Quanta Services, Inc. (PWR) Q1 2014 Earnings Call Corrected Transcript: 01-May-2014
Kip A. Rupp - Vice President-Investor Relations, Quanta Services, Inc.James F. O'Neil - President, Chief Executive Officer & Director, Quanta Services, Inc. Derrick A. Jensen - Chief Financial Officer, Quanta Services, Inc. Other Participants Noelle C. Dilts - Analyst, Stifel, Nicolaus & Co., Inc. Tahira Afzal - Analyst, KeyBanc Capital Markets, Inc. Dan Mannes - Analyst, Avondale Partners LLC Jamie L. Cook - Analyst, Credit Suisse Securities (USA) LLC (Broker) Will J. Gabrielski - Analyst, Stephens, Inc. Alex J. Rygiel - Analyst, FBR Capital Markets & Co. Steven M. Fisher - Analyst, UBS Securities LLC Vishal B. Shah - Analyst, Deutsche Bank Securities, Inc. Adam R. Thalhimer - Analyst, BB&T Capital Markets Craig E. Irwin - Analyst, Wedbush Securities, Inc. John B. Rogers - Analyst, D. A. Davidson & Co. Andrew J. Wittmann - Analyst, Robert W. Baird & Co., Inc. (Broker) Brian K. Lee - Analyst, Goldman Sachs & Co. Jon Braatz - Analyst, Kansas City Capital Associates MANAGEMENT DISCUSSION SECTION Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Quanta Services First Quarter 2014 Earnings Conference Call on the 1st of May. Throughout today's recorded presentation all participants have been in listen-only mode. After the presentation there will be an opportunity to ask questions. [Operator Instructions]. I would now hand over the conference to Kip Rupp. Please go ahead, sir. Kip A. Rupp, Vice President-Investor Relations Great. Thanks Rodney and welcome everyone to the Quanta Services conference call to review first quarter results. Before I turn the call over to management, I have the normal housekeeping details to run through. If you would like to have Quanta news releases and other information e-mailed to you when they occur, please sign up for e-mail information alerts by going to the Investors and Media section of Quanta Services' website at quantaservices.com. In addition, Quanta has an Investor Relations app for iPhone, iPad and Android mobile devices, which is available for free at Apple's App Store and at Google Play. The Quanta Investor Relations app allows users to navigate the company's investor relations materials, including the latest press releases, SEC filings, presentations, videos, audiocasts, conference calls and stock price information. A replay of today's call will be available on Quanta's website at quantaservices.com. In addition, a telephonic recorded instant replay will be available for the next seven days, 24 hours a day, that can be accessed as set forth in the press release. Please remember that information reported on this call speaks only as of today, May 1, 2014 and therefore you are advised that any time-sensitive information may no longer be accurate as of the time of any replay of this call. This conference call will include forward-looking statements intended to qualify under the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include all statements reflecting Quanta's expectations, intentions, assumptions or beliefs about future events or performance or that do not solely relate to historical or current facts. Forward-looking statements involve certain risks, uncertainties and assumptions that are difficult to predict or are beyond Quanta's control, and actual results may differ materially from those expressed or implied as forward-looking statements. Management cautions that you should not place undue reliance on Quanta's forward-looking statements, and Quanta does not undertake and disclaims any obligation to update or revise any forward-looking statement based on new information, future events or otherwise. For additional information concerning some of the risks, uncertainties and assumptions that could affect Quanta's forward-looking statements, please refer to the company's annual report on Form 10-K for the year ended December 31, 2013 and its other documents filed with the Securities and Exchange Commission, which may be obtained on Quanta's website or through the SEC's website at sec.gov. With that, I would now like to turn the call over to Mr. Jim O'Neil, Quanta's President and CEO. Jim? James F. O'Neil, President, Chief Executive Officer & Director Thank you, Kip. Good morning, everyone and welcome to Quanta Services first quarter 2014 earnings conference call. I will start the call with an operational overview before turning it over to Derrick Jensen, Quanta's Chief Financial Officer, who will provide a detailed review of our first quarter results. Following Derrick's comments, we welcome your questions. Revenues increased approximately 11% in the first quarter as compared to last year's first quarter which reflects solid demand for our services, safe project execution and Quanta's leadership position in the energy and infrastructure market place. Our operations performed well in what is typically our most seasonally challenged quarter. Excluding the effects of the unusual charge taken in the first quarter, profitability grew and margins expanded as compared to the same quarter last year. Total backlog increased to a record $9 billion at quarter end, up nearly 29% year-over-year. Our employee count at the end of the first quarter increased 9.4% from year end 2013 to a record 22,846. Man-hours in the first quarter increased 16.1% over the same period last year. For the second quarter we anticipate a late breakup or seasonal thaw in Canada and in northern parts of the United States. The extreme cold temperatures and the duration of the frigid weather in the first quarter in the northern climes has created in some areas up to eight feet.