MTZ - Earnings call transcript Q1 2021

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Operator

Welcome to MasTec's First Quarter 2021 Earnings Conference Call, initially broadcast on Friday, May 7, 2021.

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

Marc Lewis

Thanks, Lauren. welcome first and call. everyone morning to quarter MasTec's Good of the made for Private The Act is to Securities safe Reform the following statement in pursuant harbor described forward-looking Litigation XXXX. statements

differ make are certain these should as press regarding more the underlying assumptions we any expectations in future are our in releases MasTec's operate. day call we detailed or trends With may undertake plans, or filings anticipated on significantly industry statements communications. prove incorrect, statements the financial and and of Should remarks on of communications, these results, actual the by with in discussing are in press forward-looking, we and or In that These the yesterday's metrics such results to schedules. may who release today's risks these company one or forward-looking of adjusted from expectations of risks, conference will initial or company's supporting this be events not SEC. expressed the does management, update these uncertainties, our knowledge. and statements based materialize subsequent broadcast reconciled implied Various uncertainties results assumptions and

of a These period. review George With followed Q&A and our measure use GAAP Vice may Pita, can analysis In be addition, the Mas, in our be are reconciled have News conference in CEO; be by at CFO. the non-GAAP and in in discussions on financial Jose by XX-Q opening measures Investors financial not posted we'll President presentation comparable located A this mastec.com. found followed Jose non-GAAP earnings we of remarks we certain reconciliation Executive financial George. call. today, call, measures the by website the to from release, will section and The press format of these us our most PowerPoint our our comments

another had about have lot minutes. to about a to call We expect beat-and-raise last of quarter important XX We the talk things and today.

Jose. to So, I'll Jose. it now over turn

Jose Mas

and how have I'll you be reviewing and MasTec's inspiring. are safe. Good pandemic am thank of my on first pray relied highlighting that ones we for like power, I'd US communications, I'd and Millions of men as commitment the I to joining Marc. the results today to customers this by serve. Their providing to quarter us and morning and outlook XXXX and and we Thanks for welcome the proud like other the our sacrifices, been resilience, our throughout quarter of you well today your markets healthy hope start as first and entertainment, MasTec. call. creativity, Today, services women I during families provide. help loved

and their Our thank men team delivered. to women safely sacrifices the like I'd hard of their again MasTec for work. and And has

we'll INTREN's to continues a future Before announced gas its INTREN growth. needs million customer by distribution in and of With of the substation will acquisition getting trailing the and strong West of United generation, revenues usage, relatively to construction, electricity. for electric strong hardening suite and coupled transition enhance the XXXX capabilities and distribution capabilities distribution impact INTREN the grid towards vehicle an members in We changes quarterly Midwest the it services results, largest power electrical XX-month including the $XXX as full expand MasTec, of new transmission and MasTec allows sell base. renewable in approximately have our led INTREN. the of expands electrical electrical opportunities mile last the combination is With areas, modernizations this and contractors private a team and this significantly with week footprint. the both underserved over by Coast enormous increased distribution to States. on presence utility believe we traditionally one With

the represents based purchase of turn. our we million believe the a We approximately value. of our about that taking quarter. net over $XXX purchase full synergies potential and acquisitions end the first closed are basis got future multiple excited that tax on on represent other historical very the a year-end The two their present for higher roughly prospects, price MasTec, opportunities. we it's value while We into opportunities seven multiple on account cross-sell price of during multiples a benefits that On very call, good times, announced without

to NTREN, addition two In acquired we've during quarter. second the companies other

also to family. engineering rural of and On significantly a and we I'd of not only growth Directors, MasTec our employees team and enhances members, the will concrete, the across be XG other fiber states, new engineering bundle engineering for a the infrastructure control XXX MasTec to shareholders, outsourced. we've Funds, services potential heavy all with fund Coast to resources Smart contractor telecommunication With Engineering, behalf the opportunities, engineering expect in supported members these largest the telecom country. to XX is investments, expands both private services plant Board public construction outside capabilities electrical that critical a capabilities is America, able and Byers us industrial path enjoy strong schedule market share. the hope be With by our investments West further firms new to one the welcome Fund, Byers Rural Industrial Digital typically approximately to Phoenix to team like to piping, first And in Opportunity that The and of but it City presence. spend, brings along allow to and success. with allow construction significant Being including of will our us

track the on quarter for are end we $X,XXX,XXX,XXX, Now and billion. earnings $X.XX, backlog was was at adjusted operations quarter $XXX was EBITDA share Revenue $X.X another had from quarter quarter for first million, flow highlights. cash some $XXX In adjusted excellent was was year. great per million, another and summary,

revenue and quarters, the Considering an business mix. with long-term on target last path pandemic $XX our billion annual margins. we've future the a our the we of laid challenges industries, and few gas Over to talked oil goals strategic about double-digit achieving out

key One of ability was XXXX grow revenues gas of EBITDA. and our and highlights to non-oil our

that gas guidance XX% non-oil provided we today, expect to our EBITDA in grow recent approximately with in business over acceleration and reflects as of our we in diversification and half most acquisition, including significant second continued Our XX% XXXX. XXXX, in the revenues

in the encouraged front scale are growth by us. We of of size the opportunities and

Now some I'd specifics. like cover industry to

That last revenue and time for quarter were with fourfold XX%. list. first and year's in growth were very strong revenues broke Comcast increasing our include vocal quarter, down Both expected of their both quarter top the Verizon spectrum about Our first and the and auctions AT&T for Verizon margins both the XX the declines the growth from year-over-year. with $XXX offset T-Mobile, year's XX% million the into XG Highlights quarter communication first AT&T were XX was importance our revenues in increased approximately business, our for over points last business. was quarter. which basis also in improved customer whose

and recent in the revenues increase significant to XXXX. for also the into accelerate in opportunities or broadband will next funding provide telecommunications XX the in year second The gigabit build growth over these networks. a planned $XX of Opportunity areas. Fund underserved RDOF, to excited We investments half the We're Fund developments America Digital which billion two heading to years with connect especially very is with customers, rural Rural Connect of AT&T the wireline speeds followup around expect the

next which rural to will America, to established wireless decade of the the fund Additionally, XG provide in connectivity FCC in an to America. for run XXXX, billion over rural October XG the additional broadband bring $X funding up

In enhancing are networks technologies networks most XG. entering infrastructure deployment included XG consumer, exciting one of believe in history our the we a for telecommunications bill changer I addition, direct and the the investments is of and truly and of for customers, associated the early in MasTec. wireless game periods the including the drafts that of telecommunications additional the

our last first $XXX Electrical was revenue million Transmission versus million segment, Moving $XXX in year's quarter. to

awarded have much the balance been and begun margin for one profile of expect we larger of projects We a better previously now had XXXX. the

expect of drivers also on renewable MSA negotiations well aging beyond late believe infrastructure, of are and we We been system to agreements and which segment remain backlog reliability, number We for integration, XXXX new we've this as the hardening. as projects. awarded for stages improve, larger include positioned a and in are intact,

had our year revenue of been Based to strong as guidance assuming delayed XXXX XXXX regulatory gas billion some and $X.X levels, and oil market. revenue into that XXXX. had billion $XXX activity recurring working target the we to continued pushed our million. forecasted We Moving gas a was delays, start in pipeline current will a projects a oil be to $X expect on depressed project a because we Last and year, backlog of our on were segment, a year we assumes longer-term strong

over reminder, last of a X% pipelines come our of our years, being revenues As the from tied only business majority natural the oil with have gas. to X

integrity and demand We for see services, strong distribution, activity. replacement to gas continue line

our to We are diversify revenues in focused on segment. continuing this

$XXX energy our the a and $XXX quarter to million Moving million XX% increase. segment, year, clean prior in year-over-year infrastructure revenue the first for versus was

we've $X.X million million We by new increase was already importantly, $XXX subsequent year's and Backlog a $XXX of approximate approximately expect awarded billion, more revenues XXXX. XX% end, nearly quarter sequentially up full projects. to over been to

levels in record in segment, continue backlog to QX the we backlog to coming already this While at increase quarters. was expect over

business significant We our profitably smaller in segment addition in tuck-in our investments through to acquisitions. this grow to opportunities have made organic

services. first nearly in the XXXX. XXXX the resources and first the our members add of continue to quarter end the XXXX We segment to meet talent this added demand quarter new We in end of the increasing for team to from in

well and With carbon have significant the seen companies both traditional energy oil energy, a clean we in their and clear investments a trying customers clean are administration to as planned improve focus as footprint. increase new that from gas on

is and As within energy infrastructure segment. partner, clean positioned and MasTec leading diversification our to energy the clean investments. highlight benefit I'd a these uniquely to from like contractor

our meeting are demands. got and While we any start our customers' today capable win, we of of

working we actively generation seeing quarter biofuel are and to an on are as continue had our load solar capabilities are in renewable To first serve. markets we gas demand, projects, we quickly excited footprint. the excellent projects, opportunities We recap, significant the very and and about base expand

hydrogen into including we we uniquely infrastructure anticipated With and with the telecommunications with Civil, clean bill. the recent are related our significant market XG including the our presence to built-out capabilities positioned spend. this infrastructure biofuels, solar, Heavy expansion recent from exposure market, Road storage encouraged which an to developments include significant energy are benefit and feel a wind, and We in to coupled heavy infrastructure

our able in turn markets in men these continued growth George. the confident infrastructure, great and MasTec significant our results at group. value. the women in congratulate to challenging I'd and are hit it's by a a again of targets but been we've fantastic financial success. we government now investments honored and call can financial providing These their the and I'll spend. honesty, do customers review. integrity, The with and stewardship, because our private best to to thank to been a are lead and of acceleration of have We women over customers. and ourselves growth And of and George solely environment the recognize for like our great environmental with for men values safety, traits I our quality that people's committed privileged position recognized deliver to project our the MasTec such outstanding work am potential performance. great for

George Pita

good recently annual our the updated guidance announced results first Thanks financial expectation XXXX of acquisition. everyone. Today, quarter our cover and morning Jose and INTREN I'll inclusive

be our the at details we In record adjusted of website of will and measures indicated beginning XX% over cash press over quarter on our XX% year; summary, can results financial a non-GAAP non-GAAP earnings last million, call, and increase EBITDA. in discussion Marc had of Reconciliation our release As our include $X.X of or results approximately over in revenue record a last adjusted record increase XX% adjusted the filings. of guidance SEC year. and flow a $XXX million, EBITDA from year; strong last approximately operations with increase $XXX billion, first and for approximately found

approximately exceeded expectation exceeding per First with exceeding expectation share exceeding $X.XX. EBITDA adjusted by expectation expectation earnings and by results approximately million, $XXX adjusted revenue quarter our our diluted million, $XX by

to related expect beat million $XX quarterly representing within revenue and our We EBITDA annual million to increase XXXX. $XX XXXX with adjusted that our view of the represents quarter first balance project in an timing accelerated

a This $XX million reducing less of million to than quarter, This the cash quarter. debt levels by leverage strong funding first first liquidity leverage approximately ample position coupled quarter quarter ratio one-time easily $XXX the our $XX us acquisitions sheet performance despite to equates the allowed flow during while second metrics. continued strong ended with approximately our We approximately flow record the maintaining to of approximately level book billion. net we during of continued balance and million, $X.X performance and XXXX acquisition liquidity a cash with and comfortable INTREN fund

our will segment and detail I regarding of first XXXX. expectations for cover some quarter Now, guidance the results balance

services First segment line spectrum of incorporated to impact expected the quarter performed lower which generally timing in due recent communication our wireless expectation, with auctions. the C-band of

is deployment to latter C-band expected drive to As Jose expected for of years. in opportunities is awarded already begin mentioned, revenue spectrum XXXX recently significant the and part multiple

basis improvement rate adjusted of to was EBITDA compared revenue, year. XX point last period a segment communication First quarter X.X% same the margin

XXXX $X.X deployment billion basis during basis billion points This initiates. will revenue annual adjusted second XXXX the points XXXX segment EBITDA improving revenue and communication over that C-band accelerate margin that as expectation approximate to XXXX the adjusted rate, annual of margin Our spectrum expectation half both improvement to is rate levels. with EBITDA $X.X will XX XXX includes

First as revenue. energy X.X% Clean energy $XXX performed and $XX approximately quarter and clean revenue generally period. or of segment million segment infrastructure was was million or quarterly slow during seasonally a clean energy EBITDA adjusted revenue expected

clean Looking balance we bidding both of expect of infrastructure market energy active in and markets. a forward towards XXXX, the the continuation very

the adjusted segment in high grow the revenue expect the XXXX in and margin billion approach XX to to energy improvement will XXX basis annual $X.X XX% over range annual XXXX rate prior continue points EBITDA clean basis improvement with year. We point

segment gas and at adjusted oil exceeded $XXX revenue million. our EBITDA quarter and expectation $XXX First at revenue with million

during we our initiated selective expected, and large we projects on quarter estimated As exceeded activity the production.

levels an represents a between project this mentioned, the expected portion year. $X.X due and XXXX second half expectation first for oil XXXX range selected the during with project third will includes assumption while project project approval into portion within fourth will expect and move that XXXX to activity greater a expected annual previously billion quarter be of $X.X and of acceleration half second last expected timing expected is results, revenue XXXX I annual another activity. to expected permitting of and activity the the As represents winter expectation will large delays revenue margin approximate XXXX activity to the range. due the beat improvement segment high an annual currently level EBITDA billion We over This thus during quarter adjusted the XXXX gas oil a continued rate the half gas of breakup teens this in segment that level segment to lesser to quarter with of XXXX

quarterly a towards with First revenue and as we seasonally at electrical quarter expected impact reflecting performed rate project slow with X.X% the continued last discussed generally segment of as at inefficiencies margin period EBITDA revenue move project completion. adjusted million quarter transmission $XXX coupled

acquisition the forward revenue annual of recent of margin expected balance year for EBITDA at partial million approximate annual for to this $XXX approximate segment to adjusted adjusted million became effective to electrical margin rate we guidance the operations includes XXXX. which transmission INTREN the double-digit including of the of Looking expect And $XXX the acquisition, revenue May and rate a in revenue. of approximately XXXX XXXX EBITDA X.X% XXXX, INTREN,

approximately of approximately a second project quarter percentage that part our XX% was quarter as and a from station fiber three latter revenue basis, quarter services of bans for the XX% derived X% frost I'll large lifted. in our largest once well the of a the during revenue, was of X%. and revenue. period approximately offerings as totaled of other Canadian the wireline was discuss customers a service road are On first these comprised initiated project approximately will install-to-the-home wireless XX total revenue as activity combined separate AT&T resume services and Now, first summary top Enbridge

impact due wireless to the budgeted while managed that that the that organization giving reminder, under important independently within revenue As level corporate C-band offerings diversification as are previously a it temporary note to services this auction. falling spectrum is Also one AT&T corporate and lower revenue includes us indicated, umbrella of within these universe.

construction were XX%. comprising Energy NextEra was comprise X%; and revenue Individual service with WhiteWater each of master X%; revenue. was X%; agreements Verizon Energy Duke each Midstream Pattern and of Comcast X% Transfer Energy first our were was X%; T-Mobile, XX% Energy, projects at at quarter

acquisition all coupled increase to With revenue whose work XX, was MasTec an the total revenue to virtually revenue of our future with million, highlighting INTREN to approximately basis. of percentage of MSA is At increase MSA $X.X in a resurgence a the March year-end expected expected as wireless as be combination recurring driven, XXXX, derived our of $X.X expected MSA on backlog XXXX. revenue flat essentially billion was

clarity, does the the INTREN amounts of not For first recently backlog include announced any sake quarter reported acquisition. for

Lastly, as projects in single large off only a each quarter we've at lumpy large new years, backlog contract time. into and come for as can point backlog indicated be burn awards

working discuss capital will flow, I capital Now, usage, investments. and cash our liquidity,

the million ended at the DSO flow ended EBITDA. with expected of cash quarter, to leverage from and X.X which just million XXs. DSOs a $XXX we book of in in the generated We quarter level adjusted operations range XX During $XXX the first our equates net below first quarter times high ratio record to with mid debt

profile. as $X.X as with well billion. We in cash million proud plus MasTec's borrowing continued on as and highlights ended liquidity record strong consistency resiliency, defined cash of approximately hand strength, performance availability the this cash flow flow are the from $XXX our quarter operations first believe of cash We of and

first the $XX million we net During debt million funding. despite our approximately quarter first $XX acquisition quarter, reduced in by

working During in we temporarily $XXX quarter, with comfortable leverage will the liquidity our that within million while cash quarter target sequential increase leverage $X the expect capital expected range. the quarterly approximately billion our the an given and outflow second maintaining during of associated coupled for the with increase acquisition, INTREN XXXX metrics substantial of revenue still

liquidity As working leverage and net combination In we strong expect summary, adjusted the us one flexibility and quarter growth. despite to year-end an low extremely planned any is leaving quarter ample solid interest to with long-term second second expected approximate at balance look expected XXXX, book over With maturities, forward billion, continued of EBITDA. we This past cash reduce with XXXX potential gives to full us levels generation, $X.X flow to structure associated with advantage slightly from the debt growth capital revenue shareholder value. and liquidity. ample opportunities ratio take our capital times significant rates, near-term no maximize our of the

in of We $XXX and guidance, our billion to strong increase guidance. $X.X XXXX increase combination $XX EBITDA, earnings benefit pleased significantly and diluted revenue million adjusted performance in EBITDA of increase annual XXXX earnings are represents the comprised now of million adjusted the share. increase INTREN and adjusted diluted a $X.XX acquisition. revenue our XX.X% annual or This the of of a revenue first $XXX adjusted with quarter per million a We in project share per $X.XX of of

CapEx of expectations, net cash XXXX this dollars XXXX color some anticipate $XXX other I quarter at additions capital first in leases $XXX and incurred second cover lower with under have expectations. is guidance finance for spending levels acquisitions. approximately provided and inclusive segment annual briefly to expected as million be additional $XXX million million our an As we of will to previously expectation to We

with larger oil and revenue, level and as As we profile shift investment. our capital segment operations historically largest end-market a overall as becoming our previously non-oil indicated portion reduce gas of capital spending should have has segments our gas required the of the

expect $XX M&A activity. million $XXX interest including levels XXXX million this with We second level continue quarter over XXXX approximate to expense in to and first annual

related adjusted We maintain once working flow increase in income, cash revenue. with despite our expect projected the net flow billion to free to annual again XXXX strong profile $X.X annual exceeding a XXXX requirements capital cash

For estimate modeling continues purposes, at million our count XXXX share for $XX shares.

We revenue to first activity. second annual quarter of and expense X.X% of XXXX inclusive approximate depreciation expect M&A

indicated, XXXX to As this and we we previous on salvage expense increased conservative have market segment protect of uncertainties. compared oil as incorporates values an level and depreciation additions expectation capital lives utilizing are to against depreciation previously when potential gas XXXX

depreciation anticipate of expense XXXX revenue. Given of these percentage trends, revenue as X.X% to decrease levels will that we next and annual XXXX a approximate compared when year

We adjusted be of overall net XXXX of revenue. segment corporate a to cost annual EBITDA approximately X% expect

Lastly, XX%. we expect tax rate approximate that annual XXXX income adjusted will

share. expectation of adjusted revenue is quarter $X.XX or XX.X% earnings million of EBITDA second with adjusted $XXX guidance $X.X and billion Our at revenue per diluted

high some on additional performance, concludes the over adjusted EBITDA XXXX revenue terms quarter margin third with half in revenue mid year the second That rate of range of our third revenue. we remarks. growth consolidated the quarter expected expect XX% In consolidated approximating color XXXX XX% of to timing prior

the turn Operator. questions will to answers. back for the I and Now, operator call

Operator

And first Riley. Instructions] Alex from Rygiel B. question our with take [Operator we'll

Alex Rygiel

balance of on Jose, flow on and Can business which talk strong, M&A was a your of segments bit focused you your to you're it. capacity the sheet little more have tons about there? continues cash the pipeline

Jose Mas

it last look, into going talked about year. Yes, we

the we lots front of reasons. with the about seeing Last what complicated As were COVID. year were progressed, excited got M&A on we for year really

had based changed. really in a with, seeing in targets laid 'XX, what's you're the number middle are end of incredibly we're important so 'XX. think We most a happening. hasn't in the out of segments us there and for excited of deals of at negotiations very that number very Pipeline the that I about we the strong, clear on activity XXXX is early a active

grid everything related, a by Telecom that's because think infrastructure. got related, we've followed So really everything and that's a on focused lesser to then presence we're we clean great extent energy electric and

there. areas four really on. Great that the are opportunities those out we're So focused

be focused on meet best to on. and but we acquisition what coming. is one been will of we execute for demand and will we're that's growth how there on That's that. that of really hyper-focused do that definitely our some make think all how ready to position things that lot of the coming sure ourselves I A we're we've opportunities customers' be organic, do what's the

Alex Rygiel

strong. energy And prepared clean talk you about been a larger I earlier but some you and real of prospects? has a exactly bit to about in more follow mentioned the can you're little deeper up, the little give and that remarks, Can into talk what growth in few projects? segment know your you a working on there bit

Jose Mas

Sure.

So couple of areas.

first projects the renewable we've lot bigger. you or So traditional those whether getting done, when a are think about type wind that projects solar, it's

more are building lot larger going is more a plans I spectacular out phenomenal. assets and to that projects. seeing on solar expensive, more Our a The long pretty three it's which two growth farms people, think we're to require the last are customers years for in are The time. of

why from in a that of we're money significant to these to today people take lot we're investments. business ultimately do of a we opportunity. business costing energy in and is bringing making today it, board, nowhere that's very, is really our multi-year it. to we're in clean where strong It's advantage do it's very you think What a us think we can revenue investing perspective in near - of a truth costing see period We're is the achieve us hiring of a we're margins the we're ramp. going to lot be on we people, what So a

margins the see of the to we'll half. second in improve really think business begin I the

that We business have year. significant in throughout the ramp

bigger So first perspective. from our quarter probably revenue quarter second our will a to XX% than going be

bigger is half year. year than of going half second of Our the first be XX% probably the our to

So The we're of size business to bigger. them. Project - continue in invest unbelievable fantastic growth to we're today. going advantage to is that and take just going getting through are opportunities we're

I think we're and customers are And of I they can that think it's them. definitely one partners again, think I manageable. looking key for very trust

Operator

Fisher question with next from UBS. Steven Our comes

Steven Fisher

--good to wanted morning. Just

wanted risk Just lot it's characterize on discussion. you do starting prospects I on I'm how like different clean projects? the risk? these follow determine that a how how And do convert. you see to great prospects Yes, up finally the curious, energy to project that now there's too from good to much guess, you it of carries seems out a - there, one determine robust

Jose Mas

I time has a think of MasTec the long risk been projects. on of one strengths managing for

that's really set us I apart. think

performance the you and I last been at our and to good I you've understanding contract course think seen a If risk at. look think succeed of we've our of long based a putting years great of of position for mitigating in the to on sure, over five really job a ourselves done the that our of of time, I strength period ability which earnings our we've forecast over business exceptionally structures think

frankly is base. One of business the the strengths quite customer our in

that we're just generation biggest for country, I been. that's is different working than at in of working which we're them it's supporting ever some we're a of market kinds, look of blue the very think for it's endeavors chip today, all utilities customers you the their the and growing changing If in

been working think us to partner time a want think for be and with think of successful our as to projects our I customers match. that a chasing new blue sophistication the business have their mitigate risk, ability in We're on on understand shape. based think we're chip based developers, the long we're customers I need doing not We're that I - it's and So not this funding. chasing perfect that great that I

Steven Fisher

those about are XXXX? driver, sounds AT&T that thinking how dependent then telecom how on is the mean, doesn't can Verizon what side, just particular and that I then upon? C-band really but into in we spending, like does be what they is acceleration further the the and out on, push that And Great. the there in dependent decisions it second on this confident half

Jose Mas

We're highly confident.

happened, see lot completed. now that. end customers waited decline Everybody a those if build. auctions spectrum their of now year. They talked it. strategy, definitely is We end a two what's saw think process in in what front have you the of particular significant I because to the of knows going about the business for in at the they're those have They Everybody to shifted complete. auctions

we're we're midst engineering obviously plans, business that it know when know So coming, the of and work. the should of hit. we and is see prep in We talking we act work site for acceleration of that the the - a site lot

- that I quite I left. So think that frankly is not there think much

certainty in there's think I it.

it the going bigger coming. are than lot It's definitely think a be I will 'XX plans in ramp be to 'XX. in

in acceleration second business of I year. seeing of that think we'll half this the the start

nice grow have I in versus half, going with half ramp. And of be second think into will of be the momentum go comms at growth business. second XX% We business. beginning going that We're incredible which in we're to first half, half really north the we'll XXXX - first the to our

Operator

Thielman comes from question next Our Brent DA with Davidson.

Brent Thielman

pipeline deals Jose, own you does pursue it have might been cultivating that might term? potential sale its prior the of that near INTREN come to the to with look over

Jose Mas

does. It

haven't pipeline they've brought a pretty of There that talking to. that that solid done definitely a to is the been around lot work they We yet. table

getting next process So under them in we we'll few belt. our here start - we'll the weeks start start that as

busy right pipeline, own our so have incredibly now. We we're

the through best opportunities a So good do. most sit they try us, it's our the really job do and make that yes, for and, the to things is sense to question but

Brent Thielman

Yes.

look in revenue you the alluding you're guidance say that expect quarter what of front some the year? similar and had in you to year-on-year 'XX work project of Okay. for the large tough I XXXX oil plus into guess healthy And you I'd this you, but and bookings, segment set comparison opportunity spillover of that some can pretty then this gas, the still think do to in with

Jose Mas

we're a have to Well, great going 'XX.

about be to his going it's in to prepared loaded. 'XX remarks George talked So, 'XX, front-end

if was So in the the billion, you half very where oil at roughly billion to it's second $X.X look be of $X to last year to similar year. and going gas, it

about shows oil of talked of oil that we've you the outlook the those Even gas being of the pick billion With at around X.XXX. if half second $X.X midpoint strength gas, changing our had that that into in when XXXX. really really and not business billion you gas We've we're I business. think said, to I 'XX, out. make non-oil that and account and $X assumptions guidance longer-term think take in and put for you the our it our

that for own come modeling really last case that second, our even year in but we've XXXX everything ourselves case really those back $X done roughly oil how to midpoint our can or in we business. range. that and that's in - deteriorates levels, of the we billion gas target think and at revenue to achieve this We'll revenue a I to we're over at the level, billion $X approximately prepare even happens, target trying think market is a

results oil Now, lot of at of couple course with when mean, look over a the last of the you the earnings phenomenal. gas days, our been I earnings of that have said, and customers there

I think which terms stated repayment, their of they're making great debt goal. been has strides in

been We are talking that a about projects lot of mothballed. had

we've than activity in lot Obviously, business. more or in that seen, whether will that that's into stuff know. 'XX 'XX a we're we business not, definitely don't the pushing that help So seeing hits

our as you'll total see in year, the frankly, in in the XXXX, second really what of think being what you our that so see think that our And get little telling the in do been probably our conservative a the Street easier, non-oil half see Gas is gas. the planning MasTec's the has oil I comparables around really I drive Company. we're quite business think the anything, But to too thoughts gas and the much of growth and as 'XX again, we're story we've as and if potential. Oil business So story, results I growth you

Operator

Andy question Kaplowitz from with Citigroup. next comes Our

Andy Kaplowitz

been between maybe a follow could because I transmission more bit you INTREN for up fit, business. about but difficult a talked little more just INTREN electrical execution your little you expect geographic legacy of electric sense historical and the growth little It's sledding as terms want in the know characteristics that legacy it's on margin Jose, interesting the to more complementary then, And you you in business? you bit your gave about us. around synergies in color talk

with scale that in of So overall management you new execution segment? help think can electrical the increased the of influx do

Jose Mas

question Yes. Andy. it's a great

INTREN piece a which our non-union transmission got got is which - there, well. we segment have is as well. communications business, distribution been will we've complement We've is business So union a a about think obviously really we within as which mostly our which business which our business, historically strong very

So us of the ton potential. doubt gives across a we've INTREN's that workforce got different a no their really nice There presence across customers a is lot reputation, country. of

we about that things customers infrastructure for like gas of work. INTREN is One deal the base the really need their

scenario area the good that think we really So that it's past really at. INTREN on we're focused an hasn't in

can again, market a opens So, that up rest for that the huge us MasTec think businesses space. of we operate in the it for

whole So or be of the for past. a haven't side projects, opportunities had of us different it's number I that exposure they're think a their kind the even for new opens to customer cross-sell we customers base of tons whether projects generation that renewable to in power going there's on up doing for tremendous

benefits, I there's think years. about great the on lot of its We've over a tangible They've lot XX of a intangible for talked the the ones XX% They're at growing last only obviously So a been now. of company course own. ones.

good them levels. those a and really company just it's at expect So a growth and continue profile great to metrics with we operating

Andy Kaplowitz

growth organic of I in bit growth. billion And in then, the like you which ask you math, high all understand. confidence I we suggest looks think 'XX got it about, If like Jose, here I a do good something to for target this out threw May $X single-digit little maybe and

good a We such and in if right in talked ramp? acquisitions communications ramping about obviously visibility about because talk it energy already that more you is maybe thinking I'm about you little can bit the that clean have and that just So up.

Jose Mas

Yes.

I question. your think if of me - address you so one points let your in

for and look business start would you premise you a at that we're mid-point. be gas the what at 'XX oil our with and saying If

million $XXX So down talking million. we're year million be to next up it means $XXX $XXX and it would about being the business

So roughly of the being versus would from billion acquisition $X.X in in be INTREN. totality XXXX with that XXX-XXX business driven up XXXX

would balance be So the of that growth.

off. I the be X% would So think

would the business what seeing. that's double-digit and we're think strong I balance it our across think growth be I really of

that the So organic future. then, that's MasTec versus that's that's business of out non-oil And that I that's we're to trying to. and we're rates really to profile the you we managing in that the comp and with oil 'XX, growth see pretty you what resources what model really 'XX how and gas has easy prepare. ourselves, the begin have we're mean, grow - could an managing in our I what That's what 'XX we're trying and ourselves to how a gas to, we're if think actually become for business growth preparing prepare with to

Operator

next question with Stifel. Dilts comes from Our Noelle

Noelle Dilts

back those bringing discuss Buyers in-house? other I in acquisition. Could of are to wanted capabilities Engineering markets key where the more go you engineering at engineering Thanks. to your to the if and potentially more your you're important business of becoming of there engineering customers are end any the acquisition, capabilities if areas any looking

Jose Mas

Sure Noelle.

the existing the the what investment a have coming been players telecom in, changing. time, that their market seeing we're market business Even in new of So for all especially long there's this new is in that's players. with

fiber really players, the engineering massive by country and long a incumbent, builds changed these of subset some going different resources of people time. lot have that new, are happen over that some you hasn't So all a an in to with

years no get the engineers. big those saw find side in So there last of it to hard was front we even of that hard of the the was heavy issues was engineering. into of one going the fiber the engineering when qualified It question It couple business. builds, in is to

get much So I think that's only going worse. to exacerbate and

staff manage it. have into business grow and more their importantly, on to help and, that ability the So them

that we're super the of few deal, people, substantially but excited that perspective, big XXX on months. with dollar in number a of it that It's a just acquisition. it grown comes a lot So about obviously There wasn't last people. has

we've at where with challenge Our significantly scale got to today. even that it's is, business from

with I business to we're the look really 'XX a in can to that to right capabilities So we to is assets business. the and We're we're ourselves get put a going 'XX our them returns investment to have other be of is in-house year scale opportunity of because think is that in But going that And we business going think engineering than investments, at of don't great for unique on position. business. that to reality really some the propel we to significant on some of be out in the focus dramatically their help not India we're focus how going bigger it there it. really today. going

market a opportunity engineering doing telling them, our You give just which look, the going services, with but couple turnkey we that and customers to approach. you full isn't can

talking subset bundle You we've the need services, been handoffs, engineering to with the there's less really one that's resonating but to. want throat, customer there's we construction, that within that to choke

I think with So, in fantastic this to ability multiple coming our to perform which substantial for us. deal gear is be ability services, again, what's is and our a up going to

Noelle Dilts

of you billion maintenance there for as give Okay, sense us you work. the a state steady you're how thinking business, the billion robust that - still business? that much how demand you're gas working out $X if to Could $X.X business, mentioned revenue and to on great. side thinking recurring revenue replacement about actively that is and to Thanks. that look and more helpful. grow the or that then And Very oil element of for you're maintenance pretty of, you

Jose Mas

years a hard know what's think, and maintenance out, being Look, a of project year of will will end it it it's happen Again, be I to and X/Xrd driven. half going to out. X/Xrd up two driven

is the in that the seeing no we're environment. it is sentiment of completely today X have what than different There The business is financials an today improved. ago. improving question months think companies I these was

of that capital they're think I the every - No. condition? projects today? are, Do on their see mean building think reassessing day. strength based they're I do their financial talking at it because Absolutely, we they it plans about does and looking So they are

the put very to we're we we're out, ready maintenance think is talking of to that we're to we conservative, think the that We're have that levels but ability don't with that call targets I really we've end comfortable comfortable So the and build that today, being our out yet. up are the that targets achievable. hope on business put with the over continue our we side time

Operator

with from comes Thompson question Adam next Our Davis. Thalhimer

Adam Thalhimer

start to and the latest on opportunity thoughts timing wanted I on the Jose, your RDOF. What's wireline there.

Jose Mas

stuff type good that hits is with it's it there ground. Yes, the do different actually into It's lots of the before work different We're a I middle gets in else. of think some mean, then Adam. I Everybody of customers. really business. in of realize types lot work of morning like we're this and really everything of we Look, excited to active. of active lots extremely

construction going to going we're 'XX. that think see with ramps of quarter I significant into in the activity second third, into fourth XXXX half

in 'XX, QX, just think QX, is start in reality year an lot be we're what a an the that market. is that. to to year to going but to we I seeing going think unbelievable relative Again, work 'XX awesome be of I relative it's the

Adam Thalhimer

your INTREN segment and risk time, talk then, obviously you how over the transmission focused. that more bit Can profile? transmission about focused And changes distribution a Okay. little

Jose Mas

it's Well, MSA recurring mostly work. driven

think the other. ones it's riskier I a more know - from the don't I than So

I very think good both consistent. they're businesses makes that very obviously the business

in So I think it's both. important to participate

going have think business. I the that and maximizes of to are both think growth efficiency it tremendous I opportunities

for there for career for will path cross-sell be think I employees. and opportunities also again

market really lacking. we've for scale, to that strengthen going been side it's the which think us. us of So It gives I

I been market. of our in one think issues that's the

So was already we growth. business between expected - and that and again, anticipated a it

in it faster $X pace as think that starting grow out irrespective of INTREN business our well, but that just I business acquisitions. And ultimate probably billion that bigger bigger makes to that at set so makes we in target us a goals had business allows now. or

Operator

Our with Suisse. comes from next Cook question Jamie Credit

Jamie Cook

been from see, to strong of people was earnings but just on the gas profits the from strong, very the segments I dollars, by comments a very have I still that majority and oil guess, profit versus the want obviously, driven quarter Jose, and relative the the basis. clients are are get

acquisition tipping And that part of do margin when profitability. you couple the with profitability? bigger the other you line second segments? tuck-in non-oil the of in nice did acquisition, of where is a just think and question, do point then my of helps a So obviously, the that was businesses gas more could wondering, the these that that growth you accelerate could a Thanks. I'm sight see you comprise

Jose Mas

that great concern We about Yes, been last talking It's third exist. what know question, it's Jamie. the we've year. a quarter of since

we - of a remarkable of if take I out in live MasTec. the transformation I think obviously step think midst the I but of this to back we're day day,

projecting we've If would our laying It's you business was we're business in we're think think I this on that. what thought be ago. do And to the out we're would anybody the think I able don't not going it have believed still of have our think the timeline do that to you we'd middle but that we is oil grow plan out switch, the think to and produced turn very achievable. a results, and gas and like and record laid year I I

XX% EBITDA the crux If perspective so 'XX, you topline and to of look from third almost at the think MasTec's our second of fourth gas perspective. this when we XXXX, from and a we look and at they story, 'XX our is increased I at half year, last from non-oil revenues and quarter, an expect XX%

I it think going So to in 'XX. you're see

we're our up, year how growth of half second jobs got businesses. tremendous we the non-oil investments incredible starting cusp the that. momentum. our - and We deliver And significant and enter we're of the see year in in half non-oil in see earnings believe of think business really first gas to the versus the on XXXX lining that's making, are and I we've with we that gas and our the

our job So is to execute.

can. To deals second we jobs job there think those a to achieve growth that and deal big pure deliver are, those your size don't itself to is I of any of and These There's outsized if can have I And think on of think, the confident, highly we expectations is us speaks perform dramatically a from look, price realistic margins. answer I lot those that it The was expectations perspective. margin the we story gets us Our acquisitions, as we levels. for yes. levels, other on also and very mean, We other profiles that aren't there? deals Are for INTREN big. a will. purchase I'm question out growth

for there. we mix exist think sense pick out of deal Again, us. really So the ones make trying there that we're the most that is nice a to opportunities

our fund It a these acquisitions with to operations of from extent that. have going XXXX and customers. great aggressive story. year-end. to position do We're flow the to in if for One continue the think from for at we lot our cash around roughly to lot remarkable And Even acquisitions. remarkable. we million. our cash that's things the debt that perspective in going majority we I the you the the the the of George first to fully second operations paid I make We about talked that do flow changes to deliver of our a incredibly going have those funded profile paying the at from am great a great they of exceeding balance year. price the made balance and the quarter, acquisitions off We're business. business quarter. think in in proud be to $XX with of put in be cash from acquisitions quarter, the our flow us that made cash first a We that a these that's a We Again, and quarter. net flow using in those for We're profile we're we're business. capacity going to make the income. of the spent strides to cash acquisitions sense of, more down of we in they to look of going We're generated in flow sheet grow

it's where at I we very So, saying again, think, in a know keep MasTec. times exciting privilege spot truly I and it, but

Operator

Robert Baird. W. from comes question Justin with Hawk next Our

Justin Hawk

little first the trying than margin revenue lower and understand guidance I bit of million I like in about EBITDA than million bit guess mean, And so you more. but communications, organic $XX it on I change expectations what your that beat that at sounds a a of is the of you had was little and I if look by clean the to is side just revenue INTREN, energy. more quarter. $XX

just I'm or first the anything it changed was understand, for to So of trying the quarter flowing is organically, through in in just outlook balance your year? the

Jose Mas

perspective. QX. I Yes, gas in expected oil makes didn't that would that mean, piece did to is have do flow that pushed from the into But a We of important our I work in up and out of I know a in really flattish topline reality you quarters. think will modeling there the lot year. some no of half QX the we probably but our oil gas look earnings of again, there, when what's question and and later the That is do some through there's be business the at year, second

that to you - profile for last high margin in out come business talk year, the you and second for of the if margins teens margins to high half, gas for to oil at the the XX laid we've the If and look gas going you're year. half second oil in that compares

making estimates and at out million So oil talking And think our to gas $XXX roughly business. business the the QX, I in second in transformation rest year, up and business the be half there of in in in that and EBITDA down we're that's the the QX look going our about. in gas analyst consensus we're we're if oil and of our you that

think We're non-oil that's last for half we charts. keep when And reporting of that. year. to on together since tangible our visible the the I that become and organic as year. the the will And of been that, saying out perfectly. XXXX And quarters third think execute deliver our going we in is So very to quarter growth off what the I we've second gas comes that and story

Justin Hawk

second purchase the clarification is on kind for question that, to Okay. I think of based a earn-outs, of price, is tied and the is $XXX the purchase that? that My more INTREN how you just million. is appreciate on much can what's the about that. cash to seven times, talk maybe and about that price

Jose Mas

XXXX for The performance. earn-out solely is

XXXX, So if is exceeds performance a in based there it on EBITDA, their then trailing kicker.

pay actually in addition multiple. we earn-out whatever to in price purchase the the will So be dilutive

Operator

Sean Our comes Markets. with next Eastman question Capital from KeyBanc

Sean Eastman

year flesh INTREN months Just last maybe I'd looking XX% figure to just set relative you like to following with can you I'm to the going the and full-year how back accretive XX have over XX up and out that you contribution? I that and over over the just XX with next do trying performance? a for get you out it's the also CAGR on try targets or period guess what next to do But one. be historical expecting are years, growth expansion margin standalone think to

Jose Mas

good so, expect would opportunities digits. your months, a $XXX at we that million grow to That's cross-sell we about it market. MasTec. can XX them of at We've Yes, being I create double mean, talked It's to question. not inclusive any trailing

full-company on really basis, strong we this in the expect is So growth business. a that reality

do when important got time. to looking margins then for would can We $XXX range. probably we 'XX, somewhere for their we've the again, XXXX, For the million it. own that million think the at we expect total the of built 'XX, the improve mean, we're And terms year it's Again, look balance revenue over about of in I $XXX at will Company.

businesses, of is of by and gas all a year offset of expected in lot we in our oil 'XX saying INTREN. across inclusive we're down what So growth

growth. and full So do Obviously, have year this oil would billion balance of year number $XXX where our rest the part went again, in what can revenue be 'XX growth the in of and $X.X million-ish, the the be we of would they XXX hit billion the an can in in a think and that difference if $X we gas between down that of we'll organic business. a it's environment the

Sean Eastman

of of about even will agenda, about piped to transport Okay, a lot a thinking and helpful. a abstract that carbon that Is this there? opportunity the seeing require retooled oil What more I one, to how for reading lot a but are COX. just you the And toward capture, be gas bit interesting? decarbonization infrastructure and was

Jose Mas

great it's and interesting super again, And of story. challenges, opportunity. a getting Yes, the the not out

these their So profiles they off, with I financials. of balance paying aren't them work within subset that levels customer away. have were at look own companies going these significant that amazing it at the A we lot when companies if continue sheet they're traditionally to pay capabilities, think the you for, off especially debt

years, companies won't the around be me that I a think somewhat insane. idea these in is to of couple

capture retooling So of be those for exist. the growing MasTec companies retool in to opportunities And those them. will and, their they'll those opportunities importantly, businesses, there businesses in that business their keep are lots more going - for that to we're of and going

versus hopefully, is. we're it's can So expectations just of set how than to be our Hopefully, over it term. the business have being out ended oil that longer up market our in conservative and next important months gas where should I again, very view X the I'm And about we think X, realistic more bullish been. business the talking conservative.

Sean Eastman

And an I'm of just role, the whether here, the QuadGen is interesting interesting out curious back over with C-band the acquisition we playing as up look to ramping half more deployment year? got whether be that going has

Jose Mas

of a infrastructure. lots is there There done touching very of They good really resources. grow. is different the had actually necessarily - our an a 'XX. the of strength XG it's business, to great that different customers XXXX. we start traditionally lots continue that doing for have mean, our to been been whole They've things got that I company. can phenomenal of to skill relative they've only us offer that's acquisition to well. a we're haven't decent their There They're parts lots to but they're things is going set excellent of Look, and

Operator

from comes Dilts question Stifel. final our And Noelle with

Noelle Dilts

demand of just look I just seems coming tight potentially up, and picking business, not in could RDOF, of got the telecom, So really market, infrastructure see for that strong bill It but at labor this these through. capacity. the wireless like very market when drivers all you've you across a

resources feels what years. think thinking like with talked it's the you are could this you feels again? been a it of how about guess, it that From mean? demand in about I training few like while First, over a do since and to are next starting second, really ramp all perspective, And it's we a price the pricing there, possibility coming through. But out you

Thanks. on So any be thoughts that great. would

Jose Mas

in view we and consistently done years, an the of talent Look, talent think We've we've really it. I in over done people. and talked to train bring as we've a that really lot about the ourselves choice a employer grow market. lot And

different our where business to that's where today over continue we going at one times business that going today than we're comfortable of points business other scale we feel our of that. up There's more other. we change know to that parts the are in We and we've where There's parts on. training time. There do got significant

at adapting bringing of the think So right the us. market of very good I help requirements the in to and people to we're

margin our of I think profile. that's part

had these a all team is that we've of significant people. been that training of we've And perspective issue. people adding the our margin additions to doing challenges said, in recognize customers some of terms from the a and just businesses significant of been in some that is our With that this

Our years. help customers thought labor of execute fact going a coming true a them ourselves are I in aware position really our that their the one And is fully as customers that behind can to with projects. that we think be and leader constraint

around that. - that will be don't think So I an think pricing issue I ever

well-recognized I issue. a it's think

in, to for into time the But very build At our them. here long to able period of working a a employer I make fulfill tends same with be and a customers it to together. think our you markets, the going think we the we're you needs. for get so those tight and for at lot think customers a to an contractors. to when end great We time, can over a us not what job, situation be good career that's time for company position to work to be a service we're of better of a where of day, be sense choice, just combined as

Operator

Jose And concludes I any to back Mas conference question-and-answer session. like or today's additional to closing for that the remarks. would turn

Jose Mas

for second to call. look Again, thank and Thank updating today our want just everybody quarter you to forward participating on we you.

Operator

today's conference. We does that And conclude you participation. your thank for

You disconnect. now may

MasTec (MTZ) 7 May 212021 Q1 Earnings call transcript