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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Infrastructure and Energy Alternatives Inc | NASDAQ:IEA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 13.72 | 13.72 | 13.72 | 0 | 01:00:00 |
Delaware
|
|
|
|
47-4787177
|
(State or Other Jurisdiction
of Incorporation)
|
|
|
|
(IRS Employer
Identification No.)
|
6325 Digital Way
Suite 460
Indianapolis, Indiana
|
|
46278
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Title of each class
|
|
Trading Symbols(s)
|
|
Name of exchange on which registered
|
Common Stock, $0.0001 par value
|
|
IEA
|
|
The NASDAQ Stock Market LLC
|
|
Infrastructure and Energy Alternatives, Inc.
|
|
|
Table of Contents
|
|
|
|
|
|
PART I. FINANCIAL INFORMATION
|
|
|
|
|
Item 1
|
Financial Statements (unaudited)
|
|
|
Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018
|
|
|
Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2019 and 2018
|
|
|
Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2019 and 2018
|
|
|
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018
|
|
|
Notes to Condensed Consolidated Financial Statements
|
|
|
|
|
Item 2
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 3
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 4
|
Controls and Procedures
|
|
|
|
|
|
Part II. Other Information
|
|
Item 1A
|
Risk Factors
|
|
Item 5
|
Other Information
|
|
Item 6
|
Exhibits
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
47,917
|
|
|
71,311
|
|
||
Accounts receivable, net
|
143,982
|
|
|
225,366
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
59,526
|
|
|
47,121
|
|
||
Prepaid expenses and other current assets
|
16,323
|
|
|
12,864
|
|
||
Total current assets
|
267,748
|
|
|
356,662
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
170,893
|
|
|
176,178
|
|
||
Goodwill
|
37,373
|
|
|
40,257
|
|
||
Intangibles
|
47,334
|
|
|
50,874
|
|
||
Company-owned life insurance
|
4,056
|
|
|
3,854
|
|
||
Other assets
|
179
|
|
|
188
|
|
||
Deferred income taxes - long term
|
21,403
|
|
|
11,215
|
|
||
Total assets
|
$
|
548,986
|
|
|
$
|
639,228
|
|
|
|
|
|
||||
Liabilities and Stockholder's Equity (Deficit)
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
77,578
|
|
|
158,075
|
|
||
Accrued liabilities
|
65,021
|
|
|
94,059
|
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
85,269
|
|
|
62,234
|
|
||
Current portion of capital lease obligations
|
23,424
|
|
|
17,615
|
|
||
Term loan - short-term
|
32,435
|
|
|
32,580
|
|
||
Total current liabilities
|
283,727
|
|
|
364,563
|
|
||
|
|
|
|
||||
Capital lease obligations, net of current maturities
|
60,156
|
|
|
45,912
|
|
||
Long-term debt
|
290,803
|
|
|
295,727
|
|
||
Deferred compensation
|
6,892
|
|
|
6,157
|
|
||
Contingent consideration
|
23,082
|
|
|
23,082
|
|
||
Total liabilities
|
$
|
664,660
|
|
|
$
|
735,441
|
|
|
|
|
|
||||
Commitments and contingencies:
|
|
|
|
||||
|
|
|
|
||||
Preferred stock, par value, $0.0001 per share; 1,000,000 shares authorized; 34,965 shares and 34,965 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
|
34,965
|
|
|
34,965
|
|
||
|
|
|
|
||||
Stockholders' equity (deficit):
|
|
|
|
||||
Common stock, par value, $0.0001 per share; 100,000,000 shares authorized; 22,266,211 and 22,155,271 shares issued and 22,252,489 and 22,155,271 outstanding at March 31, 2019 and December 31, 2018, respectively
|
2
|
|
|
2
|
|
||
Treasury stock, 13,722 shares at cost
|
(76
|
)
|
|
—
|
|
||
Additional paid in capital
|
5,501
|
|
|
4,751
|
|
||
Retained earnings (deficit)
|
(156,066
|
)
|
|
(135,931
|
)
|
||
Total stockholders' equity (deficit)
|
(150,639
|
)
|
|
(131,178
|
)
|
||
Total liabilities and stockholders' equity (deficit)
|
$
|
548,986
|
|
|
$
|
639,228
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Revenue
|
$
|
190,810
|
|
|
$
|
50,135
|
|
Cost of revenue
|
184,037
|
|
|
53,220
|
|
||
Gross profit
|
6,773
|
|
|
(3,085
|
)
|
||
|
|
|
|
||||
Selling, general and administrative expenses
|
27,754
|
|
|
16,960
|
|
||
Loss from operations
|
(20,981
|
)
|
|
(20,045
|
)
|
||
|
|
|
|
||||
Other expense, net:
|
|
|
|
||||
Interest expense, net
|
(10,367
|
)
|
|
(851
|
)
|
||
Other expense
|
(170
|
)
|
|
(11
|
)
|
||
Loss before benefit for income taxes
|
(31,518
|
)
|
|
(20,907
|
)
|
||
|
|
|
|
||||
Benefit for income taxes
|
8,629
|
|
|
3,515
|
|
||
|
|
|
|
||||
Net loss
|
$
|
(22,889
|
)
|
|
$
|
(17,392
|
)
|
|
|
|
|
||||
Net loss per common share - basic and diluted
|
(1.06
|
)
|
|
(0.81
|
)
|
||
Weighted average shares - basic and diluted
|
22,188,757
|
|
|
21,577,650
|
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Treasury Stock
|
|
Accumulated Deficit
|
|
Total Equity (Deficit)
|
||||||||||||||
|
|
Shares
|
Par Value
|
|
|
Shares
|
Cost
|
|
|
|||||||||||||||
Balance at December 31, 2017
|
|
21,578
|
|
2
|
|
|
—
|
|
|
—
|
|
—
|
|
|
(10,021
|
)
|
|
(10,019
|
)
|
|||||
Net loss
|
|
|
|
|
|
|
|
|
|
(17,392
|
)
|
|
(17,392
|
)
|
||||||||||
Issuance of preferred stock
|
|
|
|
|
|
|
|
|
|
(34,965
|
)
|
|
(34,965
|
)
|
||||||||||
Contingent consideration
|
|
|
|
|
|
|
|
|
|
(69,373
|
)
|
|
(69,373
|
)
|
||||||||||
Merger recapitalization transaction
|
|
|
|
|
|
|
|
|
|
(22,973
|
)
|
|
(22,973
|
)
|
||||||||||
Balance at March 31, 2018
|
|
21,578
|
|
$
|
2
|
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
|
$
|
(154,724
|
)
|
|
$
|
(154,722
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2018
|
|
22,155
|
|
2
|
|
|
4,751
|
|
|
—
|
|
—
|
|
|
(135,931
|
)
|
|
(131,178
|
)
|
|||||
Net loss
|
|
|
|
|
|
|
|
|
|
(22,889
|
)
|
|
(22,889
|
)
|
||||||||||
Share-based compensation
|
|
|
|
|
1,040
|
|
|
|
|
|
|
|
1,040
|
|
||||||||||
Share-based payment transaction
|
|
111
|
|
—
|
|
|
235
|
|
|
(14
|
)
|
(76
|
)
|
|
|
|
159
|
|
||||||
Merger transaction
|
|
|
|
|
|
|
|
|
|
2,754
|
|
|
2,754
|
|
||||||||||
Preferred dividends
|
|
|
|
|
(525
|
)
|
|
|
|
|
|
|
(525
|
)
|
||||||||||
Balance at March 31, 2019
|
|
22,266
|
|
$
|
2
|
|
|
$
|
5,501
|
|
|
(14
|
)
|
$
|
(76
|
)
|
|
$
|
(156,066
|
)
|
|
$
|
(150,639
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(22,889
|
)
|
|
$
|
(17,392
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
12,017
|
|
|
1,972
|
|
||
Amortization of deferred financing charges
|
1,239
|
|
|
—
|
|
||
Share-based compensation expense
|
1,040
|
|
|
—
|
|
||
Loss on sale of equipment
|
133
|
|
|
—
|
|
||
Deferred compensation
|
735
|
|
|
155
|
|
||
Provision for losses on uncompleted contracts
|
—
|
|
|
872
|
|
||
Deferred income taxes
|
(8,629
|
)
|
|
(2,567
|
)
|
||
Other
|
35
|
|
|
—
|
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
81,354
|
|
|
20,938
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
(12,405
|
)
|
|
3,685
|
|
||
Prepaid expenses and other assets
|
(3,149
|
)
|
|
(601
|
)
|
||
Accounts payable and accrued liabilities
|
(110,060
|
)
|
|
(16,943
|
)
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
23,032
|
|
|
24,726
|
|
||
Net cash provided by (used in) operating activities
|
(37,547
|
)
|
|
14,845
|
|
||
|
|
|
|
||||
Cash flow from investing activities:
|
|
|
|
||||
Company-owned life insurance
|
(202
|
)
|
|
(25
|
)
|
||
Purchases of property, plant and equipment
|
(1,908
|
)
|
|
(108
|
)
|
||
Proceeds from sale of property, plant and equipment
|
47
|
|
|
—
|
|
||
Net cash used in investing activities
|
(2,063
|
)
|
|
(133
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from debt and line of credit
|
9,400
|
|
|
64,927
|
|
||
Payments on debt and line of credit
|
(16,151
|
)
|
|
(38,447
|
)
|
||
Debt issuance costs
|
—
|
|
|
(2,144
|
)
|
||
Payments on capital lease obligations
|
(4,289
|
)
|
|
(1,304
|
)
|
||
Sale-leaseback transaction
|
24,343
|
|
|
—
|
|
||
Proceeds from stock-based awards, net
|
159
|
|
|
—
|
|
||
Recapitalization transaction
|
2,754
|
|
|
(22,973
|
)
|
||
Net cash provided by financing activities
|
16,216
|
|
|
59
|
|
||
|
|
|
|
||||
Net change in cash and cash equivalents
|
(23,394
|
)
|
|
14,771
|
|
||
|
|
|
|
||||
Cash and cash equivalents, beginning of the period
|
71,311
|
|
|
4,877
|
|
||
|
|
|
|
||||
Cash and cash equivalents, end of the period
|
$
|
47,917
|
|
|
$
|
19,648
|
|
|
|
|
|
||||
Supplemental disclosure of cash and non-cash transactions:
|
|
|
|
||||
Cash paid for interest
|
$
|
9,168
|
|
|
$
|
853
|
|
Cash paid for income taxes
|
$
|
190
|
|
|
$
|
—
|
|
Merger-related contingent consideration
|
$
|
—
|
|
|
$
|
69,373
|
|
Issuance of common shares
|
$
|
—
|
|
|
$
|
90,282
|
|
Issuance of preferred shares
|
$
|
—
|
|
|
$
|
34,965
|
|
Preferred dividends declared
|
$
|
525
|
|
|
$
|
—
|
|
•
|
the last day of the fiscal year following July 6, 2021, the five-year anniversary of the completion of M III's IPO;
|
•
|
the last day of the fiscal year in which our total annual gross revenues exceed $1.07 billion;
|
•
|
the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt
|
•
|
the date on which we become a “large accelerated filer,” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock held by nonaffiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter.
|
Preliminary identifiable assets acquired and liabilities assumed (in thousands)
|
CCS
(1)
|
William Charles
(2)
|
||||
Cash
|
$
|
6,413
|
|
$
|
6,641
|
|
Accounts Receivable
|
58,041
|
|
69,740
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
9,512
|
|
16,095
|
|
||
Other current assets
|
1,813
|
|
7,999
|
|
||
Property, plant and equipment
|
59,952
|
|
47,899
|
|
||
Intangible assets:
|
|
|
||||
Customer relationships
|
19,500
|
|
7,000
|
|
||
Backlog
|
8,400
|
|
5,500
|
|
||
Tradename
|
8,900
|
|
4,500
|
|
||
Deferred income taxes
|
(2,361
|
)
|
—
|
|
||
Other non-current assets
|
134
|
|
75
|
|
||
Accounts payable and accrued liabilities
|
(25,219
|
)
|
(60,962
|
)
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
(14,194
|
)
|
(14,810
|
)
|
||
Debt, net of cash acquired
|
(52,257
|
)
|
(15,672
|
)
|
||
Capital lease obligations
|
(1,124
|
)
|
—
|
|
||
Other liabilities
|
(704
|
)
|
(907
|
)
|
||
Total identifiable assets
|
76,806
|
|
73,098
|
|
||
Goodwill
|
29,773
|
|
4,581
|
|
||
Total purchase consideration
|
$
|
106,579
|
|
$
|
77,679
|
|
(1)
|
The estimated acquisition-date fair values pertaining to CCS reflect the following significant changes from year ended December 31, 2018: an increase to property, plant and equipment of
$2.5 million
, an increase to deferred income taxes of
$1.6 million
, and a decrease to goodwill of
$4.1 million
.
|
(2)
|
The estimated acquisition-date fair values pertaining to William Charles reflect the following significant changes from year ended December 31, 2018: a decrease to property, plant and equipment of
$1.2 million
and an increase of goodwill of
$1.2 million
.
|
(in thousands)
|
Three months ended March 31, 2019
|
||||
|
CCS
|
|
William Charles
|
||
Revenue
|
55,509
|
|
|
54,401
|
|
Net (loss) income
|
(2,458
|
)
|
|
(2,369
|
)
|
|
Three months ended March 31,
|
||||
(in thousands)
|
2019
|
|
2018
|
||
Revenue
|
190,810
|
|
|
169,868
|
|
Net loss
|
(22,889
|
)
|
|
(27,713
|
)
|
Net loss per common share - basic and diluted
|
(1.06
|
)
|
|
(1.28
|
)
|
|
Three Months Ended
|
||||
|
March 31,
|
||||
|
2019
|
|
2018
|
||
Numerator:
|
|
|
|
||
Net loss
|
(22,889
|
)
|
|
(17,392
|
)
|
Less: Convertible Preferred Share dividends
|
(525
|
)
|
|
—
|
|
Net loss available to common stockholders
|
(23,414
|
)
|
|
(17,392
|
)
|
|
|
|
|
||
Denominator:
|
|
|
|
||
Weighted average common shares outstanding - basic and diluted
(1)
|
22,188,757
|
|
|
21,577,650
|
|
|
|
|
|
||
Anti-dilutive:
(2)
|
|
|
|
||
Convertible preferred shares
|
5,045,149
|
|
|
3,959,797
|
|
RSUs
|
354,106
|
|
|
—
|
|
|
|
|
|
||
Basic EPS
|
(1.06
|
)
|
|
(0.81
|
)
|
Diluted EPS
|
(1.06
|
)
|
|
(0.81
|
)
|
(1)
|
The contingent earn-out shares were not included at March 31, 2019 and 2018, respectively. See
Note 8. Fair Value of Financial Instruments
for discussion regarding the Company's contingently issuable earn-out shares that were not potentially dilutive as of March 31, 2019.
|
(2)
|
Warrants to purchase
8,480,000
shares of common stock at
$11.50
per share were outstanding at March 31, 2019 but were not potentially dilutive as the warrants’ exercise price was greater than the average market price of the common stock during the period.
646,405
of vested and unvested Options and
169,494
of unvested RSUs were also not potentially dilutive as of March 31, 2019 as the respective exercise price or average stock price required for vesting of such award was greater than the average market price of the common stock during the period.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Contract receivables
|
$
|
90,969
|
|
|
$
|
161,408
|
|
Contract retainage
|
53,085
|
|
|
64,000
|
|
||
Accounts receivable, gross
|
144,054
|
|
|
225,408
|
|
||
Less: allowance for doubtful accounts
|
(72
|
)
|
|
(42
|
)
|
||
Accounts receivable, net
|
$
|
143,982
|
|
|
$
|
225,366
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Allowance for doubtful accounts at beginning of period
|
$
|
42
|
|
|
$
|
216
|
|
Plus: (reduction in) provision for allowances
|
30
|
|
|
—
|
|
||
Less: write-offs, net of recoveries
|
—
|
|
|
—
|
|
||
Allowance for doubtful accounts at period end
|
$
|
72
|
|
|
$
|
216
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Costs on contracts in progress
|
$
|
910,077
|
|
|
$
|
935,820
|
|
Estimated earnings on contracts in progress
|
62,478
|
|
|
76,883
|
|
||
Revenue on contracts in progress
|
972,555
|
|
|
1,012,703
|
|
||
Less: billings on contracts in progress
|
(998,298
|
)
|
|
(1,027,816
|
)
|
||
Net underbillings
|
$
|
(25,743
|
)
|
|
$
|
(15,113
|
)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$
|
59,526
|
|
|
$
|
47,121
|
|
Billings in excess of costs and earnings on uncompleted contracts
|
(85,269
|
)
|
|
(62,234
|
)
|
||
Net underbillings
|
$
|
(25,743
|
)
|
|
$
|
(15,113
|
)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Buildings and leasehold improvements
|
$
|
6,778
|
|
|
$
|
4,614
|
|
Land
|
18,460
|
|
|
19,394
|
|
||
Construction equipment
|
177,891
|
|
|
175,298
|
|
||
Office equipment, furniture and fixtures
|
2,805
|
|
|
2,994
|
|
||
Vehicles
|
4,455
|
|
|
4,991
|
|
||
|
210,389
|
|
|
207,291
|
|
||
Accumulated depreciation
|
(39,496
|
)
|
|
(31,113
|
)
|
||
Property, plant and equipment, net
|
$
|
170,893
|
|
|
$
|
176,178
|
|
(in thousands)
|
Goodwill
|
||
January 1, 2018
|
$
|
3,020
|
|
Acquisitions
|
37,237
|
|
|
December 31, 2018
|
$
|
40,257
|
|
Acquisition adjustments
|
(2,884
|
)
|
|
March 31, 2019
|
$
|
37,373
|
|
|
March 31, 2019
|
|
|
|
December 31, 2018
|
|
|
||||||||||||||||||||
($ in thousands)
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Remaining Life
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Remaining Life
|
||||||||||||
Customer relationships
|
$
|
26,500
|
|
|
$
|
(1,856
|
)
|
|
$
|
24,644
|
|
|
7 years
|
|
$
|
27,000
|
|
|
$
|
(814
|
)
|
|
$
|
26,186
|
|
|
7 years
|
Trade name
|
13,400
|
|
|
(1,294
|
)
|
|
12,106
|
|
|
5 years
|
|
13,400
|
|
|
(575
|
)
|
|
12,825
|
|
|
5 years
|
||||||
Backlog
|
13,900
|
|
|
(3,316
|
)
|
|
10,584
|
|
|
2 years
|
|
13,400
|
|
|
(1,537
|
)
|
|
11,863
|
|
|
2 years
|
||||||
|
$
|
53,800
|
|
|
$
|
(6,466
|
)
|
|
$
|
47,334
|
|
|
|
|
$
|
53,800
|
|
|
$
|
(2,926
|
)
|
|
$
|
50,874
|
|
|
|
(in thousands)
|
Remainder of 2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||
Amortization expense
|
$
|
10,062
|
|
|
$
|
11,837
|
|
|
$
|
6,466
|
|
|
$
|
6,466
|
|
|
$
|
5,841
|
|
|
|
Fair Value Measurements at Reporting Date
|
||||||
|
Amount recorded on balance sheet
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
||||
Liabilities as of December 31, 2018
|
|
|
|
|
||||
Contingent consideration
|
23,082
|
|
—
|
|
—
|
|
23,082
|
|
|
|
Fair Value Measurements at Reporting Date
|
||||||
|
Amount recorded on balance sheet
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Other Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
||||
Liabilities as of March 31, 2019
|
|
|
|
|
||||
Contingent consideration
|
23,082
|
|
—
|
|
—
|
|
23,082
|
|
Beginning Balance, December 31, 2018
|
$
|
23,082
|
|
Fair value adjustment
|
—
|
|
|
Ending Balance, March 31, 2019
|
23,082
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||
|
|
|
|
||
Term loan
|
292,500
|
|
|
300,000
|
|
Line of credit
|
47,900
|
|
|
46,500
|
|
Commercial equipment notes
|
5,133
|
|
|
5,341
|
|
Total principal due for long-term debt
|
345,533
|
|
|
351,841
|
|
Unamortized debt discount and issuance costs
|
(22,295
|
)
|
|
(23,534
|
)
|
Less: Current portion of long-term debt
|
(32,435
|
)
|
|
(32,580
|
)
|
Long-term debt, less current portion
|
290,803
|
|
|
295,727
|
|
Remainder of 2019
|
$
|
42,003
|
|
2020
|
56,273
|
|
|
2021
|
51,683
|
|
|
2022
|
47,513
|
|
|
2023
|
81,564
|
|
|
Thereafter
|
150,077
|
|
|
Total contractual obligations
|
$
|
429,113
|
|
|
Revenue %
|
|
Accounts Receivable %
|
||||||
|
Three Months Ended
|
|
|||||||
|
March 31,
|
|
March 31, 2019
|
December 31, 2018
|
|||||
|
2019
|
2018
|
|
||||||
|
|
|
|
|
|
||||
Company A
|
*
|
|
18.6
|
%
|
|
12.2
|
%
|
20.0
|
%
|
Company B
|
11.9
|
%
|
*
|
|
|
*
|
|
*
|
|
Company C
|
21.1
|
%
|
*
|
|
|
21.0
|
%
|
19.0
|
%
|
Company D
|
*
|
|
16.6
|
%
|
|
*
|
|
*
|
|
Company E
|
*
|
|
25.8
|
%
|
|
*
|
|
*
|
|
•
|
Heavy civil construction services such as high-altitude road and bridge construction, specialty paving, industrial maintenance and other local, state and government projects.
|
•
|
Environmental remediation services such as site development, environmental site closure and outsourced contract mining and coal ash management services.
|
•
|
Rail Infrastructure services such as planning, creation and maintenance of infrastructure projects for major railway and intermodal facilities construction.
|
|
For the three months ended March 31,
|
For the three months ended March 31,
|
||||||||
(in thousands)
|
2019
|
2018
|
||||||||
Segment
|
Revenue
|
% of Total Revenue
|
Revenue
|
% of Total Revenue
|
||||||
Renewables
|
$
|
75,060
|
|
39.3
|
%
|
$
|
50,135
|
|
100.0
|
%
|
Specialty Civil
|
115,750
|
|
60.7
|
%
|
—
|
|
—
|
|
||
Total revenue
|
$
|
190,810
|
|
100.0
|
%
|
$
|
50,135
|
|
100.0
|
%
|
|
For the three months ended March 31,
|
For the three months ended March 31,
|
||||||||
(in thousands)
|
2019
|
2018
|
||||||||
Segment
|
Gross Profit
|
Gross Profit Margin
|
Gross Profit
|
Gross Profit Margin
|
||||||
Renewables
|
$
|
2,187
|
|
2.9
|
%
|
$
|
(3,085
|
)
|
(6.2
|
)%
|
Specialty Civil
|
4,586
|
|
4.0
|
%
|
—
|
|
—
|
%
|
||
Total gross profit
|
$
|
6,773
|
|
3.5
|
%
|
$
|
(3,085
|
)
|
(6.2
|
)%
|
•
|
our ability to consummate the transactions under the Equity Agreement (defined below) and the Second Amendment (defined below);
|
•
|
availability of commercially reasonable and accessible sources of liquidity;
|
•
|
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 CCS and 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.
|
•
|
changes to our customers’ capital spending plans;
|
•
|
mergers and acquisitions among the customers we serve;
|
•
|
access to capital for customers in the industries we serve;
|
•
|
new or changing regulatory requirements or other governmental policy uncertainty;
|
•
|
economic, market or political developments; and
|
•
|
changes in technology, tax and other incentives.
|
•
|
Seasonality and Geographical Factors
. Seasonal patterns can have a significant impact on project margins. Generally, business is slower at the beginning of the year. Adverse or favorable weather conditions can impact project margins in a given period. For example, extended periods of rain or snowfall can negatively impact revenue and project margins as a result of reduced productivity from projects being delayed or temporarily halted. Conversely, in periods when weather remains dry and temperatures are accommodating, more work can be done, sometimes with less cost, which can favorably impact project margins. In addition, the mix of business conducted in different geographic areas can affect project margins due to the particular characteristics associated with the physical locations where the work is being performed, such as mountainous or rocky terrain versus open terrain. Site conditions, including unforeseen underground conditions, can also impact project margins.
|
•
|
Revenue Mix
. The mix of revenues derived from the industries we serve and the types of services we provide within an industry will impact margins, as certain industries and services provide higher margin opportunities. Additionally, changes in our customers’ spending patterns in any of the industries we serve can cause an imbalance in supply and demand and, therefore, affect margins and mix of revenues by industry served.
|
•
|
Performance Risk
. Overall project margins may fluctuate due to work volume, project pricing and job productivity. Job productivity can be impacted by quality of the work crew and equipment, availability of skilled labor, environmental or regulatory factors, customer decisions and crew productivity. Crew productivity can be influenced by weather conditions and job terrain, such as whether project work is in a right of way that is open or one that is obstructed (either by physical obstructions or legal encumbrances).
|
•
|
Subcontracted Resources
. Our use of subcontracted resources in a given period is dependent upon activity levels and the amount and location of existing in-house resources and capacity. Project margins on subcontracted work can vary from project margins on self-perform work. As a result, changes in the mix of subcontracted resources versus self-perform work can impact our overall project margins.
|
|
|
Three Months Ended March 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
190,810
|
|
100.0
|
%
|
|
$
|
50,135
|
|
100.0
|
%
|
Cost of revenue
|
|
184,037
|
|
96.5
|
%
|
|
53,220
|
|
106.2
|
%
|
||
Gross profit
|
|
6,773
|
|
3.5
|
%
|
|
(3,085
|
)
|
(6.2
|
)%
|
||
Selling, general and administrative expenses
|
|
27,754
|
|
14.5
|
%
|
|
16,960
|
|
33.8
|
%
|
||
Income from operations
|
|
(20,981
|
)
|
(11.0
|
)%
|
|
(20,045
|
)
|
(40.0
|
)%
|
||
Interest expense, net
|
|
(10,367
|
)
|
(5.4
|
)%
|
|
(851
|
)
|
(1.7
|
)%
|
||
Other income (expense)
|
|
(170
|
)
|
(0.1
|
)%
|
|
(11
|
)
|
—
|
%
|
||
Income from continuing operations before income taxes
|
|
(31,518
|
)
|
(16.5
|
)%
|
|
(20,907
|
)
|
(41.7
|
)%
|
||
Provision for income taxes
|
|
8,629
|
|
4.5
|
%
|
|
3,515
|
|
7.0
|
%
|
||
Net income
|
|
$
|
(22,889
|
)
|
(12.0
|
)%
|
|
$
|
(17,392
|
)
|
(34.7
|
)%
|
•
|
Heavy civil construction services such as high-altitude road and bridge construction, specialty paving, industrial maintenance and other local, state and government projects.
|
•
|
Environmental remediation services such as site development, environmental site closure and outsourced contract mining and coal ash management services.
|
•
|
Rail Infrastructure services such as planning, creation and maintenance of infrastructure projects for major railway and intermodal facilities construction.
|
(in thousands)
|
For the three months ended March 31, 2019
|
For the three months ended March 31, 2018
|
||||||||||||||
Segment
|
Revenue
|
Gross Profit
|
Gross Profit Margin
|
Revenue
|
Gross Profit
|
Gross Profit Margin
|
||||||||||
Renewables
|
$
|
75,060
|
|
$
|
2,187
|
|
2.9
|
%
|
$
|
50,135
|
|
$
|
(3,085
|
)
|
(6.2
|
)%
|
Civil
|
115,750
|
|
4,586
|
|
4.0
|
%
|
—
|
|
—
|
|
—
|
|
||||
Total
|
$
|
190,810
|
|
$
|
6,773
|
|
3.5
|
%
|
$
|
50,135
|
|
$
|
(3,085
|
)
|
(6.2
|
)%
|
|
|
Three Months Ended March 31,
|
||||
(in thousands)
|
|
2019
|
|
2018
|
||
|
|
|
|
|
||
Net cash provided by (used in) operating activities
|
|
(37,547
|
)
|
|
14,845
|
|
Net cash used in investing activities
|
|
(2,063
|
)
|
|
(133
|
)
|
Net cash provided by financing activities
|
|
16,216
|
|
|
59
|
|
Measurement Period
|
Ratio
|
Prior to the fiscal quarter ending December 31, 2020
|
3:50 : 1.00
|
From and after the fiscal quarter ending December 31, 2020
|
2.25 : 1.00
|
|
|
Payments due by period
|
|
|
|
|
||||||||||||||||||||||
(in thousands)
|
|
Total
|
|
Remainder of 2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt (principal)
(1)
|
|
345,533
|
|
|
24,523
|
|
|
31,569
|
|
|
30,854
|
|
|
30,450
|
|
|
78,060
|
|
|
150,077
|
|
|||||||
Debt (interest)
(2)
|
|
120,948
|
|
|
22,020
|
|
|
26,829
|
|
|
23,881
|
|
|
21,151
|
|
|
17,635
|
|
|
9,432
|
|
|||||||
Capital leases
(3)
|
|
83,580
|
|
|
17,480
|
|
|
24,704
|
|
|
20,829
|
|
|
17,063
|
|
|
3,504
|
|
|
—
|
|
|||||||
Operating leases
(4)
|
|
15,427
|
|
|
4,058
|
|
|
3,586
|
|
|
1,658
|
|
|
1,004
|
|
|
765
|
|
|
4,356
|
|
|||||||
Total
|
|
$
|
565,488
|
|
|
$
|
68,081
|
|
|
$
|
86,688
|
|
|
$
|
77,222
|
|
|
$
|
69,668
|
|
|
$
|
99,964
|
|
|
$
|
163,865
|
|
(1)
|
Represents the contractual principal payment due dates on our outstanding debt.
|
(2)
|
Includes variable rate interest using March 31, 2019 rates.
|
(3)
|
We have obligations, exclusive of associated interest, recognized under various capital leases for equipment totaling $118.5 million at March 31, 2019. Net amounts recognized within property, plant and equipment, net in the consolidated balance sheet under these capitalized lease agreements at March 31, 2019 totaled $100.8 million.
|
(4)
|
We lease real estate, vehicles, office equipment and certain construction equipment from unrelated parties under non-cancelable leases. Lease terms range from month-to-month to terms expiring through 2038.
|
(in millions)
|
|
||
Segments
|
Backlog at March 31, 2019
|
||
Renewables
|
1,264.4
|
|
|
Civil
|
892.7
|
|
|
Other
|
—
|
|
|
Total
|
$
|
2,157.1
|
|
•
|
engaging in transactions with affiliates;
|
•
|
buying back shares or paying dividends in excess of specified amounts;
|
•
|
making investments and acquisitions in excess of specified amounts;
|
•
|
incurring additional indebtedness in excess of specified amounts;
|
•
|
creating certain liens against our assets;
|
•
|
prepaying subordinated indebtedness;
|
•
|
engaging in certain mergers or combinations;
|
•
|
failing to satisfy certain financial tests; and
|
•
|
engaging in transactions that would result in a ‘‘change of control.’’
|
•
|
initially increasing the interest rate by 2.00% per annum on certain loans, making the interest rate on Initial Term Loan borrowings a rate of, at the Company's option, (x) LIBOR plus a margin of 8.25% (rather than 6.25%, for consenting lenders) or (y) an alternate base rate plus a margin of 7.25% (rather than 5.25%);
|
•
|
increasing the interest rate upon occurrence and during the continuance of a significant event of default from an additional 2.00% per annum to an additional 3.00% per annum;
|
•
|
limiting the ability to add back charges, expenses or losses incurred as a result of any adverse weather event in calculating consolidated EBITDA (including for purpose of determining the First Lien Net Leverage Ratio), and providing an overall limitation on the aggregate amount added back to net income for certain types of charges, costs, expenses and adjustments for purposes of calculating consolidated EBITDA;
|
•
|
adding a requirement for control agreements with respect to our bank accounts upon certain events;
|
•
|
limiting the amount and nature of cash that can be used to calculate the First Lien Net Leverage Ratio;
|
•
|
imposing a make-whole premium or prepayment premium upon certain voluntary prepayments;
|
•
|
eliminating the ability to request one or more Incremental Term Facilities or Incremental Revolving Facilities;
|
•
|
imposing stricter mandatory repayment requirements of Excess Cash Flow;
|
•
|
eliminating the ability to designate unrestricted subsidiaries; and
|
•
|
eliminating certain exceptions to the covenants not to incur additional indebtedness or make restricted payments.
|
•
|
create, or authorize the creation of, or issue or obligate itself to issue any shares of Senior Stock, Parity Stock, capital stock that votes with the Series B Preferred Stock on matters requiring consent, or capital stock of a subsidiary;
|
•
|
reclassify, alter or amend any capital stock of the Company or its subsidiaries if such reclassification, alteration or amendment would render such other capital stock senior to or pari passu with the Series B Preferred Stock;
|
•
|
enter into any agreement with respect to, or consummate, any merger, consolidation or similar transaction with any other person pursuant to which the Company or such subsidiary would not be the surviving entity, if as a result of such transaction, any capital stock or equity or equity-linked securities of such person would rank senior to or pari passu with the Series B Preferred Stock;
|
•
|
assume, incur or guarantee, or authorize the creation, assumption, incurrence or guarantee of, any indebtedness for borrowed money (subject to certain exceptions);
|
•
|
authorize or consummate any Change of Control or Liquidation Event unless on or prior to the consummation of such Change of Control or Liquidation Event, all shares of Series B Preferred Stock will be redeemed, paid or purchased in full at the Optional Redemption Price (defined below);
|
•
|
alter, amend, supplement, restate, waive or otherwise modify any provision of the Certificate or any other governing document in a manner that would reasonably be expected to be materially adverse to the rights or obligations of the holders of the Series B Preferred Stock;
|
•
|
at any time when the Company is prohibited from making Class A Cash Dividends pursuant to the Certificate, to utilize the restricted payment basket set forth in the Company’s credit agreement any purpose other than making a Series B Preferred Cash Dividend or redeeming, repurchasing or otherwise retiring Series B Preferred Stock; or
|
•
|
enter into any amendment to the credit agreement that materially and adversely affects the ability of the Company to make cash dividend payments, liquidation payments or redemption payments compared to the credit agreement in effect at the initial sale of the Series B Preferred Stock.
|
Required Payment Amount
|
Ratio
|
100% of Excess Cash Flow
|
Greater than 5.00 : 1.00
|
75% of Excess Cash Flow
|
Less than or equal to 5.00 : 1.00 but greater than 1.76 : 1.00
|
50% of Excess Cash Flow
|
Less than or equal to 1.76 : 1.00 but greater than 1.26 : 1.00
|
25% of Excess Cash Flow
|
Less than or equal to 1.26 : 1.00 but greater than 0.76 : 1.00
|
0% of Excess Cash Flow
|
Less than or equal to 0.76 : 1.00
|
Measurement Period
|
Ratio
|
From and after fiscal quarter ending March 31, 2019 through December 31, 2019
|
4.75 : 1.00
|
From and after fiscal quarter ending March 31, 2020 through December 31, 2020
|
3.50 : 1.00
|
From and after fiscal quarter ending March 31, 2021 through December 31, 2021
|
2.75 : 1.00
|
From and after the fiscal quarter ending March 31, 2022
|
2.25 : 1.00
|
Exhibit Number
|
Description
|
10.2*
|
|
31.1*
|
|
31.2*
|
|
32.1**
|
|
32.2**
|
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.
|
|
|
|
|
Dated: May 15, 2019
|
By:
|
/s/ JP Roehm
|
|
Name: JP Roehm
|
|
|
Title: Chief Executive Officer
|
|
|
|
|
Dated: May 15, 2019
|
By:
|
/s/ Andrew D. Layman
|
|
Name: Andrew D. Layman
|
|
|
Title: Chief Financial Officer
|
|
|
|
|
Dated: May 15, 2019
|
By:
|
/s/ Bharat Shah
|
|
Name: Bharat Shah
|
|
|
Title: Chief Accounting Officer
|
1 Year Infrastructure and Energ... Chart |
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