Willdan Group, Inc.

Good day and welcome to the Will Dan Group fourth quarter and fiscal year 2021 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Al Kashchok, VP Investor Relations. Please go ahead, sir.

Thank you, Jenny. Good afternoon, everyone, and welcome to Will Dan Group's fourth quarter and fiscal year 2021 earnings call. Joining our call today are Tom Brisbane, Chairman of the Board and Chief Executive Officer, Kim Arley, Chief Financial Officer, and Mike Beaver, President. The call today builds on our earnings release we issued after market closed today. You may find the earnings release and the investor report that accompanies today's call in the press release and stock information section of our investor relations website at ir.wildan.com. Management will review prepared remarks, and then we will open the call up to your questions. Statements made in the course of today's conference call, including answers to your questions, which are not purely historical, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve certain risks and uncertainties, and it is important to note that the company's future results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially and other risk factors are listed from time to time in the company's SEC reports, including but not limited to the annual report and form 10-K filed to the year end of January 1st, 2021. The company cautions investors not to place undue reliance on the forward-looking statements made during the course of this conference call. Will Dan disclaims any obligation and does not undertake to update or revise any forward-looking statements made today. In addition to GAAP results, we'll then also provide non-GAAP financial measures that we believe enhance investors' ability to analyze business trends and performance. Our non-GAAP measures include net revenue, adjusted EBITDA, and adjusted EPS. Tom, I'll turn the call over to you.

Thanks, Al, and good afternoon, everyone. We continue to build post-COVID momentum. The fourth quarter and the year delivery results well ahead of our internal estimates. We see positive signs that the initial impacts of COVID are behind us. As stated previously, all our contracts have restarted and access to customers is open in all geographies we serve. I would like to repeat that no contracts were canceled and revenue only moved out in time. Looking back at the year, we adapted well to the virtual work environment. As a services firm, our employees found many benefits working from home. We anticipate most of our customers will be back in their offices over the next few months. We also expect our employees to return to a hybrid model. Our current challenge is ramping up the California IOU contracts. There are three key points I would like to make to help investors understand Wildan's position coming out of this pandemic. We have a record backlog of approximately $1.5 billion. We look at this simply as three years of work. Thus, we conclude that winning work is not the priority for many parts of the organization. The priorities are ramping up, growing organically, executing, and collecting the money fast enough to offset the capital needs of organic growth. The second point is how will the customers respond post-COVID to energy efficiency? We think we have a pretty good idea at this point. The really small businesses are struggling, and for the most part, utilities are looking on how to help them. Our largest energy efficiency contract, Los Angeles Department of Water and Power, LADWP, serving the Los Angeles area, is now exceeding the weekly pre-COVID revenue. Simply stated, we are doing more now than before COVID. This tells us that the commercial customers are buying energy efficiency. We expect to ramp this contract more throughout the year because we have excess budget that was not spent during COVID. The third point is we have an all-time high headcount of 1,560 people, which is a 15% increase. At the same time, we only had 4% organic growth for the year. Thus, we have ramped up in personnel to deliver the California programs But as planned, substantial revenue will not follow into the second half of 2022. Looking at the rest of the operations, engineering, consulting, construction management, they are all well positioned for 2022. We do expect, as Kim will point out, as previously stated, that 2022 has a ramp throughout the year, mainly because of this late start and the wrapping of the California contract. In summary, we have the work and proof that the customers are buying energy efficiency. We also have all the people, the processes, the tools, the knowledge, and the experience to execute the contracts. We expect about 20% organic growth in 2022. Looking a little deeper, the market for reducing carbon continues to grow. Electrification, that being converting carbon fuels to electric, is growing. The loads due to electrification on electric vehicles will be increasing for the utilities. Thus, demand for energy efficiency will continue to be strong. As an example, we are starting on a New York City Housing Authority facility. This $90 million three-year design-build contract reduces infrastructure-related carbon in New York City. This new first-of-its-kind program introduces innovative electrification measures to specifically lower the carbon footprint and improve existing infrastructure and public housing. WILDAN's technical approach was selected competitively above all others and has application across the United States. We have also started the two-year $75 million design-build project for facility improvements for the Pueblo County School District 70. WILDAN will provide engineering and construction management to update 19 schools and four district buildings. In 2022, we expect our construction management revenue to double, approximately $70 million to $150 million. We have also gained ground in the IOU market. We were awarded a five-year, $24 million energy efficiency program for a large Mid-Atlantic investor-owned utility. We beat a major competitor to grow into this new geographic territory. We have also won an expanded recompete with National Grid in New York. Our programs have not been immune to the disruption in the supply chain and overall cost inflation. In terms of procurement, we have seen delivery schedules extended. From a cost inflation perspective, we expect to see salary inflation, as well as higher materials and equipment costs. The latter we expect to recover. We are building this potential disruption into our delivery schedules. The last two years of COVID have felt very stagnant. Most of our efforts have been on surviving and adapting. 2021 demonstrated we are emerging stronger. Our position in the clean energy space is strong. Our dominance in New York, California, and the progressive carbon states is strong. We expect this year and the future years to be our best years. We have been working many years to build the foundation of WLDAN. Our team of people and diverse capabilities is exciting to watch. The growing opportunities in this clean energy disruption is accelerating. Wildan is well-positioned, COVID is behind us, and now back to the business of growing the company. Thank you to our employees and shareholders for their perseverance and tenacity over the last two years. I will now turn the call over to Kim to discuss our financial results. Kim?