IEA - Earnings call transcript Q4 2019 | Infrastructure and Energy Alternatives Inc

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Operator

Good morning, and welcome to Infrastructure and Energy Alternatives Fourth Quarter and Full Year 2019 Conference Call. I'd like to note, that all participants on today's call are in a listen-only mode. And with that, I will turn the call over to Kimberly Esterkin, Investor Relations for IEA.

Kimberly, please go ahead.

Kimberly Esterkin

Hello, and thank you for joining us today to discuss IEA's fourth quarter and full year 2019 financial results. are Officer; Chief Operating and management Moerbeek, Officer; Officer. from Financial Chief Michael us JP Executive Roehm, Pete With Stoecker, Chief

by Except to company's in undertakes call. growth release factors website and Before its management I yesterday's in non-GAAP expectations. IEA yesterday's Any contains over required press GAAP forward-looking call should financial SEC can found the statements statements note including be included will release. cautionary some statements financial press like update as obligation in to appropriate be references considered forward-looking future on law no turning presenting risk discussion with EBITDA, that in and IEA's well as after to about Since filings. financial IEA's the the as forward-looking as the the reconciliations today's conjunction the of adjusted Investors would today's measurements be management, statements, section

IEA's call And with that, to JP. ahead, Please I'll Officer, the now over Roehm. go JP Chief turn Executive

JP Roehm

Good of Thanks, year our quarter joining fourth thank of appreciate for continued you full IEA. and call. support earnings and your conference XXXX morning We Kimberly.

have to also Board. Underwood Meghji recently advice will continue the been announced guidance experience Ares strong great been are stepped we we that I Ares Mo our grow want of thank His of from IEA, of Schapiro. pleased partner has and Board a two be asset Matt financial invaluable. As Their we who down Equity as our work and IEA. Ian Private directors has welcome Group have to added Matthew to Board yesterday, our a to of Directors. been we and

and Board with team. as at has leadership the positions of Primoris the an financial welcome, construction Advisor like President, Officer Services also joins of engineering, decades across in Executive experience IEA our three Pete Most to and Chief to been XXXX. February serving I'd executive, Vice Financial IEA over Pete Corporation. utility industries. operational to Directors executive Moerbeek recently since and Pete Director,

transition. working forward for to are we Pete a expecting we a seamless the So as I search permanent CFO. begin look with

opportunity an hear in this call. have You later to Pete

turn of XXXX for XX% summary our IEA. the results. me size. Full progress excluding as of now double record of our year-over-year revenues year in billion approximately improved Even were a year was a XXXX acquisitions to revenues we Let improving XX% impact of almost a year-over-year. $X.X

Civil both IEA improve XXXX the we footing and Renewable a Specialty business is To was it take opportunities to advantage the of the entering solid so. on end with growth continued and we that ability have of done As essential markets. across result, generate liquidity us, ahead our growing

Stock, from debt topic. offering. the Series have further issuance Preferred efforts we leave received reduce been rights past X improve executed $XXX to total, speak a used financing included the B Over to and our and to will I by funds approximately it to this million. Pete liquidity recapitalization our public $XXX of raised In a which months, effort, we Warrants The million.

IEA and delivery clients XX diversified environmental have provide EPC rail Over Today solar, with the past service construction, end months the offerings. across we markets. our power capabilities the civil, wind, can

the Our entire our for qualified teams self-perform can experienced virtually end in and markets. project projects scope

the some of to We are benefits our see of starting diverse capabilities.

at over us million we a Since providing the the received of into very translated the $X.X December, great unrelated backlog enter quarter quarter, fourth the during billion end third visibility $XXX construction. XXXX. as we end new farm healthy business to of of of awards wind New

each and significant overlap platform our diversified labor, in the key across equipment of has One our of the skills benefits businesses. of been

strategic synergy The our margins. the and much of Thereby perform XXXX still of With greater capabilities by the need transactions on on resources reducing scale can deploying a we organization. can of the from reasons portion the our basically we these entire ultimately complete, projects. our improving capitalize throughout efficiently work gained now acquisitions integration that that to the we is one subcontract and

we number very XXXX fortunate were to in IEA. team the of Finally management strengthened hires key a make at that

an who those and our first of and XX-year was the is performance have veteran One hires Chief Officer. has operationally predictability a our Michael construction projects. Mike teams Stoecker, Operating our improved, is impact made of immediate

discuss Mike, of so operational to these turning Mike? the I'm that could improvements. some call over he

Michael Stoecker

great to systems to April, implement I Thanks, to manage with last reliable all our controlled of Since IEA projects have ensure stakeholders. the more opportunity JP. for our results It's predictable, mechanisms efficiently and joining to and worked speak everyone and today. execution

year, During upon fleet our of XXXX into maintenance tracking equipment process embarked common one piece consolidating the we and system. the

and needed. reduce improving to utilization. our we workforces we organized improved supervision utilization of operating our with the are fleet as by parts teams We stages management goal fleet of the the craft to downtime the of redirecting managing the maximizing companies time throughout same At initial company our and both began different

tools implemented labor project as weather such changing project and to We project better conditions forecast other ultimately or software our manage control designed help production, project real-time profitability. delays forecast teams better

in cash believe help stance We change order We improve forward. much going taking and this flow are and a on orders that more resolving addressing claims. change focus will management, proactive project

competitive and we still risk a centralized of closely We we reviewed the contracts into peers. terms insurance group to currently other is ensure our properly to IEA with cost-efficiency that both management our single insurance, are risk prepared of very our claims market, risks and risk enhanced virus. functions tracking address performance. the is One while COVID-XX for In staying management our

we'll deploy and there If we China project necessary and to situation delays return are any received work. actions experience notices in expect closed. to in Nevertheless, slowdown should projects monitoring near term, the actively work manufacturers factories sourced the of are do equipment the significant time. on we not remain China no a in few we've where materials in While been China at this being out have

Last, focused but ensuring we safety not certainly the of least, on our all of remain employees.

incident IEA's improvement our employees for from a lost that across are impact a not our it returning ability means sound past had leverage to future safe rate positive marked year, our on we LTIR, day. rate recordable and able been this home total Over we win in that have and work generate work, only incident time mentioned has operating TRIR each our segments. seen have JP or to the

provide So few examples. let me a

better power of react our wind XXXX. IEA in to more farm outperformed efficiently. First, the projects of of power groups our over $XX This control million changes XX flow our and collection projects change allows delivery to on over work delivery notable

road group building our provided farm our Next, on William in to Wind maximizing to Charles' has thereby Heavy projects, our Midwest Wind equipment our the services resources and overall utilization. Civil group craft perform

Texas location Ragnar work, project that light transportation XXX Constructors miles Lastly, rail April, began railroad is with The completed construction each South siting including X,XXX a in space to and approximately citing full where project Texas be heavy expected our and in American from Civil William feet. end extension to of rail Benson. end collaboration ranges contractor is over and general rail in Charles in our service

us of of Normal leveraging and sum fourth pace weather a the expertise energy our sites in individual number to quarter to far for clients our and patterns can in a greater across projects the in quarter begin in our earlier the steady civil years. can thus at across the in stakeholders. It much nearly continue XXXX of than returns our clear product on have and is season even work by pieces of parts first prior the offer that IEA our operate of we all entire our platform wind clients more enabled XXXX to and achieve

said, that I over will to Pete? Pete CFO, the our Moerbeek. call With now turn

Peter Moerbeek

Thanks, everyone to this Mike, and thanks to call. listening

our a providing years result of XX-K of I'm financial that today, as annual and the revenue growth than will IEA Let standards. exceeded work rapidly to an us we and in we perspective. and the our require limits successfully say fourth later that many me we have XXXX, the file been to recognition begin traded our quarter for lease the publicly that accounting Form overall of teams. an company. less operations This grown revenue adopted by allows hard X emerging have company when report time in has pleased

fade including Additionally, strong of start JP quarter old of just Lien a CFOs I retiring. away, year ever guess debt we a mentioned focused operations at last cash significantly the don't say $XXX momentum with the hand also on with as nearly strong IEA fourth don't have liquidity, never with when ending and in profitable team XXXX improved on than true it's that XXXX less with million begins earlier. and First

quarter bad Full did the XXXX. increased in reason in us happen. what was increase quarter the XXXX. We year, us didn't last the affected weather for that While revenue at allowed running the at ground fourth the X complete of The the have primary revenues is the significantly for year months better weather start to the the XXXX. in more which us to hit end the projects also not of allowed

$X.X our when X were to Renewables XX.X% of to we quarter gross margins in showed by year benefit margins -- the Gross higher The the to margin primarily when delays improvement that our major also X.X% fourth profit XXXX. compared remaining project compared any million negative of XXXX prior was improved also for hampered to projects totaled the quarter we a in of the can from loss segment to for due release estimates. wind in fourth million profit contingency quarter weather quarter the fourth our as of complete $XX Gross compared margins as period. the profit

for included XX expenses XXXX of as from revenues compared or the X.X% one fourth of $XX.X period. projects. ago the SG&A in Finally, million of the totaled for million. the dispute the revenues, to benefit quarter fourth the also resolution of year The quarter weather affected XX.X% or million $X.X

million year X.X% For $XXX or the full expenses revenue. were of SG&A

in earn-outs year of and Interest EBITDA as of of reduction accruals on in XXXX. year's million expense the the publicly for a were fourth the At $X.X Those $XX accrued that traded and For the $XX.X our in million IEA and for Series quarter, resulted in XXXX time was not in accrued up interest cost gain result of in company XXXX XXXX earn-outs. the increased further totaled the Preferred a of achieved that the $XX.X a in XXXX, quarter. became $XX.X the $XX.X loss operating compared XXXX, million million prior stock. a at accrual either No million, end million of from we XXXX. March million estimated approximately remain to $XX.X primarily quarter quarter a B income

dividend a we million, the considered to deductible thus of tax year quarter, not for the Fourth Series per loss tax made from recorded purposes taxable expense income B share net are to compared quarter payments or $X.X During shares preferred $XX they interest the diluted of period. share, was million income diluted XXXX in $X.XX the income. ago per $XX or a $X.XX are million

share a diluted XXXX a million $X.X share For of income per compared totaled the million of per period. to loss $X.XX diluted $X.X net in year $X.XX or loss ago or

loss positive The counter reduction contingent the including calculating earnings with as income the share for per not of as income or share. consideration of per intuitive not the about EBITDA a when result

million quarter loss million X.X% the For EBITDA $XX.X compared fourth negative X.X% the to or a in of adjusted or revenues fourth XXXX. of revenues was of $XX.X of quarter

compared the million $XXX.X XXXX. to to and show are I which expenses preferred B full on adjusted EBITDA. revenues the basis, Series the On market market of anticipate that was forward earnings shares; For the slides two our EBITDA going value of related or warrants $XX limited release compensation posted value. adjustments revenues expense and million the will our of X.X% in fair the from be or a website stock our adjusted calculation Both to of X.X% the EBITDA year,

$XX.X We XXXX, from generated of million an XXXX. is for flow $XX.X that operations from cash million of improvement

consisted $XXX.X Series loans. we equipment preferred equivalents, of of $XXX.X million in it stock debt since outstanding drawn million available of did credit in were of we $XX.X B term [ph]. leases, million had required our $XX million facility and million on mandatory XX, in The and cash $XXX $XX a letters it's million redemption that year-end, and cash zero $XXX.X debt so loans, million $XX which debt. million, have had to financed we classify December of of commercial in has feature, had draw $X.X million credit at We As

initiatives, with in X% expectation number financing Capital year. Series Due that in to on raises of distribution $XX.X financial the step the of another expenditures million totaled be we availability annual That fixed through rating XX%. and we of a and our in November on loan rates our last of lowering which million of This months financed IEA term capital $XX.X an Ares. financing million credit flexibility help raising borrowings improvement would interest used $XX of pipeline. $XX our stock. August B our revenues. closed business and improved growing capital was approximately After eight saw our outstanding down through with funded a resulted expenditures total increased line leases. partners, and Oaktree, is preferred loan, million completed bonding in of on Ares these In reduce and was approximately the our term our to million Moody's to charge by by $XXX with support capital

down The Series stock. on B term our loan in loan triggered at step lowered and interest a our It our preferred leverage year-end. interest payment rates rates also ratio also reduced

net loan a one, were quarter. where was the term at of ratio less significant leverage Our reduction third we end very senior than the of

are stability. We path a toward on financial

the totaled XX, project and of of billion XXXX billion, we burn decrease $X.X at backlog in is this final in sequential as consistent with revenue decrease off a quarter, $X.X seasonality as end closeouts year. third of Backlog the December business the the calendar complete our from

longer we to be to growth no expect do be may emerging we While an growth company, company. a continue

XXXX to for $XXX to annual It business $X.X our anticipates adjusted of EBITDA billion guidance which in full year we We contract give our lines. and policy are million billion, seeing strong million. our reiterating in is guidance XXXX $X.XX are revenues opportunity wins between all of with $XXX to

to have we started our on regard With some projects. construction earlier renewable seasonality, XXXX

in in we third As fourth revenues there quarter. a expect the the that quarter toward be second rather will and increased a just result, shift than

adjust profitable future to accordingly. results, We XXXX we expect to our deliver growth and as greater will in visibility we get guidance

I And to call you. remarks. the closing will back now for turn Thank his JP

JP Roehm

Pete. Thanks,

expect XXXX. can you we guidance, solid As tell performance our from in

for with addition In end-markets. US booked we opportunities predicting we've the each with experts XXXX growth to the will be for year now in market wind the wind renewables, a Beginning of see that backlog, future construction in strong projects industry already construction. our strong robust for remains

scalability, wind the making reducing of and combined larger fossil work push sound turbines renewable and credit anticipated. more as recent choice. fuel wind an tax than eliminating initiated into such originally power improvements, Technological XXXX in storage environmentally for solar our friendly economically are and should the production towards increase The XXXX with wind projects or usage for extension XX% federal demand

in resulting coal On IEA's States ash XXX of harbored ash coal United X,XXX the landfills the management. than of coal production Saiia side, the provides waste each produced ponds the in opportunities environmental acquisition from currently of tons year. and More million over still

to of and sources ready clients pollutants is power safely plants more and much of our our Overtime, increasingly positioned uniquely team clients. of regulation civil coal coal are coal disposal engineers contractors Saiia our for remove ash As to becomes help residuals the of energy. with replace stringent, efficient contaminants

in XXXX the bridge spend spend transportation at growth X% reach by and in Builders increasing X%, expected total Lastly, Transportation will levels. construction transportation the Road that rail XXXX fueled with increasing state estimating solid construction and spend and over American tunnel and XXXX Association X%, highway is local in space; construction is $XXX levels. federal, The increasing billion domestic construction over investments

these end-market to opportunities. We benefit from expect

our is clients doing our to on infrastructure to balance essential we delivering our and focus construction will best engineering services With innovative we liquidity, the meet and needs. which sheet what improvements do efforts

earnings to Thank quarter us the on for and look We coming XXXX over full fourth to progress IEA's again joining you call. our year forward continuing share quarters.

to We will your now call the Operator? questions. open

Operator

[Operator comes Instructions] Please line with with question D.A. first from Brent Thielman Our your of Davidson. question. proceed the

Brent Thielman

Thanks. Good Pete, back. welcome morning,

Peter Moerbeek

you. thank morning and Good

Brent Thielman

little in now way a as is bit areas work you that by quantify, and wind your can about maybe XXXX? there to is outside the could much backlog bit Is civil driven included that least going how wind? talk revenue backlog. a go of How other into at of work JP, we Hey versus talk we about a be much

JP Roehm

Yes.

backlog mostly half half I half little is our a you solar, will at the be our wind wind. -- think over our a But renewable is reported, balance over and look of as backlog renewables little should we today, markets. end the numbers as other and think of or work, you about it as

Brent Thielman

the it on for Okay. PTC And the booking the you or to impact extension with big going then, of is market I a have -- guys? guess

JP Roehm

we're going to our you the as longevity are pivot continue of the increases particularly know, thought of market, cycle this of that's what the in again United the time think a we around share over to we're and calls; in several entrance believe Well, -- we just that that of the while I world, super time renewables. -- the States a in and massive

always renewables I'd So reinforce long other the we're also continue that. very that and extension a continued on talked to more continues the in The we industry to point items in been. efficient, just rotor you We get But have think if get both is things wind the of output about turbines, diameter bigger, before. hype they from -- which in scale greater. growth to

getting install offshore years turbines few technology. been to think in would megawatt close XXXX the I to have a which just going range, short were of X.X type here that we're -- ago

are which on PPAs. continuing technology, [indiscernible] country all policy, of to over federal across the XX% continue almost then, see So state interest the continuous industrial commercial policies not of a customers basis. year, the but utilities we're lastly renewable continuing to see be this just diverse expanded of interests in a energy massive renewable renewable to energy, improvements And and we're purchases the

before enhances kind that. just let's of we what talked XX% think So, of all we refresh extension but about kind the

Brent Thielman

I the years; I what helpful; And you're everything equity hearing markets there can are last it'd next outlook comfortable us new but telling we about us from be [ph]? obviously, business given talk can world here, month and get seeing -- over anything entering think JP, mean, the help a the couple with of might of your we're Okay. a the just be that kind for granular I mean customers you half?

JP Roehm

that Well, seeing questions, I let the markets think to of works the if that to you're that that I'll -- a back circle probably short-term speak volatility I'm to all I the going across because for just -- should we're speaking probably -- you virus. Mike Brent. actually on for second, then and you, maybe Stoecker

Brent Thielman

That's great. Thanks, JP.

Michael Stoecker

Yes, Brent.

So several follow-up our of of kind should today, on firm us kind occur, preliminary delays they delays. wind clients. delay I'll will any have actually had given as some not some any have clients -- some our we any notices of more from a say notices definitive But of that of

that; So a going really getting more recent kind to we'll we significant up with weeks, a up good. the that we back so of anticipate communicate aren't little at we're much far, should XX% come to China we factories in should their any have impact. of or so a production impacts bit with But but obviously hopeful too

JP Roehm

quite of they solution. in far is to a the from we down several investing of kind frankly, the I any heavily continue opposite; We kind the development to see the years or yet. And As road our ourselves our think long-term impact clients clients. as short-term their just all of business pipeline clients, are and our hear belief don't this

us a more just to have years we for all that tremendous So opportunity that the continues make on. certain

Brent Thielman

do of curious the that. I be opportunity to relatively maybe kind for you implement here. if you; you're could recent, bother Pete, been frankly, new some it's -- guess, of things and maybe role Okay, here. know see I your or thanks in looking I quite the

Peter Moerbeek

good all we're a long what to filings out. renewables But the platform what take we do, So at that our making diverse the we sure get X.X obviously for to capital we opportunities hard and and I in what in the opportunities think see past weeks, look both IEA our and other work want are, our are be company, can businesses. a structure

the So look liquidity, manage profitable, more profitable maintain first make our make standpoint, to is and balance make a the and platform to at business company. XXXX from grow out bigger, our to thing and on cash, that our that the that obviously and and going that figure opportunities, sure then this sheet beyond look we we use how at

Brent Thielman

Okay, fantastic. time. it. the Appreciate Thanks for

Operator

you. to Roehm JP time turn Thank like at would questions. further closing gentlemen, there this it no for are Ladies and comments. back I to

JP Roehm

further full you fourth Well, calls XXXX joining forward our the today. year we exciting all ahead. appreciate you quarter us to XXXX and We results you wish we results. Thank all joining for today sharing for and all us best in look the our

Operator

and Thank gentlemen, you. this today's concludes Ladies teleconference.

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

Infrastructure and Energy Alternatives (IEA) 11 Mar 202019 Q4 Earnings call transcript