Visionary Education Technology (GV) - 2020 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2020 was $47.8 million, an increase of $3.4 million, or 7.7%, compared to the same period last year [13] - Net income increased to $2.5 million, or $0.10 per share, for Q2 2020 from $819,000, or $0.03 per share, in Q2 2019 [19] - EBITDA for Q2 2020 improved 54.2% to $6.9 million, compared to $4.5 million for the same period in 2019 [21] - Total backlog at June 30, 2020, increased 109.2% to $417.3 million, compared to $199.5 million a year ago [22] Business Line Data and Key Metrics Changes - Electrical construction revenue in Q2 2020 was $46.7 million, an increase of $7.5 million, or 19%, from $39.2 million for the same period in 2019 [14] - Gross margin on electrical construction operations increased 420 basis points to 18.7% compared to 14.5% for the same period in 2019 [16] - Revenue from real estate development operations decreased to $1.1 million for Q2 2020 from $5.2 million in Q2 2019 [15] Market Data and Key Metrics Changes - Increased MSA project activity driven by a near record backlog, which is expected to provide strong opportunities during the second half of 2020 [11] - The company has seen an uptick in interest from investors and potential investors [36] Company Strategy and Development Direction - The company is focused on expanding service lines and pursuing new customers, particularly in Texas and surrounding regions [50][51] - Management is optimistic about maintaining profit margins in the mid to high teens over the long term [35] Management's Comments on Operating Environment and Future Outlook - Management noted that demand for services remained strong despite the challenging health and economic environment [9] - The company has not experienced material adverse impacts on workforce availability due to COVID-19 [12] - Management expressed confidence in the growth potential through new customers and expanded service lines [42] Other Important Information - The acting CEO, John Sottile, is currently hospitalized for a non-COVID related respiratory condition [8] - Total capital expenditures for the first half of 2020 were $9 million compared to $14.3 million in the same period last year [24] Q&A Session Summary Question: Are there any large contracts that you're bidding on? - Management indicated they are always open to pursuing contracts and are aware of rumors about large contracts but have not seen them yet [27] Question: Is there consideration for a name change to reflect the business type? - Management has considered this and will resend it to the board for further consideration [28] Question: What is the outlook for profit margins and backlog? - Management expects profit margins to maintain or improve and noted that the backlog is still significant compared to historical levels [34][41] Question: Can you provide an update on Texas growth? - Management confirmed that service line expansion in Texas has opened doors for new customers and they are pleased with the results [50] Question: Is there an increase in demand for substation installations? - Management noted an increase in demand for substations, especially in greenfield areas and regions with growing populations [72]