MasTec, Inc.

Welcome to Mass Tech's first quarter 2020 earnings conference call, initially broadcast on May 1st, 2020. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to Marc Lewis, Mass Tech's Vice President of Investor Relations. Marc?

Thanks, Ian, and good morning, everyone. Welcome to Mass Tech's first quarter call. The following statement is made pursuant to safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking, such as statements regarding MiStec's future results, plans, and anticipated trends in the industry before we operate. These forward-looking statements are the company's expectations on the day the initial broadcast of this call, and the company does not undertake to update these expectations based on subsequent events or knowledge. Various risks, uncertainties, and assumptions are detailed in our press releases and filings with the SEC. Should one or more of these risks or uncertainties materialize, or should any of our underlying assumptions prove incorrect, Actual results may differ significantly from results expressed or implied in today's communication. In today's remarks by management, we will be discussing adjusted financial metrics as discussed in reconciling yesterday's press release and supporting schedules. In addition, we may use certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measures without reconciling these comments to the most comparable GAAP financial measures can be found in our earnings press release, our 10Q, or in the posted PowerPoint presentations located in the investors and news sections of our website located at mastech.com. With us today, we have Jose Mas, our Chief Executive Officer, and George Pita, our EVP and Chief Financial Officer. The format of the call will be opening remarks by Jose followed by a financial review from George. These discussions will then be followed by a Q&A period and we expect the call to last about an hour. We have another great quarter and a lot of things to talk about today, so I'll go ahead and turn it over to Jose. Jose?

Thanks, Marc. Good morning and welcome to Mass Tech's 2020 first quarter call. I hope and pray that everyone's family is healthy and safe. We are truly in challenging and unprecedented times. Just a few months ago, on February 28th, we reported record 2019 results combined with record guidance. While the COVID-19 virus came up during our year-end call, little did we know that a few weeks later, much of the country would be shut down and quarantined. During this time, the safety of our team members has been our top priority. I have to say I'm so proud of the men and women of MosTec. Their sacrifices, resilience, creativity, and commitment have been inspiring. Millions of families throughout the U.S. rely on the power, communications, entertainment, and other services we help our customers provide. Our team has delivered, and I'd like to thank the men and women of Maastricht for their sacrifices and hard work. First, a recap of our first quarter. Revenue for the quarter was $1,417,000,000. Adjusted EBITDA was $118,000,000. Adjusted earnings per share was $0.60. Cash flow from operations was $203,000,000. And backlog at quarter end was $8.3 billion, a new record level. We had a solid first quarter, exceeding our previous financial guidance for revenue, EBITDA, and EPS. It's important to keep in mind that most of our services have been deemed essential under state and local pandemic mitigation orders, and all of our business segments have continued to operate. While there was some disruption to the last couple weeks of the quarter, March was an excellent month. As we think about the balance of the year, we felt we have enough visibility to provide guidance. Again, since most of our work is ongoing, the biggest risks to our guidance are around governmental permitting, crew social distancing mitigation, and the impact they may have on project schedules and any potential project delays. Our 2020 guidance, which George will cover in detail, assumes the impact of these risks based on the best information we have today. Now I'd like to cover some industry specifics. Our communications revenue for the quarter was $644 million versus $613 million last year, and margins were up about 50 basis points year over year. Our wireline and wireless business was up 10%, offset by about a 20% decline in our installation business. As we think about the COVID impacts on our communications segment, are install businesses predominantly only doing service-related work with strict mitigation efforts in place as it relates to entering customers' homes. Most of our outdoor work, like fiber insulation and wireless deployment, have continued with the exception of a few markets where we are currently shut down. Our customers are working hard to ensure their Internet connectivity is strong and available for their customers. This has created a spike in work activity levels associated with these services. Our customers are also committed to rapidly deploying technology, including 5G. As the world reopens, our day-to-day lives may be temporarily or more permanently impacted. If you think about social distancing requirements on a go-forward basis, access to information will be key. I can easily envision apps that will effectively be queues for public spaces. Long lines are going to be replaced by just-in-time access as things like restaurants limit seating and public venues require testing and temperature readings. Deploying 5G networks are an enabler for these potential technologies. We are confident that our customers are committed to these deployments. With that said, we anticipate potential impacts to our business for the balance of the year. We're concerned with governmental permitting delays. We have been working with cities and municipalities to bolster remote permitting capabilities and have seen improvements since the start of the shutdowns. Our customers are looking for solutions and creative ideas to speed up deployments. Revenue in our electrical transmission segment was $128 million versus $95 million in last year's first quarter. Margins for the first quarter improved 250 basis points year over year. Backlog was up year over year but down sequentially and does not include a number of verbal awards. We're very excited about the progress we've made in this segment and feel we are very well positioned for the long-term growth. As it relates to recent impacts, we have a number of projects that have seen some recent delays in permitting and project starts have been pushed out a couple of months. While there is a large amount of work to be awarded in the industry, we believe some of the stay-at-home orders have impacted bidding schedule. Despite these impacts, we expect revenues and earnings in 2020 to exceed 2019 levels and believe we are very well positioned for 2021 and beyond as the drivers for this segment remain intact, which include aging infrastructure, reliability, renewables, and system hardening. Moving to our power generation and industrial segment, revenue was $286 million for the first quarter versus $189 million in the prior year. We continue to achieve significant growth rates in this segment and backlog at quarter end was a record at 1.3 billion. We expect this segment to grow somewhere between 30 to 50% this year and margins to improve over 2019 by over 100 basis points. COVID impacts to the segment have been minimal as most of our jobs are located in rural areas. We continue to see strong demand for renewables with significant growth in solar activity along with distributed generation. Our oil and gas pipeline segment revenue was down as expected. First quarter revenue was $359 million compared to revenue of $621 million in last year's first quarter. We ended first quarter with backlog of $2.6 billion, a significant increase from year-end levels. We have been in constant communications with our customers and we're confident in our backlog levels. We're closely monitoring the impact that COVID-19 is having on commodity prices and how it's affecting world demand. We expect a significant decline in U.S. oil production as a result. It's important to note that over the last three years of Moss Tech's roughly $10 billion of oil and gas segment revenue, only 6% of that revenue came from oil pipelines. Based on current backlog levels and discussions with our customers on future projects, we are comfortable with the revenue levels provided in our updated guidance. Looking ahead into 2021, we now expect a considerable amount of revenue from these projects to move into next year as we expect both permitting and crew distance requirements will limit the number of people on one project and thus will extend schedules. While we're not in a position to provide guidance for 2021 in our oil and gas segment, between current backlog levels and potential future rewards, we think we're in a good position as the market ultimately recovers and demand increases. To recap, we've had a good first quarter and are confident we are mitigating the effects and impacts of the COVID-19 virus. While times are challenging and uncertain, opportunity always arises from these challenges. Our company was built around our response to Hurricane Andrew in 1992 and again reinvented itself after the dot-com crash in the early 2000s. Our customers will be looking for ways to change and improve their business model as the world reopens. In that lies our opportunity. Our greatest strength has been to understand the trends in our industry and our customers' needs. Our ability to provide services, whether existing or new, has always been a strength. I'm excited for what the future holds for Maastricht. I'd like to again thank the men and women of Maastricht for their commitment to safety, their hard work, and their sacrifices. Keep up the good work. I'll now turn the call over to George for our financial review. George? Thanks, Jose, and good morning, everyone.