UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 15, 2012
MASTEC, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Florida |
0-08106 |
65-0829355 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 800 S. Douglas Road, 12th Floor Coral Gables, Florida 33134 |
| (Address of Principal Executive Office) |
Registrant’s telephone number, including area code (305) 599-1800
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 2.01 | Completion of Acquisition or Disposition of Assets. |
As previously reported, on May 24, 2012, MasTec North America, Inc. (“MasTec NA”), a wholly owned subsidiary of MasTec, Inc., a Florida corporation (the “Company”), entered into a Membership Interest Purchase Agreement with the Company’s wholly owned subsidiary, DirectStar TV, LLC (“DirectStar”), Red Ventures, LLC (“Red Ventures”) and the other parties thereto, pursuant to which Red Ventures agreed to purchase, and MasTec NA agreed to sell, all of the issued and outstanding membership interests in DirectStar (the “Units” and such purchase and sale of the Units, the “Transaction”).
On June 15, 2012, the Transaction was consummated, and Red Ventures paid to the Company the purchase price in an amount in cash equal to approximately $105.6 million, subject to certain adjustments.
| ITEM 9.01 | Financial Statements and Exhibits. |
(b) Pro forma financial information
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2012 and the unaudited pro forma condensed consolidated statements of operations of the Company for the three months ended March 31, 2012 and the year ended December 31, 2011, including the notes thereto, are filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference in this Item 9.01.
(d) Exhibits
| Exhibit Number |
| |
| 99.1 | Unaudited pro forma condensed consolidated balance sheet of MasTec, Inc. as of March 31, 2012 and unaudited pro forma condensed consolidated statements of operations of MasTec, Inc. for the three months ended March 31, 2012 and the year ended December 31, 2011, including the notes thereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MASTEC, INC. | ||||||
| Date: June 18, 2012 | By: | /s/ Alberto de Cardenas | ||||
| Alberto de Cardenas | ||||||
| Executive Vice President, General Counsel and Secretary | ||||||
EXHIBIT INDEX
| Exhibit Number |
| |
| 99.1 | Unaudited pro forma condensed consolidated balance sheet of MasTec, Inc. as of March 31, 2012 and unaudited pro forma condensed consolidated statements of operations of MasTec, Inc. for the three months ended March 31, 2012 and the year ended December 31, 2011, including the notes thereto. |
Exhibit 99.1
MasTec, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Statements
On May 24, 2012, pursuant to an option agreement between Red Ventures, LLC (“Red Ventures”) and MasTec North America, Inc. (“MasTec NA”), a wholly owned subsidiary of MasTec, Inc. (the “Company”), Red Ventures exercised its option to purchase DirectStar TV, LLC and its subsidiaries (collectively, the “DirectStar Business”), and entered into a purchase agreement with MasTec NA, DirectStar and the other parties thereto, pursuant to which Red Ventures agreed to purchase, and MasTec NA agreed to sell, the DirectStar Business for a purchase price, payable in cash, equal to approximately $105.6 million, subject to certain adjustments. The parties consummated the transaction on June 15, 2012.
The following unaudited pro forma condensed consolidated financial statements have been derived from the historical consolidated financial statements of the Company and adjusted to reflect the sale of the DirectStar Business. The unaudited pro forma condensed consolidated balance sheet has been prepared as if the sale had occurred on March 31, 2012, and the unaudited pro forma condensed consolidated statements of operations give effect to the sale as if it had occurred on January 1, 2011. The pro forma adjustments include assumptions that management believes are reasonable.
These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the Company’s operating results or financial position that would have been achieved had the sale of the DirectStar Business been completed as of the dates indicated, nor are such financial statements necessarily indicative of future results. These unaudited pro forma condensed consolidated financial statements and the accompanying unaudited notes should be read together with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012.
MASTEC, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2012
(in thousands)
| Historical MasTec, Inc. |
Disposition (a) |
Pro Forma Adjustments |
Pro Forma | |||||||||||||||||
| Assets |
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| Current assets: |
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| Cash and cash equivalents |
$ | 20,131 | $ | (3,089 | ) | $ | 102,976 | (c | ) | $ | 120,018 | |||||||||
| Accounts receivable, net of allowance |
667,064 | (7,939 | ) | — | 659,125 | |||||||||||||||
| Inventories |
100,827 | — | — | 100,827 | ||||||||||||||||
| Other current assets |
35,706 | (535 | ) | 129 | (d | ) | 35,300 | |||||||||||||
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| Total current assets |
$ | 823,728 | $ | (11,563 | ) | $ | 103,105 | $ | 915,270 | |||||||||||
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| Property and equipment, net |
264,968 | (1,263 | ) | — | 263,705 | |||||||||||||||
| Goodwill and other intangible assets, net |
925,693 | (103,804 | ) | — | 821,889 | |||||||||||||||
| Other assets |
55,903 | — | — | 55,903 | ||||||||||||||||
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| Total assets |
$ | 2,070,292 | $ | (116,630 | ) | $ | 103,105 | $ | 2,056,767 | |||||||||||
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| Liabilities and Shareholders’ Equity |
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| Current liabilities: |
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| Current maturities of long-term debt |
$ | 34,440 | $ | — | — | $ | 34,440 | |||||||||||||
| Accounts payable and other accrued expenses |
400,071 | (10,438 | ) | 9,145 | (e | ) | 398,778 | |||||||||||||
| Acquisition-related contingent consideration, current |
17,774 | — | (2,658 | ) | (h | ) | 15,116 | |||||||||||||
| Billings in excess of costs and earnings |
95,407 | — | — | 95,407 | ||||||||||||||||
| Other current liabilities |
30,899 | (5,350 | ) | — | 25,549 | |||||||||||||||
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| Total current liabilities |
$ | 578,591 | $ | (15,788 | ) | $ | 6,487 | $ | 569,290 | |||||||||||
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| Long-term debt |
426,838 | — | — | 426,838 | ||||||||||||||||
| Other liabilities |
235,810 | — | (5,705 | ) | (d | ) | 230,105 | |||||||||||||
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| Total liabilities |
$ | 1,241,239 | $ | (15,788 | ) | $ | 782 | $ | 1,226,233 | |||||||||||
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| Commitments and contingencies |
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| Shareholders’ equity: |
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| Preferred stock |
$ | — | $ | — | $ | — | $ | — | ||||||||||||
| Common stock |
8,526 | — | — | 8,526 | ||||||||||||||||
| Capital surplus |
794,393 | — | — | 794,393 | ||||||||||||||||
| Accumulated surplus |
107,661 | (100,842 | ) | 102,323 | (f | ) | 109,142 | |||||||||||||
| Accumulated other comprehensive loss |
(6,577 | ) | — | — | (6,577 | ) | ||||||||||||||
| Treasury stock, at cost |
(75,000 | ) | — | — | (75,000 | ) | ||||||||||||||
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| Total MasTec, Inc. shareholders’ equity |
829,003 | (100,842 | ) | 102,323 | 830,484 | |||||||||||||||
| Non-controlling interests |
50 | — | — | 50 | ||||||||||||||||
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| Total shareholders’ equity |
$ | 829,053 | $ | (100,842 | ) | $ | 102,323 | $ | 830,534 | |||||||||||
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| Total liabilities and shareholders’ equity |
$ | 2,070,292 | $ | (116,630 | ) | $ | 103,105 | $ | 2,056,767 | |||||||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements
MASTEC, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2012
(in thousands, except per share amounts)
| Historical MasTec, Inc. |
Disposition (b) | Pro Forma Adjustments |
Pro Forma | |||||||||||||||||
| Revenue |
$ | 778,476 | $ | (34,855 | ) | $ | — | $ | 743,621 | |||||||||||
| Costs of revenue, excluding depreciation and amortization |
684,657 | (27,326 | ) | — | 657,331 | |||||||||||||||
| Depreciation and amortization |
20,954 | (79 | ) | — | 20,875 | |||||||||||||||
| General and administrative expenses |
40,809 | (1,955 | ) | 454 | (g | ) | 39,308 | |||||||||||||
| Interest expense, net |
8,992 | — | — | 8,992 | ||||||||||||||||
| Other income, net |
(454 | ) | — | — | (454 | ) | ||||||||||||||
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| Income before provision for income taxes |
$ | 23,518 | $ | (5,495 | ) | $ | (454 | ) | $ | 17,569 | ||||||||||
| Provision for income taxes |
(9,348 | ) | 2,123 | 176 | (7,049 | ) | ||||||||||||||
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| Net income |
$ | 14,170 | $ | (3,372 | ) | $ | (278 | ) | $ | 10,520 | ||||||||||
| Net loss attributable to non-controlling interests |
(2 | ) | — | — | (2 | ) | ||||||||||||||
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| Net income attributable to MasTec, Inc. |
$ | 14,172 | $ | (3,372 | ) | $ | (278 | ) | $ | 10,522 | ||||||||||
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| Earnings per share: |
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| Basic earnings per share |
$ | 0.18 | $ | 0.13 | ||||||||||||||||
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| Basic weighted average common shares outstanding |
80,615 | 80,615 | ||||||||||||||||||
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| Diluted earnings per share |
$ | 0.17 | $ | 0.13 | ||||||||||||||||
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| Diluted weighted average common shares outstanding |
83,906 | 83,906 | ||||||||||||||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements
MASTEC, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011
(in thousands, except per share amounts)
| Historical MasTec, Inc. |
Disposition (b) | Pro Forma Adjustments |
Pro Forma | |||||||||||||||||
| Revenue |
$ | 3,008,977 | $ | (148,476 | ) | $ | — | $ | 2,860,501 | |||||||||||
| Costs of revenue, excluding depreciation and amortization |
2,606,091 | (115,164 | ) | — | 2,490,927 | |||||||||||||||
| Depreciation and amortization |
75,228 | (325 | ) | — | 74,903 | |||||||||||||||
| General and administrative expenses |
148,432 | (10,838 | ) | 110 | (g | ) | 137,704 | |||||||||||||
| Interest expense, net |
34,423 | 4 | — | 34,427 | ||||||||||||||||
| Gain on remeasurement of equity interest in acquiree |
(29,041 | ) | — | — | (29,041 | ) | ||||||||||||||
| Other income, net |
(183 | ) | — | — | (183 | ) | ||||||||||||||
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| Income before provision for income taxes |
$ | 174,027 | $ | (22,153 | ) | $ | (110 | ) | $ | 151,764 | ||||||||||
| Provision for income taxes |
(68,055 | ) | 8,441 | 42 | (59,572 | ) | ||||||||||||||
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| Net income |
$ | 105,972 | $ | (13,712 | ) | $ | (68 | ) | $ | 92,192 | ||||||||||
| Net loss attributable to non-controlling interests |
(29 | ) | — | — | (29 | ) | ||||||||||||||
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| Net income attributable to MasTec, Inc. |
$ | 106,001 | $ | (13,712 | ) | $ | (68 | ) | $ | 92,221 | ||||||||||
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| Earnings per share: |
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| Basic earnings per share |
$ | 1.29 | $ | 1.12 | ||||||||||||||||
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| Basic weighted average common shares outstanding |
82,182 | 82,182 | ||||||||||||||||||
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| Diluted earnings per share |
$ | 1.23 | $ | 1.07 | ||||||||||||||||
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| Diluted weighted average common shares outstanding |
86,718 | 86,718 | ||||||||||||||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements
MasTec, Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
| (a) | Reflects the pro forma elimination of the assets, liabilities and equity associated with the DirectStar Business, which are included in the Company’s historical condensed consolidated balance sheet. |
| (b) | Reflects the pro forma elimination of the operating results of the DirectStar Business, which are included in the Company’s historical consolidated statements of operations. |
| (c) | Represents gross proceeds from the sale of the DirectStar Business, net of accrued earnout liabilities, further discussed at (h) below. |
| (d) | Represents adjustments to tax balances to reflect the reversal of existing deferred tax liabilities associated with the DirectStar Business. |
| (e) | Represents estimated current taxes payable on the sale of the DirectStar Business calculated at statutory tax rates. |
| (f) | Represents gross proceeds of approximately $105.6 million, net of estimated current taxes payable and the reversal of deferred tax liabilities associated with the DirectStar Business. |
| (g) | Represents the add back of certain administrative costs previously allocated to the DirectStar Business, which would otherwise have been included in the Company’s historical consolidated statements of operations. |
| (h) | Represents accrued earnout liabilities associated with the DirectStar Business, which are included in the Company’s historical condensed consolidated balance sheet. |