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Charah Solutions (CHRA)

Participants
Tony Semak Head, IR
Scott Sewell President and CEO
Roger Shannon CFO and Treasurer
Toni Kaplan Morgan Stanley
Michael Feniger Bank of America
Brian Butler Stifel
Call transcript
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Operator

Good morning ladies and gentlemen. And welcome to Charah Solutions, Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After today’s presentation, we will conduct a question-and-answer session. [Operator Instructions]

to call like to now would turn over the Mr. I for Head of Semak, Charah Investor Tony Relations Solutions. ahead. go Please

Tony Semak

Thank you, remarks our operator. joining Good with And morning, everyone, and to forward your We financial conference sharing your questions. we XXXX look us our thank appreciate participation answering quarter in prepared third you results call. and today. you for

release review closed, We hope find as the we market but issued investor the not, release as presentation the you www.charah.com had our Investor well press ir.charah.com. the a supplemental the section yesterday press chance website could if to or you on after at of

Joining me and Shannon, President and today our Roger the on Chief Financial Scott Treasurer. Sewell, Executive and Officer; are Chief Officer call

session dialogue. Following their prepared remarks, we question-and-answer continue and will customary conduct the the

that Securities I’d regarding those subject statements Act. to calls. results from be are earnings currently Before like remarks could cause different include conference that meaning you disclosed releases to the Litigation and to Private within actual be risks remind to of we materially our statements our begin, the in Reform and forward-looking believe uncertainties Solutions that Charah forward-looking we These statements

obligation as we update filings Commission, Those other among things, earnings matters to these quarterly report in with our including forward-looking We as described risks any in XX-Q. our that release disclaim the Securities include, Exchange statements. well our have and Form on

measures. non-GAAP in this and provide During our our presentation will supplemental financial to We release, on the we to refer GAAP earnings conference reconciliations applicable measures call, website.

our call I’d thank over joining Scott? like the turn And President to today. CEO. for now want we you and Again, to Scott Sewell, to us

Scott Sewell

I'm and our last share demonstrated morning, call thank on following growth participate also strategy in executing we the Good success improvements quarter debt since to we've on reducing today. choosing you spoke anticipated. year. how Tony. this I’ll in for to And our operational the report second of our made everyone. delighted as Thanks, we've

leadership the team that spent how better considerable positioned has and become targets the shortly time XXXX objectives to work a I'll and and to accomplishments illustrate entire you beyond. achieve effort performance corporate in our of we’ve help Our describe results and reach our to will

briefly opportunities, results an and provide and a our I'll review initiatives, our business and on our on accomplishments, review developments, morning, technology current This our legislative update financial of of pipeline an recent significant update actions. regulatory including

for and and our I'll then discussion the quarter, XXXX transition guidance financing, to performance our into our financial Roger XXXX outlook. activities a the during dive call and deeper around

XX% of of quarter within driven Revenue environmental deemed to coupled compared the third Brickhaven compliant decrease as the of our and services of value in decrease projects a with completions remediation revenue from the Including in component won completion termination, of segment. primarily by project awarded resulting solutions XXXX, the the project XXXX.

and This maintenance to offset decline increase though due Revenue by outages overall net scope lesser in an nuclear increase of revenue also technical by within and a services overall to offerings. partially offerings. revenue an service extent, reduced services fewer from segment, byproduct our our a declined our was out sales fossil net partially in from offset

services of the the in contracts. project, revenue early our as solutions by decrease declined due remediation segment, of other well and roll-off the in profit and environmental Gross driven Brickhaven to the termination compliance

Along overall partially XXXX, quarter from net the with specific a profit offset from byproduct of issue sales. first related continuing to in by gross project losses increase one

the of fewer segment primarily maintenance technical and period. offset our outages and nuclear a higher by from However, partially gross service gross in increased due service fossil profit scope our profit to offerings, reduced outages

with our Brickhaven applied revolving location. our to customer we to agreed with to of loan $XX and early the the our contract of the settlement, consistent the related we proceeds termination Charah consistent communicated credit our agreement. or payment agreement connection reduction August of applied received announced the the pay term that On to our an $XX balance million Charah’s million previously prior XXXX, we with expectations XX, reached guidance, In with

Next, the approximately that now activities our Most several in million review year-to-date. of new a $XXX we growth the demonstrate I’ll success vital strategy. business during development accomplishments notably, pace on are awards in having quarter strong won

more million than in $XXX negotiation. we awards have under verbal currently Additionally,

contract total expanded as awards contracts, revenue the new winning well than base. approximately on is that as Our times ago include under contract year-to-date customer year period. have success our higher multiple four project rate extensions awards in based These

We our continued domestically on technology to both internationally. beneficiation ash utility make progress interest MPXXX and and from receive customers, keen

convert to customers. reduced excellent with safety into performance, our continued hope which our significantly employees consistent because total guidance. We for And soon. awards debt interest this we demonstrates receive we And our prior our award and to to and our commitment it's recognitions further

towards a our for contracts increased transitions faced have scope. challenging competing and quarters as few business We complexity with

we take believe that are However, positioning to of developments. current ourselves we advantage

more Charah and coal the ash. in I’ll We believe, decade. coming momentum Solutions a these player be are we solutions market the remediating and regulatory a for of to discuss responsibly well from elements detail. believe We environmental will benefit very over bit recycling positioned developments key

remediation to we store estimated require coal positioned billion XXXX those or rating remediation for EPA well the services. $XX we in mandated be believe, and ash a leading pounds landfill than are provider US. More opportunities ash in in closure And

significant ash regulatory recycling to driving trends plays also beneficiation and customer increasingly a We public needs is solutions, remediation see for creative where policy for role. continue of including

We us opportunity. beneficiation this continue well technology ash our on believe positions capitalize MPXXX to that to

awards been expect past there the increase over years, the of RFPs of delays periods. the we in to couple new Though have announcing business size coming utility over

end well four the and expect above the we year around above of by signed year the be total under contracts won Our submitted dollar the period. ago year-to-date ago bid to are times year. And period value

growth opportunities continue project increasing also our and of to Further, future These more upcoming weighted be segment. solutions environmental pending toward scope our complexity increasing heavily potential. opportunities are

We have here secured approximately new in $XXX million awards today.

awards in under have verbal more negotiation. Additionally, than currently million $XXX we

the expect continue We awards of verbal XXXX. during works into contractual the remainder conversion these to of

We and on to expect verbal of awards active year negotiation most record. year-to-date awards business under development in result combination the generated new our

write to that custom revenue potential. ability management business, believe, ideally market increasingly along our combine expand are with environment, to conducive regulatory we our proprietary With our technologies, generating positioned solutions our we beneficiation leading and to our ash a capabilities,

our will While growth to be safety, commitment focused significant opportunities. of are share intensely our profitable priority we a on capturing always highest

initiatives. provide update Next, developments on an our I’ll and technology

for MPXXX ash in continuing But ready environmentally demand and a market gain mix reception high concrete positive buildings, most It technology is stronger, to excites from concrete us and about the me it of an products friendly of beneficiation beneficial proprietary from more is customers. strong that into utility use to thermal manner. compelling as roads economical meeting is waste coal construction Our known transform enables durable what technology for the our making while to customers, purposes bridges. utility the this

in we their with customers this deploy And international discussions technology utility in businesses. holding are to technology. begin with to discussions interested also this customers are deploying We

have MPXXX growth initiative to been our rollouts expect than a key be technology we to business. slower the for While byproduct our previously driver technology anticipated, continue sales

methods, the in the prescriptive level. approaches closures that ash and at ash required state level a federal more a regulation trend We continue coal dictate that means see at pond for are to toward

customers more some States Virginia, ash utility like work rules we own Carolina, Carolina, quarters. expect are management with the already coal and new growth South Illinois, which Kentucky, the North proactively, have Indiana and plants and will proceeding coal states in to anticipated closure for in Missouri, contribute Oklahoma, their ash awards and coming developed other

issue prior for widespread much reporting discussion quarters, contamination plans to opportunities groundwater or provide could create disposal see concerns to environmentally we sites. in ash about growing issue, continue on and coal environmental of result reporting near friendly is in another The discussed of we've them Charah this potential example remediation that which plants, and at solutions. this As

in of based approach released location federal the approach. to change coal closure residuals from XXXX, that prompting proposed regulations a At clean Court CCR XXXX or to size-based has for due EPA amendments the combustion of the the the its Circuit to Appeals DC a level, criteria

determinations on than The closure final and ruling be could to by groundwater tonnage. contamination, period risk be means the rather waterways the established and end. a This year will underway, based current is

XXXX. unlined, this which brings to EPA units of requires the unlined also to to from that initiate and XXXX a soil-lined or Earlier and ash in rule, CCR month, CCR proposed the closure change include deadline October August additional stop impediments failing XXXX, to surface receiving closure and for XX the forward clay-lined XX revisions classification a

role. drive technologies increasingly more remediation creative expectation other and regulatory us to a beneficiation our recent We effective These strong ability where creative these and policy a bundle cost to plays with needs to including remediation puts believe, for public position proprietary approaches solutions. in our develop reinforce competitive and significant our trends for examples traditional solutions, customer

in potential been the regulatory compliance are to require contamination actions could developments in business. support their in our expanding water Also, key These about and plans. our other on utilities drivers deadlines, prompt further increase closure. of states concerns our to have of future approaching Growing clean ground likely focus pipeline opportunities developing confidence

our financial turn to review to over of With that, Roger I'll it a provide results.

Roger Shannon

Thanks, Scott.

sheet financial a liquidity and results to an with for review and guidance on XXXX our our Now balance and Scott and turning I’ll outlook continue provide review remarks. XXXX our closing of back it before update

million compliance Revenue the services first XXXX, the $XX.X previously nuclear from the of by project value Brickhaven discussed period project outages the scope in the quarter the and outages. to during $XXX.X of remediation and refueling from project by a component, for our extent of XX% decrease or and to decreased XXXX, fewer within reduced year termination completions million a including and of one deemed a nuclear third completion in quarter resulting lesser ago driven

while primarily and a profit solutions These associated million issue by extent project margin XX.X% gross increased decreased in a $XX.X that to year. to environmental last quarter. driven completions million from lesser were with project period $XX.X continued same from second costs during and XX.X% declined quarter, declines the specific the Gross by segment, to our the

$XX.X for As the isolated relation no year lower GAAP The attributable was decrease $XX.X million current net by million previously these any net giving quarter costs million of loss profit. gross a interest decline circumstances we a as and million in reported loss the and a We have expenses, G&A to the compared primarily $XX.X are projects. in anticipated in an $X.X expense, ago or to period. have with rise in loss offset the other of partially to net discussed, decrease

during charges quarter in period, expenses The non-recurring period. $XX.X last were legal million the in reduction associated ago million compared the year primarily $XX.X costs. was with Our due ago year to the G&A to

expense as term compared in also Interest ago We term primarily to lower benefit million ago. recognized loan the September in result refinancing loan interest a following $X.X year period, of income income $X.X of quarter year tax million to a XXXX. was compared debt a the current as benefit as a the tax the declining

QX decrease CapEx period, an in approximately $X recurring result activity. financing million initiatives, during lower the due from ago rollouts and $X.X $XX.X down technology lease was to adjusted of ago offset quarter from of was of gross G&A primarily million anticipated our in year slower million than million as down a the expenses. the period, by primarily EBITDA profit, in $X.X a slightly increase year

level. to decreased for million. for Remediation Now accounted I’ll services byproduct off remediation while or the results our revenue million the contracts in to declined revenue decrease value $XX XX% in XXXX, segment environmental $XX.X a compliance a impact discuss segment reporting million, projects rolling of and in our $X.X increase solution and million $XX.X sales due In one and net revenues. segment,

and million previously and million, issue gross profit off project $XX.X attributable in the mentioned one for from side. to XX.X% and remediation margin specific rolling to declined decline gross profit Most decreased segment in this the projects gross margin XX.X%. at Gross the of to the was $X.X segment

the segment, services had services outages X% of technical decrease third business, as In to quarter to $XX.X million million. refueling outage we or our and one compared nuclear XXXX. In none but our $X.X in revenue maintenance completion completed underway, refueling

The have through ago scope compared to the relative XX, during also period. September in were outages Year-to-date we anticipated. outages as we year XXXX six outages eight reduced to XXXX completed

as quarter, expected, year. services factors As to compared the led nuclear these for lower last to revenue

the result fossil X.X% offset The of gross nuclear nuclear decrease increased margins gross gross in technical Maintenance higher partially in was to by services from a technical profit gross approximately lower by and to X% $X X.X%. services profit segment. services fossil $XXX,XXX services increased services Maintenance services as increased offset revenue. or revenue from business, million and partially the profit

Now Proceeds of gross $XX.X At liquidity. with our the turning used were of and to term by from $XX had decrease levels. XXXX approximately quarter, to debt $XX $XXX.X and from of year-end which applied from million prior we our loan consolidated balance is XX credit. September Brickhaven sheet toward of a a XXXX, million million, termination decrease remainder the reduce deemed million, balance our payments line the

Our $XX of of the approximately million XX liquidity as fourth September $XX.X XXXX, XXXX. million from was quarter at end of the down

I'll address Next, guidance. XXXX our

guidance the previous guidance revenue year $XXX tightening range has Charah As the we attributable million Solutions a of million of presentation, to on slide range million ranges reflect adjusted visibility full revenue, to in detailed million. to to $XXX our and range $XXX are The EBITDA from $XXX XXXX outcome. for income XX new XXXX net of narrowed our better to

Solutions attributable now loss has a $XX a of from loss to The of be net income loss to range guidance narrowed million Charah of million $XX of to million a the loss $XX million. to $XX

narrowed EBITDA now million million million. $XX from adjusted to range the million to to guidance The $XX is $XX $XX

affirming are of we outlook, to million $XXX our XXXX range our $XXX revenue previous Regarding our million. outlook of

is CapEx, slag our to to range is conditions described our rollout assessment million while of of $XX $XX discretion earnings adjusted the technologies at million slide market grinding driven rollout $X range $XX respect and Our million million net by With of XX to income technology EBITDA driven. MPXXX our our of on as technology of presentation. customer the and

optimistic soon be As to we interest are Scott noted, that potential by we’re seeing customers we strong able contracts. will utility announce and

With to back call that, I’ll Scott. now turn over the

Scott Sewell

Thanks Roger.

deliver believe environmental remediation full in I Charah of positioned want and suite its to outage a ash services sales, maintenance recycling, is strongly that the conclude, to management again and we coal I power industry. generation As emphasize to Solutions ability byproducts

opportunities we're So with believe, on customized as to we we the in their ideal capitalize challenges. environmental of list complex to position an partner to bring growing solutions customers

We're a The is fly favorable. company's facilitate larger and regulatory which dynamics the Market bundled remain current largest currently our and interest should at our new pace, MPXXX ash history. opportunity our projects. market record winning technology, in in significant awards beneficiation

improve to for to efficiency, we and pursue business margin operating of further levels our we our reduce making pipeline our our additional as of market expanding And our debt operating increase opportunities, our remain are potential. committed to and company ability adjustments our capture grow convinced share. We the opportunities and

be track safety for work continues. an compliance extraordinary available and of industry Our leading there And amount quality, to done. record is

in us, I capitalize and given to optimistic have enthusiastic peer on a confidence potential. the substantial also deliver should very I'm future. have we growth strengthen us particularly ability strategic before put valuation believe, opportunities the So about Charah I'm and value and have to position attractive about shareholders Solutions our business confirm to our shareholders, our strong us. the corporate our underway compelling investor placed comparisons, awareness group action in we already plans our to significant

that operator, it With questions. to open up let's

Operator

instructions] from the of first Kaplan Your Stanley. [Operator comes Toni with question line Morgan

Toni Kaplan

Thank you.

that's there any strategy that that? that just about changes than the last is mentioned are reasons you this out talk what Are higher be driving your call You that year. win driving you’d success? rate might Could in

Scott Sewell

in that see timing we're from right on kind the big a the really Tony. everything and largest is awards. Good of customers approach, our delay the talked And record This very of And several generation. more Solutions quarters. here now now. are by just to excited for on, be, about And rates awards driven Scott. year think, I morning, we rounding and really potentially Good what really backlog really Charah else last communicating our from that, win the coupled And some know turn. awards with, Sure. for of really, perspective, question. release work bit disciplined we I is we've and

now. So things side our happening all right good here on really,

be about that. excited So talking we're to really

Toni Kaplan

is then, midpoint you points year expansion Okay. you XXX Great. versus some And the the of from a initiatives you're savings to expansion next you implementing at of guidance. the basis much the cost and that initiatives you're three cost get the identified the much versus from How from get how of to savings that other margin factors how to projects breakdown? Thanks. much mentioned trying

Scott Sewell

we not shift exact expand buckets but and in see margin we those Roger And here anything our that the coming into business, the that, it, that a think really that of that of again business, about kind the on business, call, inner we that movements increase I'll I us of solution regulatory Tony. you everything our exciting if sure big in major let lot big as the kind Sure, can tailwinds, pipeline where miss. on side about in, are, is But really, predominantly shift of percentages the talk as if environmental go from side to of see large especially higher really the seeing, the we're of as about a we well which house. margin else is

taken results savings level seeing XXXX, from a year, or next place, SG&A the have increase project as and at margins those seeing as area place. to really be that through the level, growth into at lot whether it going that taken well a initiatives XXXX. in So Starting is help perspective, of that in come cost we've in the

want if Roger, that? you to anything expand sure on there's not

Roger Shannon

Sure.

impact margin from to amount that, Just received an from discussed we we the the Brickhaven add we've gross termination. you some had know a quarter, as little to last adjustment

our business. from going Scott environmental to XXXX, solutions as So said, into we an increasing margin shift expansion see

right of beginning a rapid it a the cash toward of to end our going the of the year, year this to initiatives will those concrete start year a on targeting, next G&A G&A of that end year, of call of of steps taking rate initiatives year basis. on the forefront getting into going a we're did run the the end next percentage revenue, X% We have very, as We continue. middle that size number this to of still X% to continue and

Toni Kaplan

coal one I the just or One regulations around last thinking to the of and about be ash Obama from Thank those some regulations. around from exempting EPA market era the a business me, we addressable that from the number guess, you. how should the even from relaxing regulations? the utility Perfect. read operators risk risk and to relapsed articles

Scott Sewell

one we we've pulls over Sure rollback more it, several think way we Tony, And in the a further kind also think And are is about necessarily rules. as gotten of addition it that, good really existing couple impairments the don't the weeks rules, for closure. intended the of last the from of existing question. of here that folks. of rather but clarification That the CCR about

it as of it it, that presented there we not of opportunity an that previously. we see into see really, the the our in you market of addressable So way kind those more of kind opposite to pull entitlements were

online line the you require think about now impairments. So be if impairments rules clay considered it, to

some the rule kind of Just clarification further saw changes we of in back XXXX. the of

good there. kind previously. equal of We weighting of see had for objectives really, a that it's out a EPA as with balance, economic environmental So signaled clarifying things and just lot

a it see for really positive as us. we So,

this a are already talked lot a so right into we're we convert And of don't, into these as of as the are now, federal kind they've call stuff, of these they're that understand regulations those they're pipeline there, they and coming we a we they it especially we the starting rule, consideration, to baking don't positive. of some plans, out the the believe clarifications large talked and about but well business we that their in there also, our down took started more where lot current of to educated A going. of see already then projects customers risk

Toni Kaplan

Thank Perfect. you.

Operator

a Michael comes Your line America. Bank the Feniger from of question of with next

Scott Sewell

Good morning, Michael.

Michael Feniger

my taking Good morning, question. guys. for Thanks

-- Just EPA like I'm more that if from it on utilities help that? I, stringent. also help does of -- a piggybacking it's a the time it's understand allow updates decision? of the November us curious, that, more off also part fifth. update make But from that EPI? the you Is guess sort it’s little just confused just I I'm to I could get me

Scott Sewell

the sir. is making There extension of decision bit process. an for a Yes, utilities little allowed and there in

don't in we based don't, the rate have we see pipeline the projects that just the else as impacting However, currently or like on anything we move we that forward, award that.

are and kind differences the So again, that very, minor. the time of

see So moving that needle the nothing in perspective. we that

the know, I in point know, think, more market. importantly, out the the you our increasing significantly more time online of from really there that by weighed ponds difference that importantly, moreover, view our our, You addressable kind is perspective of inclusion the from of was all and

Michael Feniger

completed Understood. three that again, issues, by your its structure exact the were be some there much you on, and believe versus contract of remind mentioned What reimbursable were, And that could if think there, costs issues fixed? us you they'll these like XXXX. and how remediation I I projects had

Scott Sewell

on well business, in including either been overall probably I services as our we've or Yes, technical XX% fashion. this, business, rate the so as of and maintenance for some solutions pretty is for think clear reimbursable environmental

in about our of think DNS way actually you that's, projects whole on and business if side discrete view we the suite that's the which the were of house. the So, three services, these

a think and this back these do QX side. with They we're mistakes to management about made some and talking project that events. to when QX; lot we on I you think predominantly QX our had year,

and, of period completed that and those that and of However, three time have quarter. in were completed they they projects two in discreet

you know XXXX. third The in will end

in XXXX a the through earlier of going perspective. previous roll or to the a any work are from quarter there's not from field the the However, the queue, from into impacts future

Michael Feniger

larger with do to projects these faced becoming this now becoming just and these, understand that view how in Okay, and guess, complex, some I year complex? we are I'm and it more you these more but, context these issues and, just of projects the of with projects trying then larger

Scott Sewell

Yes.

I think we're when it's were view the we on especially leader the the of really, in complexity projects, provide way when using the think that term services the already that industry on. it's I about that guess, we bundling complex, it, the we

So I they're we think bundling nature complex in or together. because services multiple are coupling

think I we these as in types benefit However, continue the our how forward. we see well move that that handle management already teams that have situations to very in to we these versed are project of projects and we’ll as

I diligent standpoint, be de-risk think a as also contracts as forward. we’ll the for move contracting structure very much to we possible as

Michael Feniger

March the can from -- on Excellent. we the ops the then the flow and timeline I something in the there? How fourth repayment help, should think cash just EBITDA give implied in or think there's any mean, on you fourth help And reminder see quarter? free about cash Can us flow I the I with think, you of side. update And cash XXXX. schedule? on can we on quarter a the debt side, me

Roger Shannon

Michael, it's Roger. Sure,

end to scheduled repayment flow From can to million $XX X/XX/XXXX. a debt track cash we on the you cash we of for the by additional So, flow an And QX do see quarter. that. perspective, either remain are by obviously make of the

of quarter. the QX over on to projecting we're We're the we're what beginning So flow now basis. in a essentially -- cash be flat in right is

requires had builds by of in quickly, side part working end quarter, gone cash the nuclear from into and very unwind with first the outage that outage flow we unwind of capital November. some maintenance cycles quarter This the those really will this is

be we cash to the for be So taking quarter. expect consideration, flow all those flat into to

Michael Feniger

in that's think XXX a million that's, that's then say And [ph] do record. like, new said awards your I helpful. Okay, on, just you you date,

that Just And start that and help then I positive of think projects you to convert other the question timeline end. and towards in XXXX, cash guess does as XXXX? these it, us just doing understand, the is, help it just the beginning in how understand the us that is is is that. project new us much multi-year to, actually of I used flips help the a it they're that

Scott Sewell

the five previous as to year I here. a projects to projects those and a, of and if team going really I'll considerable the XXX yes think the previous more and as calls, but future of to But, to and other if beyond. the tag those, way think and convert it, heavily Roger sub well. significant if are a end average, about new segment XXX on XXXX, to help the believe say foundation I years a it’s those on will revenue Sure. probably couple build projects others year, not again lot contribute look split to for the predictable the the and streams in framed the the a well between of at in nature, like the And eight way the of we more want as going awards, now those helped and one, XXXX in two years we to be middle, this you a are of you And it more

that projects that significant foundation say there some that others in exact contribution XXXX. now. year of sports. not But that a have I are XXXX right a it's good frame lay stream revenue sure long exactly you significantly mix. will will the two for a will about horizon And predictable call this contribute on when in there it, to then really how So, I'm think

Roger Shannon

ongoing that combination have Yes, remaining years a getting things. that we're contributing of really this to the that so are lives projects and to XXXX pushed facing of we will directly It's this that It's, issues least three XXXX. as result about year, it's year several add think of XXXX are the and we've spoken, that a projects in out. at that just

been to couple years. of have terms a very the fourth have that or revenue throughout starting course this significant not begin even as in Then quarter, in in way end starts which year. this project material of contribute won over in I top add seeing there of to and on lower the each but a the the started awards the go pickup and be fourth new that, pickup guess we contribute there's the of business of happens XXXX in is year, that quarter XXXX. So year, projects We're year. the a then at year, those will this in invariably

Just that. cash the is your -- little different cash a project you from of paying we cognizant flow, And questions be of be that more On with that back it perspective. line we're bring a project do address the to different look when a on often in for billing a certainly to between financing to know can initiatives help from there to in deployment. types mobilization economics versus neutral on bit from there we've type timing got costs you perspective to mismatch flow underway at come projects, certainly perspective, when cash starts a of work to some are,

own a that's on there's the then CapEx kind to part us to to, incumbent to our flow. manage deployment, And minimize and cash our of disruption

me the inflows with the a we excuse in existing way how you those new expenditures our working and equipment. we the to -- projects, managed as it's you to build out capital the us, risk we those new balance balance So projects but have sure sorry, capital finance using make us these into to into a and that and things in to look equipment manage priority these all equation online, outflows, for our it's, efficiently go as work for come

Scott Sewell

And that months will a capital piggyback brief built see We've on had spends. lot not comment that about you see, shift that spoken you'll strategic us. a upfront made last we've XX I’ll in the just projects think I one big with

will I definitely so from our some large had and that costs as shift like think shift excess a balance see sheet builds forward, making we're move we not of on you these here. strategic we we've taken away a previously,

Operator

Your [Operator Instructions] next of Brian from question a line with Stifel. comes Butler the

Brian Butler

Good taking questions. my for morning. Thanks

Scott Sewell

morning, Good Brian.

Brian Butler

Just kind I guidance, growth the coming point to finer is the on of put where and a understanding XXXX from. think

verbal make trying the of that can is a million. be I’m it, much out about to from kind midpoint already contracts from a understand talked to risk XX expectations much how you is guess those just how on just from won? contracts there? the midpoint, So guess, put much is you just and I but about awarded? of are is you I it little what, clearer contracts How -- to Can

Scott Sewell

talked say, as said best is we the to quarters to, think you we said talked Yes, -- the repeat I wording what guess last about this the continue and that piece booked. get The so substantial I the to answer is projects just these quarter, business by of awards started guidance in in, contract our we know, guidance is, we've, have XXXX we business degree about we, very under this you a how methodology. about high existing that so think of last confidence underpinned and

very know So, substantially the, you really to underpin that a know nothing existing what the from get we sky from a you there confidence and perspective minimizing high high by the and percentage blue very out call business. go business

Brian Butler

Okay, I mean mean substantial that is ballpark? XX% I that like

Scott Sewell

percentage. -- I is don't it we've go I out. but that out. terms a It there are high it's for that looking is really can't historically understated number, given something you We -- in not number giving of

Brian Butler

people just I Okay, struggling And about I'm another outlook margin million. with. an EBITDA guess and got to are what for And confidence much how on the savings you substandard that's and a to cost understand I for is, there is, But you trying the that -- put That's G&A. level. XXXX. $XX the get you mean, outlook know, I talked metric. on an

about $X So million that to sounds $XX like, million. that's

growth the coming call million the correct? $XX that, is in the shift from it ES is to Is in that $XX So million business.

Scott Sewell

That's correct.

Brian Butler

Okay. give out… And ahead. Go you did

Scott Sewell

growth business, and expansion in like said. you the Margin ES

Brian Butler

right. split because is going about Right. was where that to you're be. It's mean, though, to X% on And G&A I X% it XX:XX. he about said is

about like buckets million a looks into? $XX that where to going in XXXX. $XX savings that's from I'm So again, you're it improvement understand what be million just to trying And to put

Scott Sewell

got like the to these slightly we, gross rolling quarter, we've that projects more It's got the weighted talked side. call. are Because the earlier margin off. on weaker And to we we've last about

drag new been projects about on. on projects margin. These have we We have that a rolling talked

mentioned -- But heavily toward saves. obviously contribution margin were you it their also, So model, weigh I'd with your at from slightly with G&A gross improvement.

Brian Butler

if win on I this, the I give awards? missed a then and you Okay, did rate of lastly, just million new XXX apologize

Scott Sewell

rate. win give We did not a

said as both previous specific always that it's the to think exceed rates I levels. value as that is the well win

Brian Butler

for you thank questions. taking Okay, my

Scott Sewell

Brian. Thanks,

Operator

now no Scott closing have for turn to We the questions. further I back call remarks.

Scott Sewell

you. Again, Great. thank

joining Hope you the Thank on a again, in our the road and thank everybody you today. great many helpful. And Just we have see you call on want future, us of so for to very you found much. very the day. forward progress updating look to

Operator

call. This conference concludes today's

You disconnect. may now