MasTec (MTZ) Q4 2011 Earnings Call March 01, 2012 9:00 am ET Executives J. Marc Lewis - Vice President of Investor Relations Jose Ramon Mas - Chief Executive Officer and Director C. Robert Campbell - Chief Financial Officer, Principal Accounting Officer and Executive Vice President Analysts Andy Kaplowitz - Barclays Capital, Research Division Tahira Afzal - KeyBanc Capital Markets Inc., Research Division Peter Chang - Crédit Suisse AG, Research Division Alexander J. Rygiel - FBR Capital Markets & Co., Research Division William D. Bremer - Maxim Group LLC, Research Division John Rogers - D.A. Davidson & Co., Research Division Liam D. Burke - Janney Montgomery Scott LLC, Research Division Adam R. Thalhimer - BB&T Capital Markets, Research Division Presentation Operator
In today's remarks by management, we will primarily be discussing adjusted financial metrics as discussed and reconciled in yesterday's press release, 10-K and supporting schedules. In addition, we may make certain -- use of certain non-GAAP financial measures in this conference call. Also, a reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP measure can be found in our earnings press release or 10-K and on the Investor Relations side of our website at mastec.com.With us today, we have Jose Mas, our Chief Executive Officer; Bob Campbell, our Executive Vice President and Chief Financial Officer. The format of the call will be opening remarks and analysis by Jose, followed by a financial review from Bob. These discussions will be followed by a Q&A answer period, and we expect the call to last about 60 minutes. We have a lot of things to talk about today, so I'd like to turn it over to José. Jose Ramon Mas Thank you, Marc. Good morning, and welcome to MasTec's fourth quarter and year-end call. Today, I'll discuss our full-year results and provide an overview of 2012. Before getting into details, I'd like to take a step back and make some observations. A few years ago, we publicly set out to diversify our business and put ourselves in a position to have greater growth opportunities with improved margins. Over the course of the last 5 years, we've tripled revenues and almost quadrupled EBITDA. We've accomplished our objectives despite a difficult market environment. While these are impressive financial results, our greatest accomplishment is how we've positioned ourselves across a number of growth industries, which we feel will offer us expanding opportunities for both continued growth and better margins during an improving market environment, which we are today clearly seeing.
For 2011, annual revenues were $3,009,000,000, a 30% increase. We had solid and broad-based growth with our Install-to-the-Home business growing 25%, our Wireline and Utility business growing 24%, our Wireless business growing 59%, our Pipeline business growing 38%, our Transmission business growing 205% and these were offset by a reduction of 35% in our Renewable business.As I mentioned earlier, we've done an excellent job of both diversifying our business and positioning ourselves to capitalize on some great growth opportunities. More importantly, we believe every one of these markets, including renewables, will continue to provide significant opportunities for consistent growth for the foreseeable future. From an earnings perspective, we finished 2011 with $1.07 of EPS, $261 million of EBITDA and an EBITDA margin of 8.7%. While 2011 was another record year for MasTec, I am not satisfied or happy with our margin results. Our margins were negatively impacted by the second half performance of both our Wireless and Pipeline businesses. While disappointed, I'm encouraged by our progress and believe we will see significant margin improvements in 2012. Again, just to reflect, we made tremendous margin improvements from 2007 to 2010, taking EBITDA margins from 7% to 10.4%, while we slipped in 2011, we have set an initial goal of 10% EBITDA margins for 2012, a 130-basis point improvement from last year. I can guarantee that, as a company, we are focused and driven to improve margins in 2012 and beyond. We expect margins to steadily improve as the year goes on, especially as we complete our challenged projects in the Marcellus area and as wireless spending begins to aggressively ramp up. Now, I would like to cover some industry specifics. Our communications revenue was up 12% for the fourth quarter of 2011 versus 2010 and up 33% for the full year. Our Install to the Home business was up 24% for the fourth quarter of 2011 versus 2010 and up 25% for the full year. Growth was driven by both organic growth and our acquisition of Halsted, a provider in the northeastern United States. The integration of this business has been smoother than expected, and in 2012, we'll enjoy a full-year contribution from Halsted. We expect organic growth to be in the mid-single-digits and anticipate the sale of our retail sales business sometime in the second quarter. Read the rest of this transcript for free on seekingalpha.com