Willdan(US:WLDN)2025-05-08 22:32Financial Data and Key Metrics Changes - The company reported record first-quarter results for revenue, adjusted EBITDA, and EPS, with contract and net revenue each growing by 24% year over year [5][20] - Adjusted EBITDA rose by 31%, while GAAP diluted EPS increased by 52% and adjusted diluted EPS was up 58% [5][23] - Contract revenue increased to $152 million, and net revenue grew to $85 million, with organic growth rate for net revenue at 12% [20][21] Business Line Data and Key Metrics Changes - Revenue in the Energy segment rose by 25%, driven by strong program and construction management activity [21] - Engineering and Consulting segment revenues increased by 20%, reflecting strong client demand and geographic expansion [21] - The company completed two acquisitions that contributed $6 million to contract revenue in the quarter [20] Market Data and Key Metrics Changes - Commercial customers are forecasted to comprise 15% of revenue, state and local government customers at 44%, and utilities at around 41% [7] - Demand remains healthy across all customer groups, particularly in electricity usage at data centers driven by AI [7][8] - The company has minimal exposure to federal contracts, insulating it from recent federal spending cuts [9] Company Strategy and Development Direction - The company aims to pursue acquisitions that expand capabilities and relationships with commercial customers [8] - A focus on energy efficiency and infrastructure solutions positions the company well for long-term growth [6] - The company is enhancing financial flexibility through expanded credit facilities to support growth and acquisitions [24][25] Management's Comments on Operating Environment and Future Outlook - Management noted a structural shift in the energy landscape, with significant new opportunities arising from electrification and increased electricity demand [15] - The company is preparing for potential tariff impacts by seeking alternative equipment sources and inserting flexible contract terms [17][30] - Management raised 2025 financial targets based on strong Q1 performance, expecting net revenue between $325 million to $335 million [26] Other Important Information - The company ended the quarter with $38 million in cash and access to an undrawn $50 million line of credit, resulting in total liquidity of $88 million [24] - The effective income tax rate was favorable at 9.75%, contributing to a net income of $4.7 million, up 59% from the previous year [22] Q&A Session Summary Question: Impact of tariffs on the company - Management acknowledged potential risks related to equipment costs due to tariffs but noted no immediate impact and ongoing efforts to find alternative suppliers [28][30] Question: Conversations with customers regarding load growth - Management indicated that discussions with utilities and government customers are focused on updating forecasts and CapEx spending due to changing market conditions [32][35] Question: Confidence in raising guidance - The company raised guidance based on strong Q1 performance and customer interest in expanding contracts [36][38] Question: Any signs of slowdown in demand - Management reported no significant headwinds in operations, with strong demand across the board [41][42] Question: Equipment costs in large contracts - Equipment costs are estimated to be 25% to 30% of overall contract value, indicating some exposure to tariff impacts [44][45] Question: Integration of recent acquisitions - The company is facilitating cross-selling between teams from recent acquisitions without merging them physically [51][53]