This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk07: 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.
spk00: 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.
spk02: 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.
spk03: Pete? Thanks, JP, and good morning to everyone listening. Last night, we issued our 2021 first quarter earnings press release and filed our Form 10-Q. Let me start by noting that from a financial perspective, the first quarter was quiet and in line with our expectations. As we have communicated in the past few calls, we expected that the 2021 first quarter would be challenging, especially when compared to the 2020 first quarter. JP has talked about the decrease in revenue, so I will speak briefly about the gross margins. the primary driver for the reduced margin was unabsorbed or idle equipment costs. For the quarter, that amount was approximately $10 million in total, $5 million in each of our operating segments. Monthly depreciation and operating lease expenses continue even when equipment is not assigned to projects. If IEA were only a $270 million a quarter or $1.1 billion annual revenue company, we would have way too much equipment but we are a more than $1.8 billion revenue construction company, and we will need all of our equipment to achieve that level of revenue in 2021. The unused equipment did not sit idle during the quarter as we were able to accomplish some preventative maintenance. Similarly, we incurred labor inefficiencies during the quarter as some of our key craft and project management employees were not assigned to projects. They use the time for safety and job-related training, as they will be very busy building wind and solar farms for the rest of the year. To reach the midpoint of our guidance, we need to generate revenues of $1.6 billion during the next three quarters. Our expectation is that by the end of the year, we will have returned to our traditional gross profit margins. For the quarter, SG&A expenses decreased by $4.6 million compared to last year's first quarter, primarily from reductions in performance-related compensation. For the quarter, SG&A expenses were 9% of revenue compared to 8.2% of revenue in last year's first quarter. As the revenue increases throughout the year, we would expect SG&A expenses to be similar to last year's mid-6% of revenue range. Some other financial highlights. In the first quarter, our cash used in operations totaled $53.8 million compared to $74.2 million in the same period a year ago. We generally have negative cash flow from operations in the first quarter of each year resulting from the lower level of first quarter operations compared to the fourth quarter of the previous year. Interest expense for the quarter totaled $14.4 million down from $16.1 million in the first quarter of 2020, primarily as a result of lower effective interest rates on our term loan, partially offset by an increased dividend rate on our Series B preferred stock from 12% to 13.5% for the quarter. The increase of the dividend rate resulted from a first lien net leverage ratio above 1.5 at the end of the quarter. We made the Series B dividend payments in cash at the end of the quarter. Adjusted EBITDA for the quarter totaled $3.4 million or 1.2% of revenues as compared to $16.5 million or 4.6% of revenues in the first quarter of 2020. As of March 31st, 2021, our balance sheet showed cash of $95.2 million. Our debt at the end of the quarter included $173.3 million outstanding under our credit facility with no amortization payments due until December 2022, $4.9 million of commercial equipment loans, and $51.8 million of financing leases. We also showed $186 million of Series B preferred stock that is mandatorily redeemable in 2025 and therefore categorized as long-term debt on the balance sheet. We had $53 million of availability under our revolving credit facility a decrease of $14.2 million from the prior quarter due to increased letters of credit related to recent project wins. Capital expenditures for the first quarter totaled $6.1 million, of which $2.2 million was financed through leases. We continue to expect that capital expenditures for the year will be in the $35 to $38 million range, or approximately 2% of revenues for 2021s. Turning to backlog, we added $606 million to our backlog in the first quarter, ending with a record total of $2.7 billion. Our new contract awards for the quarter were $883 million, also a record. We expect to recognize $1.9 billion of that backlog amount in the next 12 months. On to guidance for full year 2021. While the year started slowly, we have not experienced significant cancellations in projects, nor have we lost projects to competitors. So we are expecting that the next three quarters will be very busy. We are increasing the bottom end of our revenue range from $1.7 billion to $1.8 billion, while reiterating the top end of the revenue range at $1.95 billion. And our full year 2021 guidance for adjusted EBITDA of $130 million to $140 million. Finally, let me comment on our capital structure. During Q1, we made some progress as Oak Tree completed a secondary offering for most of their shares in February, and last week, Oak Tree converted all of their Series B warrants to common shares. Their holdings are currently slightly less than 2 million shares of common stock. We continue our discussions with all of our stakeholders, including Aries, which owns all of our Series A and Series B preferred equity, our sureties, who view our balance sheet and making decisions about bonds, many of our investors, and our board of directors. We expect that we will be able to improve our capital structure, but we are not yet ready to commit to a specific direction or timetable at this point. Thank you, and I will now turn the call back over to JP to talk about IEA's market opportunities.
spk02: Well, thank you, Pete. As IEA's business continues to grow, our focus on environmental, social, and governance issues has only increased, and I am particularly proud to announce that IEA will be releasing our first-ever ESG report later this week. As a key player in the renewable energy space, we committed ourselves to building a greener future from the very start, and we now look forward to sharing our progress in a formalized report. The results of our study will serve as a baseline from which we can continue to improve in years to come. Mike Stoker, our Chief Operating Officer, leads our ESG initiatives, spearheading the ESG team that tracks internal data evaluates our efforts, and maintains best practices for our company. Mike and his team have done an exceptional job in increasing IEA's transparency and fostering a dialogue around our ESG policies and metrics. Our board of directors has reviewed and endorsed our efforts as well. Adding to our efforts to improve our governance, just yesterday we announced the addition of Theodore Bunting to our board of directors. Theo is a qualified financial expert and a very experienced public company director who comes to IEA from the utility industry. Most recently, Theo served as group president utility operations at Entergy Corporation, a Fortune 500 power company, a role he held for five years prior to his retirement in 2017. In total, Theo spent 34 years in various leadership positions at Entergy, He will bring strong utility operations experience to IEA. On behalf of our entire board of directors, we welcome Theo and look forward to working together. As we consider the growth of IEA, we see strong macro trends across each of our end markets. Obviously, the first one is the potential impact of a federal infrastructure bill and proposed tax plans. The administration's American Rescue Plan calls for a number of changes that could benefit the renewables industry. These include a requirement that utilities source 100% of their electricity needs from clean energy. That by 2035, the U.S. would achieve 100% clean power, and that $15 billion would be provided for demonstration projects, including those related to utility-scale clean energy storage. Bloomberg has stated that the US will need to add at least 70 gigawatts of wind and solar per year from 2025 onward to reach the 100% clean energy by 2035 goal. On the tax side of the equation, in December 2020, legislation added a one-year extension of the 60% PTC for wind and a two-year extension of the ITC for solar at 26% of the project's value. for both wind and solar projects placed in the service by 2025 are eligible for these extended credits. The proposed federal tax plan also provides for a 10 year extension of the PTC and ITC and creates incentives for long distance transmission lines needed to move electricity from clean energy generators. Our specialty civil segment could also benefit from funding legislation as the administration's infrastructure bill proposal includes $621 billion for transportation infrastructure, of which $115 billion goes to fixing roads and bridges or over 20,000 miles of highways, roads and streets, and another $85 billion of modernization of transit systems, including rail. Beyond the proposed government investment in the renewable space, we see other secular drivers, including state renewable power mandates and the previously disclosed interest of both utilities and large corporations to focus on renewable energy. Because we are an EPC company, we are dependent on owners to complete their funding and permitting prior to the start of construction. As such, we do not expect that we would see a benefit to 2021 revenue from either a tax plan or infrastructure bill but that these pieces of legislation would accelerate our growth opportunities in the next few years. Beyond renewables, we are also seeing strong growth drivers for our especially civil business, and in particular, coal ash removal. As I noted on last quarter's call, there are more than 700 coal ash impoundments and landfills in the United States today. Approximately 15% have been closed or remediated. The coal ash remediation opportunity in this country could therefore exceed $50 billion over the next decade alone. And at present, there are very few companies of the scale and the experience, one of whom is IEA, that can serve this market. We are hopeful that we will be able to announce progress in our coal ash efforts in the near future. In the rail space, aging commuter infrastructure combined with the anticipated growth in freight volume of 36% over the next decade is actively driving the opportunity for additional rail improvement projects. In November of last year, we announced a joint venture contract awarded by the Northern Indiana Commuter Transport District to design and build a commuter railroad project. In the past two years, IEA has gained significant experience in commuter rail, which is one area of emphasis in the administration's infrastructure proposal. While the administration's infrastructure proposal does not emphasize non-rail surface transportation, the need to improve the country's roads and bridges certainly remains. As the economies across the country continue to open up, we would expect the historical bipartisan support to create a transportation system that is safe, resilient, and that has the capacity to handle the nation's growing population. IEA entered 2021 knowing that we had a tough comparison to the first quarter of the prior year. But as Pete noted, we anticipate that 2021 will be a strong year for IEA. Not only has the traditional seasonality of our business returned, but the overall macro conditions have improved, and so too has the demand for our services. as demonstrated by our record backlog. As I hope you have gathered from my comments, almost any version of an infrastructure bill would appear to be transformational for the renewables industry. While we need to temper expectations of the timeframe for turning legislation into actual projects, the passage of a bill would generate momentum for our industry and for IEA. I want to conclude by noting that we were in the right businesses at the right time. To continue to advance IEA's business, we will focus on five key growth areas. One, and most importantly, developing our people. Number two, engaging with our community. Three, continually improving our safety. Four, increasing our efficiency. And five, diversifying our businesses to take advantage of meaningful opportunities. I certainly believe that IEA is up to the task and look forward to continuing to update all of you and share our progress in the future. Thank you again for joining us this morning for our first quarter call. We have our virtual annual shareholder meeting in two days and hope that you can join us. Operator, would you please open the call to questions?
spk07: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question is coming from the line of Noel Diltz with Stifel. Please receive your questions.
spk01: Hi, guys. Good morning, and thanks for taking my question.
spk03: Good morning, Noel.
spk01: Good morning. I was hoping you could just maybe expand a little bit on how we should all be thinking about the trajectory of wind versus solar. I know you said solar bidding activity is strong, but I think by the last call there was some discussion about solar potentially doubling. Can you give us any sense of what the backlog is looking like maybe so we can think about kind of how to think about the directional changes for those businesses?
spk02: Yeah, great question, Noelle. Well, certainly we're seeing the biggest growth opportunity in our renewable segment in the solar industry. It's certainly at a growth trajectory that's exceeding that of wind. Now, that being said, we're all-time record kind of backlog for wind as well and an all-time kind of record build-out from an industry standpoint. But, you know, as we kind of look at the road in front of us, we think solar has an opportunity to continue to grow, and we have an opportunity to make that much more a part of the revenue mix in our renewable segments.
spk01: Okay, great. And then just in terms of this, you know, slowdown in some of the transit and specialty civil work ahead of an anticipated infrastructure bill, I mean, we've certainly witnessed that in the past. But, you know, could you, again, maybe talk us through how you're thinking about, I mean, really, when we think about the funding going into these markets, sometimes it's a, you know, 12, 18-month delay post the passage of a bill. So are we looking at kind of a two-year slowdown in those businesses ahead of the bill or maybe, you know, kind of this year and then things start to pick up next year? Just kind of curious how you're thinking about that timing. Well, good question.
spk02: You know, ultimately, really the only material slowdown we're seeing so far is mostly in our rail portion of our specialty civil segment. And we directly attribute that to, you know, our freight rail business and the the car counts being lower during the COVID pandemic. We believe that's a couple quarter type of situation. In fact, we think that is starting to recover right now with the recovery and the opening up of the nation. As far as kind of the other areas, especially civil, either our environmental or transportation offerings, believe it or not, we're seeing the opportunities kind of maintaining par with prior to the pandemic. I know we've talked and passed the calls, quarterly calls, about our concerns about the revenue shortfall, particularly the transportation funding side. But right now, at least in the end markets that IEA participates, the bidding activity seems to be at pre-pandemic levels. So We're hoping for a post-infrastructure build just to see further upside in those areas.
spk01: Okay, great. That's really helpful. Thank you.
spk07: Our next question is coming from the line of Adam Thalheimer with Thompson Davis. Please proceed with your questions.
spk06: Hey, good morning, guys. Congrats on the backlog growth. Hey, Adam. Good morning. Thanks, Adam. I was hoping you guys can help a little bit on the cadence of EBITDA as we go through the year. I'm curious if we see more year-over-year declines in Q2 and then followed by strength in the second half.
spk03: Well, Adam, we're not going to give guidance at quite that level, definitely not quarterly guidance. I think you are going to see a very strong second half, maybe even stronger. Because we started so slowly, we may very well see 60% of our revenue and somewhat corresponding EBITDA in the second half, but a little stronger than normal in the back end. Okay.
spk06: That makes sense. And then you briefly touched on the equipment delays. I think that's mostly on the wind side. How is that tracking versus your expectations earlier this year?
spk02: Well, so far, we really haven't seen any, you know, many delays materialize. But, you know, we're sitting here, it's May, and, you know, Those deliveries will kind of follow our revenue trends. So, you know, it is early to tell about what deliveries will look like in Q2, Q3, and even Q4. But we haven't been advised by any of our customers any major delays. But, you know, we're certainly cognizant that we're in an all-time build-out for the industry. COVID-19 is still in areas of the world, and the supply chain is still existent. So we remain vigilant and cautious, and we'll handle those as they come.
spk06: Okay. And then just one more. I'm curious how you're thinking about backlog and backlog growth from here. I mean, have you told your sales guys almost to pull back a little bit? I'm just curious the $2.7 billion backlog. I mean, does that strike you as kind of sold out for the near term? Or do you plan on continuing to grow backlog? Come on, Adam, I never slow down.
spk02: Slow it down, guys. We can't do all this work. Well, good question. I think we ought to think about that in context of our segments. You know, we have pretty much brought in the backlog what we will build in 2021. You know, we are in a sales cycle now. for 2022 and beyond in our renewables segment, quite frankly. And, you know, our specially civil segment is more of a book to burn type of business. So, you know, we still have the opportunity in that side of the business to bring projects in the backlog and execute them and run them off before the end of the year. But, you know, there's still a possibility of picking up some renewable work that may start at the end of the year and really trail into 2022, but the real big renewable opportunity is going to be 2022 and beyond. But as I said, we're still concentrating on bringing 2021, especially civil work, in the door.
spk07: Got it. Okay. Thanks, guys. Our next question is coming from the line of Zane Fermini with DA Davidson. Please proceed with your question.
spk05: Thank you for the time and questions, guys.
spk03: No problem, Zane. Good morning, Zane.
spk05: So first off, people have talked about backlog. I'm just going to get one more time on it. So backlog numbers on the quarter were significantly ahead of our expectations in prior year numbers. I was just wondering if you could provide some more background on it, in particular, backlog composition, and if you have seen any changes in the margins of those backlogs or the average project length or different type of growing work in that backlog.
spk02: Probably our, I think our biggest growth is, you know, I talked about earlier here in the questions about our biggest opportunities. Well, we're seeing the biggest growth in solar. You know, our year-over-year growth and backlog, I think the biggest area in growth is certainly solar. We're seeing margins, you know, remain consistent. But, you know, I would certainly attribute a good portion of that opportunity
spk05: uh growth and backlog to uh to our solar uh efforts at growth okay and then i think in your prepared remarks um you guys mentioned that there needs to be about 15 gigawatts of new clean energy coming online a year to meet the 2035 goals around clean energy and on a more normalized basis how much of that work do you think you could get done on the current platform and how large of a market opportunity could that be? Um, I understand that the year's out, um, but just trying to get my head wrapped around that opportunity.
spk02: So to meet, to meet the administration's goals, it's about 70 gigawatts a year of clean energy that has to be constructed, uh, to meet those goals. And just to level set, uh, that's about, excuse me, two to three times the amount of wind and solar that's being, that was built between 2019 and 2021. Uh, So tremendous opportunity for companies like ourselves. And, you know, back to my comments in the earnings call, you know, any kind of, you know, the current administration's plan, it's certainly transformational as is. But, you know, even a percentage of that plan, you know, half of that plan, a quarter of that plan is still going to be tremendous growth from what the market's been the last three years. So we're extremely excited. Ourselves, and I'm sure companies like ourselves, are starting to plot about strategies of how you get the resources and how you grow to meet that demand. And we'll certainly hopefully be talking to that in many calls here in the future.
spk05: Thank you for the time of questions.
spk07: Thank you. Our next question is from the line of Char Parisa with Guggenheim Partners. Please receive your question.
spk04: Hi, good morning. This is actually Constantine Lednev in for Char. Thanks for taking our questions. Thank you. Congratulations on a solid quarter, especially with the backlog ads. And just curious to kind of get some of your thoughts on the increased kind of workflow and backlog and how will that impact kind of utilization and the margin profile going forward and the understanding that there was kind of some margin compression unusual kind of with the seasonality that you mentioned, but just kind of how do you see that trending on an annual basis? And is there room to kind of improve, potentially not even in 21, but going forward kind of as you grow into a bigger backlog in terms of utilization?
spk03: You know, the first part of your answer is we expect by the end of this year, that we will be back to much more normal traditional margins and a margin profile. So it's probably going to be a little bit better for the last three quarters since we were somewhat challenged in the first quarter. I think that the utilization that we're expecting and that we're staffed for and for which we have equipment is really intended to be able to get to the top end of our revenue range As we look going forward, some of the challenges we have is that there are kind of generic markers where most of our customers expect that we're going to represent somewhere around 30% of their capital spend on a project. And so we don't quite have the ability to change margins dramatically. Where we notice the benefit of the market right now is in the contractual terms. So we end up with much better terms than we do when they're in a position where there are way too many EPC contractors and not enough work. So right now, as we look forward, we expect to see margins on an annual basis to be consistent with where we've been or perhaps slight improvements. And we expect to see better contractual terms for the next you know, certainly in the next few quarters.
spk04: And maybe a quick kind of operational follow-up to that, just kind of as you expand the product offerings and the backlog, maybe in terms of an order of magnitude, do you need kind of incremental capex or staffing to kind of grow the backlog, let's call it, if you double your backlog in 22, kind of what sort of incremental costs or capex would you anticipate? Is it still kind of within that 2% of revenues that was allocated that you announced previously, or how should we think about that?
spk03: Yeah, it somewhat depends where the increase is. For example, if we ended up with a significant CCR or COLASH contract, we may have to spend, that tends to be very hard on equipment, so we may need to spend slightly more than 2%. Again, if we are in the renewables, you're probably going to see us stay a lot closer to the 2%. So it really is a function of where the increase comes. And so I think as you look forward, that's going to be the determinant. Obviously, if you're talking about doubling, our challenge will probably be much more on finding craftsmen and craft labor than it is on the equipment. I think we're kind of seeing that all over. Everybody is saying pretty much where we are today, yes, we can meet our commitments. If you were to try to change us dramatically, double our revenue, those are some of the challenges we're going to have to deal with.
spk04: Okay. And then the last follow-up that I have, if I may, It's just on kind of the financial strategy, and I appreciate that there's still some analysis that kind of goes into your decision-making, but just directionally as you kind of get more visibility with the backlog and into future revenues, how does that change your trajectory and your thoughts on the capital structure?
spk03: I'm not sure that those are the drivers of the capital structure. We have... Obviously, as I mentioned in my prepared remarks, we are focused on improving the structure. We recognize that in today's market there are some potential opportunities that we would certainly like to look at and understand and consider. I think the real driver for us is making it a cleaner, more understandable capital structure and making sure we have something that is a sustainable assurities, desire, tangible net worth. So I think we are headed in that direction. We just don't know yet the precise path or how quickly we get there. But I don't think the driver is necessarily, you know, the backlog. The driver is really more our ability to produce profitably and generate cash flow.
spk04: Perfect. That's a very wholesome update. Thank you. Thanks so much.
spk07: Thank you. Thank you. We have reached the end of a question and answer session. I'll now turn the call back over to J.P. Rehm, CEO, for closing remarks.
spk02: Well, thank you, Operator, and we certainly appreciate each and every one of you showing your interest in joining us today and learning about our Q1 2021 results. Stay safe, stay healthy, and we'll see everybody in early August as we look forward to announcing our q2 results we'll talk to you all then thank you thank you this will conclude today's conference you may disconnect your lines at this time thank you for your
Disclaimer