Infrastructure and Energy Alternatives, Inc. (“IEA” or the
“Company”) (NASDAQ: IEA), a leading infrastructure construction
company with specialized energy and heavy civil expertise, today
announced that the Company’s Chief Financial Officer, Andrew
Layman, has voluntarily resigned to pursue other opportunities. Mr.
Layman’s departure is not based on any disagreement with the
Company’s accounting principles, practices or financial statement
disclosures.
“On behalf of the entire executive management
team and Board of Directors, I would like to thank Andy for his
contributions to IEA over the past five years,” said J.P. Roehm,
IEA’s Chief Executive Officer. “Since joining IEA, Andy has been an
instrumental part of our Company, from supporting the completion of
our initial public offering to ensuring the successful integration
of several notable strategic acquisitions that have significantly
diversified our platform. We wish Andy the best of luck in his
future endeavors.”
IEA’s Board of Directors has appointed Peter J.
Moerbeek as Chief Financial Officer on an interim basis, effective
immediately. Mr. Moerbeek has over three decades of experience in
financial and operational leadership positions across the
engineering, construction and utility industries. Since February
2019, Mr. Moerbeek has served as an advisor to the Company’s Board
of Directors.
Prior to his advisory role at IEA, Mr. Moerbeek
had retired from Primoris Service Corporation (NASDAQ: PRIM), a
publicly traded specialty construction and infrastructure company,
where he was Executive Vice President, Chief Financial Officer and
a Director from 2009 to 2018. Before Primoris, he served in
multiple director and C-suite positions at private and public
manufacturing and utility companies.
“Over the past year, we were very fortunate to
have Pete serve as an advisor to our Board,” commented Mr. Roehm.
“We are beginning a nationwide search for a permanent Chief
Financial Officer. In the meantime, Pete and I will work together
to ensure a seamless transition.”
Reconfirmation of 2019 Financial
Guidance
IEA reconfirms its financial guidance for the
full year ended December 31, 2019. Revenue for full year 2019 is
expected to be in the range of $1.3 billion to $1.4 billion, and
Adjusted EBITDA is expected to be in the range of $90.0 million to
$110.0 million. For a reconciliation of Adjusted EBITDA, please see
the table at the end of this release.
Balance Sheet & Liquidity
Measures
Through strategic efforts in 2019 to
recapitalize the Company’s balance sheet and reduce its debt
position, IEA saw significant improvements in its capital structure
and liquidity. As of December 31, 2019, the Company had $147.3
million of cash and cash equivalents and total debt of $362.5
million, which consisted of $182.7 million outstanding under its
term loans, $175.4 million of Series B Preferred Stock and $4.5
million of commercial equipment loans. At the end of the fourth
quarter, the Company also had $29.0 million of availability under
its credit facility. Based on the Company’s estimated cash and debt
amounts as of December 31, 2019, IEA expects a net leverage ratio
of approximately 1 times trailing twelve months Adjusted EBITDA,
which represents a more than 300% reduction from the Company’s net
leverage ratio as of September 30, 2019.
2020 Preliminary Outlook
IEA is now a significantly larger and much more
diversified engineering and construction business and is very well
positioned for positive results in 2020. IEA remains confident in
its long-term growth outlook driven primarily by a strong existing
backlog, growing pipeline of new business opportunities and
continued tailwinds across all of its end markets.
For the full year 2020, IEA anticipates revenue
in the range of $1.5 billion to $1.65 billion and Adjusted EBITDA
in the range of $105 million to $125 million. For a reconciliation
of Adjusted EBITDA, please see the table at the end of this
release.
Fourth Quarter and Full Year 2019
Conference Call
IEA will issue its full financial results for
the fourth quarter and year ended December 31, 2019 and confirm its
2020 guidance ranges before the market opens on Wednesday, March
11, 2020. Management will conduct a conference call that day at
11:00 am Eastern Time to discuss the quarterly results.
To join the conference call, please dial (877)
407-0784 (domestic) or (201) 689-8560 (international) and ask for
Infrastructure & Energy Alternatives’ Fourth Quarter 2019
Conference Call. To listen via the Internet, please visit the
investor section of the Company’s website at
https://ir.iea.net/ at least 15 minutes prior to the start of
the call to download and install any necessary audio software. The
conference call webcast will also be archived on the Company’s
website for 30 days or by dialing (844) 512-2921 (domestic) or
(412) 317-6671 (international) and providing the PIN code:
13698964.
About IEA
Infrastructure and Energy Alternatives, Inc.
(IEA) is a leading infrastructure construction company with
specialized energy and heavy civil expertise. Headquartered in
Indianapolis, Indiana, with operations throughout the country.
IEA’s service offering spans the entire construction process. The
Company offers a full spectrum of delivery models including full
engineering, procurement, and construction, turnkey, design-build,
balance of plant, and subcontracting services. IEA is one of three
Tier 1 wind energy contractors in the United States and has
completed more than 200 wind and solar projects across North
America. In the heavy civil space, IEA offers a number of specialty
services including environmental remediation, industrial
maintenance, specialty transportation infrastructure and other site
development for public and private projects. For more information,
please visit IEA’s website at www.iea.net or follow
IEA on Facebook, LinkedIn and Twitter for the latest company news
and events.
Forward Looking Statements
This release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”) and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). The
forward-looking statements can be identified by the use of
forward-looking terminology including “may,” “should,” “likely,”
“will,” “believe,” “expect,” “anticipate,” “estimate,” “forecast,”
“seek,” “target,” “continue,” “plan,” “intend,” “project,” or other
similar words. All statements, other than statements of historical
fact included in this press release, regarding preliminary
financial results, future financial performance, business
strategies, expectations for our business, future operations,
financial position, estimated revenues and losses, projected costs,
prospects, plans, objectives and beliefs of management are
forward-looking statements. These forward-looking statements
are based on information available as of the date of this release
and our management’s current expectations, forecasts and
assumptions, and involve a number of judgments, risks and
uncertainties. Although we believe that the expectations reflected
in such forward-looking statements are reasonable, we cannot give
any assurance that such expectations will prove correct.
Forward-looking statements should not be relied upon as
representing our views as of any subsequent date. As a result of a
number of known and unknown risks and uncertainties, our actual
results or performance may be materially different from those
expressed or implied by these forward-looking statements.
Some factors that could cause actual results to
differ include:
- 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 Consolidated Construction Solutions I LLC (including
its wholly owned subsidiaries Saiia LLC (“Saiia”) and the American
Civil Constructors LLC (the “ACC Companies”) (collectively, “CCS”),
and William Charles Construction Group, including Ragnar Benson
(collectively, “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.
We do not undertake any obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
Contacts:
Peter J. Moerbeek |
Kimberly Esterkin |
Chief Financial Officer |
ADDO Investor Relations |
pete.moerbeek@iea.net |
iea@addoir.com |
765-828-2568 |
310-829-5400 |
Non-U.S. GAAP Financial
Measures
We define EBITDA as net income (loss),
determined in accordance with GAAP, for the period presented,
before depreciation and amortization, interest expense and
provision (benefit) for income taxes. We define Adjusted EBITDA as
net income (loss) plus depreciation and amortization, interest
expense, provision (benefit) for income taxes, restructuring
expenses, acquisition or disposition related expenses, non-cash
stock compensation expense, and certain other non-cash charges,
unusual, non-operating or non-recurring items and other items that
we believe are not representative of our core business or future
operating performance.
Adjusted EBITDA is a supplemental non-GAAP
financial measure and, when considered along with other performance
measures, is a useful measure as it reflects certain drivers of the
business, such as revenue growth and operating costs. We believe
Adjusted EBITDA can be useful in providing an understanding of the
underlying operating results and trends and an enhanced overall
understanding of our financial performance and prospects for the
future. While Adjusted EBITDA is not a recognized measure under
GAAP, management uses this financial measure to evaluate and
forecast business performance. Adjusted EBITDA is not intended to
be a measure of liquidity or cash flows from operations or a
measure comparable to net income as it does not consider certain
requirements, such as capital expenditures and depreciation,
principal and interest payments, and tax payments. Adjusted EBITDA
is not a presentation made in accordance with GAAP, and our use of
the term Adjusted EBITDA may vary from the use of similarly-titled
measures by others in our industry due to the potential
inconsistencies in the method of calculation and differences due to
items subject to interpretation.
The presentation of non-GAAP financial
information should not be considered in isolation or as a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP.
The following table outlines the reconciliation
from estimated net income (loss) to estimated Adjusted EBITDA for
December 31, 2019:
|
For the year ended |
(in thousands) |
December 31, 2019 |
|
Low |
|
High |
Net income (loss) |
$ |
2,000 |
|
|
$ |
9,100 |
|
Interest expense, net |
50,000 |
|
|
52,000 |
|
Depreciation and
amortization |
47,500 |
|
|
49,500 |
|
Provision (benefit) for income
taxes |
(2,000 |
) |
|
(1,000 |
) |
EBITDA |
97,500 |
|
|
109,600 |
|
Non-cash stock compensation
expense |
4,000 |
|
|
4,400 |
|
Acquisition integration costs
(1) |
10,400 |
|
|
12,100 |
|
Contingent consideration fair
value adjustment (2) |
(23,100 |
) |
|
(17,500 |
) |
Project settlement legal fees
(3) |
1,200 |
|
|
1,400 |
|
Adjusted EBITDA |
$ |
90,000 |
|
|
$ |
110,000 |
|
- Acquisition Integration costs related to CCS and William
Charles include legal, consulting, personnel and other costs
associated with the acquisitions of CCS and William Charles.
- Reflects an adjustment to the fair value of its contingent
consideration incurred in connection with the Company's merger and
initial public offering transactions in March 2018. The contingent
consideration fair value adjustment is a mark-to-market adjustment
based on the Company not anticipating reaching EBITDA requirements
outlined in the original agreement.
- Project settlement legal fees reflect fees related to extreme
weather-related events that occurred on projects at the end of
2018. These project legal costs were significantly higher due
to the complexity of the settlement process when compared to
non-weather related projects.
The following table outlines the reconciliation from 2020
projected net income to 2020 projected Adjusted EBITDA for the
periods indicated using relevant estimated figures:
|
|
Guidance |
|
|
For the year ended December 31, 2020 |
(in thousands) |
|
Low Estimate |
|
High Estimate |
Revenue |
|
$ |
1,500,000 |
|
|
$ |
1,650,000 |
|
|
|
|
|
|
Net loss |
|
$ |
(5,000 |
) |
|
$ |
(1,000 |
) |
|
|
|
|
|
Interest expense, net |
|
55,500 |
|
|
66,500 |
|
Depreciation and
amortization |
|
50,400 |
|
|
55,000 |
|
Provision for income
taxes |
|
(400 |
) |
|
(1,000 |
) |
EBITDA |
|
100,500 |
|
|
119,500 |
|
|
|
|
|
|
EBITDA Margin |
|
6.7% |
|
|
7.2% |
|
|
|
|
|
|
Non-cash stock compensation
expense |
|
4,500 |
|
|
5,500 |
|
Adjusted EBITDA |
|
$ |
105,000 |
|
|
$ |
125,000 |
|
|
|
|
|
|
% Adjusted EBITDA Margin |
|
9.0% |
|
|
9.2% |
|
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