WLDN - Earnings call transcript Q4 2024

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Operator

Greetings, and welcome to the Willdan Group Fourth Quarter and Full Year 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Al Kaschalk. Thank you.

You may begin.

Al Kaschalk

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

Joining today President Officer; and Officer. our Chief Kim and call Early, are Mike Executive Vice and Financial President Chief Bieber, Executive

on conference presentation results. between found slides, which financial in all Our and press release can available non-GAAP Reconciliations remarks of both GAAP will GAAP our call and non-GAAP measures today's and website. be include in are the

EBITDA commentary organic Please EPS variances or and note adjusted remarks an adjusted during revenue, on year-over-year basis. prepared our that discussed on are

We These see will on make things forward-looking are we statements about our how statements performance. today. based

While we we at future, do statements not forward-looking undertake to update may elect any these so. the some point in obligation to do

our due filings, differ SEC uncertainties. may results to and in materially actual As risks described

over I'll that, the With hand Mike. to call

Michael Bieber

to Thanks, record consensus and Al. our a own the year in strong had Street a significantly exceeding estimates We expectations. finish XXXX,

XX% EBITDA revenue For up was contract leading up flow. all EPS and adjusted year-over-year XX%. level XXXX, EPS lines and Execution was were record free performance of up adjusted nearly to business strong, and across cash doubled was year-over-year. of XX% a GAAP

$X.XX outstanding company. generated of we XXXX, any flow, an share For cash result free per public for

acquisition XXXX. come have serve outlook long-term capabilities this in execution market fuel With the our the into Electric solid latest our growth, to to transformed all unique Willdan's announced our a commercial morning, coming market. technical capabilities we've load data center together and positive consistently

solutions for wide to grid, the local solutions. Willdan and provide X. electric to solutions infrastructure government and solutions a provides customers. energy power of commercial Slide On utilities and range electric We

and mostly of engineers clients we avoid of acquisition America employees million X,XXX technical We of XX.X emissions North greenhouse offices announced professionals. the about have have XX now gases. metric With help tons scientists, across and today, comprised

acquisition The electrical forma in our utilities and the as commercial revenue. sector. our expand today, a talked commercial APG customers commercial I technology and QX XX% well announced all local capabilities. of now the are the of XX% acquisition basis, about services percentage government biopharma our XX% engineering is year. on for and serve are as we Enica Calculated X now add wanting to overwhelmingly customers comprise serving our both now services healthy. our last State groups Demand revenue, customer with pro double of

electricity Our work commercial usage now for largely to data customers is centers. related at

continue constraints. with is growth like would commercial opportunities to that strengthen many our with capabilities We clients to load adding providing navigate AI-driven Willdan acquisitions customers. electricity help technology commercial

work for is state and single-digit at Our pace is high strong clients and government is positive. a outlook organically the growing local

work federal have with federal almost our state local the impact Willdan bonds. user government and work cuts has and or to backlog directly almost no federal spending The or primarily by funded funded no primarily government. fees outlook -- recent is the through government our had our is because

multiyear for user remains is robust. by work primarily and fees is under utilities Our contracts, funded

X. On to Slide

strategy. Southwestern In Willdan's City Texas data and work changes that solutions and demand Florida we to electricity led our and geographic customers. have asset provide center In to saw clients. market projects Those us strong load. seeing in resource Our upfront demand on acquisitions these we integrated work, expansion continued engineering, with and from associated informs particular policy valuation data often analytics are for upfront planning

expand capabilities. shows about capabilities cities. we've totaling program building engineering we management, on Since later the slides. these more where program our programs and I'll programs utility annual revenue, and million acquisitions, for X plan energy about In $XX management completed our QX, in in above diagram performed they and talk XXXX

new of string great a had call. we've X, since last Slide On wins the

territory. our program largest all $XXX contract our Angeles among significant won X-year Power, new government from timing programs winning basis. an Department recent successfully The will XXXX. don't Willdan this set Water to of of back contract of measures the new the we with recompetes award that on clients the and half the In Los LADWP. we and million major energy within due at year. note commercial LADWP in ramp-up, expanded this fact, become and the broader a The Today, annual Willdan of revenue delivers I'll recompete announced LADWP of expect complex to efficiency more until

investor-owned awarded Next, X utility energy we were California new traditional of base. our outside programs efficiency

Networks form a Energy savings. with of energy band Regional entity services providing groups public are X entities first that The collective or RENS, which and are together and

SoCalREN, For program Angeles awarded And Network, Energy energy Energy support. regulatory we million County program. Los or Regional a energy and commercial million CCREN, California for Regional for Rural were won a $X the $XX Network Central new efficiency we the

customers. are year this We more REN tracking from California opportunities

$XX South we contracts and Lake country new robust. multifamily small a the Coast We our Coming new County the program. awarded Tahoe. Quality XXXX, million into of is energy also pipeline Management around District, Snohomish opportunities were Air won For business South with and new

creating of X. future help that now consensus growth, Slide From that The U.S. is is will and scale of our again. growth mentioned returned growth, mostly are for now load exciting there load to flat growth the about by believe this higher experts load for saw already On years growth decades occur to widespread load but followed begun. drive Willdan, new speed I've until uncertain higher and XX will we has come. XXXX of U.S. has load the XXXX, opportunities this electric And higher years growth.

load Willdan facilities centers centers in the driver, blue of manufacturing growth. the industrial the center and be current light most green on by electrification how this blocks the growth the electric blocks. will consumed discussions reshoring forecast this and powering followed by AI will In largest the load slide, of block electricity the the is U.S. data meet be the of coral in the colored medium-duty data, now to on Data about buildings, vehicles, slide.

Alpha small business the our area in an been the which engineering Central X. strong presence January, transaction Southeast, has in of engineering Slide acquisition organic On Florida, Inspections. civil of In Willdan. growth we This a expands for completed

new gap for, expertise announced X. to acquisition Alternative or APG with We the customers APG utility the scale electricity. helps we Willdan Turning management and Power industry interconnects, personally I design, morning. known and expertise technical data added for in respected that experts in strategic this center are team microgrids of in engineering. well Slide substation the been they years, Generation, have many fill electrical Inc. have a APG, asking that as

with adding today our center what excited is the all work consistent our grid to customers their are their and specialized APG of combined client areas although approximately work which today in of powered strategy in planning. and customers. Willdan's generated data XXXX. new skill commercial other to Most commercial, base. We're centers, APG complement that large-scale These technical owners data engineering commercial all efficiency set million powers in are APG's years exactly believe utility has want. be expand strengths and mechanical energy electrical revenue highly $XX past, engineering, industries is

our estimated planning design XX% probably data Willdan's center efficiency combined data revenue be and and This of and in energy area. legacy the resiliency electrical offering to center consulting, then upfront XX% data work. fastest-growing offers now to APG's XXXX, is Willdan detailed engineering center

Slide X provide technology Diversifying left forma versus this customers depicts profit stability the actual customer mix on higher commercial pro add should our generally our long-term current margins. towards mix. commercial customers and

EBITDA years many slide, the of we operating side by divided XX% of goal right as the adjusted out measured ago, On revenue. a net laid margin

impacted Willdan and a A proud differentiated EBITDA is COVID associated represents with of 'XX more highly in We will 'XX customer to our margin XX% that toward to solution. around performance be While estimates quarters XXXX, XX% our over acquisitions progress Kim, margin in results, that you. best-in-class capabilities In industry ahead. even through and plan I'm our add the goal. it goal. future

Creighton Early

Thanks, afternoon, everyone. and Mike, good

a company. beginning of in record-setting productive provided quarter brief the finish Slide to year, provide for very a review and quarter exciting strong on fourth the fourth I'll an resulting XX. a performance Our

Keep of quantities experienced overdeliver opportunities quarter mind fourth exceptional from to we some some programs. year target benefited the utility in of that our on XXXX last

at of course, which, shared $XX estimated net million we contract exceptional the in these adjusted contributed impacts $XX of time, approximately revenue, opportunities of we EBITDA, million million significantly in the that revenue periods. As comparison and $X X

comparison XXXX increase per would EBITDA compared was Despite reflect XX% that adjusting the the fourth adjusted XX% relatively the those increase quarter increase in than when to XXXX, flat XXXX adjusted for lower a revenue, appearance share prior quarter a opportunities, in the exceptional and XX% earnings a year. for slightly net in of the or with

XX. to Turning Slide

and record $XXX across XXXX revenues. growth year factors increases organic. record a net increased was our XXXX all key the Double-digit million $XXX year, full Contract percent the municipal it solid over all services primary in the higher solutions million, behind civil a metrics. XX% revenue of increased and utility activities, revenue with engineering terms In programs building lines service XX% to across our of and were substantially to

stronger and If activities Consulting but adjusted of and driven year-over-year. for expanded and the mix in G&A million, a segment. XX% XX% gross expenses increase performance X%, count, improved to approximately from the tracking organic XX.X% revenue grew Gross margin growth. in revenue in year slightly activities XX% Engineering less would the of the business closely reflect by XX.X% profit $XXX our than to the increased our head growth in program X% growth increased net XXXX, and XXXX QX even about in exceptional management the opportunities ago,

discrete wage-related lower expense spread XX.X% or net over $X.XX million XX.X% lower Adjusted G&A was consistent and income $X.X a of stock-based $X.XX lower versus levels XXXX offset million. helped reflects the growth. Higher in acquisitions by tax share EBITDA in XXXX, of expanded other XXXX earnings Interest $XX.X million of increase options. efficiency or XX% this of GAAP net per per as million expenses $X.X adjusted other rate by related lower in previous rate earnings well an as in to drive ago. compared over All $XX.X decreased amortization revenue a leverage XXXX, $X.XX XXXX XX% stock resulting to to rate XXXX. and the in compensation was with per per were the or income the in share tax up million interest income partially primarily XX% tax from The effective intangible was expense year $X.XX share incentives to due for from reductions to $XX.X energy and share,

cash balance per $X.XX our This provided total our And share to $XX or $XX perspective strengthened in million cash million us line million from flow the when cash XX, $XXX combined million $XX cash From balance. impressive end and Slide of in and sheet with of flow the sheet, in on at credit, cash balance free we XXXX. our million generated flow a adding $XX flow untapped year. in liquidity operations

We and expect markets to expand through acquisitions. enhance liquidity growth our to service future cash capabilities to in strategic invest and flows this our

and Our Efficiency financial the the environment restart position and current impact in delay strong, the of LADWP Energy uncertainty remains the of economic is positive our contract. outlook of despite the new our

the XX to Thus, adjusted range EBITDA $XX share with XXXX. financial million per and and earnings XX.X expecting the are share. in net the Street estimates. and for million rate provides $X.XX targets future $XX XX% well not million million consensus $X.XX include revenue that range to above does the Slide $XXX These $XXX of any our We're million, in these in guidance adjusted Note per to targets of assume range outstanding potential current tax shares of acquisitions. a

presentation, website. the our you this on access XX-K of results, our on financial detail page release more our our can and For press Investor

now Operator, take we're questions. to prepared

Operator

Instructions] question from first Partners. [Operator Craig is ROTH Our from Irwin Capital here

Craig Irwin

solid really another on tonight. Congratulations result here

wanted a years? I this Or at off Are little LADWP and a activity Can book look start the bit year? of you business contract? any to something contract. asking the there comment this this over by that have contract, expansion chunky the about about potential the start-up Mike, So linearity step-up in a this potential renewal of does 'XX? we X of becomes as issues Is bigger the

Michael Bieber

this fourth third it's program I'll activity we've is Sure. note, this on There's not a before or recompete. though, stopped about it big in recompete. We've for years we start-up the have contract because won time contract the many this that operated December. concerns

ratified. to re-ramp have contract year. yet been the So we're in and to of proceed going as here it's notice back this have don't up and We we've finalized it to awarded spring been just the

up that first from why That's the this year expect soon and to said in the we we expect Craig. get revenue to the proceed in don't half of So contract. year, much re-ramping first notice this half of I

year. though, It's program. got some Beyond this maybe to we've should more little a than have it be $XX more year great spend program. linear a that, roughly we'll Because million bit year. it's a a ramp-up, And next

The more we adds other thing complex about is measures, it the it LADWP wanted that and needed. which

a heat measures address pump, wider complex program, So other a had going that measures, it's contract different largest. our and than one that heaters, water of customers it's group perspective, a from access to. It's great of we to become previously hot

Craig Irwin

to great That's hear. Excellent.

So I RENs. wanted a little ask bit to about the

Who the project for from? see from? the ultimate last orders and the about off And are constituents? coming Where the talked the they drives maybe it's remind funding years, you us over who on are we've this activity? Can RENs of of these nice So couple the come through. to accountability and just administered

Michael Bieber

source the Yes, made ironically that's state funding which the are by sure. up electricity case RENs the comes band together. the California. In talked that It's They past, the in of choose IOUs. efficiency to the part on themselves. same of The some SoCalREN, case. IOUs from for funding also energy about The of the bill I've exactly funds in the of in the your surcharge most

is energy RENs PUC. So and the the different together directly efficiency band types by do of that overseen

requirements bureaucracy of are It that that also through. to some and constraints asked does jump have -- not IOUs the the administrative and

service REN programs everything regulatory a different the and is to time X these of technical from and well. a we the And of contracts Each contracts. do contract. range materials simpler as they're We wider themselves. management consulting So of provide support

Craig Irwin

impacting impact transition, how you question, third of sort of strategic some and your my lot initiatives big And different the not end presidential investor change President at administration business may. is in business? administration have funnel couple your front the the the about about I This in activity activity accelerate pushing areas the to of the these see in or of potential questions been broader change Excellent. Can at on your potential if months, business and whether you a have that past activity, of Willdan. there Trump comment

Michael Bieber

do, were the much. Greg, far asked local funding activities. will a And election. seen when of change that decimated and What the impact. is what this not answer community primarily which much. seen That's from state federal because change I of we do the haven't said I The almost question coming quarter have into engineering is have what by nature no and local think administration much the do? work governments the last not thus we've mentioned presidential that we we driven you is had in cuts

outlook X% backlog In really than a fact, whatsoever. impact less change in us, to our no

So we that. impacts just haven't seen like

us with chain to to escalations to tariffs. is allowed that us And in in tariffs time I'll the most going language that contracts We in pass of on contracts benefit thing this now of this worked we pass that's or mention occur, can, time kind COVID have tariffs where customers. other if of already through. during that place potential The long-term to cost because our our language put they hard supply around

much at the business administration So all right having now. see we change don't impact to our in

Craig Irwin

again congrats performance on Well, some here. That's hear. good to strong really

Operator

our Moore And from is Instructions] Clear next Tim [Operator here question from Street.

Tim Moore

the weeks. Mike, listened calls was change over refreshing to more enthusiasm I've your than the of and last tone couple to a half earnings

is the clearly, for question, enduring electrification growth obvious maybe low Just several next an my first years. in theme

market, gaining last lot those government. a or the what wondering more frequency X to over are at is within of or programs I any implementation mean, out, I'm there within customers' maybe government, quarters incoming more jumping X least end couple within Just inquiries. trending just

Michael Bieber

The electricity additional grid. the of sources looking mentioned has I the for California gone consumption years of additional have programs efficiency has in probably same on ago, because they're energy expanded electricity likewise, effect that X.X and up, the or California

California. translated So additional though, operate New seeing the that's also one grown. pockets, programs call part in point more have into for same are in that a them demand load pockets to. The for programs certain electricity. I they is we within trend broad the York, has happening same demand That's that thing, lot where Those a can

The to also going There is other picked they thing work, of work right I'll grid that planning the trying customers centers, has say load lot is now. a new upfront navigate growth, our study on consulting And data to constraints that's work help is a APG. on have lot those of up. pick different projects follow these work. why consulting the of management centers. trends And we through that APG, we where detailed engineering able wanted are. up electrical know construction that provide and now can We're actually through and not with power to the substations We really on follow data

the are I'd those So to. areas point

Tim Moore

question just going Or software its introducing suite? And terrific. does their That's embedded on be other any own cross-selling? you And have to APG my are software? yours to update is

Michael Bieber

We're going and don't introduction right yesterday. was They any have introducing now, to software be ours. that

So new asked work them. cross-sell. that cross-selling. brand you grid support upfront these think EX well. different to been great good to market. solid about it's and And to opportunity We is The doing planning are a IA efforts software That's as that's a

Operator

question Eisenberg, is private from next Our investor. Richard a

Richard Eisenberg

Congratulations quarter year. on a great great and a

Europe? been the And intelligence into to yet Willdan integrated are opportunities artificial software? into for your what Has expand

Michael Bieber

requires new it half into The will in out or in of to of and more they first run this manage municipal and utilities, a engineers hard electrical version LoadSEER new operations version staff that load ready simplified, smaller is working predesigned like and we simplified engineering of power it. don't AI the use, year. also utilities a forecasts load to that to AI-powered and new of staff curves, the We're to LoadSEER, will cities. be the that utilities And it. this roll of integration version designing have shapes load more smaller We're smaller can for it XX need believe

out country. in throughout that we're that good this municipal the year and It's So prime looking towards to cross-sell is come the half. already relationships our to a first opportunity,

presence Europe. Europe United very mentioned have States. little of the currently and in no We You presence outside

may In or of any whatsoever. moving and got X is X so but of Eventually, Europe presence have we consider focus. years. places Rico, and acquisition We're States little outside United hardly Richard, right focused Puerto in opportunity an us outside work probably there We a our exposure short America year now. is the not several Calgary, bit next international the term, with all people in this of that in there, U.S. on market, the much the

Operator

further if to comments. to like Instructions] I'd for [Operator are And there turn floor no the questions, closing back management

Michael Bieber

Thank the minutes. Great. being and more shareholders Expect Thank now. as enjoying not this I business We're you. XX it has company seen and past, in opportunity up know in the that We'll here. for being fire, Willdan. ever on you been wrap we're throughout years over we're and some of the best in has interested enjoying Thank robust, business right you. year.

Operator

today's teleconference. This concludes

you may time. lines You at your your disconnect again Thank this participation. for

Willdan (WLDN) 6 Mar 252024 Q4 Earnings call transcript