MASTEC INC - FORM 424B1
Filed
Pursuant to Rule 424(b)(1)
Registration Statement No. 333-133252
PROSPECTUS
637,214 Shares
COMMON STOCK
The selling shareholders named on page 15 may offer for sale up to 637,214 shares of our
common stock, which they acquired in connection with our acquisition of substantially all the
assets and assumption of certain operating liabilities and contracts of Digital Satellite Services,
Inc. We will not receive any proceeds from the sale of the shares by the selling shareholders.
Our
common stock is listed on the New York Stock Exchange under the
symbol MTZ. On April 11,
2006 the last reported sale price of our common stock on the New York
Stock Exchange was $12.20 per
share.
This prospectus is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not permitted.
Investing in our common stock involves certain risks. See Risk Factors beginning on page 5.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is April 28, 2006.
You should rely only on the information contained in this prospectus. Neither we nor the
selling shareholders have authorized anyone to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on it. Neither we nor
the selling shareholders are making an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted. You should not assume that the information contained in this
prospectus, any prospectus supplement or free writing prospectus and the documents incorporated by
reference herein and therein is accurate as of any date other than the dates of the specific
information. Our business, financial condition, results of operations and prospects may have
changed since those dates. See Where You Can Find More Information About MasTec.
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page |
|
|
|
|
3 |
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
5 |
|
|
|
|
|
|
|
|
|
15 |
|
|
|
|
|
|
|
|
|
15 |
|
|
|
|
|
|
|
|
|
15 |
|
|
|
|
|
|
|
|
|
16 |
|
|
|
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
19 |
|
|
|
|
|
|
|
|
|
19 |
|
|
|
|
|
|
|
|
|
19 |
|
|
|
|
|
|
|
|
|
20 |
|
2
PROSPECTUS SUMMARY
This prospectus summary highlights information contained elsewhere in this prospectus and in
documents we file with the Securities and Exchange Commission that are incorporated by reference in
this prospectus. This summary is not complete and does not contain all of the information that you
should consider before investing in our common stock. You should read the entire prospectus and the
information incorporated by reference in this prospectus carefully, including Risk Factors
included below and our consolidated financial statements and related notes included in our most
recently filed Form 10-K in each case as updated or supplemented by subsequent periodic reports
that we file with the Securities and Exchange Commission, before making an investment decision.
Unless the context requires otherwise, as used in this prospectus the terms MasTec, we, us,
and our refer to MasTec, Inc., a Florida corporation.
Our Company
We are a leading specialty contractor operating mainly throughout the United States and Canada
and across a range of industries. Our core activities are the building, installation, maintenance
and upgrade of communications and utility infrastructure and transportation systems. Our primary
customers are in the following industries: communications (including satellite television and cable
television), utilities and government. We provide similar infrastructure services across the
industries we serve. Our customers rely on us to build and maintain infrastructure and networks
that are critical to their delivery of voice, video and data communications, electricity and
transportation systems.
We, or our predecessor companies, have been in business for over 70 years. We offer all of our
services under the MasTec® service mark and operate through a network of approximately 220
locations and 7,700 employees as of December 31, 2005.
Our principal executive offices are located at 800 S. Douglas Road, 12th Floor, Coral Gables,
FL 33134 and our telephone number is (305) 599-1800. Our website is located at www.mastec.com. The
information contained in, or that can be accessed through, our website is not part of this
prospectus.
Recent Developments
In March 2006, we repaid $75 million of our 7.75% senior subordinated notes due February 2008
with a portion of the net proceeds from an equity offering that we completed in January 2006.
In April 2006 we settled, without payment to the plaintiffs by us, several complaints for
purported securities class actions that were filed against us and certain of our officers in the
second quarter of 2004. While we believe we would have ultimately been successful in defense of
these actions, given the low amount of the settlement, the inherent risk of uncertainty of the
legal proceedings, and the substantial time and expense of defending these proceedings, we
concluded that entering into the settlement was the appropriate course of action. As part of the
settlement, our excess insurance carrier has retained its rights to seek reimbursement from us
based on its claim that notice was not properly given under the policy. We believe these claims
are without merit and plan to continue vigorously defending this action. We also believe that we
have claims against our insurance broker for any losses arising from the notice. See Legal
Proceedings in our Annual Report on Form 10-K for the year ended December 31, 2005, as updated or
supplemented by subsequent periodic reports we file with the Securities and Exchange Commission and
Risk FactorsWe may incur costs due to the complaints that were filed against us and certain of
our officers in this prospectus for additional information.
3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
We are making this statement pursuant to the safe harbor provisions for forward-looking
statements described in the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are not historical facts but are the intent, belief, or current expectations of our
business and industry. We make statements in this prospectus that are forward-looking. When used in
this prospectus or in any other presentation, statements which are not historical in nature,
including the words anticipate, estimate, could, should, may, plan, seek, expect,
believe, intend, target, will, project and similar expressions are intended to identify
forward-looking statements. They also include statements regarding:
|
|
|
our future growth and profitability; |
|
|
|
|
our competitive strengths; and |
|
|
|
|
our business strategy and the trends we anticipate in the industries and economies
in which we operate. |
These forward-looking statements are based on our current expectations and are subject to a
number of risks, uncertainties and assumptions. These statements are not guarantees of future
performance and are subject to risks, uncertainties, and other factors, some of which are beyond
our control, are difficult to predict, and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements. Important factors that could cause
actual results to differ materially from those in forward-looking statements include:
|
|
|
economic downturns, reduced capital expenditures, consolidation and technological
and regulatory changes in the industries we serve; |
|
|
|
|
the ability of our customers to terminate or reduce the amount of work or in some
cases prices paid for services under many of our contracts; |
|
|
|
|
technical and regulatory changes in our customers industries; |
|
|
|
|
the highly competitive nature of our industry; |
|
|
|
|
our ability to attract and retain qualified managers and skilled employees; |
|
|
|
|
our dependence on a limited number of customers; |
|
|
|
|
the seasonality and quarterly variations we experience in our revenue and profitability; |
|
|
|
|
our dependence on a limited number of customers; |
|
|
|
|
increases in fuel and labor costs; |
|
|
|
|
the restrictions imposed by our credit facility and senior notes; and |
|
|
|
|
the other factors referenced in this prospectus, including, without limitation, under Risk Factors. |
We believe these forward-looking statements are reasonable; however, you should not place
undue reliance on any forward-looking statements, which are based on current expectations.
Furthermore, forward-looking statements speak only as of the date they are made. If any of these
risks or uncertainties materialize, or if any of our underlying assumptions are incorrect, our
actual results may differ significantly from the results that we express in or imply by any of our
forward-looking statements. These and other risks are detailed in this prospectus, in the documents
that we incorporate by reference into this prospectus and in other documents that we file with the
Securities and Exchange Commission. We do not undertake any obligation to publicly update or revise
these forward-looking statements after the date of this prospectus to reflect future events or
circumstances. We qualify any and all of our forward-looking statements by these cautionary
factors.
4
RISK FACTORS
An investment in our common stock involves significant risks. You should carefully consider the
risks described below and the other information included or incorporated by reference in this
prospectus, as updated or supplemented by our subsequent periodic reports that we file with the
Securities and Exchange Commission, before you decide to buy our common stock. The trading price
of our common stock could decline due to any of these risks, and you could lose all or part of your
investment.
Risks Related to Our Industry and Our Customers Industries
An economic downturn or reduced capital expenditures in the industries we serve may result in a
decrease in demand for our services.
Commencing in 2001 and through 2003, the communications industry suffered a severe downturn
that resulted in a number of our customers filing for bankruptcy protection or experiencing
financial difficulties. The downturn resulted in reduced capital expenditures for infrastructure
projects, even among those customers that did not experience financial difficulties. Although our
strategy is to increase the percentage of our business derived from large, financially stable
customers in the communications and utility industries, these customers may not continue to fund
capital expenditures for infrastructure projects at current levels. Even if they do continue to
fund projects, we may not be able to increase our share of their business. Bankruptcies or
decreases in our customers capital expenditures and disbursements could reduce our revenue,
profitability or liquidity.
Many of the industries we serve are subject to consolidation and rapid technological and regulatory
change, and our inability or failure to adjust to our customers changing needs could reduce demand
for our services.
We derive, and anticipate that we will continue to derive, a substantial portion of our
revenue from customers in the communications industry. The communications industry is subject to
rapid changes in technology and governmental regulation. Changes in technology may reduce the
demand for the services we provide. New or developing technologies could displace the wire line
systems used for the transmission of voice, video and data, and improvements in existing technology
may allow communications providers to significantly improve their networks without physically
upgrading them. Additionally, the communications industry has been characterized by a high level of
consolidation that may result in the loss of one or more of our customers. Utilities have also
entered into a phase of consolidation similar to the communications industry which could lead to
the same uncertainties.
Our industry is highly competitive which may reduce our market share and harm our financial
performance.
Our industry is highly fragmented, and we compete with other companies in most of the markets
in which we operate, ranging from small independent firms servicing local markets to larger firms
servicing regional and national markets. We also face competition from existing or prospective
customers that employ in-house personnel to perform some of the same types of services we provide.
There are relatively few barriers to entry into the markets in which we operate and, as a result,
any organization that has adequate financial resources and access to technical expertise and
skilled personnel may become one of our competitors.
Most of our customers work is awarded through a bid process. Consequently, price is often the
principal factor in determining which service provider is selected, especially on smaller, less
complex projects. Smaller competitors are sometimes able to win bids for these projects based on
price alone due to their lower costs and financial return requirements.
5
Risks Related to Our Business
We derive a significant portion of our revenue from a few customers, and the loss of one of these
customers or a reduction in their demand, the amount they pay or their ability to pay, for our
services could impair our financial performance.
In the year ended December 31, 2005, we derived approximately 31.8%, 10.2% and 10.0% of our
revenue from DIRECTV®, BellSouth and Verizon Communications, respectively. In the year
ended December 31, 2004, we derived approximately 24.3% and 13.9% of our revenue from
DIRECTV® and Comcast Cable Communications, Inc. respectively. In addition, our largest
10 customers accounted for approximately 63.9%, 71.1% and 71.3% of our revenue in the years ended
December 31, 2003, 2004 and 2005, respectively.
Because our business is concentrated among relatively few major customers, our revenue could
significantly decline if we lose one or more of these customers or if the amount of business we
obtain from them is reduced, which could result in reduced profitability and liquidity. For
example, we experienced a decrease of $103.9 million in revenue for Comcast in the year ended
December 31, 2005 compared to the same period in 2004 due to the completion of the rebuild and
upgrade of their broadband networks in 2004. Our revenue, profitability and liquidity could decline
if certain customers reduce the amounts they pay for our services or if our customers are unable to
pay for our services. A number of our customers filed for bankruptcy protection or experienced
financial difficulties commencing in 2001 through 2003 during the last economic downturn in the
communications industry which negatively impacted our revenue, profitability and liquidity. In
2003, 2004 and 2005 total provisions for bad debts aggregated to $8.8 million, $5.1 million and
$4.9 million, respectively, and were reflected in part in continuing operations and in part in
discontinued operations. As of December 31, 2005, we had remaining receivables from customers
undergoing bankruptcy reorganization totaling $14.5 million, of which $8.0 million is included in
specific reserves for bad debts, with the remaining amounts expected to be recovered through
secured and unsecured claims and enforcement of liens or bonds.
Most of our contracts do not obligate our customers to undertake any infrastructure projects or
other work with us.
A significant portion of our revenue is derived from multi-year master service agreements and
other service agreements. Under our multi-year master service agreements and other service
agreements, we contract to provide customers with individual project services, through work orders,
within defined geographic areas on a fixed fee basis. Under these agreements, our customers have no
obligation to undertake any infrastructure projects or other work with us. A significant decline in
the projects customers assign us under these service agreements could result in a decline in our
revenue, profitability and liquidity.
Most of our contracts may be canceled on short notice, so our revenue is not guaranteed.
Most of our contracts are cancelable on short notice, ranging from immediate cancellation to
cancellation upon 180 days notice, even if we are not in default under the contract. Many of our
contracts, including our service agreements, are periodically open to public bid. We may not be the
successful bidder on our existing contracts that are re-bid. We also provide a significant portion
of our services on a non-recurring, project-by-project basis. We could experience a reduction in
our revenue, profitability and liquidity if:
|
|
|
our customers cancel a significant number of contracts; |
|
|
|
|
we fail to win a significant number of our existing contracts upon re-bid; or |
|
|
|
|
we complete the required work under a significant number of our non-recurring projects
and cannot replace them with similar projects. |
We may not accurately estimate the costs associated with our services provided under fixed-price
contracts which could impair our financial performance.
A substantial portion of our revenue is derived from master service agreements and other
service agreements that are fixed price contracts. Under these contracts, we set the price of our
services on a per unit or aggregate basis and assume the risk that the costs associated with our
performance may be greater than we anticipated. Our profitability is therefore dependent upon our
ability to accurately estimate the costs associated with our services. These costs may be affected
by a variety of factors, such as lower than anticipated productivity, conditions at the work sites
differing materially from what was anticipated at the time we bid on the contract and higher costs
of materials and labor. Certain agreements or projects could have lower margins than anticipated or
losses if actual costs for our contracts exceed our estimates, which could reduce our profitability
and liquidity.
6
We account for a majority of our projects using units-of-delivery methods or
percentage-of-completion, therefore variations of actual results from our assumptions may reduce
our profitability.
For installation/construction projects, we recognize revenue on projects on the
units-of-delivery or percentage-of-completion methods, depending on the type of project. We
recognize revenue on unit based projects using the units-of-delivery method. Under the
units-of-delivery method, revenue is recognized as the units are completed at the contractually
agreed price per unit. Our profitability is reduced if the actual cost to complete each unit
exceeds our original estimates. We are also required to immediately recognize the full amount of
any estimated loss on these projects if the estimated costs to complete the remaining units for the
project exceed the revenue to be earned on such units. For certain customers with unit based
construction/installation contracts, we recognize revenue only after the service is performed and
as the related work orders are approved. Revenue from completed work orders not collected in
accordance with the payment terms established with these customers is not recognized until
collection is assured. If we are required to recognize a loss on a project, we could experience
reduced profitability which could negatively impact our liquidity.
We recognize revenue on non-unit based fixed price contracts using the
percentage-of-completion method. Under the percentage-of-completion method, we record revenue as
work on the contract progresses. The cumulative amount of revenue recorded on a contract at a
specified point in time is that percentage of total estimated revenue that incurred costs to date
bear to estimated total contract costs. The percentage-of-completion method therefore relies on
estimates of total expected contract costs. Contract revenue and total cost estimates are reviewed
and revised periodically as the work progresses. Adjustments are reflected in contract revenue in
the fiscal period when such estimates are revised. Estimates are based on managements reasonable
assumptions and experience, but are only estimates. Variation of actual results from estimates on a
large project or on a number of smaller projects could be material. We immediately recognize the
full amount of the estimated loss on a contract when our estimates indicate such a loss. Such
adjustments and accrued losses could result in reduced profitability which could negatively impact
our liquidity. For example, for the years ended December 31, 2004 and 2005 we incurred
approximately $7.8 million and $3.3 million, respectively, of losses on percentage-of-completion
contracts a part of which were included in continuing operations and a part in discontinued
operations.
Amounts included in our backlog may not result in actual revenue or translate into profits.
Approximately 69.3% of our 18-month backlog at December 31, 2005 was comprised of master
service agreements and other service agreements which do not require our customers to purchase a
minimum amount of services and are cancelable on short notice. These backlog amounts are based on
our estimates and therefore may not result in actual receipt of revenue in the originally
anticipated period or at all. In addition, contracts included in our backlog may not be profitable.
We may experience variances in the realization of our backlog because of project delays or
cancellations resulting from weather conditions, external market factors and economic factors
beyond our control. If our backlog fails to materialize, we could experience a reduction in our
revenue, profitability and liquidity.
Our business is seasonal and is affected by adverse weather conditions and the spending patterns of
our customers, exposing us to variable quarterly results.
The budgetary years of many of our specialty infrastructure services customers end December
31. As a result, some of our customers reduce their expenditures and work order requests towards
the end of the year. Adverse weather conditions, particularly during the winter season, also affect
our ability to perform outdoor services in certain regions of the United States and Canada. As a
result, we experience reduced revenue in the first and fourth quarters of each calendar year.
Natural catastrophes such as the recent hurricanes in the United States could also have a
negative impact on the economy overall and on our ability to perform outdoor services in affected
regions or utilize equipment and crews stationed in those regions, which in turn could
significantly impact the results of any one or more of our reporting periods.
7
We are self-insured against many potential liabilities.
Although we maintain insurance policies with respect to automobile liability, general
liability, workers compensation and employee group health claims, those policies are subject to
high deductibles, and we are self-insured up to the amount of the deductible. Since most claims
against us do not exceed the deductibles under our insurance policies, we are effectively
self-insured for substantially all claims. We actuarially determine any liabilities for unpaid
claims and associated expenses, including incurred but not reported losses, and reflect those
liabilities in our balance sheet as other current and non-current liabilities. The determination of
such claims and expenses and the appropriateness of the liability is reviewed and updated
quarterly. However, insurance liabilities are difficult to assess and estimate due to the many
relevant factors, the effects of which are often unknown, including the severity of an injury, the
determination of our liability in proportion to other parties, the number of incidents not reported
and the effectiveness of our safety program. If our insurance claims increase or costs exceed our
estimates of insurance liabilities, we could experience a decline in profitability and liquidity.
Increases in our insurance premiums or collateral requirements could significantly reduce our
profitability, liquidity and credit facility availability.
Because of factors such as increases in claims (primarily workers compensation claims),
projected significant increases in medical costs and wages, lost compensation and reductions in
coverage, insurance carriers may be unwilling to continue to provide us with our current levels of
coverage without a significant increase in insurance premiums or collateral requirements to cover
our deductible obligations. For example, in connection with our 2005 insurance program, we paid our
insurance carrier $18.0 million for cash collateral. In January 2006, we provided to our insurance
carrier a $6.5 million letter of credit related to our 2006 insurance plans. An increase in
premiums or collateral requirements could significantly reduce our profitability and liquidity as
well as reduce availability under our revolving credit facility.
We may be unable to obtain sufficient bonding capacity to support certain service offerings and the
need for performance and surety bonds may reduce our availability under our credit facility.
Some of our contracts require performance and surety bonds. Bonding capacity in the
infrastructure industry has become increasingly difficult to obtain, and bonding companies are
denying or restricting coverage to an increasing number of contractors. Companies that have been
successful in renewing or obtaining coverage have sometimes been required to post additional
collateral to secure the same amount of bonds which reduces availability under our credit facility.
We may not be able to maintain a sufficient level of bonding capacity in the future, which could
preclude us from being able to bid for certain contracts and successfully contract with certain
customers. In addition, even if we are able to successfully renew or obtain performance or payment
bonds in the future, we may be required to post letters of credit in connection with the bonds
which would reduce availability under our credit facility. We reported net losses for the years
ended December 31, 2003, 2004, and 2005. If we continue to incur net losses, our overall level of
bonding capacity could be reduced.
New accounting pronouncements including SFAS 123R may significantly impact our future results of
operations and earnings per share.
Prior to January 2006, we accounted for our stock-based award plans to employees and directors
in accordance with APB No. 25, Accounting for Stock Issued to Employees under which compensation
expense is recorded to the extent that the current market price of the underlying stock exceeds the
exercise price. Under this method, we generally did not recognize any compensation related to
employee stock option grants we issue under our stock option plans at fair value. In December 2004,
the Financial Accounting Standards Board issued SFAS 123R Share-Based Payment or SFAS 123R. This
statement, which was effective for us beginning on January 1, 2006, will require us to recognize
the expense attributable to stock options granted or vested subsequent to December 31, 2005 and
will have a material negative impact on our future profitability.
SFAS 123R will require us to recognize share-based compensation as compensation expense in our
statement of operations based on the fair values of such equity on the date of the grant, with the
compensation expense recognized over the vesting period. This statement also required us to adopt a
fair value-based method for measuring the compensation expense related to share-based compensation.
We have evaluated the impact of the adoption of SFAS 123R on our results of operations and we
expect share-based compensation expense to be at least $2.5 million
8
annually. The actual annual share-based compensation expense could be affected by, among other
things, the number of stock options issued annually to employees and directors, volatility of our
stock price and the exercise price of the options granted. The adoption of SFAS 123R will have a
material negative impact on our profitability. Future changes in generally accepted accounting
principles may also have a significant effect on our reported results.
We may incur goodwill impairment charges in our reporting entities which could harm our
profitability.
In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, or SFAS No. 142, we
periodically review the carrying values of our goodwill to determine whether such carrying values
exceed the fair market value. In the year ended December 31, 2004, we charged $12.3 million against
goodwill in connection with the bankruptcy of our Brazilian subsidiary. In the year ended December
31, 2005, we charged $11.5 million against goodwill related to the decision to sell substantially
all of our state Department of Transportation related projects and assets. These impairment charges
are included in our consolidated statements of operations under discontinued operations. We may
incur additional impairment charges related to goodwill in any of our reporting entities in the
future if the markets they serve or their business deteriorates.
We may incur long-lived assets impairment charges which could harm our profitability.
In accordance with SFAS No. 144 Accounting for the Impairment or Disposal of Long-Lived
Assets, or SFAS No. 144, we review long-lived assets for impairment. In analyzing potential
impairment of our state Department of Transportation related projects and assets we used
projections of future discounted cash flows from these assets in 2006 and estimated a selling price
by using a weighted probability cash flow analysis based on managements estimates. These estimates
are all subject to changes in the future and if we are not able to sell these projects and assets
at the estimated selling price or our cash flow changes because of changes in economic conditions,
growth rates or changes in terminal values, we may incur additional impairment charges in the
future related to these operations.
We may incur restructuring charges which could reduce our profitability.
From time to time we review our operations in an effort to improve profitability. We could
incur charges in the future as a result of:
|
|
|
eliminating service offerings that no longer fit into our business strategy; |
|
|
|
|
reducing or eliminating services that do not produce adequate revenue or margin; |
|
|
|
|
reducing costs of businesses that provide adequate profit contributions but need margin
improvements; and |
|
|
|
|
reviewing new business opportunities capable of utilizing our existing human and
physical resources. |
All charges related to restructuring would be reflected as operating expenses and could reduce
our profitability.
Our revolving credit facility and senior subordinated notes impose restrictions on us which may
prevent us from engaging in transactions that might benefit us, including responding to changing
business and economic conditions or securing additional financing, if needed.
At December 31, 2005, we had $195.9 million in senior subordinated notes outstanding due
February 2008 under an indenture ($75 million of which we repaid in March 2006) and $0.3 million in
other notes payable outstanding. We also have a $150.0 million revolving credit facility of which
$4.2 million was outstanding at December 31, 2005 and which was subsequently repaid in January
2006. The terms of our indebtedness contain customary events of default and covenants that prohibit
us from taking certain actions without satisfying certain financial tests or obtaining the consent
of the lenders. The prohibited actions include, among other things:
|
|
|
making investments and acquisitions in excess of specified amounts; |
9
|
|
|
incurring additional indebtedness in excess of specified amounts; |
|
|
|
|
paying cash dividends; |
|
|
|
|
making capital expenditures in excess of a specified amount; |
|
|
|
|
creating certain liens against our assets; |
|
|
|
|
prepaying our other indebtedness, including the senior subordinated notes; |
|
|
|
|
engaging in certain mergers or combinations; and |
|
|
|
|
engaging in transactions that would result in a change of control (as defined in the
credit facility and indenture). |
Our credit facility provides that if our net borrowing base availability falls below $20.0
million we must comply with a minimum fixed charge coverage ratio. See Managements Discussion
and Analysis of Financial Condition and Results of Operations-Financial Condition, Liquidity and
Capital Resources in our Annual Report on Form 10-K for the year ended December 31, 2005, as
updated or supplemented by subsequent periodic reports we file with the Securities and Exchange
Commission, for additional information. In the past, we have not been in compliance with certain
financial covenants of our credit facility and have had to seek amendments or waivers from our
lenders. Should we be unable to comply with the terms and covenants of our credit facility, we
would be required to obtain further modifications of the facility or secure another source of
financing to continue to operate our business. A default could result in the acceleration of either
our obligations under the credit facility or under the indenture relating to the senior
subordinated notes, or both. In addition, these covenants may prevent us from engaging in
transactions that benefit us, including responding to changing business and economic conditions or
securing additional financing, if needed. Our business is capital intensive and, to the extent we
need additional financing, we may not be able to obtain such financing at all or on favorable
terms, which may decrease our profitability and liquidity.
If we are unable to attract and retain qualified managers and skilled employees, we will be unable
to operate efficiently which could reduce our revenue, profitability and liquidity.
Our business is labor intensive, and some of our operations experience a high rate of employee
turnover. At times of low unemployment rates in the areas we serve, it can be difficult for us to
find qualified and affordable personnel. We may be unable to hire and retain a sufficient skilled
labor force necessary to support our operating requirements and growth strategy. Our labor expenses
may increase as a result of a shortage in the supply of skilled personnel. If we are unable to hire
employees with the requisite skills, we may also be forced to incur significant training expenses.
Additionally, our business is managed by a number of key executive and operational officers and is
dependent upon retaining and recruiting qualified management. Labor shortages, increased labor or
training costs or the loss of key personnel could result in reduced revenue, profitability and
liquidity.
Increases in the costs of fuel could reduce our operating margins.
The price of fuel needed to run our vehicles and equipment is unpredictable and fluctuates
based on events outside our control, including geopolitical developments, supply and demand for oil
and gas, actions by OPEC and other oil and gas producers, war and unrest in oil producing
countries, regional production patterns and environmental concerns. Most of our contracts do not
allow us to adjust our pricing. Accordingly, any increase in fuel costs could reduce our
profitability and liquidity.
We may choose, or be required, to pay our subcontractors even if our customers do not pay, or delay
paying, us for the related services.
We use subcontractors to perform portions of our services and to manage work flow. In some
cases, we pay our subcontractors before our customers pay us for the related services. If we
choose, or are required, to pay our
10
subcontractors for work performed for customers who fail to pay, or delay paying us for the
related work, we could experience a decrease in profitability and liquidity.
Our failure to comply with environmental laws could result in significant liabilities.
Some of the work we perform is in underground environments. If the field location maps
supplied to us are not accurate, or if objects are present in the soil that are not indicated on
the field location maps, our underground work could strike objects in the soil containing
pollutants and result in a rupture and discharge of pollutants. In such a case, we may be liable
for fines and damages.
We own and lease several facilities at which we store our equipment. Some of these facilities
contain fuel storage tanks which may be above or below ground. If these tanks were to leak, we
could be responsible for the cost of remediation as well as potential fines.
We sometimes perform directional drilling operations below certain environmentally sensitive
terrains and water bodies. Due to the inconsistent nature of the terrain and water bodies, it is
possible that such directional drilling may cause a surface fracture releasing subsurface
materials. These releases may contain contaminants in excess of amounts permitted by law,
potentially exposing us to remediation costs and fines.
We are currently engaged in litigation related to environmental liabilities in Coos Bay,
Oregon. See Legal Proceedings in our Annual Report on Form 10-K for the year ended December 31,
2005, as updated or supplemented by subsequent periodic reports we file with the Securities and
Exchange Commission, for additional information.
In addition, new environmental laws and regulations, stricter enforcement of existing laws and
regulations, the discovery of previously unknown contamination or leaks, or the imposition of new
clean-up requirements could require us to incur significant costs or become the basis for new or
increased liabilities that could negatively impact our profitability and liquidity.
Our failure to comply with the regulations of the U.S. Occupational Safety and Health
Administration the U.S. Department of Transportation and other state and local agencies that
oversee transportation and safety compliance could reduce our revenue, profitability and liquidity.
The Occupational Safety and Health Act of 1970, as amended, or OSHA, establishes certain
employer responsibilities, including maintenance of a workplace free of recognized hazards likely
to cause death or serious injury, compliance with standards promulgated by the Occupational Safety
and Health Administration and various record keeping, disclosure and procedural requirements.
Various standards, including standards for notices of hazards, safety in excavation and demolition
work, may apply to our operations. We have incurred, and will continue to incur, capital and
operating expenditures and other costs in the ordinary course of our business in complying with
OSHA and other state and local laws and regulations.
We have, from time to time, received notice from the U.S. Department of Transportation that
our motor carrier operations will be monitored and that the failure to improve our safety
performance could result in suspension or revocation of vehicle registration privileges. If we
cannot successfully resolve these issues, our ability to service our customers could be damaged
which could lead to a reduction of our revenue, profitability and liquidity.
Our business is subject to hazards that could result in substantial liabilities and weaken our
financial condition.
Construction projects undertaken by our employees involve exposure to electrical lines,
pipelines carrying potentially explosive materials, heavy equipment, mechanical failures and
adverse weather conditions. If serious accidents or fatalities occur, we may be restricted from
bidding on certain work and certain existing contracts could be terminated. In addition, if our
safety record were to deteriorate, our ability to bid on certain work could suffer. The occurrence
of accidents in our business could result in significant liabilities or harm our ability to perform
under our contracts or enter into new contracts with customers, which could reduce our revenue,
profitability and liquidity.
11
Many of our communications customers are highly regulated and the addition of new regulations or
changes to existing regulations may adversely impact their demand for our specialty contracting
services and the profitability of those services.
Many of our communications customers are regulated by the Federal Communications Commission.
The FCC may interpret the application of its regulations to communication companies in a manner
that is different than the way such regulations are currently interpreted and may impose additional
regulations. If existing or new regulations have an adverse affect on our communications customers
and adversely impact the profitability of the services they provide, then demand for our specialty
contracting services may be reduced.
Claims, lawsuits and proceedings could reduce our profitability and liquidity and weaken our
financial condition.
We are subject to various claims, lawsuits and proceedings which arise in the ordinary course
of business. Claimants may seek large damage awards and defending claims can involve significant
costs. When appropriate, we establish reserves against these items that we believe to be adequate
in the light of current information, legal advice and professional indemnity insurance coverage,
and we adjust such reserves from time to time according to case developments. If our reserves are
inadequate, or if in the future our insurance coverage proves to be inadequate or unavailable or
there is an increase in liabilities for which we self-insure, we could experience a reduction in
our profitability and liquidity. In addition, claims, lawsuits and proceedings may harm our
reputation or divert management resources away from operating our business. See Legal Proceedings
in our Annual Report on Form 10-K for the year ended December 31, 2005, as updated or supplemented
by subsequent periodic reports we file with the Securities and Exchange Commission, for additional
information.
Acquisitions involve risks that could result in a reduction of our profitability and liquidity.
We have made, and in the future plan to make, strategic acquisitions. However, we may not be
able to identify suitable acquisition opportunities or may be unable to obtain the consent of our
lenders and therefore not be able to complete such acquisitions. We may decide to pay for
acquisitions with our common stock which may dilute your investment in our common stock or decide
to pursue acquisitions that investors may not agree with. In addition, acquisitions may expose us
to operational challenges and risks, including:
|
|
|
the ability to profitably manage additional businesses or successfully integrate the
acquired business operations and financial reporting and accounting control systems into
our business; |
|
|
|
|
increased indebtedness associated with an acquisition; |
|
|
|
|
the ability to fund cash flow shortages that may occur if anticipated revenue is not
realized or is delayed, whether by general economic or market conditions or unforeseen
internal difficulties; |
|
|
|
|
the availability of funding sufficient to meet increased capital needs; |
|
|
|
|
diversion of managements attention; and |
|
|
|
|
the ability to hire qualified personnel required for expanded operations. |
A failure to successfully manage the operational challenges and risks associated with or
resulting from acquisitions could result in a reduction of our profitability and liquidity.
Borrowings associated with these acquisitions may also result in higher levels of indebtedness
which could impact our ability to service the debt within the scheduled repayment terms.
12
Risks Related to Our Company and Our Common Stock
We may incur costs due to the complaints that were filed against us and certain of our officers.
In the second quarter of 2004, several complaints for a purported securities class action were
filed against us and certain of our officers. We have settled these actions without payment to the
plaintiffs by us. As part of the settlement, our excess insurance carrier has retained its rights
to seek reimbursement of $2 million from us based on its claim that notice was not properly given
under the policy. The derivative action based on the same factual predicate as the purported
securities class actions which was filed by a shareholder in December 2004 and the related SEC
informal inquiry, remain unresolved. We may be unable to successfully resolve these disputes
without incurring significant expenses. See Legal Proceedings in our Annual Report on Form 10-K
for the year ended December 31, 2005, as updated or supplemented by subsequent periodic reports we
file with the Securities and Exchange Commission, for additional information.
The market price of our common stock has been, and may continue to be, highly volatile.
From 2001 to 2003, for example, our common stock fluctuated from a high of $24.75 in the first
quarter of 2001 to a low of $1.31 in the first quarter of 2003. During 2004 and 2005, our common
stock fluctuated from a high of $16.50 to a low of $3.63. We may continue to experience significant
volatility in the market price of our common stock.
Numerous factors could have a significant effect on the price of our common stock, including:
|
|
|
announcements of fluctuations in our operating results or the operating results of
one of our competitors; |
|
|
|
|
future sales of our common stock or other securities; |
|
|
|
|
announcements of new contracts or customers by us or one of our competitors; |
|
|
|
|
market conditions for providers of services to communications companies, utilities and government; |
|
|
|
|
changes in recommendations or earnings estimates by securities analysts; and |
|
|
|
|
announcements of acquisitions by us or one of our competitors. |
In addition, the stock market has experienced significant price and volume fluctuations in
recent years that have been unrelated or disproportionate to the operating performance of
companies. The market price for our common stock has been volatile and could also cause the market
price of our common stock to decrease and cause you to lose some or all of your investment in our
common stock.
A small number of our existing shareholders have the ability to influence major corporate
decisions.
Jorge Mas, our Chairman, and other members of his family who are employed by MasTec
beneficially own approximately 34.17% of the outstanding shares of our common stock as of April 5,
2006. Accordingly, they are in a position to influence:
|
|
|
the vote of most matters submitted to our shareholders, including any merger,
consolidation or sale of all or substantially all of our assets; |
|
|
|
|
the nomination of individuals to our Board of Directors; and |
|
|
|
|
a change in our control. |
These factors may discourage, delay or prevent a takeover attempt that you might consider in
your best interest or that might result in you receiving a premium for your common stock.
13
Our articles of incorporation and Florida law contain anti-takeover provisions that may make it
more difficult to effect a change in our control.
Certain provisions of our articles of incorporation and bylaws and the Florida Business
Corporation Act could delay or prevent an acquisition or change in control and the replacement of
our incumbent directors and management, even if doing so might be beneficial to our shareholders by
providing them with the opportunity to sell their shares possibly at a premium over the then market
price of our common stock. For example, our Board of Directors is divided into three classes. At
any annual meeting of our shareholders, our shareholders only have the right to appoint
approximately one-third of the directors on our Board of Directors. Consequently, it will take at
least two annual shareholder meetings to effect a change in control of our Board of Directors,
which may discourage hostile takeover bids. In addition, our articles of incorporation authorize
our Board of Directors, without further shareholder approval, to issue preferred stock. The
issuance of preferred stock could also dilute the voting power of the holders of common stock,
including by the grant of voting control to others, which could delay or prevent an acquisition or
change in control.
14
USE OF PROCEEDS
We will not receive proceeds from any sale of common stock by the selling shareholders.
DILUTION
Our diluted net tangible book value as of December 31, 2005, as adjusted to give effect to our
public offering of 14,375,000 shares of common stock in January 2006 and our acquisition of Digital
Satellite Services, Inc. in January 2006, including the private placement of 637,214 shares of
common stock (the resale of which is being registered pursuant to this registration statement)
issued as part of the purchase price for the acquisition, was approximately $185.0 million, or
$2.88 per share of common stock. Adjusted diluted net tangible book value per share represents our
total tangible assets less our total liabilities as of December 31, 2005, divided by the aggregate
number of shares of our common stock outstanding as of December 31, 2005, in each case as adjusted
to give effect to the public offering and Digital Satellite Services, Inc. acquisition described
above. Dilution per share to new investors represents the difference between the amount per share
paid by purchasers of our common stock in this offering and our adjusted diluted net tangible book
value per share at December 31, 2005. At an assumed public
offering price of $12.20 per share, the
last reported sale price of our common stock on April 11, 2006 on the New York Stock Exchange, new
investors would experience an immediate dilution of $9.32 per share. Purchasers of our common
stock offered pursuant to this prospectus will suffer immediate and substantial dilution in net
tangible book value per share. The following table illustrates the dilution to new investors.
|
|
|
|
|
Public offering price per share |
|
$ |
12.20 |
|
Adjusted diluted net tangible book value per share as of December 31, 2005 |
|
|
2.88 |
|
|
|
|
|
Dilution per share to new investors |
|
$ |
9.32 |
|
|
|
|
|
SELLING SECURITY HOLDERS
The selling shareholders acquired the 637,214 shares of common stock being offered by this
prospectus in connection with our acquisition of substantially all of the assets and assumption of
certain operating liabilities and contracts of Digital Satellite Services, Inc. Under the terms of
the acquisition, Digital Satellite Services, Inc. initially received 637,214 shares of our common
stock which we understand it contributed or distributed to Digital Satellite Services Employee
Stock Ownership Trust which then used the shares to repay its debt to the selling shareholders.
We understand that each shareholder ultimately received 318,607 shares of our common stock.
The following table sets forth information with respect to the selling shareholders as of
April 5, 2006. All of the information contained in the table below is based upon information
provided to us by the selling shareholders and we have not independently verified this information.
Because each selling stockholder may sell all, some or none of the shares of common stock
which each holds, and because the offering contemplated by this prospectus is not currently being
underwritten, no estimate can be given as to the number of shares of common stock that will be held
by the selling stockholders upon termination of the offering. The information set forth in the
following table regarding the beneficial ownership after resale of shares is based on the basis
that each selling stockholder will sell all of the shares of common stock owned by that selling
stockholder and covered by this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of |
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
Shares Beneficially |
|
|
Number of Shares |
|
Number of Shares |
|
Beneficially Owned |
|
Owned After |
Selling Stockholder |
|
Beneficially Owned |
|
Offered |
|
After Offering |
|
Offering |
Ronald E. Phillips(1) |
|
|
318,607 |
|
|
|
318,607 |
|
|
|
|
|
|
|
* |
|
Dawn M. Phillips(1) |
|
|
318,607 |
|
|
|
318,607 |
|
|
|
|
|
|
|
* |
|
|
|
|
* |
|
Less than one percent |
|
(1) |
|
Since our acquisition of Digital Satellite Services, Inc. in January 2006, Mr. Phillips has
been employed by MasTec as a Regional Vice President and Mrs. Phillips has been serving as a
consultant of MasTec. |
15
PLAN OF DISTRIBUTION
We are registering the shares on behalf of the selling shareholders. The selling shareholders
(or their pledgees, donees, transferees or other successors in interest selling shares received
from a named selling stockholder as a gift, partnership distribution or other non-sale-related
transfer after the date of this prospectus) may sell their shares offered by this prospectus to
purchasers directly. Alternatively, the selling shareholders may offer the shares to or through
underwriters, brokers/dealers or agents who may receive compensation in the form of discounts,
concessions or commissions from selling shareholders or the purchasers of shares. The selling
shareholders may pledge or grant a security interest in some or all of the common stock owned by
them and, if any selling shareholders default in the performance of such secured obligations, the
pledgees or secured parties may offer and sell the relevant common stock pursuant to this
prospectus.
To our knowledge, there are currently no plans, arrangements or understandings between any
selling shareholders and any underwriter, broker-dealer or agent regarding the sale of the common
stock by the selling shareholders.
The selling shareholders, and any underwriters, brokers/dealers or agents that participate in
the distribution of the shares may be deemed to be underwriters within the meaning of the
Securities Act. Any profit realized by them on the sale of such shares and any discounts,
commissions, concessions or other compensation received by any underwriter, broker/dealer or agent
may be deemed to be underwriting discounts and commissions under the Securities Act. These
discounts, commissions or concessions may be in excess of those customary in the types of
transactions involved.
The selling shareholders may sell the shares in one or more transactions:
|
|
|
at fixed prices; |
|
|
|
|
at market prices prevailing at the time of sale; |
|
|
|
|
at prices related to prevailing market prices; and/or |
|
|
|
|
at varying prices determined at the time of sale or at negotiated prices. |
The sale of shares may be effected in transactions, which may involve crosses (in which the
same broker acts as agent on both sides of the trade) or block transactions:
|
|
|
on any national securities exchange or quotation service on which the shares may be
listed or quoted at the time of sale; |
|
|
|
|
in the over-the-counter market; |
|
|
|
|
in transactions otherwise than on such exchanges or in the over-the-counter market,
including privately negotiated transactions directly with purchasers or through agents; |
|
|
|
|
through the writing of options, swaps or other derivatives (whether exchange-listed
or otherwise); or |
|
|
|
|
through any combination of the foregoing or by any other legally available means. |
Our common stock is listed on the New York Stock Exchange under the symbol MTZ.
In connection with sales of the shares or otherwise, selling shareholders may enter into
hedging transactions with broker-dealers. These broker-dealers may in turn engage in short sales of
the shares in the course of hedging their positions. The selling shareholders may also sell shares
short and deliver shares to close out short positions, or loan or pledge shares to broker-dealers
that in turn may sell shares.
In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule
144, or any other available exemption from registration under the Securities Act may be sold under
Rule 144, or any of the other available exemptions rather than pursuant to this prospectus.
Because the selling shareholders, may be deemed to be underwriters within the meaning of
Section 2(11) of the Securities Act of 1933, as amended, the selling shareholders, may be subject
to the prospectus delivery requirements of the Securities Act. We have informed the selling
shareholders that the anti-manipulative provisions of Regulation M promulgated under the Securities
Act may apply to their sales in the market.
16
Upon being notified by a selling shareholder that any material arrangement has been entered
into with a broker-dealer for the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, which supplement will disclose:
|
|
|
the name of each such selling stockholder and of the participating broker-dealer(s); |
|
|
|
|
the number of shares involved; |
|
|
|
|
the price at which the shares were sold; |
|
|
|
|
the commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable; and |
|
|
|
|
such other facts as may be material to the transaction. |
Under agreements that may be entered into by selling shareholders, underwriters who
participate in the distribution of shares may be entitled to indemnification by selling
shareholders against specified liabilities, including liabilities under the Securities Act. We have
also agreed to indemnify, in some circumstances, the selling shareholders and control and other
persons related to the foregoing persons against specified liabilities, including liabilities under
the Securities Act. The selling shareholders have agreed to indemnify us in specified
circumstances, as well as specified related persons, against specified liabilities, including
liabilities under the Securities Act, that may arise from any written information furnished to us
by them specifically for use in this prospectus.
Pursuant to our agreement with the selling shareholders, we will pay all expenses of the
registration of the shares, including, without limitation, commission filing fees and expenses of
compliance with state securities or blue sky laws. The selling shareholders will pay all
underwriting discounts and selling commissions, if any associated with the sale of the shares.
The selling shareholders and their respective affiliates in the ordinary course of their
business have provided and may from time to time provide investment and commercial banking or
financial advisory services to us and our affiliates, for which they have received or expect to
receive customary fees and expenses.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.10
per share, and 5,000,000 shares of preferred stock, par value $1.00 per share. As of April 5, 2006
we had 64,563,868 shares of common stock issued and outstanding and no shares of preferred stock
issued and outstanding.
Common Stock
Each share of our common stock entitles its owner to one vote on all matters submitted to a
vote of our shareholders. The holders of our common stock are entitled to receive dividends, when,
as and if declared by our Board of Directors, in its discretion, from funds legally available for
the payment of dividends. If we liquidate or dissolve, the owners of our common stock will be
entitled to share proportionately in our assets, if any, legally available for distribution to
shareholders, but only after we have paid all of our debts and liabilities.
Our common stock has no preemptive rights and no subscription, redemption or conversion
privileges and it is not subject to any further calls or assessments by us. Our common stock does
not have cumulative voting rights, which means that the holders of a majority of the outstanding
shares of our common stock voting for the election of directors can elect all members of our Board
of Directors eligible for election in any year. See Description
of Capital Stock Material
Provisions of our Articles of Incorporation. A majority vote is also sufficient for other actions
that require the vote or concurrence of shareholders.
As of April 5, 2006, Jorge Mas, our Chairman, and other members of his family who are employed
by MasTec beneficially own approximately 34.17% of the outstanding shares of our common stock. They
have the power to control our management and affairs. Accordingly, they are in a position to
substantially influence:
|
|
|
the vote of most matters submitted to our shareholders, including any merger,
consolidation or sale of all or substantially all of our assets; |
17
|
|
|
the nomination of individuals to our Board of Directors; and |
|
|
|
|
a change in our control. |
The Mas familys ability to exercise significant control over us may discourage, delay or
prevent a takeover attempt that you might consider in your best interest and that might result in
you receiving a premium for your common stock. All of the outstanding shares of our common stock
are fully paid and nonassessable.
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company.
Preferred Stock
Our Articles of Incorporation authorize our Board of Directors to:
|
|
|
issue preferred stock in one or more series; |
|
|
|
|
establish the number of shares to be included in each such series; and |
|
|
|
|
fix the designations, powers, preferences and rights of the shares of each series
and any qualifications, limitations or restrictions on those shares. |
The Board of Directors may establish a class or series of preferred stock with preferences,
powers and rights (including voting rights) senior to the rights of the holders of our common
stock. If we issue any of our preferred stock it may have the effect of delaying, deferring or
preventing a change in our control.
Material Provisions of Our Articles of Incorporation and By-Laws
Our Amended and Restated Articles of Incorporation and our By-Laws contain material provisions
that may make the acquisition of control of us more difficult.
Business Combinations. Our Amended and Restated Articles of Incorporation contain material
provisions which may make it more difficult for a person or entity that is the holder of more than
10% of our outstanding voting stock to force us to approve a business combination. For purposes
of this discussion, a business combination includes any:
|
|
|
merger or consolidation of us with or into another corporation; |
|
|
|
|
sale or lease of all or any substantial part of our property and assets; or |
|
|
|
|
issuance of our securities in exchange for sale or lease to us of property and
assets having an aggregate fair market value of $1 million or more. |
Our Amended and Restated Articles of Incorporation require at least 80% of the voting power of
all of our outstanding shares entitled to vote in the election of directors, voting together as a
single class, to vote in favor of a business combination proposed by any holders of more than 10%
of our outstanding voting stock in order for that transaction to be approved. This voting
requirement is not applicable to business combinations if either:
|
|
|
our Board of Directors has approved a memorandum of understanding with the other
corporation with respect to the transaction prior to the time that the other
corporation became a holder of more than 10% of our outstanding voting stock; or |
|
|
|
|
the transaction is proposed by a corporation of which we are the majority owner. |
Classified Board of Directors and Related Provisions. Our By-Laws provide that the number of
our directors will be established from time to time by a majority vote of our Board of Directors
and our shareholders. Our By-Laws also provide that our Board of Directors will be divided into
three classes of directors, with each class having a number as nearly equal as possible and that
directors will serve for staggered three-year terms. As a result, one-third of our Board of
Directors will be elected each year. These classified board provisions could prevent a party who
acquires control of a majority of our outstanding voting stock from obtaining control of the Board
of Directors until the second annual shareholders meeting following the date the acquirer obtains
its controlling interest.
18
Our shareholders may remove any of our directors or our entire Board of Directors if the votes
in favor of removal constitute at least a majority of all of our outstanding voting stock entitled
to vote. However, our By-Laws also provide that our shareholders may only remove our directors for
cause and only by a vote at a meeting which is called for the purpose of removing the director or
directors. The By-Laws define cause as failing to substantially perform ones duties to us (other
than as a result of physical or mental disability) or willfully engaging in gross misconduct
injurious to us. If there is a vacancy on our Board of Directors either a majority of our remaining
directors or our shareholders may fill the vacancy.
Shareholder Action By Written Consent. Our By-Laws provide that any actions which our
shareholders may take at a shareholders meeting can be taken by written consent in lieu of a
meeting.
In order to effect a shareholder action by written consent in lieu of a meeting holders of our
outstanding stock having at least the minimum number of votes that would be necessary to authorize
the action at a shareholders meeting must sign a written consent which states the action to be
taken. If our shareholders take any action by written consent in lieu of a meeting we must notify
all of our shareholders that did not consent to the action in writing within 10 days after
receiving the written consent and describe the action to them.
Indemnification. Our Articles of Incorporation and By-Laws provide that we will indemnify each
of our directors and officers to the fullest extent permitted by law. Our By-Laws permit us to
purchase insurance on behalf of our directors, officers, employees and agents against liabilities
that they may incur in those capacities, whether or not we would have the power to indemnify them
against such liabilities.
LEGAL MATTERS
Greenberg Traurig, P.A., Miami, Florida has passed upon the validity of the issuance of the
securities being offered by this prospectus.
EXPERTS
The consolidated financial statements of MasTec, Inc. at December 31, 2005 and 2004 and for
the two years then ended and managements assessment of the effectiveness of internal control over
financial reporting as of December 31, 2005 (incorporated in this prospectus by reference to our
Annual Report on Form 10-K for the year ended December 31, 2005) have been incorporated in reliance
on the report of BDO Seidman, LLP, independent registered public accounting firm, given on the
authority of such firm as an expert in accounting and auditing.
The consolidated financial statements of MasTec, Inc. for the year ended December 31, 2003
appearing in MasTec, Inc.s Annual Report (Form 10-K) for the year ended December 31, 2005 have
been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in
their report thereon, included therein, and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION ABOUT MASTEC
We file annual, quarterly and special reports, proxy statements and other information with the
Securities and Exchange Commission. We have filed a registration statement to register with the SEC
the shares of our common stock listed in this prospectus. This prospectus does not contain all the
information contained in the registration statement and the exhibits to the registration statement.
For further information with respect to us and our common stock, we refer you to the registration
statement and to the exhibits to the registration statement. You may read and copy the reports,
statements and other information that we file, at the SECs Public Reference Room at 450 Fifth
Street, N.W., in Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on their Public Reference Room. Our SEC filings are also available from the New York
Stock Exchange, from commercial document retrieval services and from the internet site maintained
by the SEC at http://www.sec.gov. In addition, our SEC filings and other information about our
company are available on our internet website: http://www.mastec.com. Please note that our internet
address is included in this prospectus as an inactive textual reference and the information
included on our website is not incorporated by reference into this prospectus and should not be
considered part of this prospectus.
19
For information about us, you should rely only on the information contained in this
prospectus. We have not authorized anyone else to provide you with information other than this
prospectus or to make representations as to matters not stated in this prospectus. If anyone else
has provided you with different information, you should not rely on it.
This prospectus is not an offer to sell these securities or our solicitation of your offer to
buy these securities in any jurisdiction where that offer or sale would not be permitted.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference some of the documents we file with it into
this prospectus, which means:
|
|
|
we can disclose important information to you by referring you to those documents; |
|
|
|
|
the information incorporated by reference is considered to be part of this prospectus; and |
|
|
|
|
later information that we file with the SEC will automatically update and supersede
this information. |
We incorporate by reference the documents listed below:
|
|
|
our Annual Report on Form 10-K for the fiscal year ended December 31, 2005 filed on
March 1, 2006; |
|
|
|
|
our definitive Proxy Statement, filed in connection with our 2005 Annual Meeting of
Stockholders filed on April 25, 2005; |
|
|
|
|
our Current Reports on Form 8-K, filed on January 6, 2006, January 23, 2006,
February 6, 2006 and April 6, 2006 (not including any information furnished under Items
2.02 or 7.01 of Form 8-K, which information is not incorporated by reference herein);
and |
|
|
|
|
The description of our common stock contained in Form 8-A filed on February 10, 1997
(File No. 001-08106). |
In addition, all documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act prior to the termination of the offering, will be deemed to be
incorporated herein by reference and to be a part of this registration statement from the date of
filing of such documents. Any statement contained in a document incorporated herein by reference
will be deemed to be modified or superseded for purposes of this registration statement to the
extent that a statement contained herein, or in a subsequently filed document incorporated herein
by reference, modifies or supersedes the statement. Any statement modified or superseded will not
be deemed, except as modified or superseded, to constitute a part of this registration statement.
We will provide without charge to each person, including any stockholder, to whom a prospectus
is delivered, upon written or oral request of that person, a copy of any and all of the information
that has been incorporated by reference in this prospectus (excluding exhibits unless specifically
incorporated by reference into those documents). Please direct requests to us at the following
address:
MasTec, Inc.
800 S. Douglas Road, 12th Floor
Coral Gables, Florida 33134
Attention: Alberto de Cardenas
(305) 599-1800
20
637,214 SHARES
COMMON STOCK
PROSPECTUS
April 28, 2006
No person has been authorized to give any information or to make any representations in connection
with this offering other than those contained in this prospectus and, if given or made, any
information and representations must not be relied upon as having been authorized. This prospectus
does not constitute an offer to sell or the solicitation of an offer to buy any securities other
than the securities to which it relates or an offer to sell or the solicitation of an offer to buy
these securities in any circumstances in which this offer or solicitation is unlawful. Neither the
delivery of this prospectus nor any sale made under this prospectus shall, under any circumstances,
create any implication that there has been no change in our affairs since the date of this
prospectus or that the information contained in this prospectus is correct as of any time
subsequent to its date.
21