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Quanta Services Reports 2016 First Quarter Results

HOUSTON, May 5, 2016 /PRNewswire/ -- Quanta Services, Inc. PWR, -0.43% today announced results for the three months ended March 31, 2016. Revenues in the first quarter of 2016 were $1.71 billion compared to revenues of $1.86 billion in the first quarter of 2015. Net income from continuing operations attributable to common stock was $20.5 million, or $0.13 per diluted share, in the first quarter of 2016 compared to net income from continuing operations attributable to common stock of $47.7 million, or $0.22 per diluted share, in the first quarter of 2015. Included in Quanta's operating results for the three months ended March 31, 2016 is a net loss of approximately $21.3 million (or $0.08 per diluted share) that resulted from continued engineering and production issues on a power plant construction project in Alaska. Net income attributable to common stock was $20.5 million, or $0.13 per diluted share, in the first quarter of 2016. This compares to net income attributable to common stock in the first quarter of 2015 of $53.5 million, or $0.25 per diluted share.

"Quanta's first quarter results were led by solid execution in our core transmission and distribution operations, and we are on track to achieve our full year outlook. We also ended the quarter with record backlog, which exceeded $10 billion for the first time in our company's history," said Duke Austin, president and chief executive officer of Quanta Services. "Quanta's strong balance sheet and ability to deliver unique solutions provide opportunities for us to capture new work while enhancing our core business. With our scope and scale, industry-leading safety record and the largest specialized workforce in our industry, we remain well positioned in the markets we serve and believe our customer's capital programs continue to provide opportunities for additional project awards."

Quanta's results for the three months ended March 31, 2016 include severance costs associated with the departure of Quanta's former president and chief executive officer and severance and restructuring costs associated with certain operations primarily within the oil and gas infrastructure services segment, which total approximately $6.4 million ($4.1 million net of tax, or $0.03 per diluted share). Quanta has eliminated these costs, net of tax, in the calculation of adjusted diluted earnings per share. Adjusted diluted earnings per share from continuing operations attributable to common stock (a non-GAAP measure) was $0.23 for the first quarter of 2016 compared to $0.28 for the first quarter of 2015.

The adjusted diluted earnings per share measures used in this earnings release are calculated as GAAP diluted earnings per share before acquisition and integration costs, amortization of intangible assets, non-cash compensation expense, and certain other items that affect comparability of results between periods. See the attached table for a reconciliation of adjusted diluted earnings per share (a non-GAAP measure) to GAAP diluted earnings per share.

Quanta completed three acquisitions during the first three months of 2016. Therefore, the first quarter of 2016 results include these acquisitions from the respective acquisition dates and are compared to the pre-acquisition historical results of Quanta for the first quarter of 2015.

RECENT HIGHLIGHTS

  • Booked More Than $800 Million of New Large Pipeline Projects - In the first quarter of 2016, Quanta signed contracts for several large pipeline projects with an aggregate contract value of more than $800 million, which is anticipated to be realized this year and next. These projects consist of pipeline infrastructure needed to transport natural gas from production regions to load centers and natural gas power plants in North America and the construction of a pipeline in Australia.
  • Completed $750 Million Accelerated Stock Repurchase Arrangement - In April, Quanta completed the company's previously announced accelerated stock repurchase arrangement (the "ASR Arrangement") with JPMorgan Chase Bank N.A. to repurchase $750 million of Quanta common stock. In total, Quanta retired 35.1 million shares at a price of $21.36 per share under the ASR Arrangement.
  • Appointed New Non-Employee Directors - In March, Quanta announced the appointment of Doyle Beneby and David McClanahan to the company's board of directors. Mr. Beneby and Mr. McClanahan bring vast experience from the electric and gas utility and renewable energy industries.
  • Appointed Duke Austin as President, Chief Executive Officer and Director - In March, the board of directors named Duke Austin to succeed Jim O'Neil as president and chief executive officer of the company. Mr. Austin brings more than two decades of industry experience to the position and had served as Quanta's chief operating officer since January 2013. Mr. Austin was also appointed to Quanta's board of directors to fill the vacancy created upon Mr. O'Neil's departure.

OUTLOOK The long-term outlook for Quanta's business is positive. However, weather, regulatory, permitting, project timing and other factors have impacted the company's historical results, and may impact Quanta's financial results in the future. Therefore, Quanta's financial outlook for revenues, margins and earnings reflects management's effort to properly align these uncertainties with the backlog the company is executing on and the opportunities expected to materialize during 2016. The following forward-looking statements are based on current expectations, and actual results may differ materially.

Quanta expects revenues for the full year 2016 to range between $7.5 billion and $8.0 billion and diluted earnings per share from continuing operations to be $1.30 to $1.50. Quanta expects adjusted diluted earnings per share from continuing operations (a non-GAAP measure) for the full year 2016 to be $1.61 to $1.81. Consistent with the calculation of our previous earnings per share outlook, these estimates reflect the retirement of approximately 9.4 million shares delivered in April 2016 upon settlement of the ASR Arrangement. Amortization of intangibles and non-cash stock-based compensation expense are forecasted to be approximately $30.7 million and $42.5 million for the full year of 2016.

NON-GAAP FINANCIAL MEASURES The non-GAAP measures in this press release and on Quanta's website are provided to enable investors, analysts and management to evaluate Quanta's performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods. In addition, management believes these measures are useful in comparing Quanta's operating results with those of its competitors. These measures should be used in addition to, and not in lieu of, results prepared in conformity with GAAP. Reconciliations of other GAAP to non-GAAP measures not included in the table attached to this press release can be found on the company's website at www.quantaservices.com in the "Investors & Media" section.

CONFERENCE CALL INFORMATION Quanta Services has scheduled a conference call for May 5, 2016 at 9:00 a.m. Eastern Time. To participate in the call, dial 1-785- 830-7977 at least 10 minutes before the conference call begins and provide the conference call ID 3631450 or ask for the Quanta Services First Quarter 2016 Earnings Conference Call. Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting the company's website at www.quantaservices.com. To listen to the call live on the Internet, please visit the Quanta Services website at least 15 minutes early to register and download and install any necessary audio software. For those who cannot listen to the live event, an archive will be available shortly after the call on the company's website. For more information, please contact Kip Rupp, Vice President - Investor Relations at Quanta Services, by calling 713-341-7260 or emailing investors@quantaservices.com.

GET THE QUANTA SERVICES IR APP AND FOLLOW QUANTA ON SOCIAL MEDIA The Quanta investor relations app for iPhone, iPad and Android mobile devices is available for free at Apple's App Store for the iPhone and iPad and at Google Play for Android mobile devices. The Quanta investor relations app allows users to navigate the company's investor relations materials including the latest press releases, SEC filings, presentations, videos, audio cast conference calls and stock price information. Sharing functionality via email, Twitter and Facebook is available, as well as the ability for investors to be notified when new information is posted to Quanta's IR app.

Additionally, investors and others should note that while we announce material financial information and make other public disclosures of information regarding Quanta through SEC filings, press releases and public conference calls, we also utilize social media to communicate this information. It is possible that the information we post on social media could be deemed material. Accordingly, we encourage investors, the media and others interested in our company to follow Quanta, and review the information we post, on the social media channels listed on our...


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