Mastec Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

Form 10-Q

_____________________________________________

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __ to __

Commission File Number 001-08106

_____________________________________________

MasTec, Inc.

(Exact name of registrant as specified in its charter)



Florida		65-0829355
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

800 S. Douglas Road, 12th Floor
Coral Gables,	Florida	33134
(Address of principal executive offices)		(Zip Code)

(305) 599-1800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 Par Value	MTZ	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes ☐ No ☑

As of July 27, 2020, MasTec, Inc. had 73,818,180 shares of common stock outstanding.

MASTEC, INC.

FORM 10-Q

QUARTER ENDED JUNE 30, 2020

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

ITEM 1.
FINANCIAL STATEMENTS

MASTEC, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited - in thousands, except per share amounts)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Revenue	$	1,569,297		$	1,939,006		$	2,985,901		$	3,457,346
Costs of revenue, excluding depreciation and amortization	1,341,825			1,633,400			2,568,122			2,945,448
Depreciation	57,687			55,279			110,776			109,504
Amortization of intangible assets	9,793			4,665			17,184			9,471
General and administrative expenses	84,959			70,819			170,473			143,436
Interest expense, net	14,808			16,623			31,812			38,881
Equity in earnings of unconsolidated affiliates	(6,813		)	(6,551		)	(14,647		)	(12,811		)
Other (income) expense, net	(10,527		)	4,812			(11,869		)	8,317
Income before income taxes	$	77,565		$	159,959		$	114,050		$	215,100
Provision for income taxes	(20,738		)	(39,736		)	(21,161		)	(51,770		)
Net income	$	56,827		$	120,223		$	92,889		$	163,330
Net (loss) income attributable to non-controlling interests	(178		)	513			(346		)	507
Net income attributable to MasTec, Inc.	$	57,005		$	119,710		$	93,235		$	162,823

Earnings per share (Note 2):
Basic earnings per share	$	0.79		$	1.59		$	1.27		$	2.17
Basic weighted average common shares outstanding	72,045			75,183			73,392			75,088

Diluted earnings per share	$	0.78		$	1.58		$	1.26		$	2.15
Diluted weighted average common shares outstanding	72,777			75,747			74,135			75,661

The accompanying notes are an integral part of these consolidated financial statements.

MASTEC, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited - in thousands)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Net income	$	56,827		$	120,223		$	92,889		$	163,330
Other comprehensive (loss) income:
Foreign currency translation (losses) gains, net of tax	(840		)	113			(1,137		)	13
Unrealized losses on equity investee activity, net of tax	(1,325		)	(8,732		)	(24,286		)	(14,194		)
Comprehensive income	$	54,662		$	111,604		$	67,466		$	149,149
Comprehensive (loss) income attributable to non-controlling interests	(178		)	513			(346		)	507
Comprehensive income attributable to MasTec, Inc.	$	54,840		$	111,091		$	67,812		$	148,642

The accompanying notes are an integral part of these consolidated financial statements.

MASTEC, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited - in thousands, except share information)



	June 30, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	48,638		$	71,427
Accounts receivable, net of allowance	927,764			850,326
Contract assets	965,887			1,024,568
Inventories, net	104,893			100,069
Prepaid expenses	44,138			52,000
Other current assets	45,728			75,169
Total current assets	$	2,137,048		$	2,173,559
Property and equipment, net	972,177			905,835
Operating lease assets	198,844			229,903
Goodwill, net	1,227,405			1,221,440
Other intangible assets, net	202,165			211,528
Other long-term assets	252,346			254,741
Total assets	$	4,989,985		$	4,997,006
Liabilities and equity
Current liabilities:
Current portion of long-term debt, including finance leases	$	126,697		$	118,429
Current portion of operating lease liabilities	78,044			81,561
Accounts payable	630,456			535,029
Accrued salaries and wages	118,068			87,562
Other accrued expenses	163,629			115,581
Contract liabilities	338,230			206,180
Other current liabilities	68,267			74,784
Total current liabilities	$	1,523,391		$	1,219,126
Long-term debt, including finance leases	1,115,839			1,314,030
Long-term operating lease liabilities	133,535			154,553
Deferred income taxes	267,525			296,326
Other long-term liabilities	198,859			221,280
Total liabilities	$	3,239,149		$	3,205,315
Commitments and contingencies (Note 14)
Equity
Preferred stock, $1.00 par value: authorized shares - 5,000,000; issued and outstanding shares – none	$	—		$	—
Common stock, $0.10 par value: authorized shares - 145,000,000; issued shares - 92,665,097 and 91,909,430 (including 1,734,554 and 1,221,593 of unvested stock awards) as of June 30, 2020 and December 31, 2019, respectively	9,267			9,191
Capital surplus	821,584			809,753
Retained earnings	1,603,944			1,510,709
Accumulated other comprehensive loss	(101,129		)	(75,706		)
Treasury stock, at cost: 18,941,926 shares and 15,344,917 shares as of June 30, 2020 and December 31, 2019, respectively	(586,955		)	(466,727		)
Total MasTec, Inc. shareholders’ equity	$	1,746,711		$	1,787,220
Non-controlling interests	$	4,125		$	4,471
Total equity	$	1,750,836		$	1,791,691
Total liabilities and equity	$	4,989,985		$	4,997,006

The accompanying notes are an integral part of these consolidated financial statements.

MASTEC, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited - in thousands, except shares)



	Common Stock				Treasury Stock					Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Loss			Total MasTec, Inc. Shareholders’ Equity			Non-Controlling Interests			Total Equity
	Shares		Amount		Shares		Amount			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Loss			Total MasTec, Inc. Shareholders’ Equity			Non-Controlling Interests			Total Equity
For the Three Months Ended June 30, 2020
Balance as of March 31, 2020	92,618,032		$	9,262	(18,914,841	)	$	(586,153	)	$	814,425	$	1,546,939	$	(98,963	)	$	1,685,510		$	4,303		$	1,689,813
Net income (loss)												57,005					57,005			(178		)	56,827
Other comprehensive loss														(2,166		)	(2,166		)				(2,166		)
Non-cash stock-based compensation										5,850							5,850						5,850
Forfeiture of restricted shares, net	(1,424	)	—							—							—						—
Other stock issuances, net of shares withheld for taxes	48,489		5							1,309							1,314						1,314
Acquisition of treasury stock, at cost					(27,085	)	(802		)								(802		)				(802		)
Balance as of June 30, 2020	92,665,097		$	9,267	(18,941,926	)	$	(586,955	)	$	821,584	$	1,603,944	$	(101,129	)	$	1,746,711		$	4,125		$	1,750,836

For the Three Months Ended June 30, 2019
Balance as of March 31, 2019	91,591,398		$	9,159	(15,344,917	)	$	(466,727	)	$	793,748	$	1,161,487	$	(66,056	)	$	1,431,611		$	2,121		$	1,433,732
Net income												119,710					119,710			513			120,223
Other comprehensive loss														(8,619		)	(8,619		)				(8,619		)
Non-cash stock-based compensation										4,220							4,220						4,220
Issuance of restricted shares, net	57		—							—							—						—
Other stock issuances, net of shares withheld for taxes	35,531		4							1,194							1,198						1,198
Contributions from non-controlling interests																	—			584			584
Balance as of June 30, 2019	91,626,986		$	9,163	(15,344,917	)	$	(466,727	)	$	799,162	$	1,281,198	$	(74,675	)	$	1,548,121		$	3,217		$	1,551,338

The accompanying notes are an integral part of these consolidated financial statements.

MASTEC, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited - in thousands, except shares)



	Common Stock			Treasury Stock					Capital Surplus			Retained Earnings		Accumulated Other Comprehensive Loss			Total MasTec, Inc. Shareholders’ Equity			Non-Controlling Interests			Total Equity
	Shares	Amount		Shares		Amount			Capital Surplus			Retained Earnings		Accumulated Other Comprehensive Loss			Total MasTec, Inc. Shareholders’ Equity			Non-Controlling Interests			Total Equity
For the Six Months Ended June 30, 2020
Balance as of December 31, 2019	91,909,430	$	9,191	(15,344,917	)	$	(466,727	)	$	809,753		$	1,510,709	$	(75,706	)	$	1,787,220		$	4,471		$	1,791,691
Net income (loss)												93,235					93,235			(346		)	92,889
Other comprehensive loss														(25,423		)	(25,423		)				(25,423		)
Non-cash stock-based compensation									9,899								9,899						9,899
Issuance of restricted shares, net	693,355	69							(69		)						—						—
Other stock issuances, net of shares withheld for taxes	62,312	7							2,001								2,008						2,008
Acquisition of treasury stock, at cost				(3,597,009	)	(120,228		)									(120,228		)				(120,228		)
Balance as of June 30, 2020	92,665,097	$	9,267	(18,941,926	)	$	(586,955	)	$	821,584		$	1,603,944	$	(101,129	)	$	1,746,711		$	4,125		$	1,750,836

For the Six Months Ended June 30, 2019
Balance as of December 31, 2018	91,327,009	$	9,133	(15,329,817	)	$	(466,125	)	$	789,009		$	1,118,375	$	(60,494	)	$	1,389,898		$	2,126		$	1,392,024
Net income												162,823					162,823			507			163,330
Other comprehensive loss														(14,181		)	(14,181		)				(14,181		)
Non-cash stock-based compensation									7,940								7,940						7,940
Issuance of restricted shares, net	233,419	23							(23		)						—						—
Other stock issuances, net of shares withheld for taxes	66,558	7							2,236								2,243						2,243
Acquisition of treasury stock, at cost				(15,100	)	(602		)									(602		)				(602		)
Contributions from non-controlling interests																	—			584			584
Balance as of June 30, 2019	91,626,986	$	9,163	(15,344,917	)	$	(466,727	)	$	799,162		$	1,281,198	$	(74,675	)	$	1,548,121		$	3,217		$	1,551,338

The accompanying notes are an integral part of these consolidated financial statements.

MASTEC, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited - in thousands)



	For the Six Months Ended June 30,
	2020			2019
Cash flows from operating activities:
Net income	$	92,889		$	163,330
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	110,776			109,504
Amortization of intangible assets	17,184			9,471
Non-cash interest expense, net	1,451			737
Non-cash stock-based compensation expense	9,899			7,940
Benefit from deferred income taxes	(20,575		)	(14,190		)
Equity in earnings of unconsolidated affiliates	(14,647		)	(12,811		)
Gains on sales of assets, net	(8,334		)	(6,074		)
Other non-cash items, net	12,297			(2,899		)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net of allowance	(60,246		)	3,196
Contract assets	64,321			113,827
Inventories	(4,629		)	(265		)
Other assets, current and long-term portion	31,234			6,187
Accounts payable and accrued expenses	164,297			(26,355		)
Contract liabilities	130,784			(12,278		)
Other liabilities, current and long-term portion	(30,199		)	12,141
Net cash provided by operating activities	$	496,502		$	351,461
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired	(10,493		)	(94,647		)
Capital expenditures	(132,755		)	(57,455		)
Proceeds from sale of property and equipment	17,861			19,567
Payments for other investments	(16,777		)

Price	65.08	EPS	4
Shares	76	P/E	15
MCap	4,942	P/FCF	11
Net Debt	1,278	EBIT	420
TEV	6,219	TEV/EBIT	15
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-07-31
10-Q	2020-03-31	Filed 2020-04-30
10-K	2019-12-31	Filed 2020-02-27
10-Q	2019-09-30	Filed 2019-10-31
10-Q	2019-06-30	Filed 2019-08-01
10-Q	2019-03-31	Filed 2019-05-02
10-K	2018-12-31	Filed 2019-02-28
10-Q	2018-09-30	Filed 2018-11-01
10-Q	2018-06-30	Filed 2018-08-02
10-Q	2018-03-31	Filed 2018-04-30
10-K	2017-12-31	Filed 2018-02-27
10-Q	2017-09-30	Filed 2017-11-02
10-Q	2017-06-30	Filed 2017-08-03
10-Q	2017-03-31	Filed 2017-05-04
10-K	2016-12-31	Filed 2017-02-24
10-Q	2016-09-30	Filed 2016-11-03
10-Q	2016-06-30	Filed 2016-08-04
10-Q	2016-03-31	Filed 2016-05-05
10-K	2015-12-31	Filed 2016-02-26
10-Q	2015-09-30	Filed 2015-11-03
10-Q	2015-06-30	Filed 2015-08-17
10-Q	2015-03-31	Filed 2015-08-07
10-K	2014-12-31	Filed 2015-07-31
10-Q	2014-09-30	Filed 2014-10-30
10-Q	2014-06-30	Filed 2014-08-11
10-Q	2014-03-31	Filed 2014-05-01
10-K	2013-12-31	Filed 2014-02-27
10-Q	2013-09-30	Filed 2013-10-31
10-Q	2013-06-30	Filed 2013-08-01
10-Q	2013-03-31	Filed 2013-05-02
10-K	2012-12-31	Filed 2013-02-28
10-Q	2012-09-30	Filed 2012-11-01
10-Q	2012-06-30	Filed 2012-08-02
10-Q	2012-03-31	Filed 2012-05-03
10-K	2011-12-31	Filed 2012-02-29
10-Q	2011-09-30	Filed 2011-11-03
10-Q	2011-06-30	Filed 2011-08-03
10-Q	2011-03-31	Filed 2011-05-04
10-K	2010-12-31	Filed 2011-02-23
10-Q	2010-09-30	Filed 2010-11-03
10-Q	2010-06-30	Filed 2010-08-04
10-Q	2010-03-31	Filed 2010-05-05
10-K	2009-12-31	Filed 2010-02-25

8-K	2020-08-04	Enter Agreement, Off-BS Arrangement, Exhibits
8-K	2020-07-30	Earnings, Regulation FD, Exhibits
8-K	2020-07-21	Other Events, Exhibits
8-K	2020-07-20	Off-BS Arrangement, Regulation FD, Exhibits
8-K	2020-05-15
8-K	2020-04-30
8-K	2020-02-27
8-K	2019-10-31
8-K	2019-09-19
8-K	2019-08-01
8-K	2019-05-23
8-K	2019-05-02
8-K	2019-02-28
8-K	2018-11-01
8-K	2018-08-02
8-K	2018-05-22
8-K	2018-04-30
8-K	2018-02-27

EX-10.1	mtz6302010-qex101.htm
EX-10.2	mtz6302010-qex102.htm
EX-22.1	mtz6302010-qex221.htm
EX-31.1	mtz6302010-qex311.htm
EX-31.2	mtz6302010-qex312.htm
EX-32.1	mtz6302010-qex321.htm
EX-32.2	mtz6302010-qex322.htm



		Page
Part I. FINANCIAL INFORMATION		3
Item 1	Financial Statements (Unaudited)	3
	Consolidated Statements of Operations	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Equity	6
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements (Unaudited)	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4	Controls and Procedures	38
Part II. OTHER INFORMATION		39
Item 1	Legal Proceedings	39
Item 1A	Risk Factors	39
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 4	Mine Safety Disclosures	40
Item 6	Exhibits	40
SIGNATURES		41

MTZ 10Q Quarterly Report

Mastec Earnings 2020-06-30