HOUSTON, May 6, 2021
/PRNewswire/ -- Quanta Services, Inc. (NYSE: PWR) today announced
results for the three months ended March 31,
2021. Revenues in the first quarter of 2021 were
$2.70 billion compared to revenues of
$2.76 billion in the first quarter of
2020, and net income attributable to common stock was $89.8 million, or $0.62 per diluted share, in the first quarter of
2021 compared to net income attributable to common stock of
$38.7 million, or $0.26 per diluted share, in the first quarter of
2020. Adjusted diluted earnings per share attributable to common
stock (a non-GAAP measure) was $0.83
for the first quarter of 2021 compared to $0.47 for the first quarter of 2020.
"Quanta is off to a solid start for the year, with continued
strong performance and safe execution from our Electric Power
Infrastructure Solutions segment and better than expected
profitability from our Underground Utility and Infrastructure
Solutions segment. Based on this performance and continued
confidence in our ability to safely execute, we are increasing our
full-year financial expectations," said Duke Austin, President and Chief Executive
Officer of Quanta Services.
"Our strategic focus on enhancing our front-end capabilities
allows us to provide industry leading solutions to our customers
and increases our total addressable market and growth
opportunities. Spending by utilities on grid modernization, system
hardening and renewable generation integration and spending by
communications providers on broadband and 5G network deployment are
driving strong demand for our services, as evidenced by our record
backlog of $15.8 billion. These
dynamics continue to enhance our near-term visibility and are
expected to be meaningful drivers of our growth going forward, and,
when coupled with increasing movement toward a carbon-neutral
economy, incrementally increase our growth opportunities."
Certain items that impacted the first quarter of 2021 results
are reflected as adjustments in the calculation of Quanta's
adjusted diluted earnings per share attributable to common stock
and are further described in the accompanying non-GAAP
reconciliation of adjusted diluted earnings per share attributable
to common stock to GAAP diluted earnings per share attributable to
common stock. Quanta completed one acquisition during the first
three months of 2021 and seven acquisitions during the full year
2020. Therefore, Quanta's results include the results of the
acquired businesses from their respective acquisition dates. For
further information on the items that impacted comparability of
2021 and 2020, see the footnotes to the Supplemental Segment Data
table and the non-GAAP reconciliations of adjusted EBITDA and
adjusted diluted earnings per share attributable to common stock in
the accompanying tables.
FULL-YEAR 2021 OUTLOOK
The long-term outlook for Quanta's business is positive.
However, weather, regulatory, permitting, project timing, execution
challenges and other factors have impacted the company's historical
results, and may impact Quanta's future financial results. More
recently, the COVID-19 pandemic has significantly impacted certain
of Quanta's operations and various markets where Quanta operates,
which has created additional uncertainty. Therefore, Quanta's
financial outlook for revenues, margins and earnings reflects
management's effort to align these uncertainties with the backlog
the company is executing on and the opportunities expected to
materialize during the remainder of 2021.
Prior to the company's conference call, management will post a
summary of updated 2021 guidance expectations with additional
commentary in the "News and Events" and "Financial Info" areas of
the Investor Relations section of Quanta's website at
http://investors.quantaservices.com.
The following forward-looking statements are based on current
expectations, and actual results may differ materially. Quanta now
expects revenues to be between $12.05
billion and $12.35 billion,
net income attributable to common stock to be between $469 million and $533
million, diluted earnings per share attributable to common
stock to be between $3.25 and
$3.69 and adjusted diluted earnings
per share attributable to common stock (a non-GAAP measure) to be
between $4.12 and $4.57 for 2021. EBITDA (a non-GAAP measure) is
now expected to be between $1.02
billion and $1.11 billion for
2021 and adjusted EBITDA (a non-GAAP measure) is now expected to be
between $1.10 billion and
$1.20 billion for 2021. Additionally,
Quanta's full-year 2021 free cash flow (a non-GAAP measure)
expectations are between $400 million
and $600 million.
NON-GAAP FINANCIAL MEASURES
The financial measures not prepared in conformity with generally
accepted accounting principles in the
United States (GAAP) that are utilized in this press release
are provided to enable investors, analysts and management to
evaluate Quanta's performance excluding the effects of certain
items that management believes impact the comparability of
operating results between reporting periods. In addition,
management believes these measures are useful in comparing Quanta's
operating results with those of its competitors. These measures
should be used in addition to, and not in lieu of, results prepared
in conformity with GAAP.
Please see the accompanying tables for reconciliations of the
following non-GAAP financial measures for Quanta's current and
historical results and full-year 2021 expectations (as applicable):
adjusted diluted earnings per share attributable to common stock (a
non-GAAP measure) to diluted earnings per share attributable to
common stock, EBITDA and adjusted EBITDA (non-GAAP measures) to net
income attributable to common stock, free cash flow (a non-GAAP
measure) to net cash provided by operating activities and backlog
(a non-GAAP measure) to remaining performance obligations.
CONFERENCE CALL INFORMATION
Quanta Services has scheduled a conference call for 9:00 a.m. Eastern Time on May 6, 2021, which
will also be broadcast live over the Internet. Quanta will utilize
a slide presentation to accompany its prepared remarks, which will
be viewable through the webcast and will also be available in the
"News and Events" and "Financial Info" areas of the Investor
Relations section of Quanta's website prior to the start of
the call. To participate in the call, dial 1-201-689-8345 or
1-877-407-8291 at least 10 minutes before the conference call
begins and ask for the Quanta Services First Quarter Earnings
Conference Call or visit the Investor Relations section of the
Quanta Services website at http://investors.quantaservices.com to
access the Internet broadcast. Please allow at least 15 minutes to
register and download and install any necessary audio software. For
those who cannot participate live, shortly following the call a
digital recording will be available on the company's website and a
telephonic replay will be available through May 13, 2021 by dialing 1-877-660-6853 and
referencing the conference ID 13718737. For more information,
please contact Kip Rupp, Vice
President - Investor Relations at Quanta Services, at 713-341-7260
or investors@quantaservices.com.
ABOUT QUANTA SERVICES
Quanta Services is a leading specialized contracting services
company, delivering comprehensive infrastructure solutions for the
utility, communications, pipeline, and energy industries. Quanta's
comprehensive services include designing, installing, repairing and
maintaining energy and communications infrastructure. With
operations throughout the United
States, Canada,
Australia and select other
international markets, Quanta has the manpower, resources and
expertise to safely complete projects that are local, regional,
national or international in scope. For more information, visit
www.quantaservices.com.
FOLLOW QUANTA IR ON SOCIAL MEDIA
Investors and others should note that while Quanta announces
material financial information and makes other public disclosures
of information regarding Quanta through SEC filings, press releases
and public conference calls, it also utilizes social media to
communicate this information. It is possible that the information
Quanta posts on social media could be deemed material. Accordingly,
Quanta encourages investors, the media and others interested in our
company to follow Quanta, and review the information it posts, on
the social media channels listed in the Investor Relations section
of the Quanta Services website.
Cautionary Statement About Forward-Looking Statements
This press release (and oral statements regarding the subject
matter of this press release, including those made on the
conference call and webcast announced herein) contains
forward-looking statements intended to qualify for the "safe
harbor" from liability established by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include,
but are not limited to, statements relating to projected revenues,
net income, earnings per share, EBITDA, margins, cash flows,
liquidity, weighted average shares outstanding, capital
expenditures, tax rates and other operating or financial results;
expectations regarding Quanta's business or financial outlook;
expectations regarding opportunities, technological developments,
competitive positioning, future economic and regulatory conditions
and other trends in particular markets or industries; expectations
regarding the COVID-19 pandemic, including the continued and
potential impact of the COVID-19 pandemic and of governmental
responses to the pandemic on Quanta's business, operations, supply
chain, personnel, financial condition, results of operations, cash
flows and liquidity; expectations regarding Quanta's plans,
strategies and opportunities; the potential benefits from, and
future financial and operational performance of, acquired
businesses and our investments, including our investment in LUMA
Energy, LLC; the expected outcome of pending and threatened legal
proceedings; beliefs and assumptions about the collectability of
receivables; the business plans or financial condition of Quanta's
customers, including with respect to the COVID-19 pandemic and
transitioning to a carbon-neutral economy; the potential impact of
commodity prices and production volumes on Quanta's business and
demand for Quanta's services; projected or expected realization of
remaining performance obligations and backlog; the future demand
for and availability of labor resources in the industries Quanta
serves; future capital allocation initiatives, including the
amount, timing and strategies with respect to any future stock
repurchases or expectations regarding the declaration, amount and
timing of any future cash dividends; the ability to deliver
increased value or return capital to stockholders; the expected
value of contracts or intended contracts with customers; the scope,
services, term or results of any projects awarded or expected to be
awarded to Quanta; the anticipated commencement and completion
dates for any projects awarded; the development of and
opportunities with respect to future projects, including renewable
and other projects designed to support transition to a carbon
neutral economy and larger electric transmission and pipeline
projects; the impact of existing or potential legislation or
regulation; potential opportunities that may be indicated by
bidding activity or discussions with customers; and possible
recovery of pending or contemplated insurance claims, change orders
and claims asserted against customers or third parties; as well as
statements reflecting expectations, intentions, assumptions or
beliefs about future events, and other statements that do not
relate strictly to historical or current facts. These
forward-looking statements are not guarantees of future
performance, involve or rely on a number of risks, uncertainties,
and assumptions that are difficult to predict or are beyond our
control, and reflect management's beliefs and assumptions based on
information available at the time the statements are made. We
caution you that actual outcomes and results may differ materially
from what is expressed, implied or forecasted by our
forward-looking statements and that any or all of our
forward-looking statements may turn out to be inaccurate or
incorrect. Forward-looking statements can be affected by inaccurate
assumptions and by known or unknown risks and uncertainties
including, among others, market conditions; the effects of
industry, economic, financial or political conditions outside of
the control of Quanta, including economic, energy, infrastructure
and environmental policies and plans that are adopted or proposed
by the U.S. federal or state governments and weakness in capital
markets or the ongoing and potential impact to financial markets
and worldwide economic activity resulting from the COVID-19
pandemic; quarterly variations in operating results, liquidity,
financial condition, cash flows, capital requirements, reinvestment
opportunities or other financial results, including the ongoing and
potential impact to Quanta's business, operations and supply chain
of the COVID-19 pandemic; the severity, magnitude and duration of
the COVID-19 pandemic, including impacts of the pandemic and of
business and governmental responses to the pandemic on Quanta's
operations, personnel and supply chain and on commercial activity
and demand across Quanta's and its customers' businesses, as well
as Quanta's inability to predict the extent to which the COVID-19
pandemic will adversely impact its business, the prices of its
securities and achievement of its strategic objectives; trends and
growth opportunities in relevant markets, including Quanta's
ability to obtain future project awards; the time and costs
required to exit Quanta's Latin American operations, as well as the
business and political climate in Latin
America; delays, deferrals, reductions in scope or
cancellations of anticipated, pending or existing projects as a
result of, among other things, the COVID-19 pandemic, weather,
regulatory or permitting issues, environmental processes, project
performance issues, claimed force majeure events, protests or other
political activity, legal challenges, reductions or eliminations in
governmental funding, legal challenges or customer capital
constraints; the effect of commodity prices and production volumes
on Quanta's operations and growth opportunities and on customer
capital programs and demand for Quanta's services; the successful
negotiation, execution, performance and completion of anticipated,
pending and existing contracts; risks associated with operational
hazards that arise due to the nature of Quanta's services and the
conditions in which Quanta operates, including, among others,
wildfires and explosions; unexpected costs, liabilities, fines or
penalties that may arise from legal proceedings, indemnity
obligations, reimbursement obligations associated with letters of
credit or bonds, multiemployer pension plans (e.g., withdrawal
liability) or other claims or actions asserted against Quanta,
including those not covered by, or in excess of, third-party
insurance; the outcome of pending or threatened legal proceedings;
potential unavailability or cancellation of third-party insurance
coverage, as well as the exclusion of coverage for certain losses,
potential increases in premiums for coverage deemed beneficial to
Quanta, or the unavailability of coverage deemed beneficial to
Quanta at reasonable and competitive rates; damage to Quanta's
brand or reputation as a result of cyber-security or data privacy
breaches, environmental and occupational health and safety matters,
corporate scandal, failure to successfully perform a high-profile
project, involvement in a catastrophic event (e.g., fire,
explosion) or other negative incident; disruptions in, or failure
to adequately protect, Quanta's information technology systems;
Quanta's dependence on suppliers, subcontractors, equipment
manufacturers and other third-parties, and the impact of the
COVID-19 pandemic on these service providers; the ability to
attract and the potential shortage of skilled labor; the ability to
retain key personnel and qualified employees; Quanta's dependence
on fixed price contracts and the potential to incur losses with
respect to these contracts, including as a result of inaccurate
estimates of project costs or inability to meet project schedule
requirements or achieve guaranteed performance or quality standards
for a project; estimates and assumptions relating to financial
results, remaining performance obligations and backlog; Quanta's
ability to successfully complete remaining performance obligations
or realize backlog; adverse weather conditions, natural disasters
and other emergencies, including wildfires, pandemics, hurricanes,
tropical storms and floods; Quanta's ability to generate internal
growth; competition in Quanta's business, including the ability to
effectively compete for new projects and market share; the future
development of natural resources; the failure of existing or
potential legislative actions and initiatives to result in demand
for Quanta's services; fluctuations of prices of certain materials
used in Quanta's or its customers' businesses, including as a
result of changes in U.S. trade relationships with other countries;
cancellation provisions within contracts and the risk that
contracts expire and are not renewed or are replaced on less
favorable terms; loss of customers with whom Quanta has
long-standing or significant relationships; the potential that
participation in joint ventures or similar structures exposes
Quanta to liability and/or harm to its reputation for acts or
omissions by partners; Quanta's inability or failure to comply with
the terms of its contracts, which may result in additional costs,
unexcused delays, warranty claims, failure to meet performance
guarantees, damages or contract terminations; the inability or
refusal of customers or third-party contractors to pay for
services; technological advancements and other market developments
that could reduce the demand for Quanta's services; budgetary or
other constraints that may reduce or eliminate tax incentives or
government funding for projects, which may result in project delays
or cancellations; risks associated with operating in international
markets, including instability of foreign governments, currency
exchange fluctuations, and compliance with unfamiliar foreign legal
systems and business practices, applicable anti-bribery and
anti-corruption laws, complex tax regulations and international
treaties; the ability to successfully identify, complete, integrate
and realize synergies from acquisitions, including retention of key
personnel; the potential adverse impact resulting from uncertainty
surrounding investments and acquisitions, including the potential
increase in risks already existing in Quanta's operations and poor
performance or decline in value of Quanta's investments; the
adverse impact of impairments of goodwill, other intangible assets,
receivables, long-lived assets or investments; difficulties arising
from Quanta's decentralized management structure; the impact of a
unionized workforce on operations, including labor stoppages or
interruptions due to strikes or lockouts; the ability to access
sufficient funding to finance desired growth and operations,
including the ability to access capital markets on favorable terms,
as well as fluctuations in the price and trading volume of Quanta's
common stock, debt covenant compliance, interest rate fluctuations
and other factors affecting financing and investing activities; the
ability to obtain bonds, letters of credit and other project
security; significant fluctuations in foreign currency exchange
rates; new or changed tax laws, treaties or regulations; and other
risks and uncertainties detailed in Quanta's Annual Report on Form
10-K for the year ended December 31,
2020, Quanta's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2021 (when filed) and
any other documents that Quanta files with the Securities and
Exchange Commission (SEC). For a discussion of these risks,
uncertainties and assumptions, investors are urged to refer to
Quanta's documents filed with the SEC that are available through
Quanta's website at www.quantaservices.com or through the
SEC's Electronic Data Gathering and Analysis Retrieval System
(EDGAR) at www.sec.gov. Should one or more of these risks
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those expressed or implied
in any forward-looking statements. Investors are cautioned not to
place undue reliance on these forward-looking statements, which are
current only as of this date. Quanta does not undertake and
expressly disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Quanta further expressly disclaims any
written or oral statements made by any third party regarding the
subject matter of this press release.
Contacts:
|
Derrick Jensen,
CFO
|
|
Kip Rupp, CFA, IRC -
Investors
|
|
Quanta Services, Inc.
|
|
713-629-7600
|
Quanta Services,
Inc. and Subsidiaries
Condensed
Consolidated Statements of Operations
For the Three
Months Ended March 31, 2021 and 2020
(In thousands, except
per share information)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2021
|
|
2020
|
Revenues
|
$
|
2,703,581
|
|
|
$
|
2,764,095
|
|
Cost of services
(including depreciation)
|
2,330,691
|
|
|
2,431,899
|
|
Gross
profit
|
372,890
|
|
|
332,196
|
|
Equity in earnings of
integral unconsolidated affiliates
|
5,183
|
|
|
—
|
|
Selling, general and
administrative expenses
|
(243,352)
|
|
|
(230,793)
|
|
Amortization of
intangible assets
|
(21,355)
|
|
|
(17,908)
|
|
Change in fair value
of contingent consideration liabilities
|
363
|
|
|
(2,758)
|
|
Operating
income
|
113,729
|
|
|
80,737
|
|
Interest
expense
|
(12,475)
|
|
|
(14,006)
|
|
Interest
income
|
117
|
|
|
759
|
Other income
(expense), net
|
3,672
|
|
|
(9,827)
|
|
Income before income
taxes
|
105,043
|
|
|
57,663
|
|
Provision for income
taxes
|
13,724
|
|
|
16,160
|
|
Net income
|
91,319
|
|
|
41,503
|
|
Less: Net income
attributable to non-controlling interests
|
1,558
|
|
|
2,817
|
Net income
attributable to common stock
|
$
|
89,761
|
|
|
$
|
38,686
|
|
|
|
|
|
Earnings per share
attributable to common stock:
|
|
|
|
Basic
|
$
|
0.64
|
|
|
$
|
0.27
|
|
Diluted
|
$
|
0.62
|
|
|
$
|
0.26
|
|
|
|
|
|
Shares used in
computing earnings per share:
|
|
|
|
Weighted average basic
shares outstanding
|
140,121
|
|
|
144,454
|
|
Weighted average
diluted shares outstanding
|
144,447
|
|
|
146,787
|
|
Quanta Services,
Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets
(In
thousands)
(Unaudited)
|
|
|
|
March
31,
|
|
December
31,
|
|
2021
|
|
2020
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
200,218
|
|
|
$
|
184,620
|
|
Accounts receivable,
net
|
2,666,983
|
|
|
2,716,083
|
|
Contract
assets
|
518,256
|
|
|
453,832
|
|
Inventories
|
51,009
|
|
|
50,472
|
|
Prepaid expenses and
other current assets
|
169,105
|
|
|
183,382
|
|
Total current
assets
|
3,605,571
|
|
|
3,588,389
|
|
PROPERTY AND
EQUIPMENT, net
|
1,583,451
|
|
|
1,560,656
|
|
OPERATING LEASE
RIGHT-OF-USE ASSETS
|
252,206
|
|
|
256,845
|
|
OTHER ASSETS,
net
|
576,975
|
|
|
435,713
|
|
OTHER INTANGIBLE
ASSETS, net
|
415,122
|
|
|
435,655
|
|
GOODWILL
|
2,124,089
|
|
|
2,121,014
|
|
Total
assets
|
$
|
8,557,414
|
|
|
$
|
8,398,272
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Current maturities of
long-term debt and short-term debt
|
$
|
10,709
|
|
|
$
|
14,764
|
|
Current portion of
operating lease liabilities
|
83,799
|
|
|
85,134
|
|
Accounts payable and
accrued expenses
|
1,506,025
|
|
|
1,509,794
|
|
Contract
liabilities
|
499,527
|
|
|
528,864
|
|
Total current
liabilities
|
2,100,060
|
|
|
2,138,556
|
|
LONG-TERM DEBT, net
of current maturities
|
1,347,560
|
|
|
1,174,294
|
|
OPERATING LEASE
LIABILITIES, net of current portion
|
176,008
|
|
|
178,822
|
|
DEFERRED INCOME
TAXES
|
170,059
|
|
|
166,407
|
|
INSURANCE AND OTHER
NON-CURRENT LIABILITIES
|
383,564
|
|
|
391,221
|
|
Total
liabilities
|
4,177,251
|
|
|
4,049,300
|
|
TOTAL STOCKHOLDERS'
EQUITY
|
4,374,943
|
|
|
4,344,181
|
|
NON-CONTROLLING
INTERESTS
|
5,220
|
|
|
4,791
|
|
TOTAL
EQUITY
|
4,380,163
|
|
|
4,348,972
|
|
Total liabilities and
equity
|
$
|
8,557,414
|
|
|
$
|
8,398,272
|
|
Quanta Services,
Inc. and Subsidiaries
Supplemental
Segment Data
For the Three
Months Ended
March 31,
2021 and 2020
(In thousands, except
percentages)
(Unaudited)
|
|
Segment
Results
Quanta reports its
results under two reportable segments: (1) Electric Power
Infrastructure Solutions and (2) Underground Utility and
Infrastructure Solutions, as set forth below.
|
|
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
|
|
|
Electric Power
Infrastructure Solutions
|
$
|
2,060,120
|
|
|
76.2
|
|
|
$
|
1,767,027
|
|
|
63.9
|
|
Underground Utility
and infrastructure Solutions
|
643,461
|
|
|
23.8
|
|
|
997,068
|
|
|
36.1
|
|
Consolidated
revenues
|
$
|
2,703,581
|
|
|
100.0
|
%
|
|
$
|
2,764,095
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
Electric Power
Infrastructure Solution before equity in earnings of integral
unconsolidated affiliates
|
$
|
193,852
|
|
|
9.4
|
%
|
|
$
|
128,758
|
|
|
7.3
|
%
|
Equity in earnings of
integral unconsolidated affiliates
|
5,183
|
|
|
N/A
|
|
|
—
|
|
|
N/A
|
|
Electric Power
Infrastructure Solutions (a)
|
199,035
|
|
|
9.7
|
%
|
|
128,758
|
|
|
7.3
|
%
|
Underground Utility
and infrastructure Solutions
|
8,813
|
|
|
1.4
|
%
|
|
31,277
|
|
|
3.1
|
%
|
Corporate and
Non-Allocated Costs (b)
|
(94,119)
|
|
|
N/A
|
|
|
(79,298)
|
|
|
N/A
|
|
Consolidated operating
income
|
$
|
113,729
|
|
|
4.2
|
%
|
|
$
|
80,737
|
|
|
2.9
|
%
|
|
(a) Included in
Electric Power Infrastructure Solutions operating income for the
three months ended March 31, 2020 is a $16.3 million operating
loss, or a negative 90 basis point impact to operating margin,
related to Latin American operations. As of December 31, 2020,
Quanta had substantially completed its exit of those
operations.
|
|
(b) Included in
corporate and non-allocated costs for the three months ended March
31, 2021 and 2020 are $1.8 million and $1.9 million of acquisition
and integration costs.
|
Quanta Services, Inc. and
Subsidiaries
Supplemental Data
(In
millions)
(Unaudited)
Remaining Performance Obligations and Backlog (a non-GAAP
measure)
Quanta's remaining performance obligations represent
management's estimate of consolidated revenues that are expected to
be realized from the remaining portion of firm orders for fixed
price contracts not yet completed or for which work has not yet
begun. For purposes of calculating remaining performance
obligations, Quanta includes all estimated revenues attributable to
consolidated joint ventures and variable interest entities,
revenues from funded and unfunded portions of government contracts
to the extent they are reasonably expected to occur and revenues
from change orders to the extent management believes additional
contract revenues will be earned and are deemed probable of
collection.
While backlog is not a defined term under GAAP, it is a common
measurement used in Quanta's industry. Quanta believes this
non-GAAP measure enables it to more effectively forecast its future
results and better identify future operating trends that may not
otherwise be apparent. Quanta's remaining performance obligations,
as described above, are a component of Quanta's backlog
calculation, which also includes estimated orders under master
service agreements (MSAs), including estimated renewals, and
non-fixed price contracts expected to be completed within one year.
Quanta's methodology for determining backlog may not be comparable
to the methodologies used by other companies.
The following table reconciles Quanta's total remaining
performance obligations to its backlog by reportable segment along
with estimates of amounts expected to be realized within 12
months:
|
March 31,
2021
|
|
December 31,
2020
|
|
March 31,
2020
|
|
12
Month
|
|
Total
|
|
12
Month
|
|
Total
|
|
12
Month
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric Power
Infrastructure Solutions
|
|
|
|
|
|
|
|
|
|
|
|
Remaining performance
obligations
|
$
|
2,562.0
|
|
|
$
|
3,494.6
|
|
|
$
|
2,511.2
|
|
|
$
|
3,547.8
|
|
|
$
|
2,696.8
|
|
|
$
|
3,987.1
|
|
Estimated orders under
MSAs and short-term,
non-fixed price contracts
|
3,887.3
|
|
|
8,166.5
|
|
|
3,559.4
|
|
|
7,433.4
|
|
|
2,555.8
|
|
|
5,666.7
|
|
Backlog
|
$
|
6,449.3
|
|
|
$
|
11,661.1
|
|
|
$
|
6,070.6
|
|
|
$
|
10,981.2
|
|
|
$
|
5,252.6
|
|
|
$
|
9,653.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underground Utility
and Infrastructure Solutions
|
|
|
|
|
|
|
|
|
|
|
|
Remaining performance
obligations
|
$
|
607.7
|
|
|
$
|
640.3
|
|
|
$
|
327.2
|
|
|
$
|
437.5
|
|
|
$
|
719.5
|
|
|
$
|
1,385.1
|
|
Estimated orders under
MSAs and short-term,
non-fixed price contracts
|
1,875.1
|
|
|
3,528.9
|
|
|
1,868.8
|
|
|
3,713.7
|
|
|
1,622.4
|
|
|
3,693.5
|
|
Backlog
|
$
|
2,482.8
|
|
|
$
|
4,169.2
|
|
|
$
|
2,196.0
|
|
|
$
|
4,151.2
|
|
|
$
|
2,341.9
|
|
|
$
|
5,078.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Remaining performance
obligations
|
$
|
3,169.7
|
|
|
$
|
4,134.9
|
|
|
$
|
2,838.4
|
|
|
$
|
3,985.3
|
|
|
$
|
3,416.3
|
|
|
$
|
5,372.2
|
|
Estimated orders under
MSAs and short-term,
non-fixed price contracts
|
5,762.4
|
|
|
11,695.4
|
|
|
5,428.2
|
|
|
11,147.1
|
|
|
4,178.2
|
|
|
9,360.2
|
|
Backlog
|
$
|
8,932.1
|
|
|
$
|
15,830.3
|
|
|
$
|
8,266.6
|
|
|
$
|
15,132.4
|
|
|
$
|
7,594.5
|
|
|
$
|
14,732.4
|
|
Quanta Services, Inc. and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Adjusted Diluted Earnings Per Share
Attributable to Common Stock
For the Three Months
Ended
March 31, 2021 and
2020
(In thousands, except per share information)
(Unaudited)
The following table presents the non-GAAP measure of adjusted
diluted earnings per share attributable to common stock for the
three months ended March 31, 2021 and 2020, which, when used
in connection with diluted earnings per share attributable to
common stock, is intended to provide useful information to
investors and analysts as they evaluate Quanta's performance.
Management believes that the exclusion of certain items from net
income attributable to common stock enables it to more effectively
evaluate Quanta's operations period over period and better identify
operating trends that may not otherwise be apparent. However, this
measure should not be considered as an alternative to diluted
earnings per share attributable to common stock or other measures
of performance that are derived in accordance with GAAP. As to
certain of the items below, (i) non-cash stock-based
compensation expense may vary due to acquisition activity, changes
in the estimated fair value of performance-based awards, forfeiture
rates, accelerated vesting and amounts granted;
(ii) amortization of intangible assets is impacted by Quanta's
acquisition activity, and therefore can vary from period to period;
(iii) acquisition and integration costs vary period to period
depending on the level of Quanta's acquisition activity, (iv)
change in fair value of contingent consideration liabilities varies
from period to period depending on the performance in
post-acquisition periods of certain acquired businesses; and (v)
impairments of non-integral unconsolidated affiliates vary from
period to period depending on various market factors outside
Quanta's influence or control. Because adjusted diluted earnings
per share attributable to common stock, as defined, excludes some,
but not all, items that affect net income attributable to common
stock, adjusted diluted earnings per share attributable to common
stock as presented in this press release may not be comparable to
similarly titled measures of other companies. The most comparable
GAAP financial measure, net income attributable to common stock,
and information reconciling the GAAP and non-GAAP financial
measures, are included below.
See the table below.
Quanta Services,
Inc. and Subsidiaries Reconciliation of Non-GAAP
Financial Measures
Adjusted Diluted Earnings Per Share
Attributable to Common Stock For the Three Months
Ended
March 31,
2021 and 2020 (In thousands, except per share
information)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2021
|
|
2020
|
Reconciliation of
adjusted net income attributable to common stock:
|
|
|
|
Net income
attributable to common stock (GAAP as reported)
|
$
|
89,761
|
|
|
$
|
38,686
|
|
Adjustments:
|
|
|
|
Acquisition and
integration costs
|
1,761
|
|
|
1,883
|
|
Change in fair value
of contingent consideration liabilities
|
(363)
|
|
|
2,758
|
|
Impairments of
non-integral unconsolidated affiliates (a)
|
—
|
|
|
3,143
|
|
Income tax impact of
adjustments (b)
|
(361)
|
|
|
(1,901)
|
|
Adjusted net income
attributable to common stock before certain non-cash
adjustments
|
90,798
|
|
|
44,569
|
|
Non-cash stock-based
compensation
|
18,687
|
|
|
14,912
|
|
Amortization of
intangible assets
|
21,355
|
|
|
17,908
|
|
Income tax impact of
non-cash adjustments (b)
|
(10,442)
|
|
|
(8,563)
|
|
Adjusted net income
attributable to common stock
|
$
|
120,398
|
|
|
$
|
68,826
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
Weighted average
shares outstanding for diluted and adjusted diluted earnings per
share
|
144,447
|
|
|
146,787
|
|
|
|
|
|
Earnings per share
attributable to common stock:
|
|
|
|
Diluted earnings per
share attributable to common stock
|
$
|
0.62
|
|
|
$
|
0.26
|
|
Adjusted diluted
earnings per share attributable to common stock
|
$
|
0.83
|
|
|
$
|
0.47
|
|
|
(a) The amount for
the three months ended March 31, 2020 represents an impairment
associated with a non-integral unconsolidated affiliate that was
negatively impacted by the decline in demand for refined products
during the first quarter of 2020. As of March 31, 2021,
Quanta's basis in this investment was $7.6 million. This impairment
loss is included in "Other income (expense), net" in the
accompanying March 31, 2020 condensed consolidated statement
of operations.
|
|
(b) The income tax
impact of adjustments that are subject to tax is determined using
the incremental statutory tax rates of the jurisdictions to which
each adjustment relates for the respective periods.
|
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
EBITDA and Adjusted EBITDA
For the
Three Months Ended
March 31,
2021 and 2020
(In thousands)
(Unaudited)
The following table presents the non-GAAP financial measures of
EBITDA and adjusted EBITDA for the three months ended
March 31, 2021 and 2020, which, when used in connection with
net income attributable to common stock, are intended to provide
useful information to investors and analysts as they evaluate
Quanta's performance. EBITDA is defined as earnings before
interest, taxes, depreciation and amortization, and adjusted EBITDA
is defined as EBITDA adjusted for certain other items as described
below. Management believes that the exclusion of these items from
net income attributable to common stock enables it to more
effectively evaluate Quanta's operations period over period and to
identify operating trends that might not be apparent when including
the excluded items. However, these measures should not be
considered as an alternative to net income attributable to common
stock or other measures of performance that are derived in
accordance with GAAP. As to certain of the items below, (i)
non-cash stock-based compensation expense varies from period to
period due to acquisition activity, changes in the estimated fair
value of performance-based awards, forfeiture rates, accelerated
vesting and amounts granted; (ii) acquisition and integration costs
vary from period to period depending on the level of Quanta's
acquisition activity; (iii) equity in (earnings) losses of
non-integral unconsolidated affiliates varies from period to period
depending on the activity and financial performance of non-integral
unconsolidated affiliates, including gain or loss on sales of
investments accounted for using the equity method of accounting;
and (iv) change in fair value of contingent consideration
liabilities varies from period to period depending on the
performance in post-acquisition periods of certain acquired
businesses. Because EBITDA and adjusted EBITDA, as defined, exclude
some, but not all, items that affect net income attributable to
common stock, such measures may not be comparable to similarly
titled measures of other companies. The most comparable GAAP
financial measure, net income attributable to common stock, and
information reconciling the GAAP and non-GAAP financial measures,
are included below. See notes below.
|
Three Months
Ended
|
|
March
31,
|
|
2021
|
|
2020
|
|
|
|
|
Net income
attributable to common stock (GAAP as reported)
|
$
|
89,761
|
|
|
$
|
38,686
|
|
Interest
expense
|
12,475
|
|
|
14,006
|
|
Interest
income
|
(117)
|
|
|
(759)
|
|
Provision for income
taxes
|
13,724
|
|
|
16,160
|
|
Depreciation
expense
|
62,107
|
|
|
54,410
|
|
Amortization of
intangible assets
|
21,355
|
|
|
17,908
|
|
Income taxes and
depreciation included in equity in earnings of integral
unconsolidated affiliates
|
1,501
|
|
|
—
|
|
EBITDA
(a)
|
200,806
|
|
|
140,411
|
|
Non-cash stock-based
compensation
|
18,687
|
|
|
14,912
|
|
Acquisition and
integration costs
|
1,761
|
|
|
1,883
|
|
Equity in (earnings)
losses of non-integral unconsolidated affiliates
|
(685)
|
|
|
2,683
|
|
Change in fair value
of contingent consideration liabilities
|
(363)
|
|
|
2,758
|
|
Adjusted
EBITDA
|
$
|
220,206
|
|
|
$
|
162,647
|
|
|
(a) The
calculation of EBITDA for the three months ended March 31,
2020 has been amended to conform to the current period's
calculation of EBITDA.
|
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Free Cash Flow and Other Non-GAAP
Definitions
For the Three Months Ended
March 31, 2021 and 2020
(In
thousands)
(Unaudited)
Reconciliation of Free Cash Flow:
The non-GAAP measure of free cash flow, when used in connection
with net cash provided by operating activities, is intended to
provide useful information to investors and analysts as they
evaluate Quanta's ability to generate the cash required to maintain
and potentially expand its business. Free cash flow is defined as
net cash provided by operating activities less net capital
expenditures. Net capital expenditures is defined as capital
expenditures less proceeds from the sale of property and equipment
and from insurance settlements related to property and equipment.
Management believes that free cash flow provides useful information
to Quanta's investors because free cash flow is viewed by
management as an important indicator of how much cash is provided
or used by routine business operations, including the impact of net
capital expenditures. Management uses this measure for capital
allocation purposes as it is viewed as a measure of cash available
to fund debt payments, acquire businesses, repurchase common stock,
declare and pay dividends and transact other investing and
financing activities. However, this measure should not be
considered as an alternative to net cash provided by operating
activities or other measures of performance that are derived in
accordance with GAAP. The most comparable GAAP financial measure,
net cash provided by operating activities, and information
reconciling the GAAP and non-GAAP financial measures, are included
below.
|
Three Months
Ended
|
|
March
31,
|
|
2021
|
|
2020
|
Net cash provided
by operating activities
|
$
|
125,613
|
|
|
$
|
227,549
|
|
Less: Net capital
expenditures:
|
|
|
|
Capital
expenditures
|
(83,486)
|
|
|
(68,109)
|
|
Proceeds from sale of
property and equipment
|
7,230
|
|
|
4,988
|
|
Net capital
expenditures
|
(76,256)
|
|
|
(63,121)
|
|
Free Cash
Flow
|
$
|
49,357
|
|
|
$
|
164,428
|
|
Other Non-GAAP Definitions:
Days Sales Outstanding:
Days Sales Outstanding is
calculated by using the sum of current accounts receivable, net of
allowance (which includes retainage and unbilled balances), plus
contract assets, less contract liabilities, and divided by average
revenues per day during the quarter.
Total Liquidity:
Total liquidity includes Quanta's
cash and cash equivalents and availability under Quanta's senior
credit facility.
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Estimated Adjusted Diluted Earnings Per
Share
Attributable to Common Stock
For the
Full Year 2021
(In thousands, except per share
information)
(Unaudited)
The following presents the non-GAAP measure of adjusted diluted
earnings per share attributable to common stock, which, when used
in connection with diluted earnings per share attributable to
common stock, is intended to provide useful information to
investors and analysts as they evaluate Quanta's performance.
Management believes that the exclusion of certain items from net
income attributable to common stock enables it to more effectively
evaluate Quanta's operations period over period and better identify
operating trends that may not otherwise be apparent. However, this
measure should not be considered as an alternative to diluted
earnings per share attributable to common stock or other measures
of performance that are derived in accordance with GAAP. As
to certain of the items below, (i) non-cash stock-based
compensation expense may vary due to acquisition activity, changes
in the estimated fair value of performance-based awards, forfeiture
rates, accelerated vesting and amounts granted;
(ii) amortization of intangible assets is impacted by Quanta's
acquisition activity, and therefore can vary from period to period;
(iii) acquisition and integration costs vary period to period
depending on the level of Quanta's acquisition activity; and (iv)
change in fair value of contingent consideration liabilities varies
from period to period depending on the performance in
post-acquisition periods of certain acquired businesses. Because
adjusted diluted earnings per share attributable to common stock,
as defined, excludes some, but not all, items that affect net
income attributable to common stock, adjusted diluted earnings per
share attributable to common stock as presented in this press
release may not be comparable to similarly titled measures of other
companies. The most comparable GAAP financial measure, net income
attributable to common stock, and information reconciling the GAAP
and non-GAAP financial measures, are included below.
|
Estimated
Range
|
|
Full Year
Ending
|
|
December 31,
2021
|
Reconciliation of
estimated adjusted net income attributable to common
stock:
|
|
|
|
Net income
attributable to common stock (as defined by GAAP)
|
$
|
468,600
|
|
|
$
|
533,100
|
|
Non-cash stock-based
compensation
|
82,700
|
|
|
82,700
|
|
Amortization of
intangible assets
|
85,000
|
|
|
85,000
|
|
Acquisition and
integration costs
|
3,700
|
|
|
3,700
|
|
Change in fair value
of contingent consideration liabilities
|
(400)
|
|
|
(400)
|
|
Income tax impact of
adjustments (a)
|
(44,600)
|
|
|
(44,600)
|
|
Adjusted net income
attributable to common stock
|
$
|
595,000
|
|
|
$
|
659,500
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
Weighted average
shares outstanding for diluted and adjusted diluted earnings per
share attributable
to common stock
|
144,400
|
|
|
144,400
|
|
|
|
|
|
Diluted earnings
per share attributable to common stock and estimated adjusted
diluted
earnings per share attributable to common stock:
|
|
|
|
Diluted earnings per
share attributable to common stock
|
$
|
3.25
|
|
|
$
|
3.69
|
|
Adjusted diluted
earnings per share attributable to common stock
|
$
|
4.12
|
|
|
$
|
4.57
|
|
|
(a) The income tax
impact of adjustments that are subject to tax is determined using
the incremental statutory tax rates of the jurisdictions to which
each adjustment relates for the respective periods.
|
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Estimated EBITDA and Adjusted
EBITDA
For the Full Year 2021
(In thousands)
(Unaudited)
The following table presents the non-GAAP financial measures of
estimated EBITDA and adjusted EBITDA, which, when used in
connection with estimated net income attributable to common stock,
is intended to provide useful information to investors and analysts
as they evaluate Quanta's performance. EBITDA is defined as
earnings before interest, taxes, depreciation and amortization, and
adjusted EBITDA is defined as EBITDA adjusted for certain other
items as described below. Management believes that the exclusion of
these items from net income attributable to common stock enables it
to more effectively evaluate Quanta's operations period over period
and to identify operating trends that might not be apparent when
including the excluded items. However, these measures should not be
considered as an alternative to net income attributable to common
stock or other measures of performance that are derived in
accordance with GAAP. As to certain of the items below, (i)
non-cash stock-based compensation expense may vary due to
acquisition activity, changes in the estimated fair value of
performance-based awards, forfeiture rates, accelerated vesting and
amounts granted; (ii) acquisition and integration costs vary period
to period depending on the level of Quanta's acquisition activity;
(iii) equity in (earnings) losses of non-integral unconsolidated
affiliates can vary from period to period depending on the activity
and financial performance of non-integral unconsolidated
affiliates, including gain or loss on sales of investments
accounted for using the equity method of accounting; and (iv)
change in fair value of contingent consideration liabilities varies
from period to period depending on the performance in
post-acquisition periods of certain acquired businesses. Because
EBITDA and adjusted EBITDA, as defined, exclude some, but not all,
items that affect net income attributable to common stock, such
measures may not be comparable to similarly titled measures of
other companies. The most comparable GAAP financial measure, net
income attributable to common stock, and information reconciling
the GAAP and non-GAAP financial measures, are included below.
|
Estimated
Range
|
|
Full Year
Ending
|
|
December 31,
2021
|
|
|
|
|
Net income
attributable to common stock (as defined by GAAP)
|
$
|
468,600
|
|
|
$
|
533,100
|
|
Interest expense,
net
|
48,000
|
|
|
49,000
|
|
Provision for income
taxes
|
160,000
|
|
|
187,000
|
|
Depreciation
expense
|
249,600
|
|
|
249,600
|
|
Amortization of
intangible assets
|
85,000
|
|
|
85,000
|
|
Income taxes and
depreciation included in equity in earnings of integral
unconsolidated affiliates
|
7,800
|
|
|
7,800
|
|
EBITDA
|
1,019,000
|
|
|
1,111,500
|
|
Non-cash stock-based
compensation
|
82,700
|
|
|
82,700
|
|
Acquisition and
integration costs
|
3,700
|
|
|
3,700
|
|
Equity in (earnings)
losses of non-integral unconsolidated affiliates
|
(700)
|
|
|
(700)
|
|
Change in fair value
of contingent consideration liabilities
|
(400)
|
|
|
(400)
|
|
Adjusted
EBITDA
|
$
|
1,104,300
|
|
|
$
|
1,196,800
|
|
Quanta Services, Inc. and
Subsidiaries
Reconciliation of Non-GAAP Financial
Measures
Estimated Free Cash Flow
For the Full
Year 2021
(In thousands)
(Unaudited)
The non-GAAP measure of estimated free cash flow, when used in
connection with estimated net cash provided by operating
activities, is intended to provide useful information to investors
and analysts as they evaluate Quanta's ability to generate the cash
required to maintain and potentially expand its business. Free cash
flow is defined as net cash provided by operating activities less
net capital expenditures. Net capital expenditures is defined as
capital expenditures less proceeds from the sale of property and
equipment and from insurance settlements related to property and
equipment. Management believes that free cash flow provides useful
information to Quanta's investors because free cash flow is viewed
by management as an important indicator of how much cash is
provided or used by routine business operations, including the
impact of net capital expenditures. Management uses this measure
for capital allocation purposes as it is viewed as a measure of
cash available to fund debt payments, acquire businesses,
repurchase common stock, declare and pay dividends and transact
other investing and financing activities. However, this measure
should not be considered as an alternative to net cash provided by
operating activities or other measures of performance that are
derived in accordance with GAAP. The most comparable GAAP financial
measure, net cash provided by operating activities, and information
reconciling the GAAP and non-GAAP financial measures, are included
below.
|
Estimated
Range
|
|
Full Year
Ending
|
|
December 31,
2021
|
Net cash provided
by operating activities
|
$
|
725,000
|
|
|
$
|
925,000
|
|
Less: Net capital
expenditures
|
(325,000)
|
|
|
(325,000)
|
|
Free Cash
Flow
|
$
|
400,000
|
|
|
$
|
600,000
|
|
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SOURCE Quanta Services, Inc.