Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Willdan Group Fourth Quarter and Full Year 2022 Financial Results Conference Call. [Operator Instructions].

It is now my pleasure to introduce your host, Al Kaschalk of Investor Relations. Please proceed.

Al Kaschalk

Thank you, Latania. welcome Earnings Group's Call. and Fiscal Quarter everyone, XXXX Year afternoon, to Fourth Willdan and Good

Early, and Joining Chairman today issued and Kim after of call is the Financial our today earnings closed Board Chief are built on the Executive release The market Bieber, President. Mike Tom our Brisbin, Chief call Officer; we Officer; today.

Investor release the Relations report that section call in press You and investor of found may accompanies website Willdan our find at ir.willdan.com. and the the Information release earnings Stock today's

will the review not Securities forward-looking are of in Litigation to questions. forward-looking XXXX. that uncertainties, in prepared Private then Management answers remarks, and risks and the the of which course call Act Statements purely materially will statements we historical, those the today's any open could it including results questions, certain differ your conference the is to are The and call, Reform up from forward-looking to company's your within such of made important note involve meaning statements. future statements

and could materially The results to but undertake statements of conference not the call. this SEC revise to XXXX. limited place Form any statements course on including, cause actual the and annual today. undue or company does factors made XX-K not time XX, cautions investors the risk time report any to forward-looking Willdan December to the during reliance on made the update obligation forward-looking disclaims year company's reports, listed differ for filed in the not that to are Factors from other ended

to the believe provide non-GAAP enhance business then trends In addition investors' measures financial also performance. to that GAAP and we'll we analyze ability results,

net and revenue, include adjusted measures EPS. EBITDA non-GAAP Our adjusted

Tom turn Brisbin, now Willdan's CEO. Chairman over to and call I'll the

Thomas Brisbin

was of of the Al, programs. end and negative We California with associated and the afternoon, the the start-up headwinds COVID believe XXXX IOU good everyone. Thanks,

results upward XX%. growth half did. trend up As profit XXXX organic fourth quarter were an net show revenue second to The and up reported stated previously, for we it XX%, of XX%, expected the up the

We were have to trend growth a COVID. that we our back begun company before

about first why Let's about are XXXX. we talk optimistic

and the the form and loans energy tax U.S. result of passed $XXX XXXXs, clean inject in billion has Act. of a legislation to will Reduction have new energy a For direct clean over the the faster will decade to via nearly trillions credits This since time, federal the in energy facilitate first the next government dollars of in Inflation investments To federal and transition this lines stack are cities of and is be to make more incentives picking these and longer industry funding lasting consulting already of sometime our to successful. programs federal to federal using on beginning business. we this advantage on our them able of utilities fundamental The with programs together impact incentives, quarter. take are utility and full utility

utility their and trying state incentives amount maximize to the federal are customers. Every of for

We have and practice on successful focused the services financial cities. engineering

of a focused the benefits. are also We cities maximizing on number that growth seeing rapid in are

to benefit business customers. between is unique business lines bring these our forecast. infrastructure our case to of our a incremental energy natural have We This to base and opportunity synergy all

We that an article have We it XXXX, was energy Willdan to greater There its in than these talked you going did I accurate economy 'XX setbacks and stock was transition cap. And we ago. direction. days and clean we positioned XX% market take right 'XX, several are this loss as and for of very the years been fortunate that in of few appears about a for and are

Willdan. look backlog, exciting next for the fourth very years With from the the our momentum quarter and X

of you demonstrate experience. geography, The transition. this examples following are how give we capabilities few me for and Let a should examples positioned

high-end provide continues continue to Francisco San plus. will to the They the They of the entire and Willdan. consulting we framework been energy for the on move be in headquartered business in transition. clean helping EX have the grow continued growth XX% energy in Willdan Our develop country to future at where

Our energy. in primarily West is which because Energy in significant it is aggressive on is California, the business clean

For held municipal the LADWP in credential. years for is example, we nation the have certainly and recompetes, the contract X XX excellent largest with utility an

quest IOUs the We also and X serve transition their energy California the in to electrification. to save

the by we XX% to per settled, significant fair forward. Through to approach this their risk Willdan. dealing believe had were management Southern that new energy both California is That for manner, at know $XXX excessive contracting have costs. did electricity Group to programs. We the amendment how they SCE's process, million desire save going We Efficiency with not ramp-up Energy part downsized the adjudicatory we to It continue have new has have to been look contract with and to to as and amended carbon. were the proceed matter was with programs we year the of not reduce on by with SCE's or ways about efficiency us. solution SCE to are say the which Specifically, the a working to we that not in found mutually together about these we reduce anticipated of contracts

& electrification are rather all Pacific new an Gas on now should IOU Electric, energy public I than for are and say, contracts state be and their expected contributors territory. EE working to negative -- sector positive the efficiency, and electrification drags. we in construction With The California the

Gas to is delivery KWH This businesses For Diego are COVID. service an professional a that were contract. we services San from recovering customer It program is X-year contract required. not where small a recently awarded is million statewide Electric, & additional support $XX.X

all for New energy Coast operations East years. Our to Maryland, X X next Pennsylvania, Carolinas are the York, the Massachusetts, well positioned

first in of on energy the is time York, most measures, For not efficiency. revenue ever electrification based the New

years Lighting XX% XX% to ago. from energy efficiency is now down XXX% revenue, only of X

times, of tough XXXX a through we did positioning. and XXXX rightsizing the During lot

forward energy with EE, profitable Industrial positioned sector clients. be efficiency, private is going to

-- XXXX. won Energy With York organic group, Energy Engineering in XXXX. Engineering this Our growth our we work New XX% expect significant new in

York, Dormitory nitrogen Housing Authority, the backlog resident. State execution. provide better the the York of of Authority plan City New We work housing the Power and Again, and Authority excellent are they an as a York have the electrifying a with and have grid the New to for New They Warren. the for living way decarbonize

that Our future. performance on news near engineering track and exciting the is can in 'XX share for back some we

In X contracts our addition, have California based cities civil group. with won engineering the performance in engineering our relationships formed by on we

pipelines and they also share out good, the will a business news with software 'XX. news near to clear is. have XXXX came of Our Their also. in Positive picture future for looks that

were Willdan and and same we engineering for Our the services cities expect grew, in they financial XXXX, EX. They XXXX. like just profitable, for

these expect to the really future by city help investments transition and government. We us relationships the with clean energy

customer summary, Cities California. be XX-year governments X and have we rewinds. XXXX service relationship are a that seeing for important We're buying. municipal as Energy an long us, will In in more professional

resilient want We tough understanding our doing would months a also year. look I on We of forward a and major patience. issues like thank for times. and to our have X to solved the for through great I really your this thank more to again. good some first based are job has to the become employees Willdan start off shareholders

Kim, outlook. on financial the will I who provide additional and results turn call to details our will over now

Creighton Early

Thanks, Tom, everyone. and afternoon, good

also higher as well quarter. T&M Gross the California Our in profit performance up as of QX XX% revenue programs IOU energy revenue revenue a up and were momentum our year. revenues Engineering services over reflected net XX% with planning and XX%, numbers revenue gross under The $XX.X growth for surge and to increased our by consistent Consulting million segment. prior increasing from by the the driven

As percentage basis XX mix change gross increased revenues. revenue, the of gross a of reflecting points, in margin the profit

grew were Our million XX%. more revenue. the a lower and stock-based revenues up and $X.X on interest higher than to while offset higher rate rates. expenses expense partially quarter wages higher interest gross increased Lower and for compensation borrowing significantly at than average profits salaries, G&A

of XX% up was QX of $X.XX $XXX,XXX and due the lower for in to to XXX% tax year of up count. from the QX Our reported $XXX,XXX for ago. $XX.X a was income loss The XX% $X.X XXXX. million in XXXX benefit compared Adjusted per compared pretax loss net net $XXX,XXX for was of EBITDA a XXXX to share QX share earnings quarter. Adjusted a diluted to million, higher

revenue by lower factor reflects behind revenue the increased revenue. which increase was gross growth and activities partially higher higher revenue licensing services For lead from direct net and The engineering year, gross differential percentage offset consulting, full material and gross much in smaller subcontracted increase. net and rates. to primary have in content, XX%. the increased Such the management and revenue revenue also of higher revenues a construction significant and the XX% XXXX install software activities net a

average to in ramp-up California year, XXXX profit business, higher offsetting under basis. million to computer-related mix XX.X% with X% $X.X million partially or to been along lower XX% to the primarily Gross the due the $X.X X% wages interest margin due to construction the licensing Interest costs XXXX, with and expenses increased since software gross and increased a increased year to of per and reduced in IOU salaries XX.X% by borrowing management compensation, expense XX% rates. stock modest capita higher decreasing and higher from costs for expenses. greater lower revenue the with on $XXX.X Facility programs. again, year-over-year, increased pandemic million the have G&A for

loss the the increase resulting our to QX financed benefit reduced a $X.XX course $X.XX for flat levels even Higher year earnings compared the fiscal in XXXX. of facility working sheet working of loan a the in 'XX loss was perspective, support already $XXX,XXX, over the with IOU a While of received will million capital cash when corresponding $XX million in growth fourth be capital tax 'XX this drawdown in was to quarter 'XX million $XX.X fiscal the share compared lower revenue. From EBITDA in net XXXX. adjusted in QX. the Adjusted XXXX's from was the the year of to of per reported year-over-year to compared term pretax significant converted ago. revenue balance $XX.X surge $X.X by in first in half cash fiscal resulted in of amount a California course XXXX, to million,

at $X.X nothing $X.X down with of our was line from balance of XXXX, credit. million cash outstanding unrestricted million ago, under the a Our year end

net XX.X the to full will we're Looking our the million ahead to $XX to weighted $XX shares revenue is expected XX% in adjusted outstanding and be million. fiscal and that average Adjusted X%. range We X% and rate growth expecting range per estimate year tax approximately effective million. to between be $X.XX, of of the $X.XX EBITDA will earnings share in XXXX, be

management the the and we of ramp and with lower up we closings to activities start debt to accept to the The are leverage utility below our questions. to in increased school the programs peak and expected expect during prepared we're nature to no continue adjusted historic we our to a and earnings warmer reduce flow Consistent quarter our year. assuming year and business with Xx construction the model, acquisitions expand seasonally calibrated as now overall QX level, the coincide cash weather. EBITDA with earnings third Operator,

Operator

Instructions]. [Operator

Our comes Roth. Irwin from with question first Craig

Unidentified Analyst

on Andrew for It's Craig.

Just me. a for X quick

but in comments. You have inked details cycle. more backlog. you been the it know understand the I a near you guys Can some optimistic long on your guys provide of Analytics alluded contracts future, it's in a Integra sales to being I few just

great. So any would be there color additional

Michael Bieber

not This in Andrew. We QX. Mike. think is Sure, deals those any of did

of software a So proposals looked the results and never of has customers We opportunities major were in right pipeline number The and we're to contracts. better. year. of we're first have very submitted half good of that optimistic new going with discussions a a are number of now, this

Operator

from comes Moore Chip question E.F. with Hutton. next Our

Chip Moore

-- seeing talk on of great the lot momentum remarks. the -- can there. a prepared about of there guidance, Some maybe visibility In you you're in some insight positive about

contract I programs and my sort but that. as the guess relates about the to through moving Help SCE California it's of on with us amendment. particularly touched IOU it year, the first. progression You particularly

Thomas Brisbin

know We're about Get a to who that more amendment. trying little specific should on bit decide what want to answer SCE's question. you

Chip Moore

around get Any But potential what detail upside. for on on to you can conservatism visibility was I trying provide guidance more the just it. and was at really,

for talked example? guess, for you in You what deals, on are instance, I the pipeline, software about baking

Michael Bieber

Yes. Chip, this is Mike.

We backlog. that that to have or the in very either under contract work contribute all of XXXX, It in perspective. almost expect we good looks firm from

us upside number to a year. continue opportunities, which might In those see we're successful and to starting in new winning if proposals addition, and of we submit provide new the execute in

of carrying Tom that good -- we've momentum coming perspective, it that it year. as months already And in we're very looks into, QX's seen into XXXX. the this that from So mentioned, first

perspective, So that it looks good.

-- We tried contribution in down significantly we've have from factor any software the been to year.

I -- say very won't even very but on conservative that of guidance. we're out, and looks optimistic very good. contribute we licenses that, strong software looks been new half to that have said we've year with have for this We pipeline the completely our factored to the first estimates Having

Chip Moore

more That's Mike. questions. side resilient. I helpful said, the your rock very it, civil And guess question there, Perfect. my engineering you very on that's I color. is Appreciate X I guess, think, then Curious been, other like

more funding. related seeing concerns broader like IRA First, and on transition you're -- seems the environment macro energy to and any it opportunity more

what those time. outside your that given those potential of traditional markets and seeing curious California sort of synergies maybe to over tailwinds So some expand any you're about there, business

Thomas Brisbin

Yes.

We a of we're have every be. ask not whether seen or day, will or recession 'XX recession coming the yet. a ourselves is not what effect in We

we be of and like the amongst energy. if a yet business ourselves. offset mean point. like our just thinking this tell As engineering said, may energy it's we're recession you. can at all the at I and our I see in does effect ramp-up do business unknown That's I though, That's civil cities an we on you haven't are what may this talking IRA seen by to intersection lines the we said, offset, that of with EX it

Chip Moore

No, fair. Yes. that's

Michael Bieber

had they ever. XXXX, of QX better a first Counterintuitive, entering are the than very months and strong couple

So now. it at has all sort not translated into any right

Chip Moore

to think, relates and And to That's it helpful. of the tailwinds. I back in, IRA sneak maybe if I X as some

seeing maybe of indicator EX I your and growth and where maybe think how some expand of leading that at the future they're direction you direction? Just mentioned you're might on on that sort be?

Thomas Brisbin

the ones grid call I they change, call there? mean, reduce nation. I get economy, this let's transition, electrification. We've modification are whatever the efficiency. to EX to going, Well, EE, you probably is for want leading, on are consulting the technical where energy betting clean a that how is it, they this climate they it call calls, And world lot the got do these our energy in

as move utility get the We and you have to it electrify. on being economy. enough the energy They settle stack as see clean money this enough a to sets to to money market

the deal. working And we we into this And cities. that understanding And where the I going private and XX-year confusion in the carbon. by EX do understand where fit we what really a market the probably we've them lot practice is X, I of faster, sector, there's vendors the We what a get they and for last been on X a got are. years. that for we better, customers the like the because I that of in Now mean, a called selling on. cheaper, like on we they minute does, how capture it get do to of is have how smarter. and lot deep up is every means. need, mean doing the working It's call we're where transition X, what us less what utilities, we it

right, So shape. I we're good won't we're in but say pretty for completely it. ready

Operator

[Operator Instructions].

Sidoti. Marc with Our question comes from next Riddick

Marc Riddick

could would the be the bit sort touch would those how thinking you where any year. if about wondering was amendment there I of what of -- lumpiness the we appear -- is sort should So throughout into a sort changes of little about

hiring which been headcount done the was into year, ramp follow-up, Should I as 'XX. far of early the there? anything you that may everything going that up of with kind thinking we need a there come well where that? are from As most had any in be the different about through know as then as Or as human changes you be capital to

Michael Bieber

should there out opposite, should with finalized remove the actually, signed of the it with has SCE. been associated the lumpiness Marc, just is contracts. no those amendment And it lumpiness be

Likewise, a across California we company, XXXX. to obstacle steady throughout ramp hiring the year hiring in major year. pretty throughout not the have that pretty work. So the steady, IOU any on the on slow slow, face

Marc Riddick

far types the than is you be seeing there as of relatively the demand some government at might picking the then the on of that any a Great. a changes are frame rather maybe you in potential you're ones about a Okay. as there as what provide? as And sooner pipeline funding you are of local of environment time any from maybe kind bit other services that as to Or to the type later up some and pickup in of far levels. forefront Could the little state there are particular of projects may that seeing? relative talk --

Michael Bieber

to what local, efficiency governments. backlog are We work local energy us that a think, that a we've we be a right energy customers, our That received for funded momentum lot a future money, is actually with opportunity this actually record cities and and seen and is by future that stable to now. invest infrastructure group state growth is group we and do year catalyst IRA but efficiency. they're On money. in in lot of entering IRA of contract engineering haven't The performance upgraded that work will trying of with for

discussions We future currently that customers use. now. we're how have XXXX. a in not money with out access to what to trying best it us and But a to right opportunity for that number seeing figure of put is It's

Marc Riddick

me, be may weather through not And weather I on whether seen Great. of and some the not -- I sort we've with as to -- the of impacts to of wasn't beginning business. the had least was there seen as at forgive for year? sure end me. know -- impact year last through some have you've I I was that any curious anything the on historical year a was we've or would components what this maybe X or question, seen sort challenges if seen of last any that historical this at thing but maybe the you've curious then of so now the this whether

Thomas Brisbin

people lot resorts, our There's no. a impact who into go of but the the scan can been no Some from get

Operator

the call like for this turn time, to Brisbane Tom At I back to closing would comments.

Thomas Brisbin

just results quarter, and expect tuning in, you everybody days. see first we'll like about good in for thank and the I'd we to in XX

Creighton Early

lot, a Thanks everyone.

Operator

teleconference. Thank This today's does conclude you.

You may disconnect your lines have and your a at this for you and thank time, great participation, day.

Willdan (WLDN) 9 Mar 232022 Q4 Earnings call transcript