Willdan Group, Inc.

Welcome to the Wilden Group third quarter 2022 conference call. I'll now turn the call over to Al Kastralk, Vice President of Investor Relations. You may begin.

Thank you, Missy. Good afternoon, everyone, and welcome to Wilden Group's third quarter fiscal 2022 earnings call. Joining our call today are Tom Brisbane, Chairman of the Board and Chief Executive Officer, 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 Wildan investor report that accompanies today's call in the press release and stock information section of our investor relations website on the 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 of 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 in 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 to GAAP results, Woldan also provides 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. I'll now turn the call over to Tom Brisbane, Woldan's chairman and CEO.

Thanks, Al, and good afternoon, everyone. Our third quarter shows progress on many fronts. Revenue, earnings, and cash flow were all up as projected. The business overall is good. All business units have gotten past the COVID and restart problems. We have factored in the delays on supply chain. We have collaborated well with Pacific Gas and Electric, San Diego Gas and Electric, and Southern California Gas on the startups and negotiation of the California IOE programs. We are in discussions with Southern California Edison to address challenges with these contracts. We have proposed changes that will benefit SCE, WLDAN, and stakeholders to deliver energy savings. We are affirming our guidance for 2022 that net revenue growth would be greater than 10% and EBITDA margin would be greater than 10%. For the third quarter, we saw the inflection point that we've been waiting for for the second half. Third quarter net revenue was up 8% over the prior year. EBITDA margin for the third quarter was 13.5%. Our organic net revenue growth rate was 8% in the third quarter, which is the sixth straight quarter for organic growth. Within the energy segment, our energy consulting, engineering, and design-build businesses are contributing strong top-line revenue. E3 has doubled over the last three years, and is working with many of the leading jurisdictions on the clean energy transition, which was given a boost by the Inflation Reduction Act. We are looking at how to create synergy with our cities, engineering practice, and the clean energy transition. We have previously talked about the New York's LL97 decarbonization plan for the 4,000 buildings. We are also working on Denver, Philadelphia, and Boston helping with decarbonization, primarily electrified clean heat. Our two largest utility contracts are doing well. Los Angeles Department of Water and Power is adding new measures and expects continued growth in the fourth quarter and next year. We're still working together on catch-up from the COVID pause, and we expect growth in this contract. Con Edison suspended the clean heat program in the second quarter because they successfully ran out of money. They are efficiently relaunching this program in the fourth quarter. We have participated in a significant way. We managed the program for approximately half their accounts. We expect this heat pump program, electrification, to be important going forward. Condit is making this pivot to electrification. We also see this with PG&E. First Energy, another client, is through the startup phase and doing well. We expect the program to grow over time. We also won a re-compete with one of our significant southeast utilities. This was very important to us. We've had this contract since 2013. We are now running multi-family programs for four New York IOUs. These are programs for low and moderate income families. As we look at this transition to electrification, we can see that our performance engineering group is also doing well with the New York City Housing Authority. also known as NYCHA, by helping them convert buildings so the tenants can control their heat with electric infrared panels. Again, this is good for the tenants and decarbonization. Our design building unit who's doing this work has a strong backlog and they are now profitable coming out of COVID. They won $60 million worth of work in the third quarter with dormitory authority of the state of New York. Our engineering segment, He's doing well with strength across both municipal engineering and financial services. Engineering continues to grow. Some of our new assignments include Florida and Texas, although we are just getting a foothold there. For the city of Englewood, California, we are doing fleet electrification and electric vehicle infrastructure planning. The California cities are now thinking about how to electrify. We are again looking to pivot with the clean energy economy. In terms of the Inflation Reduction Act, we are tracking it and assisting cities. Given the breadth of the provisions of the bill, this has been an important topic of conversation with our clients, many of which are state and local governments and nonprofit entities. Since released in August 2022, we have done a tremendous amount of financial analysis on the bill, including the provisions around energy and climate tax incentives. We are focused on the opportunities that align with our customer base. relationships that Wildan has built over the last 60 years as a trusted advisor here in California. In summary, we built revenue and earnings momentum in the third quarter. We successfully resolved the major issues with three of the four California IOUs to the mutual benefit of the IOUs, Wildan, and outside stakeholders. We're still negotiating with SCE, and there's some progress, but no resolution. The rest of the company is performing well. Once again, I want to take a moment to thank the entire Wildent team for their dedication and outstanding execution. I also want to recognize the ongoing support of our customers and long-term stockholders. I would like to turn the call over to Kim for our financial discussion.