IEA - Earnings call transcript Q1 2020 | Infrastructure and Energy Alternatives Inc

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Operator

Good morning. Welcome to Infrastructure and Energy Alternatives First Quarter 2020 Conference Call. I would like to note, all participants on today's call are in a listen-only mode.

With that, I will turn the call over to Kimberly Esterkin, Investor Relations for IEA. Kimberly, please go ahead.

Kimberly Esterkin

Hello. joining results. to for quarter IEA's you financial XXXX thank us discuss today first And from are Officer. us and With management Pete Executive and Moerbeek, Officer; Chief Chief Financial JP Roehm, President

law, factors I Before call statements Accept conjunction today's contains statements financial included press statements turning forward-looking after with should the and to IEA's undertakes by growth in as Any company's over management, discussion future yesterday's the about expectations. release note would statements to be the that in like to risk cautionary forward-looking obligation filings. in the SEC required forward-looking update IEA no and its call. today's considered

Since website, including on in be management measurements release. found financial The as yesterday's presenting Investors press reconciliations as non-GAAP Section of can well adjusted the will as IEA's references appropriate be some EBITDA. GAAP financial

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

JP Roehm

you conference Kimberly, joining today safe Thanks, We quarter and listening healthy. and is that call XXXX in staying and everyone first our hope good morning. appreciate earnings

quarter, of on impact the increased I Before quarter COVID-XX to on XXXX, revenues a to the which as the the saw first of a I want about IEA. talk and mind comment subject, profitability top significantly compared pandemic of

on at without service customers. crisis our teams protocols enabled the in Officer, we Michael deployed construction Let work to management In we mid with I leads Stoker, hand employees focused the set the which of team. stay Operating who should communities These by me our COVID-XX, delay in work. our if and March our Chief also start any safety in of the to our have onset place at protocols the

sanitizer for extensive already of placed crews and XX our equipment washing our sanitation masks project our protection gallon enhanced stations procedures, drums and at sites. other hand protective personal and procuring We

strict a or feels checks COVID-XX, symptoms followed. Daily showing if of stay-at-home and are policy anyone conducted sick is temperature

offering believe are all days our COVID-XX. paid if obtain five have they leave exposed they employees to to testing We been the necessary

In of distancing guidelines. a minimum addition, feet compliance crews are being apart kept with in at social X

While also of ensuring abide safety are customers all and employees by our keeping protocols. own safe, our that security crew we our

we that construction members or aware any work today, contracted are who of virus. customer with As employees not our us crew of our closely the have

to any said, instance our where of well of we sites should safety being and employees COVID-XX, project customers. of to be all ready there is and ensure one That have contingency exposed the plans our

customers, of strong deploying of is is we the that the of course, another XXXX, the work the the in in best dedicated not and perform testament It's ethic. history the records in one all a who crisis, at of positive light just in to work our for attained service the first of safety IEA’s our to strength one employees One true health top global Of a this remain company. darkness plans. of it also leadership quarter our in Even the the day midst out. about and the about day crisis employees

pandemic of result impact as halt the let pandemic. turn at is on of the to economy while a the Now, the of a business, me much our

further track year, XXXX to impact from provided full guidance As this later the we has to will on material the speak initially call. not of today's the experienced XXXX today Pete we any Moerbeek, for well year our rest meet are guidance IEA on QX negative of continues our COVID-XX. CFO our call. If on

million, first XXXX. up totaled The first $XXX.X quarter Revenues for momentum in quarter year-over-year. we the the continued experienced XXXX XX.X% fourth of into the of quarter

Renewables revenues, XX.X% respectively. of and for XX.X% and Civil Specialty Our segments accounted

in an This XXXX. of of in and XXXX. conditions of segment and XXXX the XXX.X% to $XXX.X primarily in quarter of strong as growth revenue driven quarter prior the start revenues projects, by Renewables earlier generated increase year than favorable an projects million, number more the our to weather Renewables first XXXX in The constructed compared of increase over the was first QX

Specialty revenues roughly which year. segment prior of with flat The the Civil million, reported $XXX.X was

this in we improvements of as offset construction While division. to our saw quarter decline compared a by in heavy the QX in first civil of Rail XXXX, was XXXX, decline

considered in the onset in QX pandemic systems and throughout growth performs, power of is in that roads, the This revenue exemption local an bridges, we for maintaining work seen the means into work our with sites and orders. IEA we slowdown States continued the April. the infrastructure. and have not United highways, mid-March, critical shelter-in-home including have railroads all state our Even the a that saw work Almost

received not we have and any majeure we've force some to sent chains, Although, experienced customers delays to related their also letters in projects. supply significant

we've our what In with before impact projects during COVID-XX the fairly fact, the consistent of timing, over. is of pandemic all took management resource and the experienced scheduling of

Although, there are safety associated of enforcement procedures. the COVID-XX slowdowns inherent some with

timelines few schedule with of by our into insight on virus customers into COVID-XX would the remain of remain delay gain that that the not result to pipeline weeks final of completion to date. confirm each have We some in disruption projects close so cushion the their a work. our caused our built project in in schedule, Most and contact even material a

pleased and layoffs, have over applications energy April fact, alone. now available To-date, XXX had any we unfortunately in we who and experience and are available. talent at and unemployment of example, month construction an the extensive wind With to We support our highs, solar projects. not gas seeing job are we to are influx have oil hired record that in labor craft receive from report for we engineers, of

our particularly working for into status of transition our estimators some typically majority worked the where projects are requests into wind the to in Estimates always even so XXXX. Bidding a bidding remote have and also also XXXX was quite for for teams. rail that and seamless remains are The remotely, reviewed active, of approved proposal markets, go online. and it

our not for to us bidding. are person with proceed needed in reviews of So RFPs

Thinking of winning we million XXXX million bringing XXX key quarter, the XX the to solar of number of QX of the compared past at to backlog end work new QX at our secured solar end contracts over XXXX. a

Bend, White construction electricity solar more Construction, Once contract a Indiana a farm a this than complete, module solar subsidiary in IEA past double the was XX the awarded XX,XXX Northern will energy from megawatt of to quarter. build solar resources. South regions Indiana is farm

to project Appling selected to to modules from veteran community. solar support the and the procure hiring track East subsidiary which the from our was this sun IEA project, of the be construct XXX majority the Solar engineer, region of This Georgia in and will Southeast the include IEA recruited Farm craft will as XX,XXX workers Georgia, constructors farm state. will be In specifically military for contractor West. the from solar

of homes. power Iowa. wind, was this produce XX,XXX as energy the our portion the backlog end White to quarter a $XX Turning fourth to for booked XXXX. enough energy utility wind awarded into of $XX Once Construction this of renewable of will heavy our in contract infrastructure was completed, manages that projects scale, million of XXX farm million and civil Northern the farm contract subsidiary megawatt approximately

renewable there of and still is of more the price gas clear levels, It's historic for low even oil at greener, a push energy. sources with that

impending this XXXX the by or out production year. their phase of us full With of wind credit PTC are pushing the tax projects for the for end complete owners to

arm even resources for storing wind improves remain without projects Importantly, unit strong, of report project Bloomberg, recent of sizes In fallen a of the and technology the as energy renewable solar and significantly the research renewable wind the and economics global tax credit. energy cost extracting expand. has the full by

the progress the by to challenges COVID-XX, IEA with even make continues Ultimately, quarter. posed first in great

the the year growth strong our a confident we provides and in into strategy. backlog long-term visibility are Our of remainder

that turn in Officer further first Pete? I'll the With call discuss Chief our quarter to to detail. Moerbeek, over results Pete Financial said, our now

Pete Moerbeek

first thanks our auditor books of over and follows closing office to Welcome Currently and everyone our to review. virtual of our JP, earnings and remotely call, working Thanks, listening. first which is our back virtual XX% process for I filed limit XX-Q quarter some We on everyone can other our possible. end as smoothly applaud first which financial yesterday, that to Form discussion I means team quarter my as our completing highlights. this

job that in Our projects first revenues from meant our kicked site December quarter of at in of locations. last to weather winter place that margin equipment year. That off advantage and milder benefited gross and had some crews take we

of this revenue to of today. what customer year from be course JP shifting the COVID-XX of But meet does There we This has of from quarter-to-quarter. revenue still to full not continued may time, April. target. month the and assumes that our impact we experiencing on mentioned, in IEA are revenue improve some expect our our at As worsen

don't what In this time we know. know of uncertainty, we don't

During the the $X.X is potential first calculations quarter contingency the The COVID-XX these contingencies contingencies larger approximately total because created amount $XX of our first for projects. reduced future margin pandemic million percentage costs million. we completion at quarter, increased of gross in our by

of We expect any we reduce are the margins the the will we contingency XXXX. but do incur projects contingency if completed. remaining $X.X gross not increase Like costs, million margin as the over lessen rest the

list need your standard Unfortunately, we're economic career my the to on focused downturn this things in cash. business. of That strong staying not to and of includes lines hunkering to annual down credit we first conserve the do back is going list playbook and

our enacted in all for deferred dividends non-essential and quarter. paid our a Series hiring first corporate Series XXX(k) rather than We new for travel, B and in matching have cash employees, A employee the kind eliminated freeze

associated one-time end expenses. totaled and which department sanitation expenses $XXX,XXX and pandemic of of supplies our $XXX,XXX for April, was the for the costs Through $XXX,XXX, IT with

We providing test every a allowance can that also so employee in thermometer incurred $XX,XXX each self IEA around morning.

of cash $XX.X the our facility. in at on consists revolving $XX.X first of quarter liquidity remaining million million credit end Our the and

of since fully quarter. the the on end drawn the revolver have down We post

that We any fully required term not loan to also cash needs over payments do until XXXX. expect It meet months. helps we June next the XX due amortization have our

leverage reduction term X.X where from a we quarters Our loan significant is ago. under ratio times, is were which three senior just net

from of million $XXX B deleverage our of much year a has stable balance for and by beginning growth. to path down to note XXXX put improve million used portion those more term effort our at raised approximately IEA Series the million Last today. proceeds liquidity by us a Preferred our $XXX we to That issuing paying $XXX on sheet Stock

quarter. about Series on by the B decreased first the quarter $XX.X million preferred borrowings comments $XX.X as result for first loan other first in expense in from of term few increased and interest quarter, of under million, offset of credit A our our partially a up interest the quarter primarily stock, XXXX, totaled line the

tax to income dividends an or statement benefit our for $X.X significant as million period preferred pretax same for they impact of recorded compared XXXX. $X.X benefit We the Series income a an federal of income expense tax are on for deductible are interest million, the income a in stock taxes. of At but not rates, state a purposes, expense levels have B

For net of per $XX.X million the or loss income. $X.XX first improvement and is $XX.X the improving our period, a while of to in continue share, significant to a or million total to attain $X.XX loss share quarter, loss as diluted diluted compared prior net year goal per a

quarter X.X% Adjusted first or of EBITDA minus compared to loss quarter or first the X% for billion a million as revenues, $X.X XXXX. of totaled in revenues of $XX.X the of

issued yesterday which earnings EBITDA. the of Our we shows adjusted evening calculation release

the compared each cash year flow fourth to used have first in $XX.X used year. negative of first quarter the the cash previous the lower from in quarter quarter same Cash compared operations operations level million, We year, the totaled to first quarter a operations $XX.X of ago. resulting the in from generally in period operations for million of

of first for was million, the $X.X of financing which XXXX. in million that quarter expenditures our be will capital expenditures through is financed for leases. Capital revenues our totaled This expectation line with X% $X approximately

of term of B and the quarter our million preferred totaled million, Series $XXX.X Our $X.X under of million loans million included total outstanding $XXX.X and equipment revolving the credit at stock. which loan end facility $XXX debt

stock mandatorily repayable preferred considered it Our in debt XXXX. is because is

backlog, our million the During partially projects helped the burn offset added $XXX.X we approximately the million to quarter. to quarter, $XXX in new revenue in which

with for $X total billion the solid the backlog approximately rest year. Our visibility comprises of of

bidding teams we are add as mentioned, very our backlog. JP active to As looking to are

any business significant pandemic uncertain business So far in of increases. XXXX, world, an experienced we not recognize the our have from In control to disruptions potential our if we the for disruptions beyond spread the COVID-XX. significant

there in if or that cancel results the to predict of would to If operations, our and cannot cash being guidance We equipment, on future that changes government construction significant environment, crews delivery projects. that operating or flows, at of site, our that cause were delay quarantines prevent our liquidity prevent reconsider were time. customers our mandated see we we from

what However, based adjusted we $XXX full are anticipates year and billion $XXX we between year million between have revenues billion EBITDA year our full of to know $X.XX reiterating XXXX control of on full million. of guidance, today, $X.X and which and

staying I hope that safe everyone healthy. is and

Now we'll call CEO end over be CFO remarks. hopefully and call turn virtual remarks will for closing last the his our the our to that JP earnings

JP Roehm

even pandemic how in be manage conditions. we businesses more Pete. stable impact Well, a when significant Thanks, that term. position return into a poised financial COVID-XX operational the expect are all companies on solid and stronger to will to we have was IEA macro we a and their longer going

this As compared are markets. point impact robust only of to and strong each additional last Even very seeing activity half with the year. down be we a and remains percentage opportunities COVID-XX, I growth mentioned market predicted our is at global a for time engineering construction across of bidding to end

and revenue U.S. forecast and to is including increases highway year. construction to Power, transportation report improve expected X% gas to year-over-year. all this with are of X% rail spending including energy, the X% In street average along on natural on renewable

industry authority our that economy. history see for to demand pent infrastructure the and and We in and government downturn. reinvigorate critical the itself public hope We up from reemerging repeats spending

today. or The stages in for across investments nation's of gigawatts American Wind construction advanced another supplies Energy capacity construction development either the X% very strong. or wind U.S. of of electricity is Wind and U.S. according more now to $XX market remains in the than in the Association wind billion XX project

electricity in continuing still XXXX. territory, drop and for of With XXXX, the United sources XX% and energy price in are gas, renewable negative from of and to up Renewables all reaching XX% oil account XX% the even States XXXX, in to booming. are expected only in

coal national In and since routinely coal solar gas or even that energy April some has of XXXX eclipsed cheaper fired produce generation cases, wind than and of generation renewable a electricity basis. natural panels now on

the a generation for states U.S. renewable of over require the XX utilities renewables mix standards. that portfolio expiration construction beyond adopted increase wind These Today, in the standards have to creating their continue need well PTC. of

civil benefit expect market renewable these from IEA and opportunities. especially to energy

many We With across Pete year to capital end the now and enhancements take operational over our structure of each our the past that for growth just the can of spoke advantage prospects markets. to.

we focused service maintaining look we backlog, customers employee’s to our value safety, excellent our our significant and remain providing add driving new will growing on to for As our acutely shareholders. contracts to

current knowing along family's today during of your from in emerge listening stronger all wish will safety with We the difficult health these times, each and before. situation we that than even

look forward the next earnings our over coming quarters Thank we call, and be the business world we the usual. again to to hope back XXXX as time share our first progress joining that speak, continuing all quarter for will you to

now let's the Operator, up call questions. open to

Operator

question Our Brent Instructions] [Operator with Please Thielman you. from D.A. first proceed. Thank is

Brent Thielman

and Hey. on and thanks providing for an Thanks. outlook Good the times. still morning in congratulations these quarter

JP Roehm

Brent. Thanks,

Brent Thielman

bit you got play are right now. markets of listeners the maybe of me be seems now. I Thank to you you. the one much would uncertainty of hear helpful hand, for for hand, onset COVID strategic kind of it priorities want the just and other Hey, you've JP, kind defense there, the so guess what on now out on healthy it pretty I with and mean to a

there? hear from you an So, for just update to kind be of helpful

JP Roehm

Yeah. his now initiatives that, this think ours and and world Certainly, his Brent. strategic the of the comments several cash of in as liquidity performance But that's thanks industry business in went peer COVID. witnessed conserve every right on in that I luckily, we're through the executing in in every Pete, the right back for really great quarter. during like Obviously probably now.

appears And is and that year to about play that. continued absent know, we something optimistic in out the as it continue we we we've going this kind don't remain reiterate as to thought of call, to

very even to a and every continuing for of with forward go on backlog month off remain replace kind XXXX fixated XXXX. each our On and good basis, quality burn we and

and will done this have recently So throughout that we on to continue quarters that concentrate and successive the quarter year.

in have tremendous front of segments. all in our a in us We pipeline of opportunities of

COVID whether every these the is markets in that or especially look But from environment. think, particular well-positioned, at renewable going I far, well perform continuing perform the COVID company we’re seeing so in civil, that in this to just, through side I our to post situation are are of well, a they're you indicator business and

To kind little just dissect a of bit. that

there's On side, the just backlog renewable you that. megatrend our carbon middle the middle and great – of I super our in representation less anybody certainly the and a would our if world a environment we're on certainly of a in think country don't will, of pivot into of is a and disagree

investment that's no anything shortage even in that a COVID our go At we're and a capital environment. see in from what We changes don't that hearing that our customers the projects forward we of outlook. see and really now folks on least invest basis,

the about to see be our the Civil its transportation country. geographic we're On you our or Specialty opportunities throughout standpoint, throughout rail to side, continuing work robust whether think our continuing markets

act well, consumption taxes. The specifically representation on we're we that the the Washington we representation, on that. from concern our transportation bullish at in have gas lack know that's at to states pretty should that we – that I consumption. been getting we're hole created trade on least in feedback expect see especially side gas stimulus, we’ll And next plug the some base the tax But of expect, there's with for minimum by – Congress a is that a

that we've we’re on continue overall, XXXX we is, what the out of – up. So we out on We're been to on business in kind sum basis pretty but kind that coming just that of we see we're the forward opportunities think COVID. position. excited be go for Obviously, a what strong through that

Brent Thielman

on but the guys comments bit, little like surprised of you that ended And it there? just in me credit seems Okay. kind are a struggling see do because what rail

JP Roehm

be spend efficiency to and their with CapEx right COVID. in particular, and quite be a The in that pushing our customers upgrades through of For rail is seeing change seems period we're us with industry such strong. to

We haven't changes had that – we in any seen haven’t whatsoever.

like, said, across from just continue any we a disruption. seen strategic in good I So all to not point view a be markets, end of very spot really

Brent Thielman

as Okay. And up really kind companies lot scale mean, then, about I utility support moving of solar, of big And how as the you a big capacity than heard two, to I out lot quarter imagine because the your can of the Can don't I guess you? from wind? this be here for your is faster I business But business. of piece question I of it growth, questions. perking a from pie wind solar and wind imagine use guess, this activity kind two kind it's that be there. of can

JP Roehm

there are lot two markets. and skill I Well, of Yeah. -- question. back certainly, that and be lot between transferred sets those forth a could resources good of

first built Brent. day XXXX, very in solar the we from I yes, our think So, that project

skill or project construction of have transferred resources directly those From and resources Obviously, and assign folks routinely the we similarities still a solar solar and XXX installing that a the a air, project, crews farm, meters lot to day they're project. first forth, wind and are now turbines very whether back but are solar transferable. we they our our in management built also transferable we're set a we

that both have beneficial. that one have kind all now markets resulting is out. you in right of unprecedented So The build thing is you time

it's all our to or in scale resources we're critical continuing are whether So, for or the any of by competitors peers IEA our business. market,

out discipline think, I that is it on growth systematic exact far as – we about to We're any careful growth, What we the that call. of that, we and can coming I this say with think grow going our a the area be of would a opportunity. certainly to there it's manner. putting manage we're I as growth would tremendous the resources as in numbers going I'd as to business. opportunity with add on only is the

terms out we're real we and to get our – want over don't not We skis going don't to.

in the So key most is, but of solar. pivoting our in customers wind, the them are

So a more – we opportunities those road more to forward for the more become solar ‘XX, equal that mix mix key go of more customers. look building of and cross-sell will that down ‘XX, we'll as segment ‘XX we a of and an renewable we're able and our of be

Brent Thielman

that. you to business one me understand to there. tell you to got you – the I Okay. kind But liquidity lot the liquidity do suit some of backlog, a run to I what of help you of and big kind you appreciate kind get can kind mean I need keep me think maintain comfortable? guess, to need key of imagine maybe execute a obviously, more, on.

comfort of what's So, the you? minimum level for kind level

Pete Moerbeek

I think Brent. pretty right that level much at we're now,

done month shut are or down two. happen kind I if a would we would for test think stress where obviously have we a and series of what of models we to

will I hopefully think end of lower right about where the be. now toward is we

this like biggest at too quickly. the be should end challenges that see a we through we of enough, make don't able the is of ramp to us, year. increase we up one And Interestingly the company sure to liquidity point, for

for us we in. this So we are should we day-to-day we when level, comfortable where At are we to level now, right fine. there probably while and stay fluctuations, look may good think be be we at

Brent Thielman

guys. Best thank Okay. and All safe. for of the time. stay luck you Well, right,

JP Roehm

Brent. a lot, Thanks

Operator

session. closing over would of and question I JP the call like have turn We back for Roehm reached to our the answer to remarks. end

JP Roehm

earnings importantly, we safe healthy us uncertain our joining look in Well, call. you our forward stay environment QX stay we thank all Most please and good for this of XXXX to and each Thank and today reporting Have earnings you for a in day. you. one of August. QX every

Operator

concludes today's conference. This you. Thank

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

Infrastructure and Energy Alternatives (IEA) 9 May 202020 Q1 Earnings call transcript