Delaware | 001-37796 | 47-4787177 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
6325 Digital Way Suite 460 Indianapolis, Indiana | 46278 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbols(s) | Name of exchange on which registered | ||
Common Stock, $0.0001 par value | IEA | The NASDAQ Stock Market LLC |
Exhibit Number | Description |
99.1 |
Dated: August 8, 2019 | ||
INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC. | ||
By: | /s/ Andrew D. Layman | |
Name: Andrew D. Layman | ||
Title: Chief Financial Officer |
• | Awarded $491 million of new contracts, including projects across all segments |
• | Backlog increased from $2.2 billion at March 31, 2019 to $2.6 billion at June 30, 2019 |
• | Revenue increased 88% year-over-year to $328.0 million |
• | Gross margin was 9.6%, compared to the 9.7% gross margin in the second quarter of 2018. Gross margin would have been 10.0% for the second quarter of 2019, excluding the impact of substantially completed 2018 weather-impacted projects |
• | Successfully completed a $50 million capital raise of newly designated Series B Preferred Stock and warrants to purchase common stock, and a $5 million sale and leaseback transaction, using the proceeds to reduce borrowings under the credit facility and improve liquidity |
• | Expect to achieve the higher-end of full-year 2019 revenue guidance range of $1.0 billion to $1.2 billion |
• | Reiterate full-year 2019 Adjusted EBITDA guidance of $90 to $110 million |
• | availability of commercially reasonable and accessible sources of liquidity and bonding; |
• | our ability to generate cash flow and liquidity to fund operations; |
• | the timing and extent of fluctuations in geographic, weather and operational factors affecting our customers, projects and the industries in which we operate; |
• | our ability to identify acquisition candidates, integrate acquired businesses and realize upon the expected benefits of the acquisition of CCS and William Charles; |
• | consumer demand; |
• | our ability to grow and manage growth profitably; |
• | the possibility that we may be adversely affected by economic, business, and/or competitive factors; |
• | market conditions, technological developments, regulatory changes or other governmental policy uncertainty that affects us or our customers; |
• | our ability to manage projects effectively and in accordance with management estimates, as well as the ability to accurately estimate the costs associated with our fixed price and other contracts, including any material changes in estimates for completion of projects; |
• | the effect on demand for our services and changes in the amount of capital expenditures by customers due to, among other things, economic conditions, commodity price fluctuations, the availability and cost of financing, and customer consolidation; |
• | the ability of customers to terminate or reduce the amount of work, or in some cases, the prices paid for services, on short or no notice; |
• | customer disputes related to the performance of services; |
• | disputes with, or failures of, subcontractors to deliver agreed-upon supplies or services in a timely fashion; |
• | our ability to replace non-recurring projects with new projects; |
• | the impact of U.S. federal, local, state, foreign or tax legislation and other regulations affecting the renewable energy industry and related projects and expenditures; |
• | the effect of state and federal regulatory initiatives, including costs of compliance with existing and future safety and environmental requirements; |
• | fluctuations in maintenance, materials, labor and other costs; |
• | our beliefs regarding the state of the renewable wind energy market generally; and |
• | the “Risk Factors” described in our Annual Report on Form 10-K for the year ended December 31, 2018, and in our quarterly reports, other public filings and press releases. |
Andrew Layman | Financial Profiles, Inc. |
Chief Financial Officer | Larry Clark, Senior Vice President |
Andrew.Layman@iea.net | lclark@finprofiles.com |
765-828-2580 | 310-622-8223 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | $ | 327,961 | $ | 174,073 | $ | 518,771 | $ | 224,208 | |||||||
Cost of revenue | 296,539 | 157,274 | 480,576 | 210,494 | |||||||||||
Gross profit | 31,422 | 16,799 | 38,195 | 13,714 | |||||||||||
Selling, general and administrative expenses | 25,878 | 9,198 | 53,632 | 26,158 | |||||||||||
Income (loss) from operations | 5,544 | 7,601 | (15,437 | ) | (12,444 | ) | |||||||||
Other income (expense), net: | |||||||||||||||
Interest expense, net | (11,496 | ) | (1,530 | ) | (21,863 | ) | (2,381 | ) | |||||||
Other income (expense) (1) | 18,272 | 22 | 18,102 | 11 | |||||||||||
Income (loss) before benefit for income taxes | 12,320 | 6,093 | (19,198 | ) | (14,814 | ) | |||||||||
Benefit (provision) for income taxes | (6,112 | ) | (1,178 | ) | 2,517 | 2,337 | |||||||||
Net income (loss) | $ | 6,208 | $ | 4,915 | $ | (16,681 | ) | $ | (12,477 | ) | |||||
Net income (loss) per common share - basic (1) | (0.61 | ) | 0.20 | (1.66 | ) | (0.60 | ) | ||||||||
Net income (loss) per common share - diluted (1) | (0.61 | ) | 0.19 | (1.66 | ) | (0.60 | ) | ||||||||
Weighted average shares - basic | 22,252,489 | 21,577,650 | 22,220,799 | 21,577,650 | |||||||||||
Weighted average shares - diluted | 22,252,489 | 25,392,159 | 22,220,799 | 21,577,650 | |||||||||||
(1) | Other income (expense) includes a $18.8 million gain which is a mark-to market adjustment that is required to be excluded from the numerator of earnings per share which results in a net loss for the earnings per share calculation. |
Three Months Ended | Six Months Ended | ||||||||||||||
(in thousands) | June 30, | June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) | $ | 6,208 | $ | 4,915 | $ | (16,681 | ) | $ | (12,477 | ) | |||||
Interest expense, net | 11,496 | 1,530 | 21,863 | 2,381 | |||||||||||
Provision (benefit) for income taxes | 6,112 | 1,178 | (2,517 | ) | (2,337 | ) | |||||||||
Depreciation and amortization | 11,784 | 2,005 | 23,801 | 3,977 | |||||||||||
EBITDA | 35,600 | 9,628 | 26,466 | (8,456 | ) | ||||||||||
Diversification SG&A (1) | — | 798 | — | 1,985 | |||||||||||
Credit support fees (2) | — | — | — | 231 | |||||||||||
Consulting fees & expenses (3) | — | 202 | — | 361 | |||||||||||
Non-cash stock compensation expense (4) | 722 | — | 1,761 | — | |||||||||||
Transaction costs (5) | — | 752 | — | 8,372 | |||||||||||
Merger and acquisition costs (6) | — | 688 | — | 688 | |||||||||||
Acquisition integration costs (7) | 3,084 | — | 6,598 | — | |||||||||||
Settlement of customer project dispute (8) | — | 3,413 | — | 8,500 | |||||||||||
Contingent consideration fair value adjustment (9) | (18,835 | ) | — | (18,835 | ) | — | |||||||||
Adjusted EBITDA | $ | 20,571 | $ | 15,481 | $ | 15,990 | $ | 11,681 | |||||||
Pro forma adjustment for 2018 acquisitions | — | 14,193 | — | 17,217 | |||||||||||
Adjusted Pro forma EBITDA | $ | 20,571 | $ | 29,674 | $ | 15,990 | $ | 28,898 |
(1) | Diversification selling, general and administrative reflects the costs, including recruiting, compensation and benefits for additional personnel, associated with IEA beginning to expand into electrical transmission work and corresponding services, which were historically subcontracted to third parties. These costs currently did not have corresponding revenue in fiscal year 2018. |
(2) | Credit support fees reflect payments to Oaktree for its guarantee of certain borrowings, which guarantees did not continue post-combination. |
(3) | Consulting fees and expenses represents consulting and professional fees and expenses in connection with the merger with MIII Acquisition Corp. |
(4) | Non-cash stock compensation expenses. |
(5) | Transaction costs include legal, consulting, filing and other costs associated with the acquisition of IEA Energy Services by MIII Acquisition Corp. and the subsequent public listing of IEA securities on the NASDAQ stock exchange. |
(6) | Merger and acquisition costs include legal, consulting, travel, personnel and other costs associated with acquisition activity. |
(7) | Acquisition integration costs include legal, consulting, personnel and other costs associated with integration activity. |
(8) | Settlement of customer project dispute-related to a dispute regarding the costs to be incurred to complete a project and the loss of revenue related to unbilled change orders. The three months ended June 30, 2019 and 2018, regarding the costs to finish the project were $0.0 and $3.4 million, respectively and $0.0 and $8.5 million for the six months ended June 30, 2019 and 2018, respectively. The add back reflects the associated negative impact to gross margin. While IEA believed it had a strong legal position to support the charges, management determined that it was in the best interests of the Company to settle the dispute, retain the important customer relationship and secure the award of an additional Wind energy project with the customer, which will be built in 2018. |
(9) | Reflects a $18.8 million adjustment to the fair value of its contingent consideration incurred in connection with the acquisition of IEA Energy Services by MIII Acquisition Corp. and the subsequent public listing of IEA securities on the NASDAQ stock exchange. The adjustment was based on the significant decrease in stock price of $8.61 at December 31, 2018 compared to $2.04 at June 30, 2019. |
For the year ended | |||||||
(in thousands) | December 31, 2019 | ||||||
Low | High | ||||||
Net income (loss) | $ | 3,400 | $ | 8,400 | |||
Interest expense, net | 48,300 | 54,100 | |||||
Depreciation and amortization | 49,000 | 55,100 | |||||
Provision (benefit) for income taxes | (2,000 | ) | (1,000 | ) | |||
EBITDA | 98,700 | 116,600 | |||||
Non-cash stock compensation expense (1) | 4,000 | 4,400 | |||||
Acquisition integration costs (2) | 6,100 | 7,800 | |||||
Contingent consideration fair value adjustment (3) | (18,800 | ) | (18,800 | ) | |||
Adjusted EBITDA | $ | 90,000 | $ | 110,000 |
(1) | Non-cash stock compensation expenses. |
(2) | Acquisition Integration costs include legal, consulting, personnel and other costs associated with integration activity. |
(3) | Reflects an adjustment to the fair value of its contingent consideration incurred in connection with the acquisition of IEA Energy Services by MIII Acquisition Corp. and the subsequent public listing of IEA securities on the NASDAQ stock exchange. The adjustment was based on the significant decrease in the Company's stock price of $8.61 at December 31, 2018 compared to $2.04 at June 30, 2019. The $18.8 million gain is a mark-to market adjustment that is required to be excluded from the numerator of earnings per share which results in a net loss for the earnings per share calculation. |
Three months ended | |||||||||||
(in thousands) | June 30, 2019 | ||||||||||
As reported | 2018 Weather Impacted Projects | ex. 2018 Weather Impacted Projects | |||||||||
Revenue | $ | 327,961 | $ | 11,000 | $ | 316,961 | |||||
Cost of Revenue | 296,539 | 11,300 | 285,239 | ||||||||
Gross Profit | 31,422 | (300 | ) | 31,722 | |||||||
% Gross Margin | 9.6 | % | (2.7 | )% | 10.0 | % |
Six months ended | |||||||||||
(in thousands) | June 30, 2019 | ||||||||||
As reported | 2018 Weather Impacted Projects | ex. 2018 Weather Impacted Projects | |||||||||
Revenue | $ | 518,771 | $ | 54,863 | $ | 463,908 | |||||
Cost of Revenue | 480,576 | 54,790 | 425,786 | ||||||||
Gross Profit | 38,195 | 73 | 38,122 | ||||||||
% Gross Margin | 7.4 | % | 0.1 | % | 8.2 | % |
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