Infrastructure and Energy Alternatives, Inc.

Good morning and welcome to the Infrastructure and Energy Alternatives fourth quarter and full year 2021 earnings 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 Aaron Reddington, Vice President of Investor Relations. Aaron, please go ahead.

Hello, and thank you for joining us today to discuss IEA's fourth quarter and full year 2021 financial results. With us from management are J.P. Rehm, President and Chief Executive Officer, and Pete Morbek, 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 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 March 7, 2022. And with that, I'll turn the call over to J.P. Rehm, Chief Executive Officer. Please go ahead, J.P.

Well, thank you, Aaron, and welcome, and thank you for joining our call to discuss the 2021 fourth quarter and full year results. On the call today, I will provide a brief overview of our performance in the fourth quarter, an update on our strategic priorities, and commentary on key in-market trends as we see them. I will then turn the call over to Pete for a more detailed financial review of the quarter and guidance for 2022. We finished 2021 on a very strong note with fourth quarter revenue up nearly 40% compared to the prior year and backlog at record levels. Our solid fourth quarter performances across each of our business lines enabled us to achieve both record annual revenue and results at the high end of our revised guidance range for the full year 2021. The challenges and concerns in the wind and solar markets are well documented. From the uncertain policy outlook, supply chain, and inflationary challenges to questions surrounding the outlook for domestic wind, we often see headlines highlighting these issues. While the challenges are very real and daily considerations for IEA's business, I'm proud of the way our team has continued to execute in the current environment to achieve record revenue and adjusted EBITDA in 2021. Revenue within our renewable segment increased by nearly 40% year-over-year on an organic basis, driven by broad-based demand within both onshore wind and utility-scale solar markets. Our specialty civil segment had a very strong fourth quarter as well, With revenues up 38% year over year, due in large part to strength in our environmental remediation business, we continue to see a growing multi-year opportunity within the coal ash remediation market. While supply chain and inflationary pressures were headwinds in the quarter, we were still able to grow adjusted EBITDA nearly 60% year over year for the fourth quarter. while improving our adjusted EBITDA margin by 110 basis points to 8.5%. We are very proud of how we finished the year, and we are even more excited about the opportunities that lay ahead. Our new award activity levels across both our renewables and specialty silver markets accelerated during the latter half of 2021, resulting in a record backlog in next 12 months backlog For the full year 2021, IEA signed nearly $2 billion in wind and solar awards, and the pipeline of new opportunities remains robust. We enter 2022 on strong footing and are positioned for another year of record revenue and earnings. A year in 2021, total backlog was $2.9 billion, up 41% from the end of 2020. Our renewables backlog ended 2021 up 35% over last year. And our specially civil backlog is up nearly 60% versus the end of 2020. Our next 12-month backlog was $2.15 billion at year end, giving us good visibility into another year of record revenues in 2022. Long-term demand fundamentals remain strong across each of our end markets. Within our renewable segment, increased commercial and industrial demand for clean energy, together with the increasingly competitive levelized cost of wind and solar when compared to carbon-based energy sources, remain key catalysts for our growth. We were awarded several important renewables contracts in the quarter that contributed to the strong backlog growth. Some of the highlights were as follows. We were awarded a 50 megawatt solar contract to construct the Turkey Creek Solar Ranch in Garrard County, Kentucky by Nashville-based Silicon Ranch Corporation, one of the nation's largest independent solar power producers. Turkey Creek Solar Ranch is the first utility-scale solar project to receive approval from the Kentucky Public Service Commission Siding Board. Construction began in December 2021 and is expected to be completed by November 2022. We secured a $75 million award with Invenergy, where IEA will provide construction services for the Sapphire Sky wind project. That's a planned 250 megawatt utility scale wind farm in McLean County, Illinois. The project commenced during the fourth quarter 2021, with targeted completion by the fourth quarter 2022. We were awarded a $44 million contract to lead the construction of a 60-megawatt utility-scale wind farm in Riverside County, California. The project is expected to commence in the first quarter of 2022 with targeted completion by the first quarter of 2023. IEA will self-perform all engineering and construction of 15 wind turbines, two substations and meteorological evaluation towers, and an underground electrical collection system. IEA will also be tasked with construction of new private land access roads, together with improvements to existing public roads surrounding the property. This is a good example of the synergies that are often leveraged between our renewables and specialty civil segments, as most renewable projects have some form of civil work that is included in the project scopes. The ability to self-perform these services enables us to provide better control of the project timing and retain more of the profit. Within our civil segment, we expect to be a beneficiary of the transformative $1.2 trillion federal infrastructure bill passed last year. As with all federal stimulus plans, it will take some time for funds to start to flow, particularly as states and municipalities seek to adjust bidding levels to reflect sustained raw materials cost inflation. Even still, We expect the infrastructure bill to provide rateable incremental cash flows over a multi-year period as stimulus funds find their way into new projects of scale. As I indicated earlier, we remain very excited about the opportunities evident within our environmental remediation business. We believe we are in the early innings of a significant capital spend cycle for coal ash remediation, a market where IEA brings significant scale and expertise. Recent EPA actions provide further momentum towards remediation of the approximately 500 unlined coal ash surface impoundments nationwide. The timing is a bit difficult to predict as utilities are working to get the cost of remediation included in rate-based adjustments. While the timing is worked out on a project-by-project basis, it is clear there is a huge opportunity for coal ash remediation. and IEA is uniquely positioned to be a key player in this market. Before I turn it over to Pete, I wanted to spend some time walking through our key strategic priorities for the business entering 2022. These priorities provide a clear roadmap for long-term value creation and are a way for the investment community to measure our progress as we enter this next chapter of growth. First, We continue to focus on developing a leading market position of scale within markets where IEA is competitively advantaged. IEA intends to leverage its technical expertise, geographic reach, and scale across its solar, wind, heavy civil, rail, and environmental services. We remain focused on developing a strong backlog of diversified infrastructure projects to support sustained profitable growth through the economic cycle. For the full year 2021, we generated total organic revenue growth of 19%, while the renewable segment revenue increased 28% on an organic basis versus the prior year period, reflecting strong progress in this area. Secondly, we intend to capitalize on the favorable long-term fundamentals within renewables. In 2021, approximately 70% of IEA's revenue was derived from solar and wind-related EPC services. Over the next five years, IEA expects more than 100 gigawatts of new utility-scale solar capacity to be installed within the United States, an increase of more than 80% versus the prior five-year period. Onshore wind installations are also anticipated to accelerate over the next decade, with 110 gigawatts of new installed capacity expected to be online by 2030. Third, we will maintain bidding discipline and drive economies of scale to support margin expansion. IEA intends to pursue higher value margin enhancing opportunities while leveraging its size and scale to deliver exceptional value for the customer. Solar is the fastest growing segment of the renewable energy market given the multi-decade trend towards decarbonization. Having entered the solar market in 2019, we have just begun to realize economies of scale, positioning us to achieve margin expansion within this business, despite the inflationary pressures. Over time, we expect the margins in our solar business to be at least equal to the margins in our wind business. Fourth, we will look to further simplify our capital structure while maintaining sufficient liquidity to support our growth. In November of 2021, our Board of Directors authorized a program to repurchase up to $25 million of outstanding warrants to further streamline the company's capital structure. Since announcing this program, IEA has repurchased nearly 64% of the outstanding warrants through last Friday, March 4, 2022. Finally, we will pursue a disciplined capital allocation strategy. IEA will continue to invest in organic growth initiatives by expanding product and service offerings to better serve our customers, further developing industry-leading technical expertise, and growing our skilled labor workforce. IEA also intends to consider complementary bolt-on acquisitions that increase its service capabilities in adjacent markets and expand its geographic presence and enhance its blended margin profile. We are committed to our strategic plan and are confident that as we execute against our goals, it will enable us to continue to grow the business, generate attractive returns, and create value for all of our stakeholders. And with that, I will turn the call over to Pete. Pete?