Infrastructure and Energy Alternatives, Inc.

Good morning, and welcome to Infrastructure and Energy Alternatives' second quarter 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 will turn the call over to Kimberly Esterkin, Investor Relations for IEA. Kimberly, please go ahead.

Hello, and thank you for joining us today to discuss IEA's second quarter 2021 financial results. With us from management are JP Ring, President and Chief Executive Officer, 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 IEA's second quarter press release and the risk factors included in the company's SEC filings. Except as required by law, IEA undertakes no obligation to update its forward-looking statements 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 the press release issued on July 28, 2021. And with that, I'll 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 second quarter 2021 earnings conference call. I want to start by mentioning the series of financial transactions that we have begun to modify and improve our capital structure. As you can tell from the many press releases in Forms 8K, we are addressing many of the challenges of the old capital structure. I will leave the details to Pete, but we are excited for the future of IEA. For the second quarter, IEA generated record revenues of $560 million. Our renewable segment accounted for 76% of that revenue, generating $425 million, an increase of 31% year over year. Of note, our solar division revenues grew from $7 million in Q2 in 2020 to over $108 million in Q2 2021. That's an increase of more than $100 million. We started building our solar capabilities at the end of 2019, and we are now seeing the results of those efforts. Our specialty civil segment accounted for 24% of the quarter's revenue, with revenue at $135 billion. That was a decrease of 13.5% year over year, primarily from the impact of a large, heavy civil project in the second quarter of 2020, which did not repeat this year. along with unseasonably rainy conditions in parts of the country. Our specialty civil businesses are still seeing the impact of project delays resulting from the pandemic, especially in our rail transportation business. We're not totally out of the woods when it comes to COVID-19. We continue to maintain health and safety requirements at our project sites, and from time to time, we experience some delays or other supply chain issues. It's worth noting that we do have contractual protections to reduce our financial exposure to those project delays and project cost escalations. Not only did we achieve record revenues for the second quarter, but we also ended Q2 with more business in our backlog than in any other time in the company's history. Backlog increased by $86 million during the quarter to total $2.8 billion, up nearly 60%. on a year-over-year basis. We won wind and solar projects in multiple locations this past quarter, including wind and solar farms in Texas, the number one ranked state for operating wind, solar, and energy storage capacity in the country. A 200-megawatt utility-scale wind farm in northwest Iowa, the first state to generate more than 30 percent of its total electricity from wind, and a 145-megawatt utility-scale wind farm in Colorado, a state which is committed to achieving 100% clean energy generation by 2040. Wind repowering projects are also gaining traction. The U.S. ranks fourth among the top 20 wind repowering markets by capacity, with the repowering market expected to reach $25 billion annually by 2030. IEA is uniquely positioned to act on this opportunity. During the second quarter, we were awarded a $70 million balance of plant power contract to repower the 240 megawatt Big Sky Wind Farm in Illinois. By the end of the construction in July 2022, this project is expected to increase Big Sky's annual energy output by over 60%. Projects like Big Sky highlight the long-term opportunity in the wind market as installed infrastructure ages and new technologies improve efficiencies. Not only is our backlog at an all-time high, it is comprised of a much more balanced mix of business than it's ever had in the past, as we've booked more strong winds in transportation and environmental remediation this past quarter. For example, IEA won a $126 million contract from the Illinois Department of Transportation to reconstruct the I-57 and I-74 interchange in Champaign, Illinois. This includes the building of 12 new ramps and bridges. Work on this project began in July. Although not funded by money from the Federal Infrastructure Bill, this project provides an example of what a typical federally funded project could be in the future. The American Act calls for $343 billion invested in roads, bridges, and safety, with $32 billion specifically set aside for bridge repairs. This project shows that IEA can be a player in that market. Renewables has propelled our growth over the past several years, and I believe that we are now on the cusp of a similar opportunity in the coal ash remediation business. Coal ash is generated by the burning of coal at power plants, and it contains contaminants such as cadmium, mercury, and arsenic. Without proper management, these contaminants can pollute waterways, groundwater, drinking water, and even the air. Large spills near Kingston, Tennessee and Eden, North Carolina caused widespread environmental and economic damage to the nearby waterways and properties and resulted in the federal rules that ultimately protect coal ash disposal. These rules usually require that we build new ponds and landfills that comply with current regulations and then transport the coal ash residuals from the plant or former storage sites to the new disposal sites. We don't do the engineering for these projects and we don't take on any of the environmental risk associated with these projects as our customers retain that liability. Coal ash at times has the consistency similar to that of quicksand and the job requires a significant amount of equipment and expertise, thus requiring an emphasis on safe operations at a company of scale. We work mostly under master services agreements that enable us to be paid on either a per ton basis or a time and materials basis, further reducing risk and making these projects attractive from a margin perspective. The coal ash removal agreement we recently announced with a large utility underscores the opportunity in this marketplace. It's a multi-year opportunity that starts at a slow pace in the first two years and then will continue for over 10 years. Before speaking further about the growth trajectory of our end markets, I'll turn the call over to our CFO, Pete Morbick, to highlight the second quarter's financial results and speak to our 2021 guidance and, of course, address our recent capital structure transactions. Pete?