Record Fourth Quarter and Annual Revenue of $3.3 Billion and $12.0 Billion, Respectively
Full Year 2023 Cash Flow from Operations of $687 Million, a 95% Increase Over Full Year 2022
Fourth Quarter Reduction in Net Debt of $455 Million
2023 Results Include GAAP Net Loss of $47.3 Million, Adjusted Net Income of $156.7 Million, Adjusted EBITDA of $860.3 Million, Diluted Loss Per Share of $0.64 and Adjusted Diluted Earnings Per Share of $1.97
Adjusted Diluted Earnings per Share was $0.22 Above the Prior Guidance Estimate
Issuing Initial Annual 2024 Guidance Including Revenue of $12.5 Billion, a 4% Increase Over 2023, GAAP Net Income of $105 Million, Adjusted EBITDA of $955 Million, with Diluted Earnings Per Share of $1.04, and Adjusted Diluted Earnings Per Share of $2.69
CORAL GABLES, Fla., Feb. 29, 2024 /PRNewswire/ — MasTec, Inc. (NYSE:MTZ) today announced 2023 fourth quarter and full year financial results and issued its initial 2024 guidance expectation.
For the Fourth Quarter:
Fourth quarter 2023 revenue was up 9.0% to $3.3 billion, compared to $3.0 billion for the fourth quarter of 2022. GAAP net income was $1.2 million, or $0.01 per diluted share, compared to $3.4 million, or $0.04 per diluted share, in the fourth quarter of 2022.
Fourth quarter 2023 adjusted net income and adjusted diluted earnings per share, both non-GAAP measures, were $52.0 million and $0.66, respectively, as compared to $80.0 million and $1.03, respectively, in the fourth quarter of 2022.
Fourth quarter 2023 adjusted EBITDA, also a non-GAAP measure, was $231.4 million, compared to $257.9 million in the fourth quarter of 2022. Fourth quarter 2023 adjusted EBITDA margin rate was 7.1% of revenue.
18-month backlog as of December 31, 2023 was $12.4 billion, with sequential growth in each segment, excluding Oil & Gas, totaling $373 million. The Oil & Gas backlog decrease was primarily related to the expected 2024 completion of a large natural gas pipeline project.
Fourth quarter Cash Flow from Operations was very strong at almost $500 million, enabling significant net debt reduction. Net debt leverage ratio improved significantly from 3.4 times at the end of the third quarter to 2.9 times at yearend.
For the Full Year:
For the year ended December 31, 2023, revenue was up 23% to $12.0 billion, compared to $9.8 billion for the prior year. GAAP net loss was $47.3 million, or a loss of $0.64 per diluted share, compared to net income of $33.9 million, or earnings of $0.42 per diluted share in 2022.
Full year 2023 adjusted net income and adjusted diluted earnings per share, both non-GAAP measures, were $156.7 million and $1.97, respectively, compared to $234.8 million and $3.05, respectively, during 2022.
Full year 2023 adjusted EBITDA, also a non-GAAP measure, was up 10% to $860.3 million, compared to $780.6 million in 2022. Full year 2023 adjusted EBITDA margin rate was 7.2% compared to 8.0% last year.
Adjusted net income, adjusted diluted earnings per share, adjusted EBITDA and net debt, which are all non-GAAP measures, exclude certain items that are detailed and reconciled to the most comparable GAAP-reported measures in the attached Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures.
Jose Mas, MasTec’s Chief Executive Officer, commented, “Fourth quarter results were in line with our expectations after a challenging 2023. We look forward to the opportunities we have this year and expect to deliver record levels of revenue and adjusted EBITDA in 2024. Demand is very strong for our services, and I expect 2024 will position us to deliver double digit revenue and earnings growth in 2025 and beyond.”
Mr. Mas continued, “I’d once again like to thank the 34,000 men and women of MasTec who work every day to build, maintain, and improve the nation’s communications, transportation, energy, and industrial infrastructure. It is hard work, and it’s because of them that we have great long-term opportunities.”
Paul DiMarco, MasTec’s Executive Vice President, and Chief Financial Officer, noted, “I’m pleased that we were able to finish 2023 with strong cash flow generation of almost $500 million in Q4, significantly exceeding our prior expectations. DSO, at 74 days was at its lowest level since mid-2017. We are keenly focused on capital allocation to ensure we are generating appropriate returns on the capital we deploy. We will continue to focus on improving the tools and processes we utilize to measure and optimize our performance, and to capitalize on the robust demand environment provided by our end markets.”
Based on the information available today, the Company is providing both first quarter and full year 2024 guidance. The Company currently expects full year 2024 revenue will approximate $12.5 billion, a record level. 2024 full year GAAP net income and diluted earnings per share are expected to approximate $105 million and $1.04, respectively. Full year 2024 adjusted EBITDA is expected to approximate $955 million, representing 7.6% of revenue, and adjusted diluted earnings per share is expected to approximate $2.69.
For the first quarter of 2024, the Company expects revenue of approximately $2.6 billion. First quarter 2024 GAAP net loss is expected to approximate $61 million, with GAAP diluted loss per share expected to approximate $0.88. First quarter 2024 adjusted EBITDA is expected to approximate $130 million or 5.0% of revenue, with adjusted diluted loss per share expected to approximate $0.48. The projected loss in the first quarter is the result of a normal seasonally slow quarter, project delays and project start-up costs.
Management will hold a conference call to discuss these results on Friday, March 1, 2024 at 9:00 a.m. Eastern Time. The call-in number for the conference call is (856) 344-9221 or (888) 256-1007 with a pass code of 4316181. Additionally, the call will be broadcast live over the Internet and can be accessed and replayed through the Investors section of the Company’s website at www.mastec.com. The webcast replay will be available for at least 30 days.
The following tables set forth the financial results for the periods ended December 31, 2023 and 2022:
Consolidated Statements of Operations
(unaudited – in thousands, except per share information)
For the Three Months Ended
December 31,
For the Years Ended
December 31,
2023
2022
2023
2022
Revenue
$ 3,280,083
$ 3,008,361
$ 11,995,934
$ 9,778,038
Costs of revenue, excluding depreciation and amortization
2,912,370
2,637,071
10,613,762
8,586,333
Depreciation
108,611
107,753
433,929
371,240
Amortization of intangible assets
42,981
54,666
169,233
135,908
General and administrative expenses
178,190
155,194
698,899
559,437
Interest expense, net
59,741
49,942
234,405
112,255
Equity in earnings of unconsolidated affiliates, net
(7,262)
(9,413)
(30,697)
(28,836)
Other (income) expense, net
(14,562)
539
(40,893)
(1,358)
Income (loss) before income taxes
$ 15
$ 12,609
$ (82,704)
$ 43,059
Benefit from (provision for) income taxes
1,177
(9,239)
35,408
(9,171)
Net income (loss)
$ 1,192
$ 3,370
$ (47,296)
$ 33,888
Net income attributable to non-controlling interests
439
146
2,653
534
Net income (loss) attributable to MasTec, Inc.
$ 753
$ 3,224
$ (49,949)
$ 33,354
Earnings (loss) per share:
Basic earnings (loss) per share
$ 0.01
$ 0.04
$ (0.64)
$ 0.45
Basic weighted average common shares outstanding
77,879
76,492
77,535
74,917
Diluted earnings (loss) per share
$ 0.01
$ 0.04
$ (0.64)
$ 0.42
Diluted weighted average common shares outstanding
78,288
77,770
77,535
76,185
Consolidated Balance Sheets
(unaudited – in thousands)
December 31,
2023
December 31,
2022
Assets
Current assets
$ 3,974,253
$ 3,859,127
Property and equipment, net
1,651,462
1,754,101
Operating lease right-of-use assets
418,685
279,534
Goodwill, net
2,126,366
2,045,041
Other intangible assets, net
784,260
946,299
Other long-term assets
418,485
409,157
Total assets
$ 9,373,511
$ 9,293,259
Liabilities and Equity
Current liabilities
$ 2,837,219
$ 2,496,037
Long-term debt, including finance leases
2,888,058
3,052,193
Long-term operating lease liabilities
292,873
194,050
Deferred income taxes
390,399
571,401
Other long-term liabilities
243,701
238,391
Total equity
2,721,261
2,741,187
Total liabilities and equity
$ 9,373,511
$ 9,293,259
Consolidated Statements of Cash Flows
(unaudited – in thousands)
For the Years Ended
December 31,
2023
2022
Net cash provided by operating activities
$ 687,277
$ 352,297
Net cash used in investing activities
(178,061)
(821,183)
Net cash (used in) provided by financing activities
(350,998)
480,897
Effect of currency translation on cash
751
(2,155)
Net increase in cash and cash equivalents
158,969
9,856
Cash and cash equivalents – beginning of period
$ 370,592
$ 360,736
Cash and cash equivalents – end of period
$ 529,561
$ 370,592
Backlog by Reportable Segment (unaudited – in millions)
December 31,
2023
September 30,
2023
December 31,
2022
Communications
$ 5,627
$ 5,299
$ 5,303
Clean Energy and Infrastructure
3,115
3,073
3,227
Power Delivery
2,440
2,437
2,709
Oil and Gas
1,225
1,681
1,740
Other
—
—
—
Estimated 18-month backlog
$ 12,407
$ 12,490
$ 12,979
Backlog is a common measurement used in our industry. Our methodology for determining backlog may not, however, be comparable to the methodologies used by others. Estimated backlog represents the amount of revenue we expect to realize over the next 18 months from future work on uncompleted construction contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options. Our estimated backlog also includes amounts under master service and other service agreements and our proportionate share of estimated revenue from proportionately consolidated non-controlled contractual joint ventures. Estimated backlog for work under master service and other service agreements is determined based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers.
Supplemental Disclosures and Reconciliation of Non-GAAP Disclosures
(unaudited – in millions, except for percentages and per share information)
For the Three Months Ended
December 31,
For the Years Ended
December 31,
Segment Information
2023
2022
2023
2022
Revenue by Reportable Segment
Communications
$ 759.9
$ 858.6
$ 3,259.5
$ 3,233.7
Clean Energy and Infrastructure
1,067.4
1,125.0
3,962.0
2,618.6
Power Delivery
658.0
739.8
2,735.1
2,725.2
Oil and Gas
802.2
291.6
2,072.8
1,219.6
Other
—
—
—
—
Eliminations
(7.4)
(6.7)
(33.5)
(19.1)
Consolidated revenue
$ 3,280.1
$ 3,008.4
$ 11,995.9
$ 9,778.0
For the Three Months Ended
December 31,
For the Years Ended
December 31,
2023
2022
2023
2022
Adjusted EBITDA by Segment
EBITDA
$ 211.3
$ 225.0
$ 754.9
$ 662.5
Non-cash stock-based compensation expense (a)
9.0
8.6
33.3
27.4
Acquisition and integration costs (b)
11.0
26.6
71.9
86.0
Losses, net, on fair value of investment (a)
—
0.4
0.2
7.7
Project results from non-controlled joint venture (c)
—
(2.8)
—
(2.8)
Bargain purchase gain (a)
—
—
—
(0.2)
Adjusted EBITDA
$ 231.4
$ 257.9
$ 860.3
$ 780.6
Segment:
Communications
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