Diluted EPS of $0.24 in 4Q08 HOUSTON, Feb. 24
/PRNewswire-FirstCall/ -- Quanta Services, Inc. (NYSE: PWR) today
announced results for the three and twelve months ended Dec. 31,
2008. Revenues in the fourth quarter of 2008 were $921.5 million,
compared to revenues of $879.0 million in the fourth quarter of
2007. For the fourth quarter of 2008, income from continuing
operations was $47.1 million or $0.24 per diluted share as compared
to $33.5 million or $0.18 per diluted share for the fourth quarter
of 2007. For the fourth quarter of 2008, cash earnings per diluted
share from continuing operations (a non-GAAP measure) were $0.27 as
compared to cash earnings per diluted share from continuing
operations of $0.23 for the fourth quarter of 2007. Cash earnings
per diluted share from continuing operations are GAAP earnings per
diluted share from continuing operations before amortization of
intangible assets and non-cash compensation expense, both net of
tax. See the attached table for a reconciliation of non-GAAP
measures to the reported GAAP measures. "A robust fourth quarter
contributed to a year of record revenues and operating income,
despite challenging economic conditions throughout the second half
of the year," said John R. Colson, chairman and CEO of Quanta
Services. "Diverse services and broad geographic scope enable
Quanta to allocate our resources to meet growing demand in areas
such as transmission infrastructure and renewable energy and
support our customers' ongoing commitment to strengthening their
infrastructure. Despite what appears to be a difficult first
quarter, primarily related to slow telecommunications spending, our
significant increase in twelve-month and total backlog contributes
to our positive outlook for 2009." Revenues for the twelve months
of 2008 were a record high of $3.78 billion, compared to $2.66
billion for the twelve months of 2007. For the twelve months of
2008, the company reported income from continuing operations of
$166.7 million, or earnings per diluted share of $0.88, compared to
income from continuing operations of $133.1 million, or earnings
per diluted share of $0.87 for the twelve months of 2007. The
twelve months of 2007 were favorably impacted by $33.2 million or
$0.20 per diluted share in tax benefits primarily associated with
the release of tax contingencies. For additional information, see
the attached table for a reconciliation of non-GAAP measures to the
reported GAAP measures. In addition, on Aug. 30, 2007, Quanta
completed the acquisition of InfraSource Services, Inc.
(InfraSource) through an all-stock merger. Therefore, Quanta's
results for the twelve months ended Dec. 31, 2008 are compared to
its historical results for the twelve months ended Dec. 31, 2007,
which included only four months of results from InfraSource. RECENT
HIGHLIGHTS -- Secured Letter of Intent to Strengthen New England
Transmission Infrastructure - In January 2009, Quanta signed a
letter of intent (LOI) with National Grid to provide engineering
and installation services throughout the New England region. Under
the five-year contract contemplated by the LOI, the substation and
transmission infrastructure services will be performed by New
Energy Alliance, a joint venture between Quanta Services and
Balfour Beatty Infrastructure, Inc. The contract, expected to be
signed by April 1, 2009, is part of National Grid's investment of
up to $1.7 billion over five years in its power transmission system
in New York and New England. -- Added $200 Million to Existing
Contract with Northeast Utilities - Yesterday, Quanta announced the
addition of $200 million in services to, and a two-year extension
of, its existing multi-year contract with Northeast Utilities
(NYSE:NU) under which Quanta is providing transmission
infrastructure services related to NU's transmission build-out
through 2015. The anticipated value of the original contract,
signed in December 2007, was $750 million and ran from 2008 to
2013. With this recent expansion, the anticipated contract value is
now $950 million through 2015. Under the eight-year contract,
Quanta will provide labor, equipment and general management for
NU's transmission projects throughout New England. -- Awarded
Natural Gas Pipeline Project for Midcontinent Express Pipeline LLC
- Last week, Quanta Services was awarded a project to install more
than 70 miles of natural gas pipeline by the Midcontinent Express
Pipeline LLC (MEP), a joint venture between Kinder Morgan Energy
Partners, L.P. and Energy Transfer Partners, L.P. Quanta will
provide project management and installation for a segment of the
507-mile MEP pipeline in central Miss., which is designed to help
meet future U.S. energy needs, contribute to energy independence
and stability, and stimulate economic growth. Work on the project
will begin this month and is expected to be completed in the third
quarter of 2009. -- Completed Installation of Solar Generation
Facility - In the fourth quarter, Quanta completed the installation
of a 10-megawatt (MW) photovoltaic power-generation facility near
Boulder City, Nev. The project is the largest operational
thin-film, solar-power project in North America and at peak
production, is expected to generate enough electricity to power
approximately 6,400 homes. Construction began in July 2008, and
involved the installation of more than 167,000 solar modules on
more than 80 acres of desert property designated as a renewable
energy zone. OUTLOOK Quanta recognizes that it and its customers
are operating in a challenging business environment with an
economic downturn and volatile capital markets. Therefore,
management cannot predict the timing or extent of the impact these
trends may have on demand for its services, particularly in the
near term. The following forward-looking statements are based on
current expectations and actual results may differ materially.
Quanta expects revenues for the first quarter of 2009 to range
between $750 million and $800 million and diluted earnings per
share to be between $0.09 and $0.10. Quanta expects cash earnings
per diluted share (a non-GAAP measure) for the first quarter of
2009 to range from $0.12 to $0.13. Amortization of intangibles,
non-cash stock compensation expense and non-cash interest expense
are forecasted to be approximately $10.2 million for the first
quarter of 2009. These estimates include approximately $25.0
million of anticipated emergency restoration revenues for the first
quarter of 2009, compared to $22.5 million in emergency restoration
revenues recognized in the first quarter of 2008. Quanta Services
has scheduled a conference call for Feb. 24, 2009, at 9:30 a.m.
Eastern time. To participate in the call, dial (303) 262-2004 at
least 10 minutes before the conference call begins and ask for the
Quanta Services conference call. Investors, analysts and the
general public also will have the opportunity to listen to the
conference call over the Internet by visiting the company's Web
site at http://www.quantaservices.com/. To listen to the call live
on the Web, please visit the Quanta Services Web site at least
fifteen minutes early to register and download and install any
necessary audio software. For those who cannot listen to the live
webcast, an archive will be available shortly after the call on the
company's Web site at http://www.quantaservices.com/. A replay will
be available through March 3, 2009, and may be accessed by calling
(303) 590-3000 and using the pass code 11126526#. For more
information, please contact Karen Roan at DRG&E by calling
(713) 529-6600. 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 http://www.quantaservices.com/ in the
"Financial News" section. Backlog data is as of Dec. 31, 2008 and
represents the amount of revenue that Quanta expects to realize
from work to be performed in the future on uncompleted contracts,
including new contractual arrangements on which work has not begun.
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
North America, Quanta has the manpower, resources and expertise to
complete projects that are local, regional, national or
international in scope. 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 and capital expenditures; growth or opportunities in
particular markets; the impact of the Energy Policy Act of 2005,
renewable energy initiatives and the recently enacted economic
stimulus package on future spending by customers; the expected
value of, and the scope, services, term and results of any related
projects awarded under, agreements for services to be provided by
Quanta, including the agreement with Northeast Utilities;
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; continuing declines in economic and financial
conditions, including the recent volatility in the capital markets;
trends in relevant markets; delays, reductions in scope or
cancellations of existing projects, including as a result of
capital constraints that may impact our customers; ability of the
parties to negotiate and finalize the definitive agreements
contemplated by the letter of intent with National Grid; 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, including those referenced in this
release; the ability to generate internal growth; the ability to
effectively compete for new projects and market share; the failure
of the Energy Policy Act of 2005, renewable energy initiatives or
the recently enacted economic stimulus package to result in
increased demand for Quanta's services; cancellation provisions
within contracts and the risk that contracts are not renewed or are
replaced on less favorable terms; the inability of customers to pay
for services; the failure to recover on payment claims against
project owners or to obtain adequate compensation for
customer-requested change orders; the ability to attract skilled
labor and retain key personnel and qualified employees; potential
shortage of skilled employees; estimates and assumptions in
determining financial results and backlog; the ability to realize
backlog; the ability to successfully identify, complete and
integrate acquisitions; the adverse impact of goodwill or other
intangible asset impairments; growth outpacing infrastructure;
unexpected costs or liabilities that may arise from lawsuits or
indemnity claims related to the services Quanta performs; the
failure to realize further expected synergies and benefits from the
merger with InfraSource Services, Inc.; other potential adverse
impacts on Quanta's business or its financial results as a result
of the merger with InfraSource; liabilities for claims that are
self-insured; risks associated with the implementation of an
information technology solution; 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; beliefs and assumptions about the collectability of
receivables; the cost of borrowing, availability of credit,
fluctuations in the price and volume of Quanta's common stock, debt
covenant compliance, interest rate fluctuations and other factors
affecting financing and investment activities; 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 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 December 31,
2007, Quanta's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2008, June 30, 2008 and September 30, 2008 and any
other documents of Quanta filed with the Securities and Exchange
Commission (SEC). 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. You 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. 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 the company's Web
site at http://www.quantaservices.com/ or through the SEC's
Electronic Data Gathering and Analysis Retrieval System (EDGAR) at
http://www.sec.gov/. - Tables to follow - Contacts: James Haddox,
CFO Ken Dennard / Reba Reid Kip Rupp / Quanta Services Inc.
DRG&E 713-629-7600 713-529-6600 Quanta Services, Inc. and
Subsidiaries Consolidated Statements of Operations For the Three
and Twelve Months Ended December 31, 2008 and 2007 (In thousands,
except per share information) Three Months Ended Twelve Months
Ended December 31, December 31, 2008 2007 2008 2007 Revenues
$921,534 $878,992 $3,780,213 $2,656,036 Cost of services (including
depreciation) 754,801 728,117 3,145,347 2,227,289 Gross profit
166,733 150,875 634,866 428,747 Selling, general &
administrative expenses 82,265 84,715 309,399 240,508 Amortization
of intangible assets 6,836 12,427 36,300 18,759 Operating income
77,632 53,733 289,167 169,480 Interest expense (1,863) (5,254)
(17,505) (21,515) Interest income 1,660 4,636 9,765 19,977 Loss on
early extinguishment of debt, net - (23) (2) (34) Other income
(expense), net (66) 45 342 (546) Income from continuing operations
before income tax provision 77,363 53,137 281,767 167,362 Provision
for income taxes 30,250 19,596 115,026 34,222 Income from
continuing operations 47,113 33,541 166,741 133,140 Income from
discontinued operation - 46 - 2,837 Net income $47,113 $33,587
$166,741 $135,977 Basic earnings per share: Income from continuing
operations $0.24 $0.20 $0.94 $0.98 Income from discontinued
operation - - - 0.02 Net income $0.24 $0.20 $0.94 $1.00 Weighted
average basic shares outstanding 194,232 169,717 176,790 135,793
Diluted earnings per share: Income from continuing operations $0.24
$0.18 $0.88 $0.87 Income from discontinued operation - - - 0.02 Net
income $0.24 $0.18 $0.88 $0.89 Weighted average diluted shares
outstanding 202,793 201,529 202,363 167,260 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 Twelve Months Ended December 31, 2008 and 2007
(In thousands, except per share information) Three Months Ended
Twelve Months Ended December 31, December 31, 2008 2007 2008 2007
Income for basic earnings per share: From continuing operations
$47,113 $33,541 $166,741 $133,140 From discontinued operation - 46
- 2,837 Net income $47,133 $33,587 $166,741 $135,977 Weighted
average shares outstanding for basic earnings per share 194,232
169,717 176,790 135,793 Basic earnings per share: From continuing
operations $0.24 $0.20 $0.94 $0.98 From discontinued operation - -
- 0.02 Net income $0.24 $0.20 $0.94 $1.00 Income for diluted
earnings per share: Income from continuing operations $47,113
$33,541 $166,741 $133,140 Effect of convertible subordinated notes
under the "if-converted" method -- interest expense addback, net of
taxes 1,012 3,199 10,590 12,795 Income from continuing operations
for diluted earnings per share 48,125 36,740 177,331 145,935 Income
from discontinued operation - 46 - 2,837 Net income for diluted
earnings per share $48,125 $36,786 $177,331 $148,772 Calculation of
weighted average shares for diluted earnings per share: Weighted
average shares outstanding for basic 194,232 169,717 176,790
135,793 earnings per share Effect of dilutive stock options and
restricted stock 311 1,161 558 816 Effect of convertible
subordinated notes under the "if-converted" method -- weighted
convertible shares issuable 8,250 30,651 25,015 30,651 Weighted
average shares outstanding for diluted earnings per share 202,793
201,529 202,363 167,260 Diluted earnings per share: From continuing
operations $0.24 $0.18 $0.88 $0.87 From discontinued operation - -
- 0.02 Net income $0.24 $0.18 $0.88 $0.89 Quanta Services, Inc. and
Subsidiaries Non-GAAP Financial Measures For the Three and Twelve
Months Ended December 31, 2008 and 2007 (In thousands except per
share information) Reconciliation of GAAP Earnings per Diluted
Share to Cash Earnings and Adjusted Cash Earnings per Diluted Share
Three Months Ended Twelve Months Ended December 31, December 31,
2008 2007 2008 2007 As reported income from continuing operations
$47,113 $33,541 $166,741 $133,140 Adjustments: Impact of tax
contingency releases (a) - - - (33,224) Adjusted income from
continuing operations 47,113 33,541 166,741 99,916 Non-cash
stock-based compensation, net of tax 2,617 2,000 10,182 5,712
Amortization of intangible assets, net of tax 4,170 7,580 22,143
11,443 Adjusted income from continuing operations for calculation
of cash earnings and adjusted cash earnings per diluted share
$53,900 $43,121 $199,066 $117,071 From continuing operations: As
reported earnings per diluted share (b) $0.24 $0.18 $0.88 $0.87 As
adjusted earnings per diluted share (b) $0.24 $0.18 $0.88 $0.67(a)
Cash earnings and adjusted cash earnings per diluted share (b)
$0.27 $0.23 $1.04 $0.78(a) (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 and the settlement of a multi-year audit by the
Internal Revenue Service in the first quarter of 2007. (b) 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 and annual 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) December 31, December 31, 2008 2007 ASSETS
CURRENT ASSETS: Cash and cash equivalents $437,901 $407,081
Accounts receivable, net 795,251 719,672 Costs and estimated
earnings in excess of billings on uncompleted contracts 54,379
72,424 Inventories 25,813 25,920 Prepaid expenses and other current
assets 68,147 79,665 Total current assets 1,381,491 1,304,762
PROPERTY AND EQUIPMENT, net 635,456 532,285 OTHER ASSETS, net
34,023 42,992 OTHER INTANGIBLES, net 140,717 152,695 GOODWILL
1,363,100 1,355,098 Total assets $3,554,787 $3,387,832 LIABILITIES
AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of
long-term debt $1,155 $271,011 Accounts payable and accrued
expenses 400,253 420,815 Billings in excess of costs and estimated
earnings on uncompleted contracts 50,390 65,603 Total current
liabilities 451,798 757,429 CONVERTIBLE SUBORDINATED NOTES 143,750
143,750 DEFERRED INCOME TAXES AND OTHER NON-CURRENT LIABILITIES
301,273 301,510 Total liabilities 896,821 1,202,689 STOCKHOLDERS'
EQUITY 2,657,966 2,185,143 Total liabilities and stockholders'
equity $3,554,787 $3,387,832 DATASOURCE: Quanta Services, Inc.
CONTACT: James Haddox, CFO, or Reba Reid, both of Quanta Services
Inc., +1-713-629-7600; or Ken Dennard, , or Kip Rupp, , both of
DRG&E, +1-713-529-6600, for Quanta Services Inc. Web Site:
http://www.quantaservices.com/
Copyright