WLDN - Earnings call transcript Q4 2017

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Operator

Good day, everyone and welcome to the Willdan Group Fourth Quarter 2017 Conference Call. Today's call is being recorded. At this time, I would like to turn the conference over to Mr. Tony Rossi. Please go ahead.

Tony Rossi

you. Thank and results joining ended for XXXX. everyone Willdan to December you financial Group's the thank afternoon, us for discuss XX, Good fourth quarter us Mike Bieber, Chairman of Willdan Thomas Stacy With Chief President management Executive McLaughlin, and Chief Officer; Brisbin, Officer; Financial Group. from today and are open will Management then prepared to call and remarks the review your will we up questions. Reform of statements Act are not Private are forward-looking within Statements meaning which Securities XXXX. made purely of call Litigation in today's conference the the the course of historical, The future and important forward-looking in uncertainties and to note statements. involve certain statements risks differ those it that results from forward-looking is the materially such company's any could company's the XX, XXXX cause XX-Q. could the risk listed to that December SEC factors Form Factors year but ended are the time reports, limited not on XX-K results and including, to reports Form for to, differ materially from and other in actual quarterly subsequent time investors made cautions company not on undue course reliance call. conference the The this during forward-looking place statements to the of Willdan to forward-looking update does or not Group undertake any made today. statements and revise any disclaims obligation

financial to to trends results, analyze performance. business also financial measures provides GAAP that investors' we our addition In and ability non-GAAP believe enhance Willdan

EBITDA are and include the derived of from we services With turn revenue items for over will of results. that, the work reconciliations Our the release impact of non-GAAP Stacy? of a both measure at by We issued revenue Chief from measure the and Officer, is costs certain employees. end improved measures our supplemental performance, of non-GAAP I the other which Financial other nonrecurring Stacy operating earnings to revenue direct today. now expense McLaughlin. removes allows income EBITDA. subcontractor direct call net the these measures GAAP and services and of costs subcontractor included net believe of for operating our an performed

Stacy McLaughlin

fourth the start million with two its $X.X us to revenue from those Contract XX.X% quarter from revenue $XX.X of trend. income revenue our declined segment, increased both an sheet Energy Efficiency like the for XXXX. increased contract Willdan three fourth statement, quarter into non-energy I'll million $XX.X revenue, increased today's my in By to $X.X Engineering overview Services balance XX.X% services XXX% X.X% for finance its the million including $XX to welcome Homeland XXXX million, margin then on acquisitive segments I'd call. Total fourth to by Security collapse million, add to XXXX to public organic intends and million increased our Services the of to X.X% revenue segments our segments one. four Services of Tony. segments and joining quarter quarter. combining Thanks, finally, for to to in and from revenue $XX.X

of revenue total and rate of Analytics services quarter revenue Energy incremental is included revenue X.X% growth implementation subcontractor of approximately which increase as contract prior in services total The the to organic increase revenue included Efficiency Services XX.X% in for and Energy contract same of direct to in growth costs ago fourth $XXX,XXX from from the quarter million XXXX, of segment new Integral costs for material the Direct million, $XX.X increase $XX.X our was an million costs related increase corresponding the $XX.X in segment. primarily subcontractor X% was year. last fourth were period Our of The million quarter. revenue of attributable contract other year the contracts. and the Efficiency defined of result in revenue $XX.X a Services period. contract the was acquisition in the the year Net an minus as

XX.X% prior XX.X% from the quarter. third which the total in XX.X% costs costs services represented total revenue XXXX subcontractor direct contract was fourth down other lower direct of our revenue down XX.X% XXXX. contract The quarter and of the of quarter in in revenue to due contract of decline were from quarter, Our of this

said year, General the the as quarters we our XXXX period. were earlier we believe subsequently $XX revenue peaked to seen we fourth of expenses of positively percentage contract quarter compared prior costs administrative for direct year impacted has second in million $XX.X costs quarter lower As million have for and our the in progressively of the fiscal two a margin. which and

as income quarter for an fourth increase the expense of to percentage fourth XX% Operating generated $X.X in non-cash a relatively were fourth of from quarter fourth defined a period. expenses Adjusted XXXX. over of contract consistent the XX% of was the $X in total with for EBITDA XX.X% the before our quarter the million fourth up revenue, EBITDA EBITDA million XXXX was XX.X% of compared net fourth prior $X.X Adjusted the revenue As $X.X had stock quarter quarter G&A for the with compared of XXXX. was as quarter XXXX. for we the year of XXXX, percentage XX.X% of million million

income in was the in for XXXX. fourth of million Without rate into deferred of deduction benefit be EPS to or prior $X.XX approximately the XXXX, deferred share We tax the impact this have decrease our in allowed expect Efficiency which related a act In $X.XX to recently onetime we attributable to tax approximately tax $X.XX and of expense the tax Act During XXXD our onetime December, and in $X.X the passed. of quarter, to This XX% would a year. remeasurement law $X.XX. was to resulted passed diluted benefit, per a have assets of our estimate tax for liabilities Tax we've benefit $XXX,XXX. compared Tax which recorded an been Energy our

million income of income tax to diluted $X.XX $X.X to for Net of $X.X fourth rate the share per long-term our estimate of was approximately or be we quarter compared diluted or XXXX. XXXX fourth per However XX%. $X.XX million quarter the share for net

we was the by previous the cash $XX.X for and balance XXXX $X.X fiscal in was had contingent at partially year. million a The XX, cash generated of the Analytics, million of which of related payments end decrease cash cash decrease December our operations. sheet, primarily to Integral the Turning This equivalents of offset driven to consideration by prior payable was from the notes and acquisition. for use since acquisition

Our DSO was December XX XX. days at

balance strong increase the million of had Although from quarter. an this end $X.X our quarter from was of by we the days end which XXXX, year XX at collections cash increased third a

our outstanding under credit As XX, December loan had under of revolving borrowings and term of approximately $X.X facility. million loans in outstanding line XXXX, the we no

to adjusted address for EBITDA by before margin call year turn over Tom, compensation revenue. I I non-cash stock the Before to net divided want the expense EBITDA as defined

adjusted for XXXX. from XXXX that pleased We margin was up are XX.X% XX%, EBITDA in

to expect turn adjusted now over We the I’d call XXXX. like continue EBITDA margin to our up to to for XX% improve around Tom. to

Thomas Brisbin

doubled point last New Stacy we coming project for more XXXX activity, fourth from Thanks states up higher quarter local more our We types in or results any revenue greater increase continued everyone. and the our and Electric. revenue overall business diversification and income. the a San programs a of in comp, afternoon Illinoi, mix. to Jersey Gas history. and revenue capacity company against saw Diego our a in XX% our of clients requirements for grew net tough newer was good Comparing fourth and the quarter. than our of good year, another we acquisition of XXXX, finished more than organic and to Through We number quarter at ramp worked on we contract development and both In our we LCR,

have off the excellent We program. LCR an start gotten to on

Our deliver well programs goal We another X.X. is we four of step expected contribution for to one where in deliver are of XXXX year megawatt the The scheduled and LCR was from believe we are in another megawatts savings capacity. up positive to positioned XXXX, XXXX. delivered to we in energy take

our of on and will utilities growth. which efficiency for a energy strong gives beyond, us All for major foundation throughout continue layering incremental programs XXXX

of this Our see in we expect looks LCR in said Illinois. XXXX. acquisition additional good we we ComEd from to relationship datacenter for expect a a our program sector ramp contributions the for award To public foundation, growth the see program. we program, acquisitions up Edison received with direct continued The and recent as Potomac program we had of announced Maryland. new strategic our in our and We a pipeline in from expense install new the small business

sector five years because schools. in $XXX general is New work public Our is Contract of of programs targeting just Jersey department for stores, the getting the over in started. million the which will addition grow

have first two We assignments. our

that gas and all starting measures ramping its program targeting schools lodging. up. Edison is SoCalGas programs very It nice will program expanding extended California, its are will schools targeting for or Southern be our be and

non-wires, landscape. opportunities a non-pipes capacity, indicative are such New types of as of local changing

the are Willdan For we winning new we very opportunities. are proud that

catalyst increase in least of future XX% Our the of From performing a we are end outsourcing mechanical, projected. giving business They and new must grid. a California little from us competitive and selling exceptionally end building opportunities. their at the also to for Willdan are percentage well forefront be markets for at a electrical From at by these successfully XX% outsourced the advantage that Willdan. focus the We at new proving end of in state invaluable We outsourcing focus is increase later California multi-year company is growth increase term utilities. in increased been and engineering and increased for of Genesis by the XXX/Abacus at local the primary initially opportunities. longer programs believe cross on development I by least target into the XXXX in we than see a of will of XX% in to that XXXX. The a XX% moving electric are to and energy the know IRUs of XXXX, investor-owned note amount will California has later for perspective, least to by XXXX. RFPs a a the efficiency XXXX this capitalizing perspective, a mandate the will

solves can a rapid and has software trend we Integral been increased from of Electric. solar the operations generation, Analytics of adoption. the in capabilities company where XXX% assets IA because is We their also manage clients and the acquisition. grid that from transformation cities, services software. expect company significant into a increase selected range company, to data recent energy evolving revenue projects increase efficiency most are and PG&E leveraging integrate a that diverse and clients This powerful because people a leader is nearly see that collect in now A more Integral we Hawaiian order of solutions in analytic significant both resources planning by smart the adopted a help see to modernize to has in IA, we Willdan our to both a company analyze problems Hawaiian. our growing for with We and in into electric renewable of data this Analytics efficiently.

month smart We have a cities. good had for

As This York is addition you Grant have on district, quality selected $XX we X from feasibility the New community for microgrid we Jose the microgrid. now. studies, work just CECO million San are recall, been on California Commission air award management working Energy the in to we

won its a the a and microgrid Illinois the competition of linking Commission to just state Illinois The a also Massachusetts We for Wentworth to microgrid be contracted of will first Bronzeville the Institute Technology Bronzeville. for Technology country of approved technical campus microgrid. for the the This the Microgrids. advisor to Commerce kind be Institute

IIT on working as Development Ankara, We're currently generation at USTDA its both Trade microgrids. university for to for We the Turkey. Agency a also source X-megawatt distributed a that's determine campus CHP facility in of awarded are feasibility project

Indian pending Tribes also within microgrid California. We DoD opportunities and for have the

changing cities California. subject Northern with energy their well little and City for XX old Our still seeing our California new engineering Smart on very into also. the – We're proud year civil expansion growing to is XX-year-old XX did services we especially are practice bit, integration a California more see in Cities.

evolution, number our in and Our of Board senior financial Directors. a well. continued assist with have changes To our announced we did of also consultancy management

be water Debra the in is public regulated Micah planning, Her And as have Officers Her guide the Paul help investors Coy Board. succession strategies. our Coy. with on Chairman Win Board was retiring utilities been and served has the guiding As level, market an Ms. Whitelaw, plus our Counsel Head are pleased named finally, will of and part the our we to our Board will policy Development XX Westfall from utility brings Board. for years of our company. the investor Business General welcome since Chen, of and to perspective At of approximately Executive XXXX years. experience XX impressive. our Win

appreciative valuable best and retirement. service Willdan's transformed We of he company years model We the past business wish as to the are we in decade. input over provided him his the the greatly of all Win's

have Now XXXX. change let metrics guiding me to discuss some we led trends are that to the us in

as XXXX expense. expect compensation our Last EPS on the non-cash guiding no on our net direct now of the investors last diluted revenue non-cash successful XXXX equipment a we are revenue, shareholders. or cases East margin stock this gross comp increasingly increase been defined would GAAP expense quarters, align mostly of our costs comp XXXX, have contracts in been costs. West revenue. model to Because per with closely to has $X.XX. some that revenue several share. subcontractor stock other Over we stock and pass-through the compensation reduce renegotiating net about execution year, included The especially range net $X.XX changing in in management's to some expense about we subcontractor the stock instead pass-through In to $X.XX have and rise Coast, EPS little non-cash we or cost. Without Accordingly, have are goals of talked will around equipment revenue

in last and To companies and both approximate earnings and earnings numbers an expenses. disclosing they $XXX that comp expect have many represents smaller now This we XX% technology-oriented between not X% share before stock We EPS guidance, year, before to noted are and diluted guiding approximate our million. to share. to per acquisitions. over last any Accordingly, we before range stock future expenses non-cash after $XXX million stock XX% investors in Also have an to This both expense. present range and we looked non-cash net growth stock $X.XX range year, per growth XXXX revenue companies metrics at EPS compensation between our after including rapid represents an and XXXX, peer other over begun growth and to both before public, $X.XX XX% expect comp.

amortization approximately few future tax to turn back net rate With share. acquisitions million $X.XX be be count a effective approximately now assumptions, tax to is be million. for Depreciation is included $X to at The expected and Looking is approximately diluted in guidance. stock we expense expected million. approximately benefit per expected to be comp $X of to expect to operator are I expected share that, XX%, call is to X.X would like be No Q&A. the

Operator

Wedbush. Instructions] We with first Ariel our Thank you. take [Operator question from Hughes

Ariel Hughes

Hi, good quarter.

So just to wanted on… follow-up

Thomas Brisbin

can you. Ariel, we hear hardly

Ariel Hughes

Hi, can me. you hear

Thomas Brisbin

Yes.

Ariel Hughes

Okay.

new follow-up Just how advancing are clients can opportunities you affect wanted to receiving some provide the and how Analytics margins on perhaps just on moving guys hoping might how cross if acquisition, the offering, guys on are details that selling you forward? Integral

Michael Bieber

of This well is gate. have out opportunities. win We're new very the very cross Analytics. both pleased with Integral Mike. They helped us done selling They

us well the earlier their to we And year. won software, on with done also the been utilities. in other They they to went and ComEd selling on have software planning they Orals have instance HECO that own. For competitions

That's So million doing to XXXX also have out of you are they $X been and margin. million, why we of operating revenue $XX the help gate, in right, expect Willdan's improve they improve, will well.

Ariel Hughes

for it you, that's Thank me.

Operator

Instructions] [Operator

Thomas Brisbin

We see no questions. further

Operator

over back any to or questions I the remarks. additional closing would management With like turn call further to no for

Thomas Brisbin

you our all and call thank would great Willdan. your continued I interest on for like today day. a of Have to for in participating

Operator

your participation. thank We today's this And does you conference. conclude for

You disconnect. may now

Willdan (WLDN) 8 Mar 182017 Q4 Earnings call transcript