Infrastructure and Energy Alternatives, Inc.

Good morning and welcome to Infrastructure and Energy Alternatives' first quarter and full year 2021 conference call. I'd like to note that all participants on today's call are in a listen-only mode. And with that, I'll turn the call over to Kimberly Estrigan, Investor Relations for IEA. Kimberly, please go ahead.

Hello, and thank you for joining us today to discuss IEA's first quarter 2021 financial results. With us from management are J.P. Rehm, President and Chief Executive Officer of and Pete Morbake, Executive Vice President and Chief Financial Officer. Before turning the call over to management, I would like to note that today's discussion contains forward-looking statements about IEA's future growth and financial expectations. Any forward-looking statements should be considered in conjunction with the cautionary statements in yesterday's press release and the risk factors included in the company's SEC filings. Except as required by law, IEA undertakes no obligation to update a forward-looking statement after today's call. Since management will be presenting some non-GAAP financial measurements as references, including adjusted EBITDA, the appropriate GAAP financial reconciliations can be found in yesterday's press release. And with that, I'll now turn the call over to J.P. Rehm, Chief Executive Officer. Please go ahead, J.P.

Well, thank you, Kimberly, and good morning to everyone. We appreciate you joining our first quarter earnings conference call. IEA's performance for the first quarter was in line with our expectations. Consolidated revenues were $276 million and adjusted EBITDA was $3.4 million. While both revenue and adjusted EBITDA saw declines from last year's first quarter, as we had indicated would be the case on our fourth quarter call, Our underlying business remains strong as demonstrated by our backlog increase of $606 million to a record total of $2.7 billion at the end of the first quarter. Unlike last year when revenue and profitability were front loaded, we are expecting a more traditional seasonality period in 2021 with our financial performance ramping through the year. IEA remains on track to meet our full year guidance numbers. And in fact, we raised the bottom end of our revenue guidance for the year to 1.8 billion. As the economy gradually reopens across the country, we are getting the go ahead to start jobs previously delayed by the pandemic challenges, such as slower permitting. Such project starts have resulted in the onboarding of over 450 employees already in the second quarter. And we expect that ramp and employees to continue well into the third quarter. We are continuing to abide by all health and safety requirements at our project sites, but we are seeing some states relax their protocols as more people, including IEA's crews, become vaccinated. One of the main challenges to our renewable work this year will be ensuring that the scheduled delivery of wind turbines meets our high demand given the surge in renewables work. The delays in starting projects mean that construction timelines have become less flexible. While we may experience some equipment delays due to COVID-19 and other supply chain issues, we believe that our contractual protections with our clients will minimize our exposure to those delays. Naturally, we're not out of the woods when it comes to COVID-19 impact, and we are still navigating some delays from customers whose workforce continues to work remotely. The good news is that bidding activity particularly in renewables, remain strong, providing significant solar and wind construction and services opportunities. Turning to the first quarter results for our business lines, our renewables segment was 65% of overall revenue for the quarter and revenue of $180 million, a decrease of 28% from last year's record first quarter. Within the segment, our solar division continued to perform very well and revenues grew from 0.2 million to approximately 34 million in the quarter. Our newly formed wind services group also made positive contributions to the quarter. During the first quarter, we won several wind and solar projects, including both wind and solar farms in Texas, the state which ranks number one for operating wind, solar, and energy storage capacity in the country. The Texas solar farm project began this past quarter and is anticipated to be completed in December. IEA is self-performing all the work on this project, including the construction of project roads, the erection of the solar trackers, and installation of the inverter system. Similarly, IEA is self-performing all the work on one of our Texas wind farm projects, including the construction of all the project roads, the erection of the wind turbines, and installation of the underground electrical collection system. In a separate Texas contract, IEA is constructing a 200-megawatt utility-scale wind farm about 23 miles northwest of Corpus Christi. Outside of the Texas region, we won an award for a $50 million wind contract in northwest Iowa and a $40 million wind construction contract in Colorado, both of which will be completed in late 2021. Iowa was the first state in the US to generate more than 30% of its total electricity from wind power. And in 2020, wind energy officially surpassed coal as Iowa's largest single source of electricity. In Colorado, wind accounts for roughly 25% of all electricity produced or enough energy to produce or power 2 million homes per year. We're also building another new wind farm in Illinois. IEA is leading the way in expanding renewable energy generation for our nation's leading state producers of clean energy sources. Turning now to our specially civil segment. Specially civil accounted for 35% of total revenue in Q1 2021, with revenue of 96 million, down 12% year over year. The primary reason for the decline in segment revenue was delays in projects in the rail market. The pandemic has caused a decline in the number of active freight rail cars. However, we were able to win siting extension work in several states. Our specially civil work that we won during the quarter includes a landfill expansion contract in Illinois, a bridge rehabilitation contract in Northern California that includes general contracting work along with the treatment of the road surface, and electrical substation work in Iowa and Nebraska. At this point, we do not know the extent of the impact a federal infrastructure bill will have on our overall revenue. That said, we anticipate that many of our specialty civil segment customers are waiting to see how that bill transpires before aggressively bidding new contracts. We would anticipate the bill's passage will be a positive for rail and other surface transportation. Before speaking further about the growth trajectory of our end markets and the potential impact of legislation, I'll turn the call over to Pete Morbick, our CFO, to highlight the first quarter's financial results and provide our 2021 guidance.