Willdan Group, Inc.

Good day and welcome to the Will Dan Group second quarter fiscal year 2022 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Al Kashchok, VP Investor Relations. Please go ahead, sir.

Thank you, Jenny. Good afternoon, everyone, and welcome to Will Dan Group's second quarter fiscal year 2022 earnings call. Joining our call today are Tom Brisbane, Chairman of the Board and Chief Executive Officer of Kim Early, 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 Will Dan investor report that accompanies today's call in the press release and stock information section of our investor relations website, bond.ir.willdan.com. Management will review prepared remarks, and then we'll 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 on Form 10-K filed for the year ended December 31, 2021. The company cautions investors not to place undue reliance on the forward-looking statements made during the course of this conference call, will then disclaim any obligation and does not undertake to update or revise any forward-looking statements made today. In addition, the GAAP results will then also provide non-GAAP financial measures that we believe enhance the investor's ability to analyze the 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. The second quarter did not meet our expectations. We have hit some headwinds. First, the California IOU programs, which we will discuss. Second, we are also faced with some timing issues on software license sales. Also, COVID supply chain has slowed some contracts. Given these headwinds, the quarter was weak. We expect to turn the corner significantly in the second half. In the second quarter, we made significant progress in streamlining the delivery of energy efficiency under these new IOU programs. We reduced the amount of effort that it takes to receive a pre-installation package approval. This major change will reduce our engineering effort significantly and reduce the timetable for delivering projects by two to three months. We successfully worked with PG&E to enhance the technical support. while also streamline our contract delivery requirements. We successfully worked with SDG&E to improve delivery of energy efficiency to small businesses through enhanced co-payments to these economically sensitive customers. These are first-of-a-kind programs with brand new processes and requirements. Our IOU customers are learning with us. This learning curve has resulted in a slower ramp-up. but the changes we and the IOUs are now making will result in much better performance of these programs. For the first time in 18 months, we are delivering projects that will significantly increase revenue. Organic growth has improved from 2% to 5% to 12% over the last three quarters. Given what I just said, there are likely concerns out there, but here is the way we see the rest of the year. We expect revenue and profit to significantly ramp in the second half. We are making progress in California. Our engineering, financial, and energy consulting are all doing extremely well. Our New York City Housing Authority, NYCHA, and our Los Angeles Department of Water and Power, LADWP programs, are also doing well. We only have the California IOUs to churn in the third quarter and ramp heavily in the fourth quarter. Going forward into 2023, we expect the headwinds to moderate and we will see significant organic growth in revenue and profit. It has been a tough 12 months, but we are making progress. Personally, my confidence has increased significantly because we and our customers are working more closely together. I would now like to turn the call over to Kim for our financial discussion. Thanks, Tom, and good afternoon, everyone.