10-QPeriod: Q2 FY2013

QUANTA SERVICES, INC. Quarterly Report for Q2 Ended Jun 30, 2013

Filed August 9, 2013For Securities:PWR

Summary

Quanta Services, Inc. (PWR) reported solid financial performance for the six months ended June 30, 2013, driven by strong revenue growth in its core Electric Power and Natural Gas & Pipeline Infrastructure Services segments. Total revenues increased by 12.7% year-over-year, reaching $3.06 billion, with operating income growing by an impressive 33.5% to $236.5 million. This growth was fueled by increased customer capital spending and successful performance improvements within the Natural Gas and Pipeline segment. The company's balance sheet remains strong, with total assets growing to $5.19 billion. While cash and cash equivalents saw a slight decrease, the company maintained a substantial available credit facility. The company continues to execute its growth strategy through targeted acquisitions, adding capabilities in key service areas. Notably, the company is well-positioned to benefit from ongoing infrastructure upgrades and the increasing demand for energy services.

Financial Highlights

49 data points
Beta

Revenue

$1.47B

16.4% Gross Margin

Net Income

$70.24M

4.8% Net Margin

EPS (Diluted)

$0.33

Total Assets

$5.19B

Cash & Equivalents

$363.11M

Free Cash Flow

$13.25M

Financial Statements
Beta
Revenue$1.47B
Gross Profit$241.28M
SG&A Expenses$119.03M
Operating Income$117.17M
Interest Expense$503K
Net Income$70.24M
EPS (Basic)$0.33
EPS (Diluted)$0.33
Shares Outstanding (Basic)214.31M
Shares Outstanding (Diluted)214.37M

Key Highlights

  • 1Revenues increased by 12.7% to $3.06 billion for the first six months of 2013 compared to the same period in 2012.
  • 2Operating income grew significantly by 33.5% to $236.5 million for the first six months of 2013.
  • 3The Electric Power Infrastructure Services segment remains the largest revenue contributor, showing a 14.9% increase in revenue for the first six months.
  • 4The Natural Gas and Pipeline Infrastructure Services segment experienced a notable recovery and growth, with revenues up 7.2% and operating income increasing substantially.
  • 5The company's credit facility remained largely undrawn, with $520.8 million available as of June 30, 2013, indicating strong liquidity.
  • 6Two strategic acquisitions were completed in July 2013, further expanding the company's capabilities and geographic reach.
  • 7Backlog remained robust at $7.51 billion as of June 30, 2013, providing visibility into future revenue streams.

Frequently Asked Questions

Revenue growth was primarily driven by increased capital spending from customers in the Electric Power Infrastructure Services segment and a rebound in activity within the Natural Gas and Pipeline Infrastructure Services segment, particularly related to unconventional shale developments. Emergency restoration services also contributed positively.

Cash flow from operations provided net cash of $161.9 million in the first six months of 2013. While working capital needs can fluctuate due to project cycles, the company's available credit facility and cash on hand provide sufficient liquidity. The company also benefited from collections on receivables related to increased emergency restoration services in late 2012.

The outlook is positive across all segments. The Electric Power segment is expected to benefit from ongoing grid modernization and renewable energy project development. The Natural Gas and Pipeline segment is poised for growth due to shale development and energy independence initiatives, with a focus on gathering infrastructure and pipeline integrity services. The Fiber Optic segment is growing through geographic expansion and network licensing.

Yes, the company sold its domestic telecommunications infrastructure services operations in December 2012. More recently, in July 2013, Quanta acquired an electric power infrastructure services company in Ohio and a natural gas and pipeline infrastructure services company in Australia, further enhancing its service offerings and geographic presence.