Quarter Highlights
- Highest quarterly revenue in Company history; revenue totaled
$522.2 million , an increase of 23.7% as compared to last year’s third quarter. - Net income of
$11.3 million , or$0.32 per diluted share, compared to$12.6 million , or$0.24 per diluted share, in last year’s third quarter. Q3 2019 included a$4.2 million contingency gain. - Adjusted EBITDA of
$43.1 million , an increase of 11.3% as compared to last year’s third quarter adjusted EBITDA of$38.7 million . - Backlog increased by
$150 million during the quarter to$1.9 billion . - Raising revenue guidance range for the year to
$1.7 billion to$1.75 billion from$1.6 billion to$1.7 billion previously and narrowing Adjusted EBITDA guidance to$117.5 million to$125.0 million from$110.0 million to$125.0 million previously.
Management Commentary
“IEA had another successful quarter with revenues improving 23.7% to
“We are very pleased with our performance in this unique year impacted by a global pandemic and economic uncertainty. We are appreciative of the hard work and commitment by our employees who have continued to acutely focus on our safety protocols even with these added challenges. We expect to maintain our solid performance as we close out 2020 and to continue our focus on the long-term performance of our business,”
Third Quarter Results
Record revenue of
Gross profit for the third quarter totaled
Selling, general and administrative expenses of
Interest expense, net, increased by
Other income decreased by
Provision for income taxes increased
Net income was
Adjusted EBITDA was
Balance Sheet
As of
Backlog
Backlog as of
Outlook
Based on the backlog currently booked and contracts executed as of the date of this release, the Company is raising and narrowing its full-year 2020 guidance. IEA anticipates revenue in the range of
Conference Call
IEA will hold a conference call to discuss its third quarter 2020 results tomorrow,
About IEA
Forward Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements can be identified by the use of forward-looking terminology including “may,” “should,” “likely,” “will,” “believe,” “expect,” “anticipate,” “estimate,” “forecast,” “seek,” “target,” “continue,” “plan,” “intend,” “project,” or other similar words. All statements, other than statements of historical fact, included in this press release regarding expectations for the impact of COVID-19, future financial performance, business strategies, expectations for our business, future operations, liquidity positions, availability of capital resources, financial position, estimated revenues and losses, projected costs, prospects, plans, objectives and beliefs of management are forward-looking statements. These forward-looking statements are based on information available as of the date of this release and our management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurance that such expectations will prove correct. Forward-looking statements should not be relied upon as representing our views as of any subsequent date. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
- potential risks and uncertainties relating to COVID-19, including the geographic spread, the severity of the disease, the scope and duration of the COVID-19 pandemic, actions that may be taken by governmental authorities to contain the COVID-19 pandemic or to treat its impact, and the potential negative impacts of COVID-19 on economies and financial markets;
- availability of commercially reasonable and accessible sources of liquidity and bonding;
- our ability to generate cash flow and liquidity to fund operations;
- the timing and extent of fluctuations in geographic, weather and operational factors affecting our customers, projects and the industries in which we operate;
- our ability to identify acquisition candidates and integrate acquired businesses;
- consumer demand;
- our ability to grow and manage growth profitably;
- the possibility that we may be adversely affected by economic, business, and/or competitive factors;
- market conditions, technological developments, regulatory changes or other governmental policy uncertainty that affects us or our customers;
- our ability to manage projects effectively and in accordance with management estimates, as well as the ability to accurately estimate the costs associated with our fixed price and other contracts, including any material changes in estimates for completion of projects;
- the effect on demand for our services and changes in the amount of capital expenditures by customers due to, among other things, economic conditions, commodity price fluctuations, the availability and cost of financing, and customer consolidation;
- the ability of customers to terminate or reduce the amount of work, or in some cases, the prices paid for services, on short or no notice;
- customer disputes related to the performance of services;
- disputes with, or failures of, subcontractors to deliver agreed-upon supplies or services in a timely fashion;
- our ability to replace non-recurring projects with new projects;
- the impact of
U.S. federal, local, state, foreign or tax legislation and other regulations affecting the renewable energy industry and related projects and expenditures; - the effect of state and federal regulatory initiatives, including costs of compliance with existing and future safety and environmental requirements;
- fluctuations in equipment, fuel, materials, labor and other costs;
- our beliefs regarding the state of the renewable wind energy market generally; and
- the “Risk Factors” described in our Annual Report on Form 10-K for the year ended
December 31, 2019 , and in our quarterly reports, other public filings and press releases.
We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Contacts:
Chief Financial Officer | ADDO Investor Relations |
Pete.Moerbeek@iea.net | iea@addoir.com |
765-828-2568 | 310-829-5400 |
Condensed Consolidated Statements of Operations
($ in thousands, except per share data)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue | $ | 522,232 | $ | 422,022 | $ | 1,360,999 | $ | 939,764 | |||||||
Cost of revenue | 463,343 | 369,152 | 1,214,828 | 849,728 | |||||||||||
Gross profit | 58,889 | 52,870 | 146,171 | 90,036 | |||||||||||
Selling, general and administrative expenses | 29,656 | 31,313 | 87,214 | 84,945 | |||||||||||
Income from operations | 29,233 | 21,557 | 58,957 | 5,091 | |||||||||||
Other income (expense), net: | |||||||||||||||
Interest expense, net | (14,975 | ) | (13,959 | ) | (47,240 | ) | (35,822 | ) | |||||||
Other income | 3,161 | 4,455 | 428 | 22,557 | |||||||||||
Income (loss) before benefit for income taxes | 17,419 | 12,053 | 12,145 | (8,174 | ) | ||||||||||
(Provision) benefit for income taxes | (6,153 | ) | 556 | (10,025 | ) | 3,352 | |||||||||
Net income (loss) | $ | 11,266 | $ | 12,609 | $ | 2,120 | $ | (4,822 | ) | ||||||
Less: Convertible Preferred Stock dividends | (619 | ) | (759 | ) | (1,991 | ) | (2,202 | ) | |||||||
Less: Contingent consideration fair value adjustment | — | (4,247 | ) | — | (23,082 | ) | |||||||||
Less: Net income allocated to participating securities | (2,854 | ) | — | (35 | ) | — | |||||||||
Net income (loss) available for common stockholders | $ | 7,793 | $ | 7,603 | $ | 94 | $ | (30,106 | ) | ||||||
Net income (loss) per common share - basic | 0.37 | 0.37 | — | (1.47 | ) | ||||||||||
Net income (loss) per common share - diluted | 0.32 | 0.24 | — | (1.47 | ) | ||||||||||
Weighted average shares - basic | 20,968,271 | 20,446,811 | 20,748,193 | 20,425,801 | |||||||||||
Weighted average shares - diluted | 35,336,064 | 35,419,432 | 20,748,193 | 20,425,801 |
Condensed Consolidated Balance Sheets
($ in thousands, except per share data)
(Unaudited)
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 57,298 | $ | 147,259 | |||
Accounts receivable, net | 186,302 | 203,645 | |||||
Contract assets | 216,513 | 179,303 | |||||
Prepaid expenses and other current assets | 20,298 | 16,855 | |||||
Total current assets | 480,411 | 547,062 | |||||
Property, plant and equipment, net | 131,558 | 140,488 | |||||
Operating lease asset | 38,460 | 43,431 | |||||
Intangible assets, net | 27,280 | 37,272 | |||||
37,373 | 37,373 | ||||||
Company-owned life insurance | 3,905 | 4,752 | |||||
Deferred income taxes | 3,178 | 12,992 | |||||
Other assets | 278 | 1,551 | |||||
Total assets | $ | 722,443 | $ | 824,921 | |||
Liabilities and Stockholder's Equity (Deficit) | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 117,320 | $ | 177,783 | |||
Accrued liabilities | 156,467 | 158,103 | |||||
Contract liabilities | 73,999 | 115,634 | |||||
Current portion of finance lease obligations | 23,766 | 23,183 | |||||
Current portion of operating lease obligations | 9,110 | 9,628 | |||||
Current portion of long-term debt | 2,661 | 1,946 | |||||
Total current liabilities | 383,323 | 486,277 | |||||
Finance lease obligations, less current portion | 33,205 | 41,055 | |||||
Operating lease obligations, less current portion | 30,896 | 34,572 | |||||
Long-term debt, less current portion | 159,150 | 162,901 | |||||
Debt - Series B Preferred Stock | 171,878 | 166,141 | |||||
Series B Preferred Stock - warrant obligations | 8,200 | 17,591 | |||||
Deferred compensation | 7,865 | 8,004 | |||||
Total liabilities | $ | 794,517 | $ | 916,541 | |||
Commitments and contingencies: | |||||||
Series A Preferred Stock, par value, | 17,483 | 17,483 | |||||
Stockholders' equity (deficit): | |||||||
Common stock, par value, | 2 | 2 | |||||
— | (76 | ) | |||||
Additional paid in capital | 34,517 | 17,167 | |||||
Accumulated deficit | (124,076 | ) | (126,196 | ) | |||
Total stockholders' equity (deficit) | (89,557 | ) | (109,103 | ) | |||
Total liabilities and stockholders' equity (deficit) | $ | 722,443 | $ | 824,921 |
Condensed Consolidated Statements of Cash Flows
($ in thousands)
(Unaudited)
Nine Months Ended | |||||||
2020 | 2019 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 2,120 | $ | (4,822 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 36,566 | 36,373 | |||||
Contingent consideration fair value adjustment | — | (23,082 | ) | ||||
Warrant liability fair value adjustment | (171 | ) | — | ||||
Amortization of debt discounts and issuance costs | 9,343 | 3,765 | |||||
Share-based compensation expense | 3,067 | 2,812 | |||||
Loss on sale of equipment | 1,251 | 743 | |||||
Deferred compensation | (139 | ) | 1,494 | ||||
Accrued dividends on Series B Preferred Stock | 7,959 | 4,135 | |||||
Deferred income taxes | 9,814 | (2,323 | ) | ||||
Other, net | 287 | — | |||||
Change in operating assets and liabilities: | |||||||
Accounts receivable | 17,327 | (19,108 | ) | ||||
Contract assets | (37,210 | ) | (62,419 | ) | |||
Prepaid expenses and other assets | (3,288 | ) | (5,938 | ) | |||
Accounts payable and accrued liabilities | (64,089 | ) | 3,317 | ||||
Contract liabilities | (41,635 | ) | 9,580 | ||||
Net cash used in operating activities | (58,798 | ) | (55,473 | ) | |||
Cash flow from investing activities: | |||||||
Company-owned life insurance | 847 | (81 | ) | ||||
Purchases of property, plant and equipment | (6,727 | ) | (5,599 | ) | |||
Proceeds from sale of property, plant and equipment | 4,151 | 7,266 | |||||
Net cash (used in) provided by investing activities | (1,729 | ) | 1,586 | ||||
Cash flows from financing activities: | |||||||
Proceeds from long-term debt | 72,000 | 50,400 | |||||
Payments on long-term debt | (83,201 | ) | (121,215 | ) | |||
Debt financing fees | — | (14,738 | ) | ||||
Payments on finance lease obligations | (19,301 | ) | (15,953 | ) | |||
Sale-leaseback transaction | — | 24,343 | |||||
Proceeds from issuance of stock - Series B Preferred Stock | 350 | 100,000 | |||||
Proceeds from stock-based awards, net | 718 | 159 | |||||
Merger recapitalization transaction | — | 2,754 | |||||
Net cash (used in) provided by financing activities | (29,434 | ) | 25,750 | ||||
Net change in cash and cash equivalents | (89,961 | ) | (28,137 | ) | |||
Cash and cash equivalents, beginning of the period | 147,259 | 71,311 | |||||
Cash and cash equivalents, end of the period | $ | 57,298 | $ | 43,174 | |||
Non-
We define EBITDA as net income (loss), determined in accordance with GAAP, for the period presented, before depreciation and amortization, interest expense and provision (benefit) for income taxes. We define Adjusted EBITDA as net income (loss) plus depreciation and amortization, interest expense, provision (benefit) for income taxes, restructuring expenses, acquisition or disposition related expenses, non-cash stock compensation expense, and certain other non-cash charges, unusual, non-operating or non-recurring items and other items that we believe are not representative of our core business or future operating performance.
Adjusted EBITDA is a supplemental non-GAAP financial measure and, when considered along with other performance measures, is a useful measure as it reflects certain drivers of the business, such as revenue growth and operating costs. We believe Adjusted EBITDA can be useful in providing an understanding of the underlying operating results and trends and an enhanced overall understanding of our financial performance and prospects for the future. While Adjusted EBITDA is not a recognized measure under GAAP, management uses this financial measure to evaluate and forecast business performance. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not consider certain requirements, such as capital expenditures and depreciation, principal and interest payments, and tax payments. Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA may vary from the use of similarly-titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.
The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
The following table outlines the reconciliation from net income (loss) to Adjusted EBITDA for the periods indicated:
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands) | |||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) | $ | 11,266 | $ | 12,609 | $ | 2,120 | $ | (4,822 | ) | ||||||
Interest expense, net | 14,975 | 13,959 | 47,240 | 35,822 | |||||||||||
Provision (benefit) for income taxes | 6,153 | (556 | ) | 10,025 | (3,352 | ) | |||||||||
Depreciation and amortization | 12,565 | 12,572 | 36,566 | 36,373 | |||||||||||
EBITDA | 44,959 | 38,584 | 95,951 | 64,021 | |||||||||||
Non-cash stock compensation expense | 1,110 | 1,052 | 3,067 | 2,813 | |||||||||||
Acquisition integration costs (1) | — | 2,130 | — | 8,728 | |||||||||||
Contingent consideration fair value adjustment (2) | — | (4,247 | ) | — | (23,082 | ) | |||||||||
Series B Preferred warrant liability fair value adjustment (3) | (3,000 | ) | — | (171 | ) | — | |||||||||
Project settlement legal fees (4) | — | 1,186 | — | 1,186 | |||||||||||
Adjusted EBITDA | $ | 43,069 | $ | 38,705 | $ | 98,847 | $ | 53,666 |
(1) Acquisition integration costs related include legal, consulting, personnel and other costs associated with the acquisitions of
(2) Reflects an adjustment for 2019 to the fair value of the Company’s contingent consideration incurred in connection with the Company's merger and initial public offering transactions in
(3) Reflects an adjustment to the fair value of the Company’s Series B Preferred Stock warrant liabilities. The warrant liability fair value adjustment is a mark-to-market adjustment based on fluctuation in the Company's stock price.
(4) Project settlement legal fees reflect fees incurred by the Company seeking additional recovery of settlements related to extreme weather-related events that occurred on projects at the end of 2018.
The following table outlines the reconciliation from 2020 projected net income to 2020 projected Adjusted EBITDA using estimated amounts:
Guidance | ||||||||
For the year ended | ||||||||
(in thousands) | Low Estimate | High Estimate | ||||||
Net income (loss) | $ | (5,000 | ) | $ | (1,000 | ) | ||
Interest expense, net | 61,000 | 61,000 | ||||||
Depreciation and amortization | 50,000 | 50,000 | ||||||
Expense for income taxes | 9,000 | 11,000 | ||||||
EBITDA | 115,000 | 121,000 | ||||||
Non-cash stock compensation expense | 4,500 | 4,500 | ||||||
Series B Preferred warrant liability fair value adjustment | (2,000 | ) | (500 | ) | ||||
Adjusted EBITDA | $ | 117,500 | $ | 125,000 | ||||
Source:
2020 GlobeNewswire, Inc., source