Visionary Education Technology (US:GV)2020-03-12 16:26Financial Data and Key Metrics Changes - The company reported record high electrical construction revenue of $44.1 million for Q4 2019, an increase of $7.4 million compared to Q4 2018, driven by improved operations [11][12] - Net income for Q4 2019 increased to $3 million or $0.12 per share, up from $664,000 or $0.03 per share in Q4 2018 [15] - EBITDA for Q4 2019 was $7.4 million compared to $3.3 million for the same period in 2018 [15] - Total backlog at December 31, 2019, increased by $61.9 million or 28.9% to $276 million compared to $214.5 million as of December 31, 2018 [16] Business Line Data and Key Metrics Changes - Electrical construction revenue in Q4 2019 was $44 million, a 20% increase from $36.7 million in Q4 2018, primarily due to growth in Texas Southwest and Southeast regions [12][14] - Gross margin on electrical construction operations increased to 22.2% in Q4 2019 from 13.4% in Q4 2018, attributed to favorable project closeouts in Texas [13] Market Data and Key Metrics Changes - The company experienced strong revenue growth across all regions in 2019, driven by new customer acquisition and increased demand from existing customers [8] - The backlog as of January 31, 2020, was approximately $502 million, reflecting newly executed Master Service Agreements (MSAs) [8][17] Company Strategy and Development Direction - The company is expanding its service lines in substation and distribution services and increasing its presence in Kentucky through additional MSAs [9][10] - Geographic expansion into states adjacent to Texas, including Oklahoma, Arkansas, and Louisiana, is part of the growth strategy [10][44] - The company aims to enhance its distribution presence and expand its customer base, with a focus on new MSAs and service line expansion [45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning to build on recent successes and continue revenue growth [10] - The management cautioned investors to consider the company's performance on an annual basis due to potential quarterly fluctuations [32] - The company has developed plans to address potential impacts from the Coronavirus, emphasizing a lower likelihood of encountering the virus due to the nature of its operations [81] Other Important Information - The company reported an increase in selling, general, and administrative expenses due to higher accrued executive bonuses [14] - The company is actively considering share buybacks, weighing the best use of funds between buybacks, capital expenditures, and debt reduction [85] Q&A Session Summary Question: What was the profitability in the Texas and Southwest region? - Management confirmed that the Texas and Southwest region showed profitability in Q4 2019, with a revenue increase to $16.8 million from $13 million [21][25] Question: What is the timeframe for the $240 million backlog? - Management indicated that the backlog is expected to be completed over a period of three to five years [23][24] Question: Are there enough employees to handle current jobs? - Management confirmed that they currently have sufficient employees, although this may vary depending on other contractors' workloads [28] Question: What are the expected gross margins for new MSA work? - Management expressed hope that gross margins for new MSA work would be in the range of 16% to 19% [61] Question: Are there any large contracts being bid on? - Management confirmed that they are actively working on substantial contracts that may require public announcement if successful [76] Question: How is the company addressing the Coronavirus impact? - Management stated that they have developed plans to mitigate the impact of the Coronavirus, noting the dispersed nature of their work crews [81] Question: Is there consideration for a tender offer for share buybacks? - Management acknowledged that share buybacks are under consideration, but emphasized the need to evaluate the best use of company funds [85]