WLDN - Earnings call transcript Q1 2019

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Operator

Operator Good day, and welcome to the Willdan Group’s First Quarter 2019 Conference. Today’s conference is being recorded. At this time, I would like to turn the conference over to Tony Rossi of Financial Profiles. Please go ahead, sir.

Tony Rossi

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

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

Officer, I’d Stacey? items to the net are net McLaughlin. supplemental measures measures from we measures of of the expense improved EBITDA release now revenue, from and results. non-GAAP the performance reconciliations We non-GAAP end that, performed Chief over EPS are impact by removes believe work today. to the turn include certain Our of the these of the EBITDA. EPS Adjusted operating like With revenue Financial adjusted and adjusted an for call issued all at derived allows Stacy adjusted measure revenue our GAAP which employees. for operating our included of earnings

Stacy McLaughlin

contract my was $XX.X for XXXX. Weidt finally, The overview like revenue us the I’d to Total related add sheet our quarter then contract minus our growth in revenue ago direct Tony. the start and an the income recent XX.X% contributions of to Energy, and Group. first to our from other segment XXXX quarter subcontractor with on primarily increase services XX.X% million our energy from as increase first of call. acquisitions million Net balance million guidance. today’s those increased an I’ll for joining was the driven statement, welcome year Thanks, $XX.X of from NAM revenue costs $XX.X defined $XX.X quarter. and to by Lime the our of in of million,

by the and XXXX, contract energy net $XX.X quarter revenue XX.X%, increased engineering were million Within Direct net within first consulting X.X%. the the revenue an of of segment, segment, by for decreased revenue costs same increase resulting in the the and the Energy, of revenue from year. NAM related last Lime XX.X% contract in period primarily growth acquisitions. $XX.X to Weidt was the Group increase The million from

payroll driven year $X.X amortization the increased and and first percentage higher $XX.X Lime the prior primarily administrative Lime quarter the by the to increase wages, personnel the million The for salaries and has from a reduction of first revenue programs increase taxes XX.X% well period. by temporary expenses added prior attributable million were in quarter, costs energy intangible Energy General margin Weidt in our for total in employee revenue impact a higher XXXX same NAM higher the of and our direct utilize acquisitions was contract $XX.X Our year. the compared related recent primarily subcontractors XX.X% to million with acquisitions. of to which quarter revenue largely were of to related Group. benefits of the of The contracts. compared period contract In was the as of that the as through certain Energy,

net expense tax compensation of million. We approximately also $X.X of stock-based had

Tom LADWP Our in Energy to for last first We February. an included was Weidt the and to loss Group in We had quarter approximately the finance of of to first more $XXX,XXX XXXX the been related operating quarter first The quarter in costs due results debt the and operating $X.X and months transaction. the $XXX,XXX acquisition XXXX. of XXXX acquisition largest loss year. expense XXXX to program January period the operating of for in the income increase two in primarily Each of contracts compared two expanded $XX,XXX about. due now Energy. interest of of Duke to same of our first reconfigured the The utilized in programs idling The incurred of the was these program. million to compared quarter has talk $X which of million will Lime the

stock-based first attributable period units. share loss Net diluted compared loss stock $X.XX the with net same of deductions diluted an quarter, $XXX,XXX $X.X income per the During was $X.X vesting million first tax benefit we a period $X.X On of $X.XX quarter of income income quarter or million the diluted $XXX,XXX to of quarter of in or last or recorded share XXXX per of the million transaction per million to EBITDA intangible basis, relating diluted performance-based of $X.XX $X.XX restricted per share primarily the XXXX. with for million the or compared excluding and in the first with for last $X.X compared an compensation, amortization for was was first year. adjusted year. share $X.X same XXXX net costs, Adjusted our

of last cash the a only in balance consume $XX.X quarter due cash the each number of payments of typically $X.X excellent occur in that We compared generation the generated We from an to in first quarter. Turning million year We cash had a year. to in quarter QX. million operations to sheet. loss first

truly this So flow exceptional. quarter’s performance was cash

had million draw As revolving term facility. million of credit our the on March outstanding revolver XXth, delayed and XXXX we outstanding loan $XX.X $XX under --

like update Turning outlook. for to our to I targets fiscal financial would our XXXX.

upper and the ends lower increased by of have we the revenue, $X million. range net For

million. is range new Our to $XXX million $XXX

ends increased upper $X.XX. and have For of lower adjusted by range the EPS, we the

$X.XX we rate QX, that the tax the expect is XX%. $X.XX. to because effective each quarters approximately tax of tax out range rate that of approximately averages year so Our benefit next XX%. be to And XX%, the note in of to I’ll three the in

million million. call depreciation $X.X Our of $X.X amortization million, stock-based of diluted approximately Tom. like compensation approximately now count of over and shares, XX.X of $XX.X million million, share turn approximately to of $X.X approximately interest to the I’d

Thomas Brisbin

Thanks, good everyone. and Stacey afternoon,

excellent integrating made we quarter, drive collaborating the first and business the organization new on our acquisitions across progress development opportunities. to During

of of LADWP our a earnings first and the call, As largest from expected we to soft lower be activity Duke. last two clients, level on quarter somewhat we indicated due our to

result, quarter, were impacted our which a reported underutilized teams As our in results. the negatively

The as Los both ramp on awarded LADWP We Duke been have program has for include you the have program throughout will negotiations up. increasing Angeles added has our energy to forecast impact update Unified states. focused been Energy program and we School that execution District. a on programs We’ll expanded expansions new completed further for positively expansions the programs. additional XXXX. efficiency

these to with the both Lime of past, from excellent by us decision execute continue key and elements and combination come in As on both can relationships our in provide when expanded the were we development have resources expanded good opportunities and wins, business to program Willdan we energy to capabilities deliver in in utilities. and there well that targeted and indicated the to programs are programs. we of we consistently see relationships these demonstrated award Lime Energy an new expand utilities of savings, cases, the the Outside Both efforts. believe the these success ability

the with to contract York a address city signed owned City recently we buildings. of efficiency example, for energy For New

has New to contract more rise buildings. XX,XXX become National address also contracting utility There buildings tunnels provide Con awarded work York performance a been and Port will required efficient. the and for the Jersey positioned energy well Our We’ve as for bridges, by to are work, and transportation of greater New high energy Ed Grid that terminals. be airports, Authority York New to and City than

off accusation software consecutive to an incorporate Again, for We’ve into Weidt The commercial start and business, would projects integral relationship unique Through are Calpine a needs major for York latest a business across Group Weidt architects energy Our neither its have California Weidt with we as and time. on options won new the opening to and market serving this Recompete we Calpine California high engineers process see our us independent quick Choice and on business developers, basis. Procurement a contract. this works producer. Weidt program, provide see new Opportunities. stand-alone analytical our as an is to Calpine, development the program technology this have opportunity Group IA construction with renovations construction own Iowa construction In had the existing up good acquisition, expected. commercial To using opportunity is The work advance The the energy Group’s Community into independent Opportunities, efforts in with of Energy’s a MidAmerican growing we Procurement -- of efforts. the integrating efficiency will The to are throughout update our gotten new assist continues California the Willdan New buildings. energy third producers. Company, doing new statewide just including

full a of far. program that abstracts The step for the end XX so submitted for be this every submitting due by and next made and proposals summer year. that are this hopefully programs have we will We the made shortlist has decision awards

more at have continue efficiency. areas that of and emerging efficiency energy in in funding the slow demand to new see broader -- available embrace becoming Looking energy to states trends been we market,

For recently efficiency for stronger the acquisition, to don’t that in Coast the revenue in we believe with does million years. We the Dominion East launches in we but programs on generate have have pledged opportunity a a programs -- on coming compete good but following Lime $XXX Virginia, example, to energy we Dominion outsource any presence Virginia. currently Energy spend

to Two industries energy which capabilities how and Looking heavy manufacturing, and have areas year of are we at serves continue shaping are closing, we opportunities data and our excited up. consulting footprint. is focus a expand In geographic contractors further our we that to this like defense are M&A good pipeline evaluating about program, of industrial efficiency, centers. policy

revenue upon the significant earnings half Our questions-and-answers. the back very operator new Operator? pipeline to in call we and of that, I based the in rollout turn schedules second the now and have With a like would the ramp we the see to won, expect strong to programs for is year. for

Operator

ahead, you. question Irwin first go Thank ROTH with Instructions] take Partners. Please sir. [Operator We’ll Capital our from Craig

Craig Irwin

thanks Good and for taking questions. evening my

growth So this prepared an missed I did organic remarks, number quarter? share for may you first the in but have the

Mike Bieber

first X% our report. It’s the quarter. Craig, minus for on investors it was

Craig Irwin

Got it.

et starts, So some seasonality and the Lime’s then seasonality that slow other would projects, guessing cetera? be in I’m

Thomas Brisbin

contracts and referenced major we’ve starts, the because but overall the to extensions, quarter. two it’s Well the of start the renegotiation the with first slow slow a

ones. plus So that everywhere big little a the was spread two

Craig Irwin

Got it. construction, this is it, No, right. got

and services, the primary there’s year? some is Willdan? So talk finalization this well actually How guidance know and higher expanded things those I and Then aware actually sort when your contracts. Duke. guess until a driver into this this scope, new P&L for pricing about and layering local I quickly agreements work this that of could soon a on new everybody new geographies more little come this. bit How like get we does we always of on. see agreements starts stickiness for Congratulations LADWP of if Is you sometimes. the

Mike Bieber

Craig. So,

you $XX expanded by for the has The program numbers has Duke the million. LADWP Here’s And $XX by first. expanded million. program

and in burn about that. we can’t right, what Because over we’re that revenue. up all period just we quickly time burn the ramp that you’re client discussions However, with of

not at will We extend that well into out in So hit all don’t XXXX. XXXX.

contract currently signed. we -- have We’re the

We’re we’ll pricing sales working the on this start quarter. finalizing measure and later

in that then ramp continue in next the and that revenue hit QX those to would year. course, then of ramp So for QX up first it’ll probably into to two means expansions start of and part

Craig Irwin

Great.

something Did utilities? San there. in toward sort the or you end that see opportunity the comment Can ask out submit Is for this off an potentially on likely this Is of do RSA different Diego year? there summer credibly to how moving short-term? Next awards some is it far you we more things about of I think RSA there is overall activity And the the of could to how be the the released? are actually get these to for major are? wanted

Thomas Brisbin

They were The XXth expected and came and for then We’ve San are and X San large first due Electric award shortlisted and RFP on out of an been Diego. programs. abstract came first The gate Gas PG&E. in June else and the the or quarter award, the for and this Diego is then SCE the let’s say, proposals small around out. are July

We weeks. out PG&E proposals of to for couple request expect the have within a next

Craig Irwin

Excellent, excellent.

the toward same as end toward probably SCE PG&E of So thing the probably the year? well the year end of and

Thomas Brisbin

They’re good. pretty doing

Craig Irwin

Yes. I’d call schedule. it ahead of

Thomas Brisbin

Yes.

Craig Irwin

Jersey are markets New about in How market New scope talked on some very this another Jersey. and or I likely awarded New Are you Procell things team progressing that maybe you a point has to local little there. York? and less, seeing we some Then with connections Lime maybe be know like XXXX? in bit brought additional year the at Adam is deep

Thomas Brisbin

be awarded don’t expect we year. Jersey, to New this

What’s New We your expect question on the that of in York? a XXXX competition. timeframe

Craig Irwin

far how had progressing, as there But are done mean, additional Ed scope? New quite Con while. York. I things guys know you update a for as any business and I

Thomas Brisbin

been We submitted. Yes the XX on years Recompete’s Street. the we’ve the incumbent,

We’re they’re do. increase expect to waiting an in to ramp or going we award up and for what

Craig Irwin

there the customers. given brought but not services helpful. synergies the some Excellent, maybe very there you integration progress comment anything is this the There maybe the be the supplementary companies and and over Do customers, excellent. cross Willdan synergies you two just still capabilities to around to And of specifically structure expect services largely about Lime way And were Willdan minimal assumptions geographies. Lime conservative very, to bringing about services you can acquisition. the of bolt-on Energy. of out and largely over know Anything is then integration could this together? have a I Lime

Mike Bieber

would Craig going would. it’s like thought I it say, just we

just plan. operating We’re The according going integration to well. our is

converting We’re system first the year. ERP this later

joint around internally California and the to some a an that focused integrate after effort externally got We’ve capabilities occurred number of the have we’re summer. will going occur competitions So country. activities as Procurements all and proposal other of then the as Lime’s continue already that’s will well

we I’d That and LADWP are of I So demonstration say just efforts early guess the it’s like to expansions news. and of our expected happening good the Duke. was

Craig Irwin

good hop to very other of I’ll one and on congratulations Well back questions. the definitely, Yes, queue the progress. ask let news. analyst in the

Operator

We’ll with Instructions] next Please question [Operator Katri take ahead. our Securities. Moshe Wedbush from go

Moshe Katri

we Hey you then should updated guys, there. for Can about us guidance QX and the on thanks. think progression Appreciate the the give year. color from some how

nice it second quarter we about but have if would can modeling I potential be a think get the at you’re some great another into talking follow acceleration I least during half, done the up. and then

Mike Bieber

nicely. Moshe. then be biggest of That’s we year. should typically and is year this down and up QX should to expect our step than be now, QX Yes, already that QX less happening be QX next normally QX would will true. in It ramp we right quarter.

got. we’ve won’t very won’t first QX We the probably existing how right of good revenue be now QX. this you’re of we unfolds. progression and the kind mainly recognize that’s starting the already part the QX but until of of year into programs and work should expansions the we’re the So year And into that because QX --

that’s unfold. it So, think I how should

Moshe Katri

looking to of Okay. half. that of a And a your color generated during XX% and XX% annual looking it? during the back then revenues the for to that at first way second you the would again, then half good get Is going we’re expect

Mike Bieber

slightly second more probably more slightly than say would just half indicated. you Probably I head. my in math the Doing in the than.

Moshe Katri

Those like XX. XX,

Mike Bieber

like more it’s, Yes that.

Moshe Katri

Okay.

Okay. That’s fair.

Mike Bieber

million that on the a consistent think QX. net with I for Yes. revenue And probably $XX print

Moshe Katri

QX? about Yes. margins we starting think And then how in should

Mike Bieber

typically little margins QX from bit quarter. highest, down should our be high QX. the margins will that’s then a utilization come increase margins That’s case just QX QX the And Our significantly. probably.

Moshe Katri

Okay.

on we we of Okay. for than is they those And or are terms to if there then board? on infrastructure coming cost, And margins a how -- as what setting a How transitioning kind up bit impact are personnel, apologies this a work? about or do deals? Are basic do question. some initial That’s those actually starting think different up helpful. some should think deals doing In that typically? scale setting these new some of setting you’re of on get be of new or how you the will up

Mike Bieber

Tom’s at I’m so. at pointing me, pointing him

on ramp some work percent programs. in instances with as costs up So some subcontractor next are generally over will depends percentage than different sometimes Other currently because or up no in a that down. that There’s we’re typically than new there you work down. start Then the no either up of margins the to in years, ramp We quickly. higher to comes the subcontractor that program. any programs seeing. mature that allows indication few the more indication California the we think now, of be of That work right have

at. kind that’s of yes where we’re So

Moshe Katri

in it or quarter of terms winding of take up in And the starting of that does ramping or typically subcontractor ultimately setting terms a two maybe in lease? infrastructure off maybe of terms kind

Mike Bieber

often these case and smaller we’re into program. going we’re rolled procuring. then be have I’ll what to already are call starter this working for programs we what In customers a Other

have people are programs. we on these of So who types experienced of most

or a up as the So new believe brand a that customer don’t be geography? I new problematic ramp as would brand

Moshe Katri

integral half quarter? are of do kind product/solution it spoke Perfect. we marketing there the about and on guys when How analytics. we’re the Final How some that what question, new in doing. color second did I look incorporates does a you the believe these for

then try monetize where to Thanks. it? are So terms in we of

Mike Bieber

last revenue is model lumpy. analytics Yes. by just going be by change the in recognition to the Integral its nature year and

good QX and weak of so quarter a for they had QX, have banner had they of QX this year. rest very a the a pipeline they And the QX

binary way it integral way almost go the down. It’ll or analytics. will way up always that’s be with So

our mathematical onto integral integrating are tools energy efficiency analytics existing We projects.

in Right country but ability the pilot you and highest target areas value now energy get they that put doing trying we’re identify most scale customers where the integral to in they the roll pockets tell We’re energy optimize sometimes mathematically target, target. programs should or exactly out to analytics of across don’t want load be down specifically you to to proposals better efficiency and on to the you to able and these efficiency. has that which

that year, that we’re a half. starting over next year roll and process out and So will the

Moshe Katri

thanks. Great,

Operator

I’d telephone any time. to further no back like remarks. or closing additional management turn conference at this are there over And questions the for to

Thomas Brisbin

like thank for continued interest and of to today you day. would Willdan, our I you Okay. a in for all very your great participating have call Thank in much.

Operator

once And you Thank all does your today’s again, for this conclude participation. conference.

disconnect. You may now

Willdan (WLDN) 5 May 192019 Q1 Earnings call transcript