 112.3 | ||
Provision for (benefit from) income taxes | 33 | (35.4) | 9.2 | ||
Depreciation | 436 | 433.9 | 371.2 | ||
Amortization of intangible assets | 134 | 169.2 | 135.9 | ||
EBITDA | $ 917 | $ 754.9 | $ 662.5 | ||
Non-cash stock-based compensation expense | 38 | 33.3 | 27.4 | ||
Acquisition and integration costs | — | 71.9 | 86.0 | ||
Losses, net, on fair value of investment | — | 0.2 | 7.7 | ||
Project results from non-controlled joint venture | — | — | (2.8) | ||
Bargain purchase gain | — | — | (0.2) | ||
Adjusted EBITDA | $ 955 | $ 860.3 | $ 780.6 | ||
Guidance for the | For the Year | For the Year | |||
EBITDA and Adjusted EBITDA Margin Reconciliation | |||||
Net income (loss) | 0.8 % | (0.4) % | 0.3 % | ||
Interest expense, net | 1.7 % | 2.0 % | 1.1 % | ||
Provision for (benefit from) income taxes | 0.3 % | (0.3) % | 0.1 % | ||
Depreciation | 3.5 % | 3.6 % | 3.8 % | ||
Amortization of intangible assets | 1.1 % | 1.4 % | 1.4 % | ||
EBITDA margin | 7.3 % | 6.3 % | 6.8 % | ||
Non-cash stock-based compensation expense | 0.3 % | 0.3 % | 0.3 % | ||
Acquisition and integration costs | — % | 0.6 % | 0.9 % | ||
Losses, net, on fair value of investment | — % | 0.0 % | 0.1 % | ||
Project results from non-controlled joint venture | — % | — % | (0.0) % | ||
Bargain purchase gain | — % | — % | (0.0) % | ||
Adjusted EBITDA margin | 7.6 % | 7.2 % | 8.0 % | ||
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures | |||||
(unaudited - in millions, except for percentages and per share information) | |||||
Guidance for the | For the Year | For the Year | |||
Adjusted Net Income Reconciliation | |||||
Net income (loss) | $ 105 | $ (47.3) | $ 33.9 | ||
Non-cash stock-based compensation expense | 38 | 33.3 | 27.4 | ||
Amortization of intangible assets | 134 | 169.2 | 135.9 | ||
Acquisition and integration costs | — | 71.9 | 86.0 | ||
Losses, net, on fair value of investment | — | 0.2 | 7.7 | ||
Project results from non-controlled joint venture | — | — | (2.8) | ||
Bargain purchase gain | — | — | (0.2) | ||
Income tax effect of adjustments (a) | (41) | (75.3) | (58.6) | ||
Statutory and other tax rate effects (b) | — | 4.6 | 5.5 | ||
Adjusted net income | $ 234 | $ 156.7 | $ 234.8 | ||
Guidance for the | For the Year | For the Year | |||
Adjusted Diluted Earnings per Share Reconciliation | |||||
Diluted earnings (loss) per share | $ 1.04 | $ (0.64) | $ 0.42 | ||
Non-cash stock-based compensation expense | 0.48 | 0.43 | 0.36 | ||
Amortization of intangible assets | 1.69 | 2.16 | 1.78 | ||
Acquisition and integration costs | — | 0.92 | 1.13 | ||
Losses, net, on fair value of investment | — | 0.00 | 0.10 | ||
Project results from non-controlled joint venture | — | — | (0.04) | ||
Bargain purchase gain | — | — | (0.00) | ||
Income tax effect of adjustments (a) | (0.52) | (0.96) | (0.77) | ||
Statutory and other tax rate effects (b) | — | 0.06 | 0.07 | ||
Adjusted diluted earnings per share | $ 2.69 | $ 1.97 | $ 3.05 | ||
(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, 2023 and 2022, includes the effect of statutory and other tax rate changes. |
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-
MasTec, Inc. is a leading infrastructure construction company operating mainly throughout
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 from rising or elevated levels of inflation or interest rates, regulatory or policy changes, including permitting processes and tax incentives that affect us or our customers' industries, supply chain issues and technological developments; the effect of federal, local, state, foreign or tax legislation and other regulations affecting the industries we serve and related projects and expenditures; project delays due to permitting processes, compliance with environmental and other regulatory requirements and challenges to the granting of project permits, which could cause increased costs and delayed or reduced revenue; 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 potential economic downturns, inflationary issues, the availability and cost of financing, supply chain disruptions, 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 the expenditure levels of our customers of, among other items, fluctuations in commodity prices, including for fuel and energy sources, fluctuations in the cost of materials, labor, supplies or equipment, and/or supply-related issues that affect availability or cause delays for such items; the outcome of our plans for future operations, growth and services, including business development efforts, backlog, acquisitions and dispositions; risks related to completed or potential acquisitions, 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 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; 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, including from climate-related events, that affect 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; 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; requirements of and restrictions imposed by our credit facility, term loans, senior notes and any future loans or securities; systems and information technology interruptions and/or data security breaches that could adversely affect our ability to operate, our operating results, our data security or our reputation, or other cybersecurity-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; 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, including as a result of shares we may issue as purchase consideration in connection with acquisitions, or as a result of other stock issuances; our ability to obtain performance and surety bonds; 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 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 our internal controls over financial reporting, 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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