EX-99.1 2 w37898exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
     
    (PRESS RELEASE)
(INFRASOURCE LOGO)    
 
     
FOR IMMEDIATE RELEASE:
  CONTACT:
 
  Terence R. Montgomery
 
  610-480-8000
 
  terry.montgomery@infrasourceinc.com
 
    
 
  Mahmoud Siddig
 
  212-889-4350
 
  mahmoud.siddig@taylor-rafferty.com
INFRASOURCE SERVICES, INC. REPORTS SECOND QUARTER 2007 RESULTS
MEDIA, PA — August 2, 2007 — InfraSource Services, Inc. (NYSE:IFS), one of the largest specialty contractors servicing electric, natural gas and telecommunications infrastructure in the United States, today announced its results for the second quarter ended June 30, 2007.
Second Quarter Results
Revenues for the second quarter 2007 were $239.6 million, or 6% lower than for the same quarter in 2006, due primarily to lower volumes of work in our natural gas business related to a decline in housing starts. Net income for the second quarter 2007 was $9.2 million, or $0.22 per diluted share, versus $5.3 million, or $0.13 per diluted share, for the second quarter last year.
Net income for the second quarter 2007 included $0.3 million (net of tax), or $0.01 per diluted share, of transaction costs related to the pending merger with Quanta Services, Inc. (NYSE:PWR) and for the second quarter 2006 included a $2.6 million (net of tax), or $0.06 per diluted share, non-cash charge associated with the refinancing of our bank debt. Excluding these transaction costs, net income for the second quarter 2007 would have been $9.5 million, or $0.23 per diluted share, compared to $7.9 million, or $0.19 per diluted share, for the second quarter last year.
Backlog & Recent Award
At the end of the second quarter 2007, total backlog was $919 million, comparable to the second quarter 2006 and 12% lower than at the end of the first quarter 2007. Not included in second quarter backlog is the award of a contract in July 2007 for the construction of a 73-mile, 500 kV
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electric transmission line in California, known as the Tehachapi Renewable Transmission Project. The estimated contract value of the project is $93.2 million.
David Helwig, Chairman, President and Chief Executive Officer, said, “We are very pleased with our results for the quarter, the recent award for the Tehachapi Renewable Transmission Project and our recent acquisitions of approximately $14 million in dark fiber related assets. We are looking forward to the final shareholder approvals for the merger with Quanta Services on August 30, 2007 and are very excited about the future of the combined company.”
About InfraSource
InfraSource Services, Inc. (NYSE:IFS) is one of the largest specialty contractors servicing electric, natural gas and telecommunications infrastructure in the United States. InfraSource designs, builds, and maintains transmission and distribution networks for utilities, power producers, and industrial customers. Further information can be found at www.infrasourceinc.com.
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Safe Harbor Statement
Certain statements contained in this press release are forward-looking statements. These forward-looking statements are based upon our current expectations about future events. When used in this press release, the words “believe,” “anticipate,” “intend,” “estimate,” “expect,” “will,” “should,” “may,” and similar expressions, or the negative of such words and expressions, are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to our plans, objectives and expectations for future operations and are based upon management’s current estimates and projections of future results or trends. However, these statements are subject to a number of known and unknown risks, uncertainties and other factors affecting our business that could cause our actual results to differ materially from those contemplated by the statements. You should read this press release completely and with the understanding that actual future results may be materially different from what we expect as a result of these risks and uncertainties and other factors, which include, but are not limited to: (1) the possibility that the pending merger with Quanta Services, Inc. will not be consummated; (2) technological, structural and cyclical changes that could reduce the demand for the services we provide; (3) loss of key customers; (4) the impact of variations between actual and estimated costs under our contracts, particularly our fixed-price contracts; (5) our ability to attract and retain qualified personnel; (6) our ability to successfully bid for and perform large-scale project work in accordance with our estimated costs; (7) work hindrance due to inclement weather events; (8) the definitive award of new contracts and the timing of the performance of those contracts; (9) project delays or cancellations; (10) the failure to meet schedule or performance requirements of our contracts; (11) the uncertainty of implementation of the recently enacted federal energy legislation; (12) the presence of competitors with greater financial resources and the impact of competitive products, services and pricing; (13) successful integration of acquisitions into our business; (14) close out of certain of our projects may or may not occur as anticipated or may be unfavorable to us; and (15) other factors detailed from time to time in our reports and filings with the Securities and Exchange Commission. Except as required by law, we do not intend to update forward-looking statements even though our situation may change in the future.
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INFRASOURCE SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
                         
    Three Months Ended     Three Months Ended  
    June 30, 2006     June 30, 2007  
    (Unaudited)  
    (In thousands, except per share data)  
 
                        
Revenues
   $ 254,261             $ 239,572  
Cost of revenues
     218,386               200,531  
 
                    
Gross profit
     35,875               39,041  
 
                    
 
                        
Selling, general and administrative expenses
     22,612               23,831  
Merger related costs
     —               483  
Provision for uncollectible accounts
     41               780  
Amortization of intangible assets
     237               93  
 
                    
Income from operations
     12,985               13,854  
Interest income
     173               144  
Interest expense
     (1,682 )             (1,050 )
Write-off of deferred financing costs
     (4,296 )             —  
Other income, net
     1,487               2,074  
 
                    
Income from continuing operations before income taxes
     8,667               15,022  
Income tax expense
     3,506               5,863  
 
                    
Income from continuing operations
     5,161               9,159  
Discontinued operations:
                        
Income from discontinued operations (net of income tax expense of $112 and $4, respectively)
     166               6  
 
                    
Net income
   $ 5,327             $ 9,165  
 
                    
 
                        
Basic income per share:
                        
Income from continuing operations
   $ 0.13             $ 0.23  
Income from discontinued operations
     —               —  
 
                    
Net income
   $ 0.13             $ 0.23  
 
                    
 
                        
Weighted average basic common shares outstanding
     39,735               40,590  
 
                    
 
                        
Diluted income per share:
                        
Income from continuing operations
   $ 0.13             $ 0.22  
Income from discontinued operations
     —               —  
Net income
   $ 0.13             $ 0.22  
 
                    
 
                        
Weighted average diluted common shares outstanding
     40,336               41,252  
 
                    

 

 

INFRASOURCE SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
                 
    December 31,     June 30,  
    2006     2007  
    (Unaudited)  
    (In thousands, except share data)  
 
                
Current assets:
                
Cash and cash equivalents
   $ 26,209     $ 18,868  
Contract receivables (less allowances for doubtful accounts of $3,770 and $4,865, respectively)
     166,780       144,359  
Costs and estimated earnings in excess of billings
     59,012       76,397  
Inventories
     5,443       4,421  
Deferred income taxes
     8,201       7,006  
Other current assets
     6,384       11,900  
Current assets — discontinued operations
     746       184  
 
            
Total current assets
     272,775       263,135  
 
            
 
                
Property and equipment (less accumulated depreciation of $73,302 and $81,218, respectively)
     154,578       176,183  
Goodwill
     146,933       147,276  
Intangible assets, net
     900       747  
Deferred charges and other assets, net
     5,529       4,862  
Assets held for sale
     517       400  
 
            
Total assets
   $ 581,232     $ 592,603  
 
            
 
                
Current liabilities:
                
Current portion of long-term debt and short-term borrowings
   $ 1,154     $ 10,055  
Other liabilities — related parties
     766       940  
Accounts payable
     47,846       33,744  
Accrued compensation and benefits
     27,951       24,111  
Other current and accrued liabilities
     22,096       25,586  
Accrued insurance reserves
     36,166       35,272  
Billings in excess of costs and estimated earnings
     23,245       20,977  
Deferred revenues
     6,188       6,611  
 
            
Total current liabilities
     165,412       157,296  
 
            
 
                
Long-term debt, net of current portion
     50,070       50,043  
Deferred revenues
     16,347       15,617  
Other long-term liabilities — related party
     900       —  
Deferred income taxes
     3,750       2,233  
Other long-term liabilities
     5,568       6,494  
 
            
Total liabilities
     242,047       231,683  
 
            
 
                
Commitments and contingencies
                
 
                
Shareholders’ equity:
                
 
                
Preferred stock, $.001 par value (authorized — 12,000,000 shares; 0 shares issued and outstanding)
     —       —  
Common stock, $.001 par value (authorized — 120,000,000 shares; issued 40,263,739 and 40,899,040 shares, respectively, and outstanding — 40,233,869 and 40,866,570, respectively)
     40       41  
Treasury stock, at cost (29,870 shares and 32,470 shares, respectively)
     (137 )     (224 )
Additional paid-in capital
     288,517       301,814  
Retained earnings
     50,785       58,774  
Accumulated other comprehensive income (loss)
     (20 )     515  
 
            
Total shareholders’ equity
     339,185       360,920  
 
            
Total liabilities and shareholders’ equity
   $ 581,232     $ 592,603  
 
            

 

 

INFRASOURCE SERVICES, INC. AND SUBSIDIARIES
Supplemental Financial Data
(Unaudited)
(In millions)
                                                 
    Three Months Ended     Three Months Ended     Increase/(decrease)  
Revenues by End Market   June 30, 2006     June 30, 2007     $     %  
 
                                                
Electric
                                                
- Transmission
   $ 59.4       23.4 %   $ 60.8       25.4 %   $ 1.4       2.4 %
- Substation
     58.1       22.8 %     46.7       19.5 %     (11.4 )     -19.6 %
- Other Electric
     32.3       12.7 %     37.2       15.5 %     4.9       15.2 %
 
                                    
Subtotal
     149.8       58.9 %     144.7       60.4 %     (5.1 )     -3.4 %
Natural Gas
     72.3       28.4 %     56.9       23.7 %     (15.4 )     -21.3 %
Telecommunications
     29.8       11.7 %     33.3       13.9 %     3.5       11.7 %
Other
     2.4       0.9 %     4.7       2.0 %     2.3       95.8 %
 
                                    
Total
   $ 254.3       100.0 %   $ 239.6       100.0 %   $ (14.7 )     -5.8 %
 
                                    
                                                 
    Six Months Ended     Six Months Ended     Increase/(decrease)  
    June 30, 2006     June 30, 2007     $     %  
 
                                                
Electric
                                                
- Transmission
   $ 117.2       25.0 %   $ 119.2       26.9 %   $ 2.0       1.7 %
- Substation
     96.9       20.7 %     93.0       21.0 %     (3.9 )     -4.0 %
- Other Electric
     69.6       14.9 %     67.2       15.2 %     (2.4 )     -3.4 %
 
                                    
Subtotal
     283.7       60.6 %     279.4       63.0 %     (4.3 )     -1.5 %
Natural Gas
     126.2       26.9 %     94.7       21.4 %     (31.5 )     -25.0 %
Telecommunications
     54.0       11.5 %     58.4       13.2 %     4.4       8.1 %
Other
     4.6       1.0 %     10.9       2.5 %     6.3       137.0 %
 
                                    
Total
   $ 468.5       100.0 %   $ 443.4       100.0 %   $ (25.1 )     -5.4 %
 
                                    
                                                 
                                    Increase/(decrease)  
Backlog by End Market   June 30, 2006     June 30, 2007     $     %  
 
                                                
Electric
                                                
- Transmission
   $ 214.7       23.4 %   $ 134.5       14.6 %   $ (80.2 )     -37.4 %
- Substation
     136.5       14.9 %     157.4       17.1 %     20.9       15.3 %
- Other Electric
     88.1       9.6 %     191.9       20.9 %     103.8       117.8 %
 
                                    
Subtotal
     439.3       48.0 %     483.8       52.6 %     44.5       10.1 %
Natural Gas
     247.4       27.0 %     196.5       21.4 %     (50.9 )     -20.6 %
Telecommunications
     221.4       24.2 %     222.0       24.1 %     0.6       0.3 %
Other
     7.7       0.8 %     17.0       1.8 %     9.3       120.8 %
 
                                    
Total
   $ 915.8       100.0 %   $ 919.3       100.0 %   $ 3.5       0.4 %
 
                                    
                                                 
                                    Increase/(decrease)  
    March 31, 2007     June 30, 2007     $     %  
Electric
                                                
- Transmission
   $ 171.8       16.4 %   $ 134.5       14.6 %   $ (37.3 )     -21.7 %
- Substation
     181.1       17.3 %     157.4       17.1 %     (23.7 )     -13.1 %
- Other Electric
     203.0       19.4 %     191.9       20.9 %     (11.1 )     -5.5 %
 
                                    
Subtotal
     555.9       53.1 %     483.8       52.6 %     (72.1 )     -13.0 %
Natural Gas
     231.5       22.1 %     196.5       21.4 %     (35.0 )     -15.1 %
Telecommunications
     237.7       22.7 %     222.0       24.1 %     (15.7 )     -6.6 %
Other
     22.4       2.1 %     17.0       1.8 %     (5.4 )     -24.1 %
 
                                    
Total
   $ 1,047.5       100.0 %   $ 919.3       100.0 %   $ (128.2 )     -12.2 %
 
                                    
Note: Percentages may not add due to rounding.