MTZ - Earnings call transcript Q1 2019

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Operator

Ladies and gentlemen, welcome to MasTec's First Quarter 2019 Earnings Conference Call, initially broadcast on May 3, 2019.

Let me remind participants that today's call is being recorded. At this time, I would like to turn the call over to Marc Lewis, MasTec's Vice President of Investor Relations. Please go ahead, Marc.

Marc Lewis

Thanks, Amy. everyone. morning, Good First MasTec's Call. Welcome Quarter to Earnings following for forward-looking is Reform of pursuant Private made Harbor Safe Act the to XXXX. statements Litigation The Securities statement described the in we future results, and are communications, In we statements industries in plans make operate. statements MasTec's as anticipated that these regarding forward-looking may the such where trends certain on These the Company this based of and the events initial does these are undertake subsequent conference Company's update of expectations the statements knowledge. broadcast forward-looking the of to not day or call expectations Various and and uncertainties and assumptions risks, our are press filings Exchange detailed releases Securities in with the Commission. or these underlying or uncertainties assumptions communications. one expressed differ materialize our actual of incorrect results of may results any Should these prove significantly more in or implied risk from should or remarks adjusted we and today's and by discussed as press discussing supporting in schedules. metrics be reconciled will financial yesterday's release management, In

in review in XX-Q the located to lot we another things us will of most be financial talk and opening quarter our presentation A a addition, remarks financial our we measures for XX had about period use important With conference Executive In may PowerPoint CFO. and be at by Mas, great we today. or reconciled will last call. comments George. non-GAAP followed financial Executive the a have Jose minutes. Q&A call expect followed Pita, of located this about the measure to George and earnings our call by any by can and non-GAAP GAAP We in of the financial these be Chief have Investors The measures and website Officer; Vice posted section to These President format reconciliation in and certain Jose discussions analysis from not press comparable News today, in mastec.com. of found our release, the

call the Jose. Jose? I'll So over turn to

Jose Mas

results first be providing as markets Today, serve. Thanks, XXXX MasTec's first call. for quarter the our Marc. Good reviewing my morning outlook and quarter I'll we well welcome to as

important quarter quarter. First, very was EPS over was quarter first versus year's record increase of in quarter. some versus first first quarter we than results end than We're new were that quarter our revenue, efforts $X.XX last year X% of and restoration $XXX the over share last impacted better EBITDA Adjusted first an excellent per that made in million earnings storm was million, were tougher $X had $X,XXX first XXXX for significantly It's XXXX year's our $XXX by Despite comparable a quarter and EBITDA by to was another proud Adjusted we $X.XX year. billion level. highlights. backlog that last at In summary, had exceeded quarter and they million note expected. Revenue favorably quarter. we last a normal.

In building business for to is operational financial building. our addition our -- results, momentum for our

that highlight opportunity segments we We & happens are what our seeing and with of Every Today, infrastructure robust. Power regardless is segments for the us the within incredibly operate with build Gas, serve across that growth our increasing our backlog in are We and Generation of spending provides in debate of Capital all infrastructure great across we will needs. growth. sequential markets had of increases backlog business opportunities million Communication, segments. accelerating $XXX segments. Oil all key

for red cuttings as primary on road debate the the an the bridges. historically the broadband, relates delays. to importance water XG, has Today, power includes the infrastructure been regulatory build tape, clean and of and While, it focus and quickly grid, environmental

especially cell the Currently, home more continued biomass We're reliability the continue MasTec. include. opportunities catalyst required regional getting an as to transmission for customers safety, and cable the in higher the well companies. an deployment The highest by segment, Internet companies our investments and grow, in of as related both the & as proud in MasTec. to This importantly bill connectivity. to We wireless accelerating opportunities densification even getting Gas production are finally, more reliability and states power and making are network operating both Power that Generation speed solar, standards. products small including as and and meet macro power fiber for The including thankful We're And of increasing transportation both in continued for resources. that both our needs, XG our making our is continued pipelines The focused to all loyalty for the grid which on our to executing in the Industrial emphasis on success their for will demand the growth value. started. for water to needs paying reality well business. accessible, wind, Oil with our confident trust, The exciting most and sites, investments near-term and in growing services repeat markets. in of creating time investments their The those renewable through MasTec renewable are customers increasing of fiber is just sure expansion

to industry I'd cover specifics. Now, like some

the $XXX margins by was quarter. last in work Our $XXX Communication of quarter were revenue driven EBITDA X.X%. restoration versus year. segment decrease the for the was level million first storm in XXXX's million The

As those X,XXX in were we've wireless months. with In added the and response last last impacted plans. customers significant and wireline needs X,XXX in investments growing our making nearly the to first are team from six our expected, of added business, quarter our future almost in margins by members workforce year's we

customers to wireless diversify. our wireline Our to and services continues expand offered both and

services. continued site with permitting, Currently speed Today, services customers our of tower fiber structural and construction, earlier business and engaging kitting, deployment commissioning include network. the antenna power review, installation, offer coordination value-added negotiations, our warehousing, the home splicing, integration, build engaging primarily provisioning, One, We more tower initiatives. higher full the major wiring in and after has of we construction, through to our procurement, fiber. two material centers are reinforcement, around lease engineering, and maintenance fiber services out, design acquisition,

fiber is backbone which related this a as construction growth backlog to significant backhaul related services. offering other we expect stage With wireless from initiative, go considerable value. engineering The into we higher-dollar to carries primarily early expansion

We are expect this this the and stages by transition to in we also very We're in encouraged half future believe early cycle. of XXXX. accelerate second opportunities at

strong business wireless saw Our year-over-year growth.

we're early well-positioned We for opportunities provider in we're wireless in leading from significant our with seeing as we market significant deployment. of customers, infrastructure are very believe the innings While XG the demand long-term growth. this

during our position to XXXX, XXXX ourselves believe be true opportunity where growth the we continued will and expect greater. balance of we is substantially for While beyond the opportunity

for to segment. prior the quarter Moving million $XXX our in was the $XXX is first Revenue Industrial Backlog Generation million versus $XXX over improved million. sequentially year. Power and currently and

of XX% year. growth approximately revenue the for expect We

years, course couple of done job diversifying the last of excellent the Over of offered segment. services we've our an this through

XX% significant number lot comprised as year's but phase. number million as Our of construction, will and our increase XXXX the We've a include of revenue not utilities year-over-year projects, generate in but projects go signed. front-end and we yet revenue which awarded in large awarded not into EPC also perform work, should projects construction does XXXX XXXX, a a substantially of versus not work, revenue maintenance, infrastructure. compressor in these $XXX of are been and the last was first repowering in Electrical $XX scales Revenue Transmission facilities specialty peaker station water construction, up wind projects farm business plans, civil solar turbine construction, Backlog vertical biomass was estimates quarter. million gas-fired construction,

should we margins Our backlog XXXX, expectation is in significant in that revenues improvements on be a will XXXX but both see based our year current better financial XXXX expected awards. than and and

for first $XXX Gas quarter million first compared of $XXX had last quarter. million & Oil in to of the segment Our year's revenues pipeline revenues

segment construction, we quarter With Our first have that diversified billion. awards single-project that to making revenues. any $X.X was only said, up customer our award. include water to not meter Backlog some important increased stations, and We of global in XXXX management that roughly large was the Oil and levels largest distribution, we project grow. Gas It's Demand booster note & drilling, in expect services, backlog number horizontal segment despite with to sequentially very large expect our the backlog a work, project continue driven diameter by include currently quarters. of stations revenue grow segment compression stations, & integrity also revenue for Oil growth to over do XX% they pipeline delays. coming Gas large to

permitting continued project guidance and challenges. year provided today full Our assumes

XXXX, we we our to ahead committed customers. into look have capacity our significantly As now

maximize start off to in try utilization, have the to XXXX. always future. to our much great into we'll this position privilege a in we're To we're recap, visibility a While

we're MasTec as their strong is segments. the opportunity outlook to our I'd to across more enjoying of opportunities work this sacrifices. importantly for to excellent and our all hard like and men backlog growth is women and their of their safety take future thank commitment Our

Our their bullish people our George? our of for I'll now future. over it's important because I'm to and the excited financial our turn most so performance George that about asset and are review. call

George Pita

structure, capital good Thanks, liquidity morning, capital quarter for expectations as first and financial well our results, Jose cash flow, including XXXX. as and guidance Today increased usage, working everyone. I'll cover

press been filings. measures as EBITDA, $X release, the restricted indicated periods benefit of activity first of has expense done It include Marc reconciliation can that will results discussion XXXX our is we our adjusted guidance adjusted occurred. non-GAAP excluding call, SEC and consistently benefit of adjusted reflect and results, beginning on GAAP million our found a stock in and this worth details website, As from prior vesting tax our on where in results quarter from be at our this noting non-GAAP our financial the earnings or in

regarding to comments our quarter XXXX summary exceeding few start performance, are first strong provided Here a expectation. our which

XXXX in Rican approximately billion last of X% non-recurrence services consolidated $XX year. $X.X by revenue First restoration million despite quarter storm grew approximately the of Puerto

consolidated first XX%. impact, by approximately XXXX Excluding revenue grew this quarter

by expectation First Oil quarter $XXX & our to exceeded revenue. consolidated higher segment mostly million approximately Gas revenue due

higher-than-expected was X.X% in $XXX cost adding XX EBITDA crew million quarter quarter & incurred adjusted This margin by performance. representing million level XXXX of to rate revenue ramp-up largest of $XX million by EBITDA of MasTec's segment in expectation Despite Oil first history. points, exceeded approximately Gas performance and X.X% revenue levels by primarily or the First expectation $XX capacity. adjusted significant or XXXX XX%. first approximately exceeded adjusted our quarter exceeded Adjusted EBITDA due $XXX level million EBITDA our basis of

to earnings representing adjusted compared First quarter $X.XX increase. year-over-year per were last year, XXXX per share share XX% $X.XX diluted a

the expectation First quarter XXXX diluted $X.XX. new quarter lastly first earnings month us to backlog record billion start in exceeded affording quarter confidence summary, annual expectation $X year, exceeding expectation. opportunity great our increase as XXXX And continued our our a XXXX first to future of guidance our provided a the by potential was growth our In adjusted XXXX supporting XX and while level.

will I quarter cover performance. a Now, segment first summary XXXX of

First same segment quarter approximately XXXX revenue Gas year last & period to million. compared to increased the approximately XX% $XXX Oil

First improvement over quarter point adjusted Oil strong Gas XXXX. a revenue of X.X% at first in of XX.X% of segment basis the XXXX quarter margin & rate reported X,XXX EBITDA was revenue

the As in the is previously rate XXXX it segment's EBITDA margin of and this Oil large is & year-over-year important or higher and reimbursable adjusted & which this to that Gas consecutive project a margin representative Oil potential. small to performance expected project quarter due said, this increase quarter approximating better, adjusted non-recurrence performance of we margin marks activity communicated, XX% lower That a rate segment cost large of note first Gas activity. benefit third of margin was EBITDA

We approximate projects, EBITDA and XXXX continue expect margin adjusted now and & to size geographic will of XX%. experience diversification Oil in Gas number segment rate annual concentration

X% First last to $XXX Communications million, million year. revenue was quarter XXXX segment $XXX a decline compared

margin previously restoration As storm included year's approximately which first quarter year-over-year services, Communications higher million Puerto in comparisons difficult. makes segment quarter we first last results $XX Rican communicated,

wireless First increase low Communications quarter and a fiber year-over-year XXXX revenue wireline XX% segment includes in services.

crew potential a a creating capacity Communications was opportunity expectation and pace our conditions negatively communicated generally with ramp-up next to by market line related with First MasTec X.X% year and telecommunications quarter our initiatives. in accelerate margins growth In investing segment impacted are at adjusted capacity our for summary, rate this we margin to growth rapid maximize beyond. in cost EBITDA year end continues XXXX major previously to

This the We throughout expect half rate margin EBITDA resources crew Communications year strong capacity adjusted view EBITDA Communications X.X%. improve XXXX adjusted of in approximating second with segment necessary the given our segment will coming continued margin years. rate incorporates initiatives

segment with expectation. a quarter X% Transmission First year XXXX. The when and was XXXX adjusted million, quarter million line or of compared in And as last decrease of revenue same with $XX our EBITDA revenue. was Electrical the $X segment million, first $XX approximately

project opportunity to bidding large experience transmission set that we segment active expect continue this in growth for We XXXX. activity sizable up will

Power XXXX revenue same approximately compared quarter increased million. First $XXX segment period Generation last the to year XX%, and approximately to Industrial

margin delays First to quarter quarter in expected during XXXX. quarter reported and segment inefficiencies adjusted XXXX due rate to to Industrial Power was of X.X% X.X% EBITDA project start-up Generation and normalize XXXX, first the compared are that first

rate active We to continue as revenue renewable the XX% show range margin annual to approaching XXXX's first in XXXX will levels. our quarter evidenced XXXX a growth experience segment backlog segment with to expect and bidding record annual very power segment by market, EBITDA that this continue adjusted XX%

this in and interest earnings in $XX that First operations Waha earnings million will other generate we in segment is our continue XXXX. was pipeline equity and approximately anticipate $X.X quarter investment approximately to million XXXX equity from

Now quarter approximately basis, as for combined of revenue. XX% revenue total install-to-home percentage our I of XX% three customers was X%. approximately from were offerings services these fiber On service the period a separate top derived of AT&T and largest totaled and XXXX wireline services summary approximately discuss our XX a will a first wireless revenue.

independently Gas Holdings was and is Midstream Phillips affiliates important also revenue was reflecting us and Group, Duke reminder, Morgan a AT&T Energy projects Verizon activity. were corporate Communications levels reflecting XX and wireless at X% and Holdings each umbrella it each of & X% year-over-year were wireline lower managed and Kinder X% of offerings GP revenue. at both As large-project falling revenue. within Transfer while one diversification. these Oil quarter and of project first EPIC X% X% of budgeted services. Energy, Iberdrola of consisting Plains note were to Corporation are expected EQT giving corporatization multiple affiliates that that under

increase month As year the $XXX billion, to a earlier, $XXX mentioned end compared to XX sequential our approximately last of year. $X a first period quarter and million increase as backlog XXXX reached compared when same million

was quarter backlog hardening transmission First in electrical multiple included Rican for booking Transmission non-storm related services. segments bookings Electrical driven activity and segment a Puerto across reduction by strong

backlog, eliminated summary, all we be fully to services Rican obtain to now have governmental finalized. we In While our Puerto our continue XX are future well Puerto Rican services from once our positioned first of record. markets all-time was both end month strength sizable a growth quarter optimism of first an the regarding backlog opportunities. level multiyear with our as XXXX quarter and This supports approvals

capital XXXX defined Moving topics quarter on capital to the of first approximately liquidity, to cash X.X ended less structure. net debt times equates leverage billion, which comfortable as debt a working and of both ratio. $X.XX with flow, total We cash

approximately liquidity ample had also of We million. $XXX

near-term rates long-term As capital -- our is significant with structure we have lower solid with noted, no and no maturities. previously

net will $XXX of We continue adjusted annual XXXX the to excess free reach income. expect cash that cash operations flow over flow level new are million in from XXXX with record reported in a

repurchase no to billion with $XXX $XXX we ratio net in to of debt, $X.X times expect year activity to book $X.X to further of ample and times. a leverage Assuming XXXX, liquidity X.X billion acquisitions end or the X.X million in million share

quarter equipment the increased to our by of cash $XXX capital million of additions. due During acquisitions XXXX, to level first related with this approximately and outflows increase the first debt quarter majority

to seasonally lower due are elevated While first DSOs quarter usually revenue levels.

DSOs significant quarter Gas activity compared ordinary quarter were to end. Oil the course collections at than XX for timing collections XXXX. higher With this days course quarter to slightly which of due project ordinary since expected first in Our of collection days increase & we've first XXX on

the of value share with as confidence shares quarter in quarter repurchase as we growing X.X XXXX long-term first million. beginning in the level commitment approximately During of we our the generate $XXX entered number authorizations, through of repurchased cost second XXXX, a have services a a small shareholder shares. XXXX, million for through demand at million opportunistic open quarter the Since share continued to well repurchased repurchases. first We $XXX a and

disposals net equipment, of of cash with finance leases. approximately CapEx Regarding $XX under our net an additional as $XX equipment defined equipment cash spending first CapEx procured was on million XXXX quarter million

our of expansion to $XX cash market approximately continue procured to our evaluate under finance end with CapEx expect given opportunities, we $XXX significant equipment XXXX we While, net approximate CapEx million currently view million leases.

Moving we to our XXXX XXXX current expectation, guidance expect revenue $X.X continue annual of approximately to billion.

We million margin by $XXX XXXX adjusted are our increasing increasing XXXX guidance EBITDA adjusted approximately to $XX million by of annual to XX approximately basis rate EBITDA XX.X% revenue. points and

earnings of share from income increasing also inclusive per increase rates. benefit of are our $X.XX, We expectations expected tax $X.XX adjusted prior expectation a guidance XXXX to diluted our lower the

XXXX As color will at we some on have guidance now level, I expectations previously expectations. cover provided the other segment

approximate for approximate continue shares, amortization annual of metrics million will and levels XXXX and expect X.X% activities. XX.X per depreciation including will approximate share earnings revenue, acquisition count all annual annual revenue diluted the these and period expense interest with XXXX We that of to will share repurchases share of XXXX X.X% impact expense of date

adjusted XXXX in slightly second diluted are XX% approximately expectation to the $X.XX and prior approximately of of income our EBITDA reducing benefit $XXX per We due $X.X earnings million GAAP mix annual revenue adjusted currently quarter our of XX% adjusted at tax compared expectation share. We our approximately expect operations. of XXXX foreign rate to changes to approximately billion of with and

lessened summary, us. EBITDA level, opportunities that multiyear XXXX levels increase pressure. first second % as and our to with quarter revenue crew but quarter Communications a rate a XXXX second great capacity strong our adjusted forward Our Gas In continued Oil XXXX improvement quarter sequential on market segment adjusted well performance margin support in in as look approaches off to 'XX expectation segment margin in growth continued includes sequential executing numerous we're ramp-up to start EBITDA due cost rate

And substantial turn and our operator we'll for in the now growth this remarks call beyond. prepared and Q&A. For XXXX, concludes to Operator? our XXXX back

Operator

Thank your [Operator line is our from Stifel. you. [Operator with open. take we Noelle Instructions] first question Noelle, Dilts And Instructions] And will

Noelle Dilts

So first you were us about Gas for just profitability, about year. you were the now with just go and like of kind starting we're last to Oil back more margins of guys XX% XX% related we talking talking at give how more XXXX, is or & territories year is you Can where a you much how contract the And work cycle? over of midstream go terms really mix facing much do the for the margin, that non-union pricing in of feeling to could the higher better think kind that etc? if

George Pita

Sure.

well will I now. So the been happen that executing of right Last year. do have good. in quarters changes We think mix very couple we're have really throughout

higher we currently, margins. reimbursable cost We're work, we're have a of better going So on don't cost first in work making the lot on quarter. doing reimbursable

we But deliver extremely more will, we're begin work we the are as to will now, doing very, active moderate which of reimbursable and So good the better, we're is do XX% margins the year we're cost confident, extremely going right to margins market well. through balance somewhat. very

Noelle Dilts

XG. a And just sounds us market. detail then you're the about a understand the might the you're of call bit I timing in little Can shifting little how help you It very here. optimistic to like over you true what appreciate Communications, bit thinking more -- comments about

given you right adding the the talked the to much that wireline, expectations XG like of in you this coming crew So year's have work do your that is about parse out? XX% is your versus feel for How capacity market, that level? FirstNet associated is, is XX% wireless or from more growth when acceleration? way still I And there a at you and to then, question traditional look this

George Pita

Sure.

we're in So XG relative limited. that XXXX a things, doing couple think I the to is fairly of work

to I that think nowhere there's going going XG reach. deployment the obviously to it's But on. scale ultimately

that. 'XX in XG it's actually going XXXX, to So be real opportunity beyond the is not and 'XX,

of from 'XX we're in So number customers. early very seeing I XG of stages different across think a

driven think a in precursor to in to we're be what the performance ultimately is into near and with side. There is run do be that is our but to related and play see in to XG early But going we'll on lot all XXXX. incredible XXXX I has a don't ground that of wireless no different by again, start market. it what But an for is at fiber which very in there backhaul. of We're the by think be anywhere is becomes. today, stages customers we'll we encouraged, up to I gearing to capacity wireless significantly 'XX, think being going going means XG full XG the

Operator

we [Operator FBR. Instructions] Riley Great. our next from B. take will Rygiel Thank you. Alex And question with

Alex Rygiel

more of bit interesting call on therefore in you & much activity things a about Oil think business? what of Gas is the outlook days the in how diversification the the also comment base about you most and Can Gas the business? I quarter would you really long-term is one reoccurring then, a And day-to-day the & these solid Oil of little that can Canada business. talk for

Jose Mas

Sure.

I the is & or five changed really been business major think we've Gas the so, way. have in really the a years in Oil in since last business

think that I the that saw. business. the to not same going to We're we've levels cyclicality in historically normal was see the

demands needs less to market to happen from bottom going cyclical top many a much a to in chain companies. different from the types to it's different so because midstream so that be is of customer there many think be have I work and producer

proud are those of there And But been. quarter, both were today is than we bottom able we're going we're be lot and line to first project, any reramped one a in that they maintain big projects those going lot without I'm Obviously, in to there and a on highly ability the top & things second can our in to the it's revenue the business said, Gas the perspective perform significant be we line confident will where that nature we we're at bigger not. XXXX unbelievable We our I a -- projects. to already position on highly we demonstrate XXXX. will is about times today the think, and in for of that. times, encouraged of how With talked a been more levels So that be where our back, historically a lot are be and there recurring Remarkably, about do a to of time. visibility year. of far start, a in going high and in high loan of we're and our which very Oil part we our XXXX into in really level quarter talk we've a for community But in big commitment we're this out starting we're up to projects. have never

So it's amazing.

of part second question, your The Alex?

Alex Rygiel

about Canada. It was

Jose Mas

There period getting a a long We're activity. of work. a through activities bidding in that's is lot of Canada. of time It's Canada seeing of a happening better. lot with went lot

it's full to is that surprise of little come there to of lot of can market. better get But reasonable capacity need improving So were back that We a a lot fill it. some We're bit have the today, contractors starting there. an a and people to doing levels.

had We in one and better expect have XXXX. year the a to 'XX we much in

it's trending last in been than are here the going and help big But right really directions. with we've think we're be the and a in we deal the to Canada. encouraged So more happening see. much few what's we'll quarters Obviously, recently elections think in

Alex Rygiel

now you've it a months? that thoughts follow to couple owned quarter. in up first for Any And at your acquisition of Kingsley the

Jose Mas

done. to million to them quarter, know. -- getting relatively of getting historically They relative quarter. fully we're just integration are a Quite of Yes. slow they've starting that over revenue really in into first now. of just and jobs up We're what lot frankly generated the first got $XX They've just

I think it's an incredible business.

we than diversity that profile other after the and that business to of water just those can a all other clients we of adds do go things changes mix lot in to management. that really our client the think it I really and things,

with sell it's that to us we to those cross So that ability services work they for. then their services didn't customers. customers cross giving have really sell traditionally And the within our

excited think it's for a to we and really great going on business them to get So We're them growth to be team the have forward looking going. us.

Operator

next Citi. Kaplowitz with from is Andy Our question

Andy Kaplowitz

bullish if about commentary before committed the term, been Jose, interesting. had capacity you've XXXX just is & pretty the you for about but in is Oil quite long Gas

you 'XXs this Does Gas? I want that, means? at follow time? in at meaning up is maybe projects of good that in on of large or visibility mix think have point, to into diverse just at have the because Oil growth & that And mean, projects basically mix this are committed you several you So what that QX it's

Jose Mas

XXXX which think we On than a maintain & time a cycle, mix demonstrated with not fully -- we've think roll diverse basis that. think what I going And in positive. I to more I we somewhat the think noted, about Oil is we've of a be Gas on growth is, think long had, to a levels for diverse able when we mix have very also historically current I one of knocks on our are stocks or you

industry. that. environmental that delays. managing through Company. not to of profile We With new managing a is business think through talking is changes that opportunities job the Obviously to grow, look our do year continue regulatory in our issues we've about we we're I of that can job think out, of think the within been in job which and phenomenal to we've completely is it, said for our done a we having one the visibility major the this

sit our fall to the have that about So And XXXX? amazing. today, into much in we're things that can if growth But it's that into an May year we be XXXX. right? and to going XXXX. again, really account. We saying before with here how plays load year feel taking or or good It's how it's way, going in unbelievable So all work versus determine we not have

Andy Kaplowitz

bit that, guided have of in And might Jose. the than margin weaker in to the the know last half of the of at you you a you guide new the margin have in then quarter, Thanks high-single Communications. half look When it second this We to for and shifting been were thinking 'XX. XX% quarter EBITDA first year. we margin digit

snap mean technicians, hard adding confident bunch in that's the right? X,XXX how it's you are So wireline a margins? of created. in back I inefficiency is There a

are confident that here for point year? is how the X.X% you So the low the

Jose Mas

I'm confident. highly

initial two first is investment -- we that's that and investment is beyond is, XXXX. not It's what right? issues that we're expectation know to than investing expensive going that. for aggressive right? in and be and an trying execute an on manner think see and really we're of a smart and to share our future. The imagine going we this of happening we're ramp really XXXX anybody dramatically is reasonable for we're And our XG have It's for share the a we hopefully it. in We because, bigger outside get build fair our ourselves and know can into than that bigger what prepare and to I

In addition happening. the only mix to We've changes in that, it's margins got Communications not right? happening thing

Our installed to decline. business continues

been right? the There of plenty nicely. year. is fiber talked business of It's and a lot last that's wireless it, course are grown the services, difficult are over about wireline projects the On a major how permitting etc. the that we work has of our been the really pre-construction stuff engineering, Our today lot of doing

we it's long a I to our meeting stopped demands not think schedules. over that Resources, and right? a function relative really performed expensive we're time. period customers' But it's well of typically doing a

there expensive, are vendors expensive. are out resources So

construction, I what is We're to long. think on lot deliver a business. of happening margins work do, And turns help we're work I to look group When today that to for it's those segment we've that's when we of we're our That's customer. really -- will going going just not you do the follow a the margins into lot that projects. to dilutive the when get overall to business when at We're for to but on to-date well, done not here money which shortly, going margins. margin, think that's and the to them. going the our that's be making really trying So

beyond are XXXX going along, to which said margins they're level going really the business. when we're we change? get XXXX, 'XX feel historical all margins going we've good strongly How or high change? in feel this look to I the So to why I to and And about into that ultimately,

Operator

question Thalhimer our with next from Davis. We Adam will Thompson take

Adam Thalhimer

you color give additional awards? non-union, I'm can the or those Thanks. verbal whether And union just on pipeline be curious Jose, some some good? color would are

Jose Mas

both. They encompass

been are being lot we But committed backlog we've And XXXX when and of for both them numbers XXXX. big a going seeing XXXX those again, into jobs start backlog non-union awarded to for late talk in business. are very soon. about union and for obviously, projects on can come that you'll So future drive

Adam Thalhimer

T. And I slide AT& wanted Communications then, about the on ask

wireless and that think up back the wireline So still business only into was accelerates the in half? we core X% Do QX.

Jose Mas

Yes.

a So again there -- parts. we got moving a tough it comp of because a quarter was lot is

to you a of it, lot Puerto XXXX, If in work storm the different quarter work there was other lot lot because that right, happening. of of pieces the a had out we which in things had Rico, a of restoration back we did first

I a we we first have the take business which to look to actually wireless quarter the pieces and of business first in out, that have you really of it storm in revenue you the because that's important lot how Our XX%. at up was And didn't right? in think quarter wireline is If manage XXXX.

year-over-year installed was the It basis. in Our on business was down low down. XXs a

north be a will it, installed combined XX% on For of roughly our when wireline down year-over-year to And wireless think our XX% and a the going think basis. business year, is be -- north on we up about business basis.

our If have in growth segment. it out, Communications we you all teen low average

we're bucketize almost businesses because looking to we're -- that's have how the go-forward them and that's at managing obviously our how you potential a opportunities you growth basis. on So our and

Operator

from Deutsche next question our with take We'll Bank. Dillard Chad

George Kasiaras

This George Thank Kasiaras for on Chad. is you.

see that so -- if weather impact was? was Just if wanted there quarter significant any this from impact the to what and comes the how

Jose Mas

impacted was there issues. countries have areas didn't -- others. some where were areas mean more that of than the I of impacted business in some the Look, George. it. were the countries There weather weather business We Thanks, Yes.

it weather through lot we've we because think for be we about our to it. job got to talk prepared a don't it's manage and I

So was impact? meaningful? there Yes. it some No. Was

Operator

Bill question with next We Newby take from Davidson. our will D.A.

Bill Newby

back comp. just on Jose,

deeper I do this capacity As build? you expect I guys overall guess, guess the half your year still mean you end expect as general back you get of year? the comp business this through backlog this one, you I do ramp through about into that And can how the of of build just we the in think

Jose Mas

is backlog this do answer balance the is year. question yes, we to No, of the expect build yes. through the So

a grow what commentary I Obviously, could long-term pieces. customer be given different to do many really We revenues that. demands moving think so are be. we're think we'll think we is haven't lot. in our positive and We so going many requests. our really There position to and There around is guidance communication a And

think, to I give future. and foreseeable double-digit going we'll I growth better think come. in we're to to for color have solid But continue quarters probably the do guidance

Bill Newby

maybe I a bit there? just & guide the step half change Gas. that I that to what with healthy guess that margin second first expecting help little in does -- and moving What this are a are in any mix? I what then mean, in given guess And help do a high of you Oil the just these half. more the suggest from is levels pieces -- in pretty guys down

Jose Mas

include reimbursable. that yes, today of don't So job are we lot a cost doing we -- right, the

we will accretive So as margins. the into component first slightly margins it a and and will that be to is second that, get built, the to part small dilutive heavy then which very of have

expect XX% there to basis, which conservative to into XXXX. to it that first think is that. second full estimate down in getting talk XXXX guidance. pushed somewhat have lot there right? a now third project that quarter noise XX-ish to which all when are to quarter. below now also, is a we We've pushing we you're expected and of and right I similar, But be just out There And in expect we we we completed So embedded think, of and is have start, that on understand There XXXX. a projects is the through, for that fourth year be means should that we about

story to today, half second of much we play out So if think to a the if our a differently, great we going would But really what year, different give it somewhat delivered and Oil on I be we if get actual look it & view is today little actually It's have relative I things think it's seeing And we're the today. year a when be Gas conservative have business, best we a of we results. that again, little lucky. conservative. our

about So we it. feel good

Operator

Afzal our take Tahira Capital question from We with Markets. will next KeyBanc

Sangita Jain

is stepping for Sangita This Tahira. in

XG through on In tracking initial rollout lot us so commentaries moving of we the can helpful? the be understand of are that should of because So walk some a well, terms be as that I would here, responses milestones parts very but the that you there

Jose Mas

is bit carrier Every approaching differently. little it a

I is think related for activity. of fiber doing the most part form some everybody

backhaul out cases, are of carriers it cases, networks carriers then contracting some who in out other the their the So behalf. carriers doing interact are building and on are

have right? And we is small very it's up bit build think and most part is coverage will as pick a related happening again, starting -- the limited going is of across but on, I for the that's and that's it beyond. just think little to everybody little So bit of early. macro, going we're There XG a XXXX area it very we industry. about activity think I cell, to initial but do a significantly

Sangita Jain

helpful. And for about year? we can work very tower the the is, for tell next us my of bit you climber how as question a going your plan ramp is That's little rest the

Jose Mas

to tower a are people continuing, are we XXX add crew about quarter. -- trying we So is perspective, we're

significantly balance through year is capacity, into planning going to do are the we to tower with crew increase important be which really the We our think XXXX. of that going

that So those quarter be quarter. far, we've that. people and up the to able to in centers. opened time to take first proficient. been There's going we've training It's And become with deliver challenges to fourth the for going

out got that plan to the getting and facilities and we're 'XX. I those team, working We people state-of-the-art hard. is which half second in are happen to going and looking forward a think working And of we have constructive think running. and our course about We of numbers being and we're

Operator

from our Suisse. Jamie will Credit We take next Cook question with

Kevin Wilson

any a sense activity This right rest On electric on And larger the you've margins projects actually transmission potential the with bidding here? for coming XXXX. of you reach the what term business? of of opportunity us large transmission project be Jamie. how to in growth smaller And for talked Kevin the there Can Wilson is is really could is about portfolio? this mix for then longer versus large give eventually

Jose Mas

do today small Sure, everything is so just projects. about we

the So the all backlog. been of of off last years a of generating We been projects. our number revenue has of most primarily in that won not couple which for is projects we've smaller driven larger

months. because beyond it of Some it's XX

months only XX backlog. cover we So of

backlog a a awarded have others that we've be we'll soon. signed soon that window. month millions we'll also that got We've in dollars of been that million of we hitting verbally actual think hundred couple that couple hitting So hundred awards XX got we because have we into will be

phase. margin perspective construction We do we better from think think when We capital as it 'XX. really to reported in look going we it backlog into that well internally. both will XXXX is So projects what think backlog, our we see Again, business will a And what's that dramatically than in we when we've start as higher out we be XXXX. is in 'XX than reported. think look perspective at in get those slightly was start and we backlog playing

in more of some here is up the start weeks. few picked that recent work last a have We quicker

and I direction. And our yet we're It's market. right We in we're think what doing showed up think in it well confident I we're the doing. in everything we're It headed good right So financials soon. haven't will just positioned. a and think

Kevin Wilson

diverse versus us up and related enable Communications. of increasingly that costs? guess work? tell up complex costs other your construction the following simply what is versus are to labor you are then confidence And Can these much maybe And ramp contracts that investments more on I will execute you on then how

Jose Mas

Sure.

functions needed is think control in we are the to what to cost that the to training. tracking on cost be centers, training we really which There we the the first associated the outs for years people they but what obviously. labor the the that the in as the that and roll people we the leading train doing bulk specific they bulk tight The Look, the of are they of out really We we to that bunch labor than training market we're required months confident are resources. field we associated we whether are would of staff, is be couple we're in as the individuals, need training, and where productive in steroids. already is are, are actually performed of to taking doing. We're So going the done employed going it's with We've the the few before. is come. this training intangibles be and functions important then to be. for think nation in want next doing are think self the kind put the highly just very This labor optimally with less contractor of of to

going support This that are to to significant customer, multiple about is broad-based needs. going time. And them. well So we've again, making we think investments We to customers customers that for think very very what a sound is initiative been but really our talking investments, it's this to about talk off to it support us. we one is for not we're long a have are pay constantly

Operator

with Bloomberg next will Levine We Scott question take our from intelligence.

Scott Levine

couple additionally given what and elaborate active last of seen talk huge you when grow mix Gen of talked you the lot you see in wanted backlog And do XXXX, areas Could you're more you doing years. continue work to about growth a in So to of that there? backlog and that to about you and in involved potential now? different Industrial, maybe into you're bit little right see grow Power

Jose Mas

in last a So we're Tremendous years the ago, this we doing somewhere about it year, million. talking $XXX a $XXX business of year $XXX just . million I was about couple growth mean million did range

was solar of That's it's diversified. for facilities. larger doing We but still the doing tremendous working building in ever wind last that do So opportunities & everything much lot that. vertical more that. We the construction. outside Oil been long metal current civil specialized construction business that's us. work We're projects growth couple we've doing Today associated there years. for what our wind we're of with the we've We're to had and of a facility Gas We're with of time. a We're still our in here from business go a of more construction which some lot biomass a Historically excite a a business. been. forward infrastructure We're projects than is going active We're water doing I that basis. associated now markets, a solar couple of lot business them won doing our recently big compressor repowering huge lot on, piece a with more of some be doing piece much buildings, it's about. of doing wind. It's we're today think stations on a in the

they during work different job of margin great some a a high this cycle. the think just geographies. environment. are It's where other year fabulous really less their It impacted that again, that years. we our in were diversifying was perspective, business year rest to of done of at getting of into the on then I the done business least But expect to last type couple based growth that margins great So businesses story. of a last close think business weather we've by sectors much was a I than our or cyclical probably From be more the solid

Scott Levine

follow-up, And guys last backlog stock bought as a you a year.

with pace. you lower -- growth to in regard were thoughts to XQ buyback on general the seasonality? the how capital other for cash function active here of relative Maybe be certainly flow areas buybacks to that its thoughts the Is allocation? So importance a intend at some or that a some

Jose Mas

our cash optimistic a about going We're Sure. have year. record to We're cash the year. very flow generation flow for

that stock still to trade said our executing the different said, in we've our growth think opportunities. the opportunistic undervalued that future today. we it, all that always at, of and that we're looking earnings we're constantly in business currently is initiative and potential feel, growth of We're nature. so multiples We're internal something organic at With acquisitions our relative valuations our we I evaluating. looking be on opportunities it's types at buyback

use don't returns will change to the our best are or where with determine I the us to and trying available in term. capital we're changed to near So that's highest

Operator

question next our from take Hirschman with Blake will We Stephens.

Blake Hirschman

Verizon maybe which nice like quarter, in of said up have is the pick looks sales you in about the think pretty X% they came I step so steady for up bit. a AT&T

think about of expected XG up going kind customer coming quarters? to with here in Just we to mix the heat forward should looking the see how cycle

Jose Mas

too like customers a nice independent building the to work that there I of growth a shrinking side. is obviously top continue on obviously is side going mix but up the probably little are lot The picking of fiber had on the fiber for AT&T XX% as more Sure. wireless make that networks we Verizon you're the roll a some out. customer into growing for. as T-Mobile. we a It's growing. think to There's on bit it's install see think companies our us wireline initiatives, out didn't lot side stable I

that. may customer pretty up top our not in think base is and I show excited So though we're it even diversifying about our XX

Blake Hirschman

just to looking taken how Thanks backlog should we there kind opportunity timing? has also and potential I believe union Rico just on Puerto the the give Thanks. of of down longer-term everything state now been the about out and there then thinking of in

Jose Mas

Sure.

Rico a funded At may reasons money that island. we the of publicly the lots it the authority year. be Puerto we $XXX the and the for in made refresh, time, So was It's last Rico, by was put announced was which project just in backlog. out were the Puerto on reason reason, million it of contract never awarded fully announced political

a be then We've taken It's backlog. of it it we we pretty going although I released think established haven't took million, both dollars got multiple a comebacks. our that eye point, less So that the happen. there we too hurricane talking of about They One we've another season. other the on. is good if needs a than never it's work island to first lot work work and to of still to Generation a we so, how it there, hurricane a will in and local funny the felt at devastating. still it our be upgrading during needs this backlog position federal Rico going since imminent. start There -- that Puerto times, market. There incredibly changed. it It going infrastructure, really Power down been could well job really billions small island significant is at if $XX funds on between that start. have We've are out have their in They spend on Communications in from was a off are government At and and of their we've work. and comes positioned. somewhat government kicked things there. and got received We're on order Lot the decent with had working but active for some funding

see, we're we good opportunity we'll one track It's there. and and that monitor. constantly a So

Operator

Chip from Moore with Genuity. take our question We Canaccord next will

Chip Moore

Jose. Hey,

can spending, talked to high-level this $X at out? way infrastructure to appears trillion a some least would agreement You be thoughts be obviously, bill, how get is it go, your that what finally on about curious to a but long play bipartisan about

Jose Mas

talking there we bridges like for has people ever talking and being conversation been water amazing, you they alone They talking obviously remarks brought being a our this broadband. about assumes just to industry. everybody both both this ways issues the environmental acknowledging a is our think make be public there, and talking and are as it's prepared I think with and but XG, associated this the bill not importantly, building up today the view infrastructure sides about democrats that will put permitting helpful they industry about and to betting really every over mid are ourselves or are executive for to about This long I we bid that trying said this easier. is agreed delays most find bottlenecks important up, we debate I'm in are time some have roads stewards to It's upon are in it about on administration projects and orders the of our as talking go I long way said to not important for passed The important. we right. had, which because and anything think and We're term. the environment. actually is and remember --

in industry it's Our that up employees that built, lost. environment. is They the the areas. up I in and such we're rap get that build to grew message bad we that They and think our on farms. live important gets they to of very yet, relative They live And the a them. environment rural grew things

did for in all for and much work creates on and and to and an it. better from like talk as of own advantage we things have couple could I look much at place infrastructure we're fantastic we're a are think I think that great take are need it about way. any ours. years make what crumbling might build doing more not years other going will that we Historically, As think but country businesses very companies that Today, three, effective Today, to as passes build. it's diversified come be been of not it might that actually the opportunities to we be MasTec. our investment the in if I five -- maybe an be of we our our Company for positive in And by going infrastructure next to impacted lot a

Operator

our We Baird. with will question from Andrew take next Wittmann

Andrew Wittmann

to taking I Great. sure sleeping make my isn't that there. George just question. Thanks for wanted

one give him So Jose this I sorry. want time. to

George Pita

jumping Andy, been I've ahead. go but

Andrew Wittmann

are last in somewhat that of to had do receivables flows third lot what's as out due increase down quarter might still is And but we business? the the George? obviously over you year decrease today, that there cash also sequentially considered down as the plays expect outlook recognizing unbilled to curious that here, your they in we to couple that The a what's or level be high still. there? just anticipated I'm quarters should If even this growth in

George Pita

you first in just a sequential for Andy, basis first have a because than we quarter usually They talked about are bit normal DSOs on little a the fact revenue of elevated. basis. our the the decrease large higher quarter

the I had We The on QX plus that quarter -- million think we don't to that. year dropped & was, typically end. final keep since closed to Receivables we $XXX last We significant automatically cost and Gas activity. things agreement Oil made and excess of process billings transition until some the lot billings. with doing that administrative point from don't we've in in we're of with collections we when then and do we our track QX. we have into

excess just But ordinary it we the and things in stay move receivables through to administrative the we're efforts line. get might in get really to billings So it's that as approved, cost extent going approval. to course

is nothing going year. significant we're no is terms collections. the since we're about operations quarter to gotten very cash And process. have that So over end. the there flow recites a course in confident There We've of of significant record abnormal the problems from

after changes million look end, day And a dramatically. time. you profile or $XXX working single capital DSO in and week at look $XXX or million quarter point calculation picture couple not million the profile when of -- you as changing. abnormal are at a next with talking about little and happening literally a time an our the bit because just of DSO Our receipts is you in a single is There $XXX

the where in are terms and of terms of both comfortable view we billing in process collection So of our we're very and with year our activity.

Andrew Wittmann

I then guess Jose, And you one for well here. as

on to and and profitability smaller being and don't to all cost business anymore. the the be the business impact need margins that On we that be? this much a doing route-based that just about a business that the sure. How the the the Communications, line is and profitability route. it business It's the do as much the does of I what still that today fixed of part are of happened you business? so a make Communications given guess comes talk was what segment my question we top have got with seen pressures sure an of that But your to to overall is for that quarter? else levels you where about And stay them to fact

Jose Mas

so done in holding of things. a couple during One period. business job fantastic has a declining management I of the think Sure, team a that margins

overly our not they're to So margins. down, diluted margins segment but are

lot to with are has have get it's in the decline that it. We ability time. good a think, in talk product we're that grail nobody a here get some bullish trying just a there than obviously delivery of been accomplished to dialogues what consumer. direct-to-consumer. to it's business. space, pushing when of it way manufacturer been company retail I third-party they to other we businesses. are opportunities the Internet better figure of a are no able the for of and need direct been figure holy buy so our really to happen has a there the been delivery. trying are talk with and a the feel period the lot ultimately quite relationship and out. warehouses out companies we And every into pass many ground have And story Two, direct that's physical been a are the manage is we're think things nobody can So services able Google some a perspective in we having that get we because of from positioned feet And need I And trying to to has They to I'm that while, from is this quite frankly you about of consumers And about done, don't in that's to component There so think different country because with I to at and constant out about and thing. and and You home But looking on it right? the what companies. to stuff lot a the is Amazon tremendous wins. that. definitely a -- a figure negative trying just anymore

of is our is to business. back And growth we're to going it being hits up One when give not it. component to on think going them a that I going business of go hit. nice And to

I think things that opportunities, and -- going ultimate again to Internet business maturity is -- it. business And to is hits, for of is we the we'll too to XG way it tremendous potential early, think us think have just early that so I but see got it's of I when big I see. right, some think is

Operator

And remarks. I would at time. there this turn additional closing back Mas Jose any are like questions additional phone no the for conference to Mr. to or

Jose Mas

MasTec for on and to for like of women men just participating our you of their their thank forward efforts today. thank second everybody to we months. call participating. for Again, Thank look to I quarter updating and So a and you couple contributions in

Operator

concludes participation. we for and thank you this gentlemen, today's your and call Ladies

now You disconnect. may

MasTec (MTZ) 3 May 192019 Q1 Earnings call transcript