MasTec, Inc.

Welcome to Moss Tech's second quarter 2024 earnings conference call, initially broadcast on Friday, August 2nd, 2024. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to our host, Mark Lewis, Moss Tech's Vice President of Investor Relations. Mark?

Thanks, Samara, and good morning, everyone. Welcome to Moss Tech's second quarter call. The following statement is made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. In these communications, we make certain statements that are forward-looking, such as statements regarding MOSFET's future results, plans, and anticipated trends in the industries where we operate. These forward-looking statements are the company's expectations on the day of the initial broadcast of this conference 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 call. In today's remarks, by management, we will be discussing adjusted financial metrics, reconciling yesterday's press release and supporting schedules. In addition, we may use certain non-GAAP financial measures in the call today. The reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings press release. Please note that we have two additional documents associated with today's webcast, which, along with the earnings press release, can be found on the investors' events and presentations page of our website at mostech.com. There is a companion presentation with information and analytics on the quarter just ended and a summary for Q3 and the balance of the year. This should help you with your models. Both PDF files are available for download. With us today, we have Jose Mas, our Chief Executive Officer, and Paul DeMarco, our EVP and Chief Financial Officer. The format of the call will be opening remarks and analysis by Jose, followed by a financial review from Paul. These discussions will be followed by a Q&A period, and we expect the call to last about 60 minutes. We have a nice court and a lot of important things to talk about today, so I'll turn the call over to Jose now. Jose?

Thanks, Mark. Good morning and welcome to MOSTECH's 2024 second quarter call. Today, I'll be reviewing our second quarter results as well as providing my outlook for the markets we serve. First, some second quarter highlights. Revenue for the quarter was $3 billion. Adjusted EBITDA was $268 million. Adjusted earnings per share was $0.96. and backlog at quarter end was $13.3 billion, a $500 million sequential increase. In summary, we had another good and clean quarter. While revenues were slightly below expectations, margins were about 65 basis points better than expected. Solid margin performance in our communication and pipeline segments, coupled with solid improvements in our clean energy segment, were partially offset by some pressure in our power delivery segment. Our second quarter results, coupled with our full-year guidance, which is essentially unchanged, demonstrate both the improvements in our business over the last year and our confidence in the future. As a reminder, on our 2023 year-end call in February, we talked extensively about the signs of weakness we were seeing in electrical distribution spending. While some of the pressure continues, we're pleased that our diversification strategy and strength in other markets have allowed us to perform above expectations. Despite the short-term pressure in our power delivery segment, the longer-term outlook continues to get significantly better. The projected energy load growth in the U.S. will have a substantial impact on our business as our customers take advantage of this growth opportunity resulting in meaningful increases in investment in both generation and grid expansion. We are incredibly well positioned to take advantage of this opportunity. These opportunities, coupled with increased federal funding impacting our communications and infrastructure segments, along with an increased expectation that natural grass will play a larger role in energy generation going forward, provide us with unprecedented opportunities across our entire portfolio. I'd like to walk through a number of positive developments that I believe will have a significant impact on our ability to grow both revenues and earnings. First, in our power delivery segment. During the second quarter, MOSTEC was awarded a 700-mile high-voltage transmission and substation project. The project is expected to start in early 2025 and complete in 2028, with annual revenues projected to be in the $300 million to $500 million range. This project, one of the largest in the United States, represents a significant win for MOSTEC as a pursuit of large transmission project has been an important part of our strategy. We've made significant investments over the last few years to better position us to compete and win large projects, and this award is a great start. While there continues to be a number of large transmission opportunities in the near term, the reality is that to meet load growth expectations, transmission spending is going to have to meaningfully increase. While a major challenge has been the time involved in the development cycle for transmission projects, we are encouraged by recent proposed legislation in Washington. On Wednesday of this week, the Senate Energy and Natural Resources Committee, in a bipartisan 15-4 vote, passed the Energy Permitting Reform Act of 2024. The purpose of this bill is to accelerate the expansion and upgrade of the U.S. electricity grid. While the bill needs to make it through Congress and there will be challenges in an election year, it demonstrates the bipartisan awareness of the importance of this issue. We believe this is a great sign. In our communications segment, margins outperformed and we expect that trend to continue. Our second half growth is largely intact and we're encouraged by our progress in both the wireless and wireline markets. Our market share expansion with AT&T, coupled with the Nokia Ericsson swap-out, is on track for our second-half expectations, and we continue to experience strong growth opportunities in our wireline business. We expect second-half revenues in 2024 to grow organically by nearly 20% compared to last year. Looking ahead, BEDS funding is becoming clear as to both size and timing, and we expect it to have an impact on our business in 2025. There has been a number of new customer entrants to the market. Many are backed by private equity and very interested in our end-to-end solutions approach, which we believe gives them a competitive edge, thus providing a great opportunity for us. In our oil and gas pipeline segment, Revenues were slightly lower than expected as some projects shifted to the second half but margins outperformed. While backlog is down, demand is strong. We expect this segment to return to a more book and burn cadence as it relies less on larger projects. We are confident in the visibility we have in this segment for the next few years and we now believe that gas-fired generation will play a much larger role in helping meet load growth needs. Having good visibility over a multi-year timeframe is very different than where we've been in the last few years, and that gives us a lot of confidence about our business. Finally, in our clean energy and infrastructure segment, revenue was up 25% sequentially, and margins were in line with expectations. We had about a 1.2 times booked a bill in backlog for the segment, and most importantly, we have excellent visibility going forward. We're in great shape on project activity, and while we have a big ramp projected for the second half of the year, we're confident in our ability to hit it. We also expect continued backlog growth through the balance of the year and beyond. We continue to see really strong demand in both renewables and infrastructure projects, and based on expected wins in bookings, believe we're in great shape to show really strong growth in 2025. In infrastructure, the need for our nation and our states to invest in deferred infrastructure spending has never been greater. Infrastructure bill investments in highways, bridges, seaports, airports, and rail, coupled with significant increases in private spending related to site development, manufacturing, and data centers, is providing MOSFET's infrastructure business with exciting growth opportunities. Bid activity is very high, and on many opportunities, competition is limited. As it relates to renewables, we had a solid quarter of bookings, and we expect that trend to continue. On Nextera's recent earnings call, they stated that demand for renewables is expected to triple over the next seven years versus the prior seven. Let me repeat that, triple over the next seven years. While I believe we need to embrace all forms of electricity generation to meet the growing demands of both manufacturing and artificial intelligence, There is no faster alternative than deploying renewables with storage. During the last quarter, we have seen virtually all of our renewable customers, utilities as well as independent developers, position themselves to meet the growing demand of load growth through the deployment of renewables. We strongly believe that irrespective of the election and political dynamics, renewables are going to play a leading role in meeting our country's future energy needs. We at MOSTEC are incredibly well positioned to benefit from that for many years to come. In summary, we delivered another solid quarter and are off to a good start to the year. Our recent transmission project win is an important milestone for us and hopefully the beginning of many more future awards. This win coupled with the industry's need to meet the load growth demands, positions our power delivery segment to outperform for the foreseeable future. Our clean energy and infrastructure segment will also be a big beneficiary of the increased investments in power generation. Couple that with both the demand in telecom and the stability within our oil and gas pipeline segment, and I believe Maastricht has never been so well positioned. I'd like to take this opportunity to thank the men and women of MOSTEC. I'm honored and privileged to lead such a great group. The men and women of MOSTEC are committed to the values of safety, environmental stewardship, integrity, honesty, and in providing our customers a great quality project at the best value. These traits have been recognized by our customers, and it's because of our people's great work that we've been able to position ourselves for continued growth and success. I'll now turn the call over to Paul for our financial review. Paul?