Willdan Group, Inc.

Greetings and welcome to the World Bank Group's fourth quarter and full year 2024 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce our host, Al Kastrog. Thank you. You may begin.

Thank you, Matt. Good afternoon, everyone, and welcome to Will Dan Group's fourth quarter and fiscal 2024 earnings call. Joining our call today are Mike Beaver, President and Chief Executive Officer, and Kim Early, Executive Vice President and Chief Financial Officer. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today's press release, and in the presentation slides, all of which are available on our website. Please note that year-over-year commentary or variances on revenue, adjusted EBITDA, and adjusted EPS discussed during our prepared remarks are on an organic basis. We will make forward-looking statements about our performance. These statements are based on how we see things today. While we may elect to update these forward-looking statements at some point in the future, We do not undertake any obligation to do so. As described in our SEC filings, actual results may differ materially due to risk and uncertainties. With that, I'll hand the call over to Mike. Thanks, Al.

We had a strong finish to a record year in 2024, significantly exceeding the street consensus estimates and our own expectations. For 2024, contract revenue was up 11%, and adjusted EBITDA was up 24% year over year. Gap EPS nearly doubled year over year, and adjusted EPS was up 39%. Execution and performance across all lines of business were strong, leading to a record level of free cash flow. For 2024, we generated $4.49 per share of free cash flow, an outstanding result for any public company. With our latest acquisition announced this morning, We've transformed our technical capabilities to serve the commercial data center market. Electric load growth, Wildan's unique capabilities in the market, and our consistently solid execution have all come together to fuel a positive long-term outlook coming into 2025. On slide three, Wildan provides a wide range of energy and infrastructure solutions. We provide solutions for the electric power grid, solutions to electric utilities, and solutions to commercial and local government customers. With the acquisition announced today, we have about 1,800 employees comprised mostly of scientists, engineers, and technical professionals. We now have 54 offices across North America and help clients avoid emissions of 12.5 million metric tons of greenhouse gases. The ANACA acquisition in Q4, serving biopharma, and the APG acquisition we announced today both overwhelmingly serve the commercial technology sector. Calculated on a pro forma basis, our commercial customers now comprise 15% of our revenue, double the percentage of last year. State and local government customers are now 44%, and utilities are now 41% of our revenue. Demand for our services with all three customer groups is healthy. Our work for commercial customers is now largely related to electricity usage at data centers. AI-driven load growth is providing Wilden with many commercial opportunities to help technology clients navigate electricity constraints. We would like to continue adding acquisitions that strengthen our capabilities with commercial customers. Our work for state and local government clients is growing organically. at a high single-digit pace, is strong, and the outlook is positive. WLDAN has almost no work directly with the federal government or funded by the federal government. The recent federal spending cuts have had almost no impact to our backlog or our outlook because our state and local government work is funded primarily through user fees and bonds. Our work for utilities is primarily under multi-year contracts, is funded by user fees, and remains robust.