Willdan(US:WLDN)2022-03-11 02:55Financial Data and Key Metrics Changes - In Q4 2021, gross revenue declined by 4.8% to $92.2 million, while net revenue increased by 2.1% to $51.8 million compared to Q4 2020 [22][26] - For the full year 2021, gross revenue decreased by 9.5% to $354 million, but net revenue increased by 3.6% to $202 million [26][28] - Adjusted EBITDA for Q4 2021 rose by 9.7% to $9.4 million, representing 18.2% of net revenue, compared to $8.6 million or 16.9% a year ago [26] - The company reported a net loss of $900,000 for Q4 2021, an improvement from a loss of $4.0 million in Q4 2020 [25] Business Line Data and Key Metrics Changes - The increase in net revenue was driven by higher revenue from the Los Angeles Department of Water and Power (LADWP), which offset a decline in construction management revenue due to project completions [22][23] - Construction management revenue is expected to double in 2022, increasing from approximately $70 million to $150 million [17] Market Data and Key Metrics Changes - The company has a record backlog of approximately $1.5 billion, equating to three years of work [10] - The market for reducing carbon and electrification is growing, with significant contracts awarded in New York City and Pueblo County [15][16] Company Strategy and Development Direction - The company aims for about 20% organic growth in 2022, focusing on ramping up California IOU contracts and expanding construction management activities [14][33] - Willdan is well-positioned in the clean energy space, with strong market presence in New York and California [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in emerging stronger post-COVID, with all contracts restarted and customer access open [8][19] - The company anticipates a slow start in Q1 2022, with a ramp-up in subsequent quarters as new utility programs begin [33] Other Important Information - The company amended its credit agreement to better align with expected cash flows and growth-related working capital needs in 2022 [30][31] - There is potential upside from over $100 million of unspent funds from LADWP, which is not included in the guidance [64] Q&A Session Summary Question: Confirmation of a back-end loaded year and cost impacts - Management confirmed that costs associated with ramping new contracts have been factored into the P&L, with no future cost risk anticipated [38][41] Question: Revenue expectations from California IOU contracts - Expected gross revenue from California IOU contracts in 2022 is approximately $50 million [46] Question: Confidence in tapering higher costs - Management indicated that labor costs are defined, and while equipment and materials costs have risen, they have been able to pass these costs onto customers without margin erosion [48][59] Question: Future revenue expectations from California - Revenue from California IOU contracts is projected to be between $150 million and $200 million in 2023 [63] Question: Potential upside from unused LADWP funds - Management acknowledged over $100 million of additional unspent money from LADWP, which could provide upside [64] Question: Impacts from Omicron and supply chain constraints - Supply chain delays have affected certain projects, but overall, the company is ahead of schedule on average [69]