01—Abstract
Summary
Summary of the 10-K filed February 29, 2008. Cited figures are marked; the original filing is the authoritative source.
Quanta Services, Inc. reported strong revenue growth in 2007, reaching approximately $2.66 billiona, a 25.9% increase over 2006.
This growth was significantly driven by the acquisition of InfraSource Services, Inc. in August 2007, which contributed approximately $348.4 millionb in revenues. The company also saw a substantial increase in gross profit, up 37.1% to $428.7 million, driven by improved pricing, higher productivity, and strong performance in electric power and telecommunications services. The company anticipates continued growth, supported by increased capital spending in the electric power transmission and distribution sector, driven by aging infrastructure and the Energy Policy Act of 2005.
Additionally, telecommunications initiatives like Fiber to the Premises (FTTP) and Fiber to the Node (FTTN) are expected to boost demand for Quanta's services. The company maintains a strong financial position with significant liquidity, positioning it well to capitalize on future opportunities, including strategic acquisitions.
Investors should note the significant goodwill recorded from the InfraSource acquisition and the ongoing integration efforts, which present both opportunities and potential integration risks. The company also highlighted its nationwide presence and diverse customer base as key strengths.
02—Key points
Key Highlights
- Revenue increased by 25.9% to $2.66 billion in 2007, largely due to the acquisition of InfraSource.
- Gross profit grew by 37.1% to $428.7 million, reflecting improved margins and higher volumes, particularly in electric power and telecommunications.
- The company has a strong liquidity position with $407.1 million in cash and cash equivalents and $306.4 million in available borrowing capacity.
- Strategic focus includes capitalizing on favorable industry trends like infrastructure upgrades in electric power and FTTP/FTTN initiatives in telecommunications.
- Expansion of the dark fiber network is planned, with approximately $85 million in capital expenditures targeted for 2008.
- Significant goodwill of $989.8 million was recorded from the InfraSource acquisition, underscoring the strategic importance and integration efforts.
- The company reiterated its commitment to operational efficiencies and pursuing strategic acquisitions to drive future growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2007, Quanta Services kept $0.05.
- Revenue$2.66B100.0%
- Cost of revenue−$2.23B83.9%
- Gross profit$428.7M16.1%
- Operating costs−$259.3M9.8%
- Operating income$169.5M6.4%
- Interest, other & tax−$44.8M1.7%
- Net income$124.7M4.7%
Where FY2007 revenue went
$2.66B- Cost of revenue: $2.23B, 84% of revenue
- Net income: $124.7M, 4.7% of revenue
- SG&A: $240.5M, 9.1% of revenue
- Other operating costs: $18.8M, 0.7% of revenue
- Interest, other & tax: $44.8M, 1.7% of revenue
Kept 4.7% as net incomeNet income $124.7M · 4.7%Other operating costs $18.8M · 0.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2007filed February 29, 2008Financial Statements
| Revenue | $2.66B |
| Gross Profit | $428.75M |
| SG&A Expenses | $240.51M |
| Operating Income | $169.48M |
| Interest Expense | $39.33M |
| Net Income | $124.70M |
| EPS (Basic) | $0.91 |
| EPS (Diluted) | $0.88 |
| Shares Outstanding (Basic) | 136.89M |
| Shares Outstanding (Diluted) | 161.52M |
05—Questions
Frequently Asked Questions
What was the primary driver of Quanta Services' revenue growth in 2007?
The primary driver of Quanta Services' revenue growth in 2007 was the acquisition of InfraSource Services, Inc. in August 2007, which contributed approximately $348.4 million to the company's total revenues.
How did the InfraSource acquisition impact the company's financial statements?
The acquisition of InfraSource significantly increased Quanta's total assets and goodwill. InfraSource's operations have been consolidated into Quanta's financial statements since August 31, 2007, contributing substantially to the reported revenue and gross profit for the year. A significant amount of goodwill ($989.8 million) was recorded on the balance sheet as a result of the acquisition.
What are the key growth opportunities and strategies for Quanta Services?
Quanta Services plans to capitalize on several key trends, including increased capital spending in the electric power sector for infrastructure upgrades and modernization, driven by the Energy Policy Act of 2005. They also see significant opportunities in the telecommunications sector from FTTP and FTTN initiatives. The company's strategy includes leveraging existing customer relationships, expanding service offerings, focusing on operating efficiencies, expanding its dark fiber network, and pursuing strategic acquisitions.
What is the company's financial health and liquidity situation as of the end of 2007?
As of December 31, 2007, Quanta Services reported strong liquidity with $407.1 million in cash and cash equivalents and $547.3 million in working capital. They also had $306.4 million available under their credit facility, indicating a solid financial position to fund operations and growth initiatives.
06—Continue