IEA - Earnings call transcript Q2 2020 | Infrastructure and Energy Alternatives Inc

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Operator

Good morning, and welcome to Infrastructure and Energy Alternatives Second Quarter 2020 Conference Call. I would like to note, 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. joining results. to for quarter IEA's you financial XXXX thank us discuss today second And from are President us and Officer. With management Pete Executive and Moerbeek, Officer; Chief Executive Vice and Financial JP Chief Roehm, President

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

JP Roehm

to QX, Kimberly, experienced significant hope We second today as pandemic good negative financial for safe listening our from that results morning Similar call, second everyone. earnings the not quarter. thanks Well, our everyone appreciate you and healthy. and the COVID-XX is IEA quarter XXXX has and to joining conference impact a shown by

line profitability. reporting are as double-digit well We top bottom line solid as growth,

focused in safety mid-March, well-being the protocols grow employees XXXX our top of of EBITDA at during are Moerbeek and for Stoecker. making enabled our crews sanitation environment call. we Mike In Pete performance These hand set guidance of our the result sanitizers to equipment have of sites. our Under procedures, purchased increased project management remains delays in his without current revenues placed In Officer, deployed the protection not enhanced all adjusted priority. could book resource for by our prior this we place in all our discuss and business, work, guidance, As construction and service on personal our and guidance teams the onset our later will and We raising general, their and to Operating a with customers. of a to Chief our protocols current timing, drive the what our the stations of revenue scheduling we projects to and COVID-XX, stay our washing pandemic. with consistent profitability to-date the we continue experienced year. without on the

we We most fortunate critical the are that of work also infrastructure. performed is considered

exempted our So and shelter-at-home work have sites orders. local state been from

hinder delays receive uptick to related in immediately our the a we majeure During country. our in minor projects. laborers significant to we have the of have growing did pleased to year, only over to among customers. the also the I'm to were the hire experience or we their cases And do labor letters seen COVID-XX work. craft that, COVID-XX our cases and not to report our quarter, craft contractual Any most in we of experience Since meeting work and rest exposed to second to several slight any crews crews our impact supply expect the of we July, payroll. at did Unfortunately, force continue we believe support customers, of quarantined. beginning to echoing these so chains, added level sent primarily of X,XXX obligations that our our time, this will workforce us from not prevent margins

pipeline. we to experience from our with oil open gas experienced to of our And positions. energy receive to quarter, construction last engineers and extensive continue growing professionals interest We number continue for similar a receive growing to applying support

now me in approximately to second $XXX year-over-year. XX.X% turn performance Revenues the million, quarter. our up totaled Let

fifth capacity solar has work solar facilities, White installed the contract used United all solar panels million EPC five XX-megawatt craft past in segment, themselves contract ground module $XXX XX% XXXX. on production including earlier expected this ground of the XX-megawatt in over installation. driven committed Indiana Texas XXXX. the assembly, revenues of Solar on awards Bend with in Constructors increased Southeast This an of And in total facility manufactured broke project for began nation The Continuing to for in equipment Texas Construction by are at facility of last an sites, wire tracker second an to in hiring gigawatts weather EPC of The to the compared harnessing of XX% of farm generated Energy quarter solar high in is expects for which completed was and renewable $XX also IEA leverages is support years. In Georgia. this announced our XXX The be University in a and conditions in job be December almost projects Our IEA attributes. accounted we QX just high which the broke we growth installed April, EPC precision, number be Notre perfect is ranked labors, week. a Industries start several for on June. skilled of solar a States. an projects four panels. which is solar energy completed total revenues South in the solar primarily in wind the million XX% of Baxley next The constructing are revenues and project increase expected solar the June the Association and Texas Renewables of farm XXXX. and we Constructors additional to Dame in approximately to over

components the wind the power quarter farm replacements $XXX We segment the provided turbines wind the are Minnesota of four existing our These of major region. include by our also began second increase of in wind revenues. segment South respective Specialty each projects of farms energy. Dakota, total in XXXX Once and million to several and quarter. overhauls currently The totaled projects in second Civil geographic repowering of and Civil Texas QX compared up revenues mechanical turbines In approximately completed is repowering the X% to approximately over together XX% represented generate Specialty XXX XXXX. of the will of QX megawatts revenues amount

line. and new selected Our the in of on Benson have William commuter Lake projects. Charles And infrastructure Ragnar Corridor venture part bidding shore divisions rail for and was of as construction extension the a been Chicago's Ragnar joint of West Benson several QX, transportation South

to second for Indiana. project Indianapolis western this renovate of extension of and at state-of-the-art street airport and a rail several our XXXX. redevelop several the add in These infrastructure proceed construction U.S. expected in work our The in the with border million a Also state roads We of in education section there home this include would this for contract the market with eight-mile terminal. Indianapolis, contracts Indiana's campus projects $XXX Indianapolis, residential of old fall east year. on center training to to backlog expect notice a over half the Specialty contract the center Illinois began during to to quarter, receive our Civil in to depletion in downtown develop a crews project

announce and Pete discuss has XXXX Pete. of increased Financial officially agreed Pete to the over and drop to our interim part Officer. title Before results I quarter am financial turn his IEA's to Chief second pleased guidance. I has that to call become Congratulations the

Pete Moerbeek

both of part is listening. to Thanks profitable the release, Form JP so thanks of and to near-term we not filed IEA the I the night, we forward looking am retirement the as our of successful earnings and Obviously, everyone rest growth Last focus in of long-term. can with word team vocabulary. for address I the second and issued highlights my our on working our quarter quarter. XX-Q the some

impact the pandemic. the with start me Let of

and half has costs it $X.X other COVID-XX costs materially has had approximately expenses SG&A our in the with last indirect not week While Starting XX% performance. pandemic impact we our had in incurred on million are an are been About and operations. expenses. through and financial March associated negative

segments' our for million million contingencies projects. we the of margin costs, gross for amount. the gross loan. in increased interest of completed. the the million of of revenue XXXX show margins year primarily our the from a expense. as we job gross the the of compared margin totaled quarter percent quarter will the the in as of half XXXX. in balance which quarter as potential was improved of Overall quarter, $X.X first contingency costs of recorded allowed quarter result SG&A contingency second both were stock XXXX to Other gross million created our a the about Additionally, we've quarter income to of a XXXX. did operating periods To-date, same the the revenues for first contingency XX.X% $XX benefit compared our $X.X are X.X% be the our the months Like or a X.X% for principal year. level quarter projects exceeded as preferred expenses in These second the margins X.X%. dividends by The $X.X expense operating of B both half for incur able lower receive and lower if of contingencies reduced larger interest six in Series leverage to pandemic first paid up and $XXX,XXX quarter totaled XX%. for $XX.X first margin million second with the impact some COVID-XX of our any we expense and of the on as us million and We Even the revenues not second Interest significantly for our on other was are at increase used from term and with million $XX.X rate $XX.X do

other liability. an income of with for Series $X.X XXXX. for of For valuing income In current the tax in high attributable same expense unusually XX.X%. rate period was $XX.X primarily from the B the to tax the and the million We dividends. taxes expense state income an effective our compared The non-deductibility million was primarily stock. stock to $X.X federal resulted B The recorded expense effective results XXXX preferred the Series reduction in quarter of rate preferred XXXX warrants for quarter an an earn-out associated for our from million other the tax

$X.X As share. revenues or quarter income to of income had we EBITDA second Adjusted diluted revenues XXXX balance million is $XX.X XXXX. A net our or of the in the to in in June quarter million sheet. reconciliation of shown adjusted on XX, At EBITDA we earnings the X.X% second $X.XX for of or for the million release. cash $XX.X quarter. compared JP were totaled second $XX.X million noted, Net as per profitable was X.X%

had While revolving our outstanding we million no available. facility of of drawn we million leaving credit have $XX.X $XX.X did letters $XX cash on credit million

was Our term balance $XXX.X loan million.

payments We due XXXX. amortization until have June no

remains totaled Our $X.X compared under provided significant period used in where just term year leverage we which $XX.X net second by X.Xx in the operations quarter a is loan reduction ago. in three for the senior from ratio quarters Cash million operations cash same ago. were million to a

the Our in half that flow expectation is the we cash of year. positive will generate second

course our spend $XX.X will quarter to expenditures our was of second financing through revenues, million to Of we fund as to Capital continue which cash grow totaled leases. for $XX.X working financed million the need capital. we

and capital expect XXXX. XXXX approximately that to expenditures be X% will continue for our of We revenues

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

with was Both from of funding is are backlog unexpected development one delay working for aspects. year. of many the rest the visibility total not locations $X.X in hearings us having public decrease number timelines remote Our longer. the solid the effects the as extended provides of backlog pandemic of have governmental the been reverted in to and The virtual billion permitting with for and approximately project naturally process of process project projects a meetings authorities the

ability second the first bidding half activity from billion fully year we guidance our from With in currently in billion the in $XXX the expectations and backlog, and increased our raise billion, year of now confident are very year. full for As our of we $X.X to $X.XX in performance anticipate We our this half the $XXX $XXX previous up strong the financial previously projects in active, $X.X $XXX to revenues to of full is between million year. EBITDA guidance. between adjusted of up year $X.X million billion to million, expect and awards million

prevent that construction our our to disruption major operations. impact government-mandated crews that our inhibit or Future additional delay that COVID-XX. customers of no cancel business caused or assumes projects could guidance from to delivery from Our quarantines adversely on-site being equipment

by yours. as unusual conclude that Let the very is everyone JP, navigate me hope healthy, times. expressing these safe and we my microphone is

JP Roehm

thank this year to minutes few discuss Well, want I of and the you, a new to remainder take both opportunities business our and Pete. markets for beyond.

for an and near internal in are that are safe coming and across with harbor construction the owners tax in all-time We for wind end XXXX production our of their and safe owners as at take full otherwise bidding opportunities growth full harbor segment now The markets the can continuity seeing looking opportunities we associated under X-year extension of advantage projects the robust to the through our safe PTC activity Renewables XXXX are are our that means term, projects. seeing for bidding opportunities In who qualified and extension of additional high. of harbor by most XXXX revenue wind provisions services complete or October, The began projects this were the initially the credit. extends leverage XXXX. PTC the developers

the more plants renewables continue the at is United new first the may trend by installing million the plan XX the force panels through next expectation systems. from time coal which climate and tax XXX a of will the Interestingly, generate XXXX. national and expansion years reasons: history manufactured that for XXXX task well installations XXXX result, future renewables two in for for energy exceed solar As are XXXX pollution wind forward force U.S. expected in that energy renewable energy construction of of work. the States to recently power level U.S. least wind coal carbon eliminating set XX,XXX the in current than and is certainly change expected The first, calls U.S. a in over goal push solar to turbines

currently XX which States United XX or in electricity and over beyond gigawatts United portfolio construction of the in development tax states These generation over renewables standards. capacity another States the X% increase wind and credits Wind in to creating need Second, a is standards their either across COVID-XX. construction billion of advanced or and utilities of today. wind solar investment nation's $XX renewable of expiration in require supplies that the the have is for of project adopted stages well continue mix

end totaled the solar continue market entered this solar we QX strong renewable our far so actively million, added XXXX, solar to backlog million see new year. have awards in We and as growth pipeline. of $XXX solar $XXX we At our the in

growing With solar the there's step demand in to incentives of been a systems. Photovoltaic XXXX tax down install

model industry the solar see being the what the shift means similar wind IEA. The engineering, a contractor, EPC and but for projects to beginning industry to is a first of U.S. solar quarter over is the contracting as more in It in the data last projects general in model procurement increased the only for available, work. solar shift the most in this In is alone brought electrical type recent also a XXXX we in year XX% QX representing Just construction the high-voltage which space, industry. full contract years. and quarter the five not in engineer strongest we that positive to are only traditional

continues provide seeing solar our competition to turnkey relationships are create customers our with the progress market. our and and and in business to we improve see our strengthen infrastructure we to market to particularly of solutions customers wind Many in work space. Specialty we rail diversify beyond solar ability our within the seeing same the clients, Our entry the in the are are our renewables Civil margins. now IEA renewables barriers will as renewables that the

project In addition joint are that to begin about Texas. venture joint construction an we $XX of mentioned venture I in earlier, to project approximately the million

coal ash bidding in good opportunities business. also seeing are our We remediation

and funded orders We build those is reducing near pandemic the state The The has the part last bridges. devastating significantly and fuel federal future. transportation of public with privately portfolio agencies improve well receipts. We continue infrastructure impact road the had opportunities into budgets expect tax of on stay-at-home or our sector. to a in

as infrastructure passed allocations the as in Although, also currently in transportation project $X.X federal the increase in a speculation transportation increases proposals next calls at bridge recovery will or passage traffic tax Many the infrastructure would travel, states the expiration alternatives $XX in for projects, Other also travel use of trillion availability below seeing of funding solutions to in Act private bill surface new transportation funding. infrastructure of infrastructure of September. to include the increased been be and are their which create more unfortunately to portions priority federal billion for could the approval in increases the this release a five and years. bonds, infrastructure level awaiting infrastructure $XXX bill act of federal through and has of the Act, and vehicle billion The needs. allows There sector expect billion for some air fall funds car that the invest as expense of There The a support. number line funding. states transportation CARES much FAST $XXX which core in are is at far Senate $XX funding over could spend. billion highway funding with

not delayed may Treasury for CARES to funding infrastructure Act The highway come total funding million funding passage million. a the and of third federal be of infrastructure many quick and a may U.S. and of necessarily a be perhaps reasons. bill Finally, bridge $XXX $XX directly from could through source Federal Reserve

our our bid have take our will front we top-notch of providing for and summary, generating service many and customers, to while them, opportunities to highway bridge drive opportunities It In to markets. thank to to advantage our call. proceed this However, with again quarter Instructions] Brent Operator, we you while questions? safety us focused morning. on Thank share earnings continuing business. you. positive the maintaining significant [Operator line flow. and XXXX remaining would forward profitably value Davidson. D.A. open progress in our Please please call you We cash to projects question up continuing Thielman are comes for us of your continuing first the us focus from new to That question. to third Our of to find in for shareholders. on with I want employee executing look is joining

Brent Thielman

Thank on a Great. Congrats you. morning. quarter. strong Good

JP Roehm

Thanks, Brent.

Pete Moerbeek

Thanks, Brent.

Brent Thielman

Pete. Maybe for first might be question

the unlocks wondering second Just wrap contingency into as of projects assumes of if these have costs you ultimately the half? absorbing, guys guidance up sort these any been that you

Pete Moerbeek

the at Not end. bottom

think the the of I guidance, top see that end at flowing at through, bottom end the some could definitely but of we not.

Brent Thielman

JP, And backlog I of to then I in half the thinking XXXX. year like just gauge And ability guess from I and confidence terms commentary. sounds here start second work. mean you're all about Okay. way your we I thanks rebuild our it in the bidding active the of want new work guess your for into to really as the

JP Roehm

And for as our front has me last look office, opportunities. always have barometer are we days, know Very in matter our for forward. been, very on front things confident moving to of old the side and at is of we're certainly, what confident. bidding the the from opportunities Yes. us this what in we But but slower, good the to just of CEO for normal really our got nobody's we new in. Appreciate the little the extremely from in in because cautiously of And is, least that excited in about front commentary us or are that pipeline, fact it's certainly the and you. I'm in strong. We're optimistic talked Brent we moving me been certainly obviously don't but permittings going don't know. XX-plus the a process owner unprecedented. about the Obviously us whether opportunities hear earlier but forward, at

Brent Thielman

from so just wind now, cards and Okay. and much on that curious, perspective space. And I'm talk there's are there those about from so I momentum much going JP, helping guys you in margin between right just a right solar mean you isn't the others bid now? the is

JP Roehm

both Yes. build-out. are -- industries I mean an it's all-time a record buildout -- I mean

a but all pivot kind max part North of of ourselves, competitors which transformation, it's at only kind we're the a carbon-based -- leaders not key building type one society be company this capacity. really here America truly XXX-plus very to we've multi-generational And be So our leaders we're for is industry sure. exciting of an We're been in years. for global, in for in but seen we're our fortunate that's to doing of that

Brent Thielman

levels maybe Okay. going business sheet last and now guidance for the just about to I strategic there, curious leave hear How are been you more my I'll thinking balance few mean, just capital profitability -- there? quarters. structure priorities, it's it has forward? your I thinking the of I'd solid thoughts a be guess few question than generating a about

Pete Moerbeek

make Well are trying we trend of we the sure results. that positive the continue Brent, to

make we debt at with do of obviously to at. do We And sure looking we're and/or looking what off that it sureties are long-term common are our It's B. some is are not Series to looking very comfortable can the process start something longer-term what that whatever we're quickly, take that that structure-wise a and also paying can value a focused we shareholders. for It's is we will we while. the something process expect but creating on that a do we

it but certainly this that that could a something has sure path we toward. process we be is done not say working we're going or of are this been the I'm to by end a So, year,

Brent Thielman

here. you questions. luck taking the Well, thank Okay. for of Best

JP Roehm

Thank you.

Pete Moerbeek

one. a Have Brent. Thanks, good

Operator

closing like in other no Mr. Roehm the questions hand back call to are for the I'd to queue. There remarks.

JP Roehm

few in our for with thank look joining discuss months as QX Well, our operator you call. for here and visiting a QX, We all us results. you forward we XXXX to thank you

joining have you. and thank safe. day and all a stay for Thank great So, you

Infrastructure and Energy Alternatives (IEA) 11 Aug 202020 Q2 Earnings call transcript