MasTec Announces New Bank Agreement and Final Results of Operations for 2003
July 29, 2004
MIAMI, Jul 29, 2004 /PRNewswire-FirstCall via COMTEX/ -- MasTec, Inc. (NYSE: MTZ) today announced results for 2003. For the year ended December 31, 2003, the net loss was $52.3 million ($1.09 per share) on revenue of $870.2 million, compared with a restated net loss of $136.6 million ($2.85 per share) on revenue of $838.1 million for the prior year. Included in the loss for 2002 was a $79.7 million non-cash charge related to periodic SFAS 142 goodwill impairment evaluations as a result of a previously disclosed change of accounting method.
On April 13, 2004, the Company announced an estimated net loss of $39.7 million for the year ended December 31, 2003. This estimated net loss for the year ended December 31, 2003 was increased by $12.6 million. The primary reason for the increased loss was the recording of an additional liability for labor claims resulting from the initiation of the shut-down of operations of the Company's Brazilian subsidiary. MasTec ceased performing contractual services for Brazilian customers in the first quarter of 2004 and expects to dispose of this investment in 2004 through liquidation of this subsidiary. Except for legal costs, MasTec does not expect to fund any significant additional costs associated with the termination of the subsidiary's operations. The Company expects to record additional non-cash write-offs for its Brazilian investment in 2004 as MasTec completes the shut- down of the operation. The Brazilian operation comprised approximately 2.2% of total revenue in 2003.
MasTec continues to finance operations primarily through internally generated cash flows. At July 26, 2004, the Company had approximately $15.5 million in cash on hand and gross liquidity, before reserves, of approximately $47.5 million. MasTec currently has no draws on its $125 million bank credit facility. The Company recently amended the loan agreement for this credit facility, resulting in additional covenant flexibility.
The following tables set forth the financial results for the year:
Consolidated Statements of Operations
(In thousands except per share amounts)
Year Ended December 31,
2003 2002
As Restated
Revenues $870,247 $838,055
Costs of revenues 793,161 749,422
Depreciation 28,783 35,063
General and administrative expenses 91,752 118,750
Goodwill Impairment -- 79,710
Interest expense 20,202 19,237
Interest income 369 1,069
Other income (expense), net 1,742 (10,266)
Net loss before cumulative effect of change
in accounting principle and benefit
for income taxes (61,540) (173,324)
Benefit for income taxes 9,241 62,439
Net loss before cumulative effect of change
in accounting principle (52,299) (110,885)
Cumulative effect of change in accounting
principle -- (25,671)
Net loss $(52,299) $(136,556)
Basic and diluted weighted average common
shares outstanding 48,084 47,922
Basic and diluted loss per share before
cumulative effect of change in
accounting principle (1.09) (2.31)
Cumulative effect of change in accounting
principle -- (0.54)
Basic and diluted loss per share $(1.09) $(2.85)
Consolidated Balance Sheets
(In thousands)
December 31
2003 2002
As Restated
Assets
Current assets $283,890 $275,172
Property and equipment, net 85,832 118,475
Intangibles, net 150,984 150,984
Deferred taxes 55,083 39,206
Other assets 35,151 38,844
Total assets $610,940 $622,681
Liabilities and Shareholders' Equity
Current liabilities $170,530 $136,018
Other liabilities 27,636 26,218
Long-term debt 196,956 197,435
Shareholders' equity 215,818 263,010
Total liabilities and shareholders'
equity $610,940 $622,681
Consolidated Statements of Cash Flows
(In thousands)
Years Ended December 31,
2003 2002
As Restated
Net cash provided by operating activities $2,225 $56,972
Net cash provided by (used in) investing
activities 6,398 (23,794)
Net cash provided by (used in) financing
activities 1,037 (70,800)
Net increase (decrease) in cash and cash
equivalents 9,660 (37,622)
Net effect of translation on cash 1,025 (2,126)
Cash and cash equivalents--beginning of
period 8,730 48,478
Cash and cash equivalents--end of period $19,415 $8,730
As previously reported, the Company reviewed the accounting treatment of certain transactions related to 2003 and prior years. As a result of these reviews, the Company restated results for 2002 and 2001, along with the first three quarters of 2003. The restated results for 2001 and 2002 are as follows:
Years Ended December 31,
2001 2002
As As
Previously As Previously As
Reported Restated Reported Restated
Loss before cumulative
effect of change in
accounting principle
and benefit for
income taxes $(147,212) $(149,403) $(168,608) $(173,324)
Net loss before
cumulative effect of
change in accounting
principle $(92,354) $(93,727) $(103,135) $(110,885)
Net loss $(92,354) $(93,727) $(128,806) $(136,556)
Austin J. Shanfelter, MasTec's President and CEO, stated, "Our business has remained steady during the last few quarters, and we continue to provide high-quality service to our clients. We appreciate the continued support we have received in recent months from our customers, lenders, bonding companies, shareholders and other investors."
Mr. Shanfelter continued, "The sectors that we serve are showing signs of recovery and growth potential. One recent example is the increased deployment plans for 'fiber to the home' by several system operators. We believe that MasTec is well positioned to serve clients in this market, where we are already working on several new fiber deployment projects for rural and RBOC customers."
Finally, Mr. Shanfelter added, "We are not giving any earnings guidance at this time. We are focusing our management team on increasing margins and improving profitability, including a new initiative to cut costs. We will update earnings guidance when the results of those cost cutting measures are more quantifiable. However, I can report that we continue to see strong revenues and expect to report year over year revenue growth for the first two quarters of 2004."
The Company's Form 10-K will be filed today. Executives of MasTec will hold their next conference call with the investment community in conjunction with the filing of the first and second quarter 10-Qs, which are expected to be filed in the coming weeks. Details of the call will be announced at that time.
MasTec
This press release and any accompanying documents contain forward-looking statements, such as statements regarding MasTec's future growth and profitability, growth strategy, and anticipated trends in the industries and economies in which MasTec operates. The words "anticipate," "estimate," "should," "expect," "believe," "intend," "target," "project" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on MasTec's current expectations and are subject to a number of risks, uncertainties and assumptions, including that our revenue and profits may differ from that projected, that we may be further impacted by slowdowns in our clients' businesses or in the economy in general, that our reserves for receivables may be inadequate and that we may experience increased costs associated with realigning our business or may be unsuccessful in those efforts. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in any forward-looking statements made by MasTec in this press release. These and other risks are detailed in this press release and/or documents filed by MasTec with the Securities and Exchange Commission. MasTec does not undertake any obligation to revise these forward-looking statements to reflect future events or circumstances.
SOURCE MasTec, Inc.
J. Marc Lewis, Vice President-Investor Relations, MasTec, Inc., +1-305-406-1815, or fax, +1-305-406-1886, or marc.lewis@mastec.com
http://www.mastec.com