(1) Non-GAAP Financial Measures
The financial measures not prepared in conformity with generally accepted accounting principles in the United States (GAAP) that are utilized in this press release are provided to enable investors, analysts and management to evaluate performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods. In addition, management believes these measures are useful in comparing operating results with those of its competitors. These measures should be used in addition to, and not in lieu of, results prepared in conformity with GAAP.
We have not provided the most directly comparable GAAP financial measures, or a quantitative reconciliation thereto, for the forward-looking guidance for 2024 and 2025 of CEI’s estimated adjusted EBITDA, CEI’s estimated contribution to Quanta’s EBITDA, or CEI’s estimated contribution to adjusted diluted earnings per share included in this release in reliance on the “unreasonable efforts” exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. Providing the most directly comparable GAAP financial measures, or a quantitative reconciliation thereto, cannot be done without unreasonable effort due to the inherent uncertainty and difficulty in predicting the timing and amount of certain items, including but not limited to amortization of intangible assets and depreciation, which may be significant and difficult to project with a reasonable degree of accuracy, as the allocation of purchase price to intangible assets and property and equipment has not yet been performed. Because these adjustments are inherently variable and uncertain and depend on various factors that are beyond Quanta’s control, we are also unable to predict their probable significance. The variability of these items could have an unpredictable, and potentially significant, impact on our future GAAP financial results.
Cautionary Statements About Forward-Looking Statements and Information
This press release (and any oral statements regarding the subject matter of this press release) contains forward-looking statements intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements relating to expectations regarding the future financial and operational performance of Quanta or CEI; the projected impact and benefits of CEI on Quanta’s operating or financial results, including, among other things, estimated revenues, EBITDA, adjusted EBITDA, margins, cash flow generation and conversion, and earnings per share; expectations regarding Quanta’s or CEI’s business or financial outlook; expectations regarding Quanta’s and CEI’s plans, strategies, opportunities and customer relationships; expectations regarding opportunities, technological developments, competitive positioning, future economic and regulatory conditions and other trends in particular markets or industries; the potential strategic benefits and synergies expected from the acquisition of CEI; the business plans or financial condition of Quanta’s or CEI’s customers; expected realization of remaining performance obligations and backlog; the development of and opportunities with respect to future projects, including renewable and other projects designed to support transition to a reduced-carbon economy and data center projects; Quanta’s ability to effectively scale CEI’s workforce; potential opportunities that may be indicated by CEI’s prior projects performed for customers; trends and growth opportunities in relevant markets, including Quanta’s and CEI’s ability to obtain future project awards; estimated transaction and integration costs associated with the acquisition of CEI; Quanta’s ability to successfully integrate the operations of CEI; and expectations with respect to Quanta’s ability to reduce its debt and maintain its current credit rating; 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 forward-looking statements are not guarantees of future performance; rather they involve or rely on a number of risks, uncertainties, and assumptions that are difficult to predict or are beyond our control, and reflect management’s beliefs and assumptions based on information available at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by our forward-looking statements and that any or all of our forward-looking statements may turn out to be inaccurate or incorrect. Forward-looking statements can be affected by inaccurate assumptions and by known or unknown risks and uncertainties including, among others, market, industry, economic, financial or political conditions that are outside of the control of Quanta, including economic, energy, infrastructure and environmental policies and plans that are adopted or proposed by the U.S. federal or state governments or other governments in territories or countries in which Quanta operates, inflation, interest rates, recessionary economic conditions, deterioration of global or specific trade relationships and geopolitical conflicts and political unrest; quarterly variations in operating and financial results, liquidity, financial condition, cash flows, capital requirements and reinvestment opportunities; trends and growth opportunities in relevant markets, including Quanta’s and CEI’s ability to obtain future project awards; the ability to achieve the expected benefits from the acquisition of CEI, including the failure of the acquisition to contribute as expected to Quanta’s earnings or the failure of CEI to produce anticipated financial or operational results; the inability to successfully integrate and realize synergies from the acquisition of CEI; the potential adverse impact resulting from uncertainty surrounding the acquisition of CEI, including the ability to retain key personnel from the acquired business and the potential increase in risks already existing in Quanta’s operations or poor performance or decline in value of the acquired business; difficulties managing Quanta’s business as it expands and becomes more complex; unexpected costs or unexpected liabilities that may arise from the acquisition of CEI; the successful negotiation, execution, performance and completion of anticipated, pending and existing contracts; loss of customers with whom Quanta or CEI have long-standing or significant relationships; competitive dynamics, including Quanta’s or CEI’s ability to effectively compete for new projects and market share; the future development of, and market for, large data center projects and renewable energy resources; the failure of existing or potential legislative actions to result in increased demand for Quanta’s and CEI’s services; estimates and assumptions in determining Quanta’s financial results; the adverse impact of impairments of goodwill, receivables, long-lived assets and other intangible assets or investments; the inability to access sufficient funding to finance desired growth and operations, including the ability to access capital markets on favorable terms, as well as fluctuations in the price and trading volume of Quanta’s common stock; debt covenant compliance, interest rate fluctuations, a downgrade of Quanta’s credit rating and other factors affecting financing and investing activities; and other risks and uncertainties detailed in Quanta’s Annual Report on Form 10-K for the year ended Dec. 31, 2023, Quanta’s Quarterly Report on Form 10-Q for the quarter ended Mar. 31, 2024, and any other documents that Quanta files with the Securities and Exchange Commission
