Revenues in the third quarter of 2008 were
For the third quarter of 2008, cash earnings per diluted share from
continuing operations (a non-GAAP measure) were
"As reflected in Quanta's revenue growth in the third quarter, many of our
customers continue to invest in infrastructure despite a challenging economic
environment," said
Revenues for the first nine months of 2008 were
RECENT HIGHLIGHTS -
-- Promoted
-- Secured Contract for Oklahoma Transmission Line - Quanta has been
awarded a contract by Oklahoma Gas and Electric for the construction of
approximately 120 miles of 345,000-volt transmission infrastructure just
outside of
-- Supported Emergency Restoration Efforts - In the third quarter of 2008, Quanta deployed personnel to support utilities in restoring power and communications in the aftermath of Hurricanes Edouard, Fay, Gustav and Ike. Hurricane Ike alone impacted more than a dozen states and caused power outages for more than 3 million power consumers across the states most heavily impacted.
-- Redeemed 4.5 Percent Convertible Subordinated Notes - Following the
OUTLOOK
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
Quanta expects revenues for the fourth quarter of 2008 to range between
Quanta Services has scheduled a conference call for
The non-GAAP measures in this press release and the attached table are provided to enable investors to evaluate performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods. Reconciliations of other GAAP to non-GAAP measures not included in this press release can be found on the company's Web site at www.quantaservices.com in the "Financial News" section.
Quanta Services is a leading specialized contracting services company,
delivering infrastructure network solutions for the electric power, natural
gas, telecommunications and cable television industries. The company's
comprehensive services include designing, installing, repairing and
maintaining network infrastructure nationwide. Additionally, Quanta provides
point-to-point fiber optic telecommunications infrastructure and leasing in
select markets and offers related design, procurement, construction and
maintenance services. With operations throughout
Forward-Looking Statements
This press release (and oral statements regarding the subject matter of
this 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, projected revenues and earnings per share and other
projections of financial and operating results, capital expenditures, growth
and trends in particular markets, benefits of the Energy Policy Act of 2005
and renewable energy initiatives, statements relating to the business plans or
financial condition of utilities and our other customers, and Quanta's
strategies and plans, 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. Although Quanta's
management believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations
will prove to be correct. These statements can be affected by inaccurate
assumptions and by a variety of risks and uncertainties that are difficult to
predict or beyond our control, including, among others, quarterly variations
in operating results; adverse changes in economic and financial conditions,
including the recent volatility in the capital markets; trends in relevant
markets; the failure to realize expected synergies and benefits from the
merger with InfraSource Services, Inc., and other potential adverse impacts on
Quanta's business or its financial results as a result of the merger,
including unexpected costs or liabilities; delays, reductions in scope or
cancellations of existing projects, including as a result of capital
constraints that may impact our customers; our ability to compete for new
projects and for market share; dependence on fixed price contracts and the
potential to incur losses with respect to these contracts; estimates relating
to the use of percentage-of-completion accounting; the successful performance
and completion of contracts; the ability to generate internal growth;
potential failure of the Energy Policy Act of 2005 or renewable initiatives to
result in increased spending on the electrical power transmission
infrastructure; the ability to attract skilled labor and retention of key
personnel and qualified employees; potential shortage of skilled employees;
growth outpacing infrastructure; the ability to successfully identify,
complete and integrate acquisitions; the adverse impact of goodwill or other
intangible asset impairments; estimates and assumptions in determining
financial results and backlog; unexpected costs or liabilities that may arise
from lawsuits or indemnity claims related to the services Quanta performs;
liabilities for claims that are self-insured or for claims that Quanta's
casualty insurance carrier fails to pay; potential liabilities relating to
occupational health and safety matters; risks associated with Quanta's dark
fiber leasing business, including regulatory changes and the potential
inability to realize a return on capital investments; cancellation provisions
within contracts and the risk that contracts are not renewed or are replaced
on less favorable terms; the ability to realize backlog; the inability of
customers to pay for services; beliefs and assumptions about the
collectibility of receivables; the ability to obtain performance bonds; the
impact of a unionized workforce on operations and the ability to complete
future acquisitions; the ability to continue to meet the requirements of the
Sarbanes-Oxley Act of 2002; potential exposure to environmental liabilities;
risks associated with operating in international markets; requirements
relating to governmental regulation and changes thereto; rapid technological
and structural changes that could reduce the demand for services; the cost of
borrowing, availability of credit, debt covenant compliance, interest rate
fluctuations and other factors affecting financing and investment activities;
the potential conversion of Quanta's outstanding convertible subordinated
notes; and other risks detailed in Quanta's Annual Report on Form 10-K for the
year ended
Contacts: James Haddox, CFO Ken Dennard / ksdennard@drg-e.com Reba Reid Kip Rupp / krupp@drg-e.com Quanta Services Inc. DRG&E 713-629-7600 713-529-6600 - Tables to follow - Quanta Services, Inc. and Subsidiaries Consolidated Statements of Operations For the Three and Nine Months Ended September 30, 2008 and 2007 (In thousands, except per share information) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Revenues $1,053,355 $655,865 $2,858,679 $1,777,044 Cost of services (including depreciation) 867,789 540,812 2,390,546 1,499,172 Gross profit 185,566 115,053 468,133 277,872 Selling, general & administrative expenses 80,126 59,816 227,134 155,793 Amortization of intangible assets 8,998 4,868 29,464 6,332 Operating income 96,442 50,369 211,535 115,747 Interest expense (5,223) (5,165) (15,642) (16,261) Interest income 2,022 5,389 8,105 15,341 Loss on early extinguishment of debt (2) (11) (2) (11) Other income (expense), net (74) (702) 408 (591) Income from continuing operations before income tax provision 93,165 49,880 204,404 114,225 Provision for income taxes 38,307 2,930 84,776 14,626 Income from continuing operations 54,858 46,950 119,628 99,599 Income from discontinued operation - 2,371 - 2,791 Net income $54,858 $49,321 $119,628 $102,390 Basic earnings per share: Income from continuing operations $0.32 $0.34 $0.70 $0.80 Income from discontinued operation - 0.02 - 0.02 Net Income $0.32 $0.36 $0.70 $0.82 Weighted average basic shares outstanding 171,693 136,279 170,938 124,362 Diluted earnings per share: Income from continuing operations $ 0.29 $0.30 $0.64 $0.70 Income from discontinued operation - 0.01 - 0.02 Net Income $0.29 $0.31 $0.64 $0.72 Weighted average diluted shares outstanding 203,131 167,869 202,292 155,828 The calculation of earnings per share is provided in the following table. Quanta Services, Inc. and Subsidiaries Calculation of Earnings Per Share For the Three and Nine Months Ended September 30, 2008 and 2007 (In thousands, except per share information) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Income for basic earnings per share: From continuing operations $54,858 $46,950 $119,628 $99,599 From discontinued operation - 2,371 - 2,791 Net income $54,858 $49,321 $119,628 $102,390 Weighted average shares outstanding for basic earnings per share 171,693 136,279 170,938 124,362 Basic earnings per share: From continuing operations $0.32 $0.34 $0.70 $0.80 From discontinued operation - 0.02 - 0.02 Net income $0.32 $0.36 $0.70 $0.82 Income for diluted earnings per share: Income from continuing operations $54,858 $46,950 $119,628 $99,599 Effect of convertible subordinated notes under the "if-converted" method - interest expense addback, net of taxes 3,181 3,198 9,578 9,596 Income from continuing operations for diluted earnings per share 58,039 50,148 129,206 109,195 Income from discontinued operation - 2,371 - 2,791 Net income for diluted earnings per share $58,039 $52,519 $129,206 $111,986 Calculation of weighted average shares for diluted earnings per share: Weighted average shares outstanding for basic earnings per share 171,693 136,279 170,938 124,362 Effect of dilutive stock options and restricted stock 801 939 709 815 Effect of convertible subordinated notes under the "if-converted" method - weighted convertible shares issuable 30,637 30,651 30,645 30,651 Weighted average shares outstanding for diluted earnings per share 203,131 167,869 202,292 155,828 Diluted earnings per share: From continuing operations $0.29 $0.30 $0.64 $0.70 From discontinued operation - 0.01 - 0.02 Net income $0.29 $0.31 $0.64 $0.72 Quanta Services, Inc. and Subsidiaries Non-GAAP Financial Measures For the Three and Nine Months Ended September 30, 2008 and 2007 (In thousands, except per share information) (Unaudited) Reconciliation of GAAP Earnings per Diluted Share to Cash Earnings and Adjusted Cash Earnings per Diluted Share Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 As reported income from continuing operations $54,858 $46,950 $119,628 $99,599 Adjustments: Impact of tax contingency releases - (17,886)(a) - (33,224)(b) Adjusted income from continuing operations 54,858 29,064 119,628 66,375 Non-cash stock-based compensation, net of tax 2,466 1,504 7,565 3,712 Amortization of intangible assets, net of tax 5,489 2,970 17,973 3,863 Adjusted income from continuing operations for calculation of cash earnings and adjusted cash earnings per diluted share $62,813 $33,538 $145,166 $73,950 From continuing operations: As reported earnings per diluted share(c) $0.29 $0.30 $0.64 $0.70 As adjusted earnings per diluted share(c) $0.29 $0.19(a) $0.64 $0.49(b) Cash earnings and adjusted cash earnings per diluted share(c) $0.32 $0.22(a) $0.76 $0.54(b)
(a) Reflects the elimination of tax benefits primarily associated with the expiration of various federal and state tax statutes of limitations during the third quarter of 2007.
(b) Reflects the elimination of tax benefits primarily associated with the settlement of a multi-year audit by the Internal Revenue Service in the first quarter of 2007 in addition to the elimination of tax benefits recorded in the third quarter of 2007 described in (a) above.
(c) As a result of applying the if-converted method for calculating diluted earnings per share, weighted average shares used in the above calculations have been adjusted assuming conversion of Quanta's convertible subordinated notes, and net income has been adjusted for an addback of related interest expense, net of tax.
The non-GAAP measures in this press release are provided to enable investors to evaluate quarterly performance excluding the effects of items that management believes impact the comparability of operating results between periods. Quanta Services, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands) (Unaudited) September 30, December 31, 2008 2007 ASSETS CURRENT ASSETS: Cash and cash equivalents $266,429 $407,081 Accounts receivable, net 958,931 719,672 Costs and estimated earnings in excess of billings on uncompleted contracts 71,492 72,424 Inventories 26,335 25,920 Prepaid expenses and other current assets 59,595 79,665 Total current assets 1,382,782 1,304,762 PROPERTY AND EQUIPMENT, net 640,079 532,285 OTHER ASSETS, net 35,772 42,992 INTANGIBLE ASSETS, net 144,262 152,695 GOODWILL 1,359,674 1,355,098 Total assets $3,562,569 $3,387,832 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $268,847 $271,011 Accounts payable and accrued expenses 459,989 420,815 Billings in excess of costs and estimated earnings on uncompleted contracts 51,514 65,603 Total current liabilities 780,350 757,429 CONVERTIBLE SUBORDINATED NOTES 143,750 143,750 DEFERRED INCOME TAXES AND OTHER NON-CURRENT LIABILITIES 298,997 301,510 Total liabilities 1,223,097 1,202,689 STOCKHOLDERS' EQUITY 2,339,472 2,185,143 Total liabilities and stockholders' equity $3,562,569 $3,387,832
SOURCE Quanta Services, Inc.