Q2 2020 Ameresco Inc Earnings Call
So I'm all participants are in the listen only mode. Later, we will conduct a question and answer session and instructions will follow.
As a reminder, this conference is being recorded I would now like sort of the cultural over to your host Mr. <unk> Vice President marketing Communications Mr. when you may begin.
Thank you Kevin and good afternoon, everyone. We appreciate you joining us for today's call joining me here, our George Sakellaris, Amerescos, Chairman, President and Chief Executive Officer during the whole senior Vice President and Chief Financial Officer.
Block, Vice President and Chief Accounting Officer.
Turning the call over to George I would like to make a brief statement regarding forward looking remark.
Call contains forward looking information regarding future events and the future financial performance of the company. We caution you that such statements are predictions based on management's current expectations or beliefs.
Actual results may differ materially as a result of risks and uncertainties that pertain to our business.
We refer you to the company's press release issued this afternoon and to our FCC filing.
These documents disgust important factors that could cause actual results to differ materially from those contain and the company's projection or forward looking statements.
We assume no obligation to provide any forward looking statements made on today's call.
In addition, we will be referring to non-GAAP financial measures during this call.
Non-GAAP financial measures are not prepared in accordance with generally accepted accounting principle.
A GAAP to non-GAAP reconciliation as well as an explanation behind the use of non-GAAP financial measures is available in our press release and in the appendix slides, which can be downloaded from our website.
I will now turn the call over to George George.
Thank you Leila and good afternoon.
Hi, everyone is staying healthy and safe.
First I.
I would like to say how proud I am all the entire moresco family.
Gross Oh, a broad geographic footprint our employees quickly. So just show to the new working environment and performed their jobs extremely well with no significant interruptions.
Also our robust corporate it technology infrastructure built over many years has enabled many of our employees to continue to work pretty markedly.
With strong job performance by our team.
Strong financial results.
Our exceptional second quarter results kept us from truck for a record year.
Yeah, we've continued to have very good visibility for 2021 and beyond.
The second quarter and my desk, we experienced broad based revenue growth of course our project.
Renewable assets and operation and maintenance business. It is we've continued to focus on executing on our backlog.
Our business improved throughout the course due at the strong execution less restrictive work environments and favorable weather conditions.
We're not only executed to efficiently on contracted projects, but they also worked hard to grow our strong contracted backlog year over year.
Well, our smart solution projects continued to yield cost savings.
Wise resiliency and measurable environment benefits for our customers I would like to highlight a couple of areas where communities sorry guilty other tangible benefits.
Since our inception public housing authorities sure RV low income populations across more asquith footprint have ban and important markets for us.
Energy efficiency renewables and improved built in infrastructure. All examples of that type of work. Once you have done for these communities.
This includes improvements to H.B.A.C. Hod water building envelope light consistent energy efficient windows, and even roof mounted solar PV.
This work not only saves energy, but you tell us through improves residence overall quality of life.
Especially comfort health safety and security.
These benefits have been calm.
Notably important indicator environment as rather than spending more time medical.
Hi, My Wesco has developed and deployed specific quote was 19 related project management and construction protocols, which has enabled us to execute on these projects with no major slowdowns.
Given ongoing budget constraints worsened by government 19 municipalities across the country are looking for quick payback moneysaving projects.
In response to this and Myrisk launched its customer focused initiative promoting the health and safety in the workplace.
That's this controls updated data CAC systems automated entry and exit systems are just if you will see energy conservation measures that can be can make an immediate impact on pretty often in offices school campuses and facilities.
It's measures can be often implemented as part of the overall as you see since you project with zero upfront costs.
In addition, and what else we continued our extensive work with Eylea do Streetlights conversions.
With decades of experience and many large deployments under our belt and my school is now the Nashville is the largest ESCO provides were well municipal eylea do streetlights conversion services.
Dramatic cost declines in led technology has created a rapid payback for every de conversion project.
Oh provides in energy savings Phillips, 60% to 70% corporate was legacy lightness solutions.
In addition to immediate energy savings Eylea do conversion provisions. It also substantially reduce expensive ongoing maintenance cost given it a much longer life span of value technology.
This is especially the truthful lights on high speeds roadways, given the extra Arctic Wyman for expensive traffic control.
Even though they say basically oney about oh, well that exist in municipal streetlights and traffic signals have been converted realities.
We expect the additional financial pressures from call. It was nice you know municipalities <unk> only accelerate thank you started conversion rate and adoption of advanced technologies controlled.
And my ASCO is not only able to perform the conversion work, but we also can provide to assist in financed as these projects, creating an extra incentive requiring no upfront capital.
And Myrisk was president of business continued to show strong momentum in the quarter.
We signed a comprehensive contract where they used to last shouldn't operation.
38 million energy infrastructure project, it's a marine Corps <unk> air fish and surety point.
The project supports the investments we've made in development and expanding our advanced technology portfolio.
Features of the projects include.
Wastewater treatment optimization airfield lighting, modernisation electrical distribution upgrades smart meters and cyber security network improvements and you measure growing importance.
I might ask cool was also won all five awardees when a five year largely design build construction contract vehicle with a capacity overnight on the $75 million.
The project at the Naval facilities Command meet Atlantic will support recovery efforts funded in the aftermath of Hurricane Florence.
It's more in core facilities in North Carolina.
Our long term side as you all have increasing their mix of recurring revenue streams continue to strengthen our business model.
Provided at high level of visibility during periods of uncertain economic conditions during the quarter.
Yes, good assets, an operation and maintenance business that so only minor impacts you covered 90 and related disruptions demonstrating the grades resiliency of this business units.
We continue to grow our assets in development pipeline, you bloating green gas and solar and wind additional operation and maintenance contracts.
In summary.
They occur overnight instead, you restaurant remains a top priority.
We've continued to follow that highest safety standards and brought up almost to put that our customers Our park Miss an hourly employees.
Well this presents many challenges we expect to once again achieved record results for the here.
We believe that our critical of course say saving services and flexible financing capabilities will be even greater demand enforced corporate 19 environment.
Our aggressive investments well over the years now people and capabilities put us in an excellent position to execute it is greatly expanding market opportunity.
I will now turn the call well over to door to provide some comments on our financial performance Doron.
Thank you George and good afternoon, everyone I'm pleased to review the company's second quarter financial performance.
Please refer to our press release and supplemental slides for additional financial information.
Second quarter revenue demonstrated strong double digit growth across our major business lines up 13% year over year.
Well Emerus go continued to navigate a challenging work environment because of various cobot 19 related restrictions, we did see sequential improvements in our ability to execute project work throughout the quarter.
The less restrictive access to work sites and favorable weather conditions that George mentioned contributed to strong performance in many of our key geographies.
As we've noted previously we've seen meaningful growth in design build projects.
We strengthened our capabilities in the design build business over a year ago with a small acquisition.
We have rapidly grown this offering which represents quick turnaround projects with limited or no upfront auditing work and no ongoing performance guarantees importantly, we are able to leverage our existing project and operational infrastructure as the actual work performed as closely aligned with our traditional perform.
Its contract work.
While these projects carry lower gross margins they are additive to our EBITDA given this operating leverage.
I did want to touch on our gross margins during the quarter, which were 17.7 per cent compared to last years, 21.8%.
In our first quarter press release, we gave specific details on the factors, which we anticipated would impact our second quarter results, including incremental expenses related to covert 19 that we would occur incur in executing on our projects.
Well this did occur.
The overall impact was below our original cost expectations, giving given better than expected execution.
However, there were increased levels of design build work along with other lower margin projects as part of the project revenue mix during the quarter.
We also incurred some unplanned maintenance costs in our own EMD business above our expected quarterly maintenance expense levels.
These were quarter specific items, and we expect gross margins to improve in the second half the year.
Operating expenses were $26.6 million, 12% below last years level.
The company reacted very quickly to the covert 19 operating environment implementing tight cost controls across the organization.
Net income attributable to common shareholders was $4.4 million compared to $9.2 million due to the impact from non controlling interest activities during the quarter a $4.5 million.
We know these are noncash accounting adjustments made to results.
Non-GAAP net income was $9 million compared to $8.6 million.
Adjusted EBITDA, a non-GAAP financial measure was $24.1 million compared to $23.6 million an increase of 2%.
EPS was nine cents compared to 19 cents and non-GAAP EPS was 19 cents compared to 18 cents an increase of 3%.
Despite our previously anticipated slowdown and new business development activity are awarded backlog increased 6% quarter over quarter, representing a surprisingly strong quarter for New awards.
Our contracted project backlog of over $1 billion grew 29% year over year, providing us with substantial visibility.
Our recurring revenue businesses, which accounted for approximately 78% of our year to date EBITDA.
Have over $2 billion and long term contracted revenue in incentives, giving us the newest quality revenue streams for years to come.
Emirates goes liquidity remained strong with ample cash in available credit to execute our asset development pipeline plans.
We ended the quarter with cash on hand of $42 million after paying down $15 million on our line of credit.
Increased focus on cash collections during the quarter reduced our dsos to under 100 days from 122 at the end of Q1.
During the quarter, we executed on many nonrecourse financings further shoring up our liquidity position and providing the company with additional capacity for future investments in renewable energy assets.
As George pointed out our assets in development or increasing.
The availability of financing combined with our ability to monetize development assets provide us with the competence to execute on this development pipeline with conviction.
Turning to our outlook.
We're pleased to reaffirm our 2020 full year guidance as detailed in our earnings press release.
Now I'd like to turn the call back over to George for closing comments anchor Doron.
Myrisk school is not only well prepared to where the near term challenges. That's a current business environment presents but we'll have that people and resources in place to take advantage or the numerous exciting growth opportunities in front of us.
Before we take your questions I would like to again, thank our employees, our customers and our partners for making Ameresco at great success stories and for their extra hard work during this challenging times.
The entire hammered ESCO team hopes you and your families. They say, Kevin I will now like to open the call two questions.
Ladies and gentlemen, scrubber question or comment at this time. Please press the star than the one key on your Touchtone telephone. If your question. That's been answered you were similar so from acute please press the pound <unk>. Our first question comes from no trade with Oppenheimer.
Good afternoon, everyone and thanks for taking the questions. Yeah, I guess just to start with the energy assets. It looks like the megawatts in development increased by 25 megawatts sequentially.
Good to see the value of energy assets and development not went up sequentially by it looks like almost $100, Oh, sorry, $100 million and you added a 11 megawatts of Orange you sequentially. So just what drove the jobs in the value of the energy assets in development did you read some major project milestones or what can you.
Share with us.
Yes.
The it's because we have a good or green gas plant coming into the pipeline that he's went to the award category and as you know the value of those assets is considerably higher than the value over the PV.
And what are you wanted something.
Oh no. It takes it that I think the the dollars dollar value like George mentioned of renewable natural gas plants is quite a bit higher in a in those pipeline. As did include a good amount of R&D I think that's what's driving it I'm going to PV. As you know can be you know sort of all over the place in terms of carport versus ground Mount.
But nevertheless, our Angie is is the higher value higher value assets.
Mhm and that's a new projects in addition to the three you've mentioned.
Mccarty wrote in the two others, how you're looking to bring online by the into next year.
And.
This is in addition to the project as we get the announced before.
And that's why we've talked about.
Terrific and then can can you just update us in their current expectations for this year megawatts placed in service are still looking around 50 megawatts. We added that include Hardie right.
Yes, yes, we still like give that number around 15 megawatts and as you know because oh.
Covered 19 situation and so I don't think until its interconnections.
I have some delays, but the number right now is that we selling from on it.
Okay, Great and just switching the project business I guess, how sustainable based on your your activity in conversation with customers. How sustainable is this current pace of contracting in the traditional project business and I ask because you know in times past, obviously, you did see a at times a slower contracting environment has.
The economy was covering but you're you're mentioning municipalities looking for cost savings obviously, the 10 demigods, a new set of dimensions to customers consideration. So just curious to see your thoughts on on the sustainability of the current contracting pets.
Oh, we think that that base, especially on the awards.
And looking at the pipeline, what's going on is beginning to pick up so I wouldn't say that.
It's pretty good sustainable.
No question about it.
And as I said that in my remarks, I think it's the fact that we bring the financing to the tables.
And they positive budget neutral situation with positive cash flow to the ultimate customers. In addition to that incorporate in some of the health and safety measures associated with club in 19, a we were going to see an acceleration of our business.
Well I take some time, but I think it's going to happen.
Okay. Thanks, so much for the color and that's all.
Thanks, Thanks, Thank you.
Our next question comes from dead, Fortunately with Canaccord Genuity.
Hi, Thanks, and congratulations on the on the quarter through a different difficult period.
Thanks first question Andrew.
I guess just dig in a deeper on the project side of the business I guess in in a in near in the near term, we're still dealing with.
Are you know the covidien and limitations, but it would seem that longer term the.
The work from home phenomenon is likely to stick at least somewhat and so in that context I'm wondering if you could talk about your expectations of municipalities and the where the stressors are coming from particularly in an environment where.
Pressure on a there's going to be pressure on taxes, but there's a massive availability of.
Capital in the in the markets.
Yeah.
We will see the activity on that project Scott continue.
And even if that to work from home environment as far as we are concerned.
I've been able to adopt that's environment very very well, so it's not going to affect.
As far as the the customers and.
Because of the need on the infrastructure upgrade that they might have ways to boil. It was it Sheila and that might his replacement and they do not have the fonts to do that replacement.
And that's what are we at approach them as they look you can get those boilers you can get to feel as you play and the finance it will come from US was very good.
That's why we feel very optimistic is the financing of this project. It's continues to be very very strong.
[noise] exactly that's why I was asking George I mean, I wasn't asking from a negative I would I would assume that this is it you should be seeing an acceleration in Europe on on that project side and that it's not a short term phenomenon, but something that even if you.
I assume that theres, a 50% or 30% attached to a to this being kind of the new normal it should continue a for awhile.
I I agree with you, but I don't want to do over optimistic, but they'll my comments as you saw it basically we we feel strongly but the quoted to 19 situation on the out and that will we see an acceleration of the business no how much impact a little have the fact that they're working.
From their homes are they cannot get their voice together well they don't forget the school comedians together to approve the projects and that's what are you might see some challenges, but I think as ever and I think I mentioned that some of the last call as people get used to it and we were able less time to get some school committed this together and get some president sessions whenever.
Some projects evaluations, India in the RFP process.
Well, that's beginning to adopt not only us in our employees, but on the other side down customers and that's why I said on the pipeline, we see pretty good activity.
And we were surprised.
That's the awards for the quarter went up.
Of course, Orijin, if you remember last call I said that we will pretty much see flattish does business development, but on the other had we saw some business pick up.
We think on the other side or they will accelerate but we want to be cautious you know, we don't want to sound overly optimistic but the trend.
I think that the offering the flexibility in the financing sometimes people underestimate the how powerful that impacted.
So the customers and you know I've been in that business for 30 years.
Uh huh.
The concept the last five years is beginning to get better and better traction in the marketplace and that's why did you see our businesses accelerate and of course aboard not just us but tell about competitors and then in addition to that's what's happened all the advanced technologies the cost of ownership come down so the projects I get it.
Larger and much better for for the clients.
Got it that's a that's helpful.
I, just I guess from a metric perspective, I would assume head count might be or the best way to measure that could you talk a little bit about.
Head count now and what we should Oh, I expect that to grow stay flat decline how should we think about that is that overlays with a with your comments on a on the higher yeah.
I I was thinking the headcount will continued to grow but you know we have some leverage operating leverage.
In order to get more projects construction you didn't more project managers unit more design engineers.
There is very hard to duplicate people or I'll get much more productivity out of them. So you will see us, adding more people, but administrative stuff or maybe more accounted mobility than someone.
If you were seeing some growth but.
The topline growth faster than was the Opex line grows.
Great One last question for Doron.
Last quarter I asked about a credit markets and you know just in that time and turmoil with respect to yield yields have come down, but the the availability of capital seems to be or you know it is full is we've ever seen it I'm just wondering if you could.
Provide any comments in terms of what you're seeing in a in the credit markets at this point, a yeah and that's it.
Sure well I mean, I I think B, we mentioned some nonrecourse financings in the the.
In my my comments about liquidity and I think that we're still continuing to see inquiries on the non recourse side and the asset based financing that market continues to be a to be quite active.
With respect to other capital markets I think it is fair to say that the the market is.
Uh huh.
Is very active right now I think we consider ourselves or to have multiple alternative ways to go to raise capital currently and it doesn't seem to be slowing down and specifically to George's comments about some of these municipal.
And even federal contracts. The funds that are that are pouring into so no U.S.P.C. contracts the rates continue to come in the the interest in the projects continues to go up so I think we're feeling.
Feeling fairly fairly confident right now and where where our capabilities are in terms of raising capital.
Great I'll jump back into the queue. Thank you.
Sure thing joint venture.
Our next question comes from Craig burden with Roth Capital Partners.
Hi, good evening and congratulations on another really solid quarter here.
That's it thank you okay.
One of the things that I noticed sort of going through the piano is sure your operating expenses seem to be tracking a little bit lower than what the at the revenue upside would have thought maybe have suggested I think were down two point threemillion sequentially in three and a half million year over year.
Despite nice gross.
Can you maybe comment about.
Where the reduction in operating expenses is coming from.
You know if it's something that's that's maybe a sustainable or is it related to project development.
What can you share with us about the reduction in expenses here.
Yes, as aren't quite as though we did.
You know very careful to make some oh wise.
Got you might say transition expenses, and so on but what's helping us the more right now is this shift.
Importantly, Lara Affleck team to develop men and do the execution side and because if you recall, we said that the we might slow down.
On a that develop and the sale site side. So sounder people it wouldnt be working in development they've been working to actual projects. So that they are.
Yeah salaries and been charged to actually direct costs and and that's why we get spending more and more dollar she though the development and in order to increase the.
Our business and growth a top line then.
And on the awards as well as the contracted backlog you will see some others expenses come back up and during my went out little bit more color to that.
Craig I think not not surprisingly still not a whole lot of travel going on I think you know we will continue to focus on controlling costs. We we aren't really changing the way we're guiding opex because we feel like you know as George mentioned his business activity and business development activity pick.
Next up then you know we potentially could have more of these salaries and benefits allocated to pre award costs that go to Opex as opposed to you know cost of goods sold in contract execution are capitalized costs. When we're going through award. So I think that that's a a that's a pattern that we're going to continue to keep our eyes on.
And at the same time of course, you know.
Like like I mentioned, we're we're looking at controlling costs and all the way that we can adjusted to the cold and working environment. They couldn't about real estate you know, we've we Oh, we're we're not blind to two ideas about ways to keep our cost base down as long as we can remain productive like.
We have.
[noise] X Suntrust, just maybe a little color around that can you maybe share with that's approximately how many employees for moved from business development over to operating execution.
Oh.
Yeah, Craig So it's actually not a number of employees and there's not a specific assignment we have 'em, we have staff who cover multiple responsibilities in essence, what happens is that you know portions of their time, our track two particular projects as to be as opposed to being tracked to business development.
Activities in the simply it it's not a it's not a head count shift.
Equation.
I mean for example, we have about <unk>.
How their development engineers and the good parts of those the engineers they work in developing new projects.
And now we have a good part of them charted to someone that time based working on projects that during the design build to various projects that we have.
In the pipeline.
Understood. Thank you for that so one thing that really surprised me this quarter I'm supposed to be awarded backlog and the total backlog were up sequentially in an environment, where I understood the customers where or.
ER awarding last as far as total contracts out there can you maybe share with us if you feel you outperformed the market here <unk> do you think that there is potential for similar momentum to continue in third and fourth quarter. So the year, what should we be paying attention to here.
As far as Sam Emirates, because competitive position on R&D project capture.
Now I will start from the last month that a go up I don't know competitive position I think we feel very very good where we are.
Our.
The market position is very good than we are winning that.
A good chunk of it projects that we go off that especially the ones that we say okay. This is the one that we want to when we when it make it investment and we're doing very very well.
Look I think our people.
Good thing.
Surprised me a lot they have.
Done an outstanding job not executing the projects, but engaging the customers. We have we started the program about a couple of months ago, We say listen we have to go to Reengage the customers and we implemented the elsewhere program, where are we going to us we have direct access to the g. if its.
I get to walk so that's what I've been working with developers and so on and it's helping out business and.
What I would say on I said, we said before we think that it has some momentum, but how much and how long will take it takes time and that's why we are little bit cautious to make sure that we deliver what we promise and but the business trend is good.
And I think that's a good messes that we have that we feel better about that's why I said, the exciting growth opportunities coming down the pipe. It could we see that basically our market is expanding or contracting because of the new things that we can add into our offering and the customers can take advantage of it.
[noise] Green and then last question if I make.
A lot of investors out there are excited about the stair step addition of additional RMG plants over the next few years 123.
It's a great progression.
What's very difficult to quantify from from someone outside the Companys how big are these stairs, we're stepping up.
Can you maybe share with us approximately what we're looking at as far as the size of the stare at some megawatts I gallon equivalents and the other factors that that will impact the incremental EBITDA such as.
L. CFS eligibility RIN ER RIN.
Lock agreements and then offtake agreements necessary with the the parties, where you're citing the.
The landfill caps or the news to new generating facilities.
Yeah. It right now again I'm going to stuck with it.
That's part of their question right. There could we are working on some potential long term.
Agreements for the Offtakers and we have two or three potential clients. We are working with them, but as you understand because the ring prices were down of those guys I wanted to get the good deals and now they're coming up because they're learning prices have come up but the long.
To make a long story short I do definitely believe that many of the gas utility companies, but we've been talking to them ultimately they will.
Executed long term contracts for those that green gas projects as far as the size is I don't think we give a spend too much time. They want anything I think we did disclose before that mccarty is about half of the size of a would live there one of those we'd have up in Michigan and the other two I don't think lose you have a come back with any specifics on.
But.
They they ask smaller I will give you that's kind of color at this point in time.
Ultimately, we will come up with some numbers for them.
Excellent excellent. So then another question on this line.
It appears from analyzing some of the other companies and talking to people involved with private companies in the space that MRF SCO has outperformed many of its appears sit on own green gas generating facilities and one of the reasons I believe it's due to your conservative I guess.
Hedging practices.
Can you maybe explain those a little bit for investors on this call and if you could share any color about the typical <unk> average duration of your your hedge agreements and what sort of protection you have at this point for this three existing facilities.
The I will say that Oh.
[laughter].
Two aspects on that performance that I've seen some analysis on the street about Oh, or a business, especially on the landfill gas too.
Energy or green gas performance.
If you recall, we were on the first first companies to get to disease space and we have developed what I call. It top quality team all the way from assessing how much a landfill gas there arent those sites, we have our own people into the analysis out there extracted out to do you find it and built a the power plants are the electric or.
The green gas plant. So we have our own teams and we do our own MPC and I will say this much too we spend a little bit more dollars than some other people in building the plant.
But they operate better than some other brands in the industry as far the hedging I would say that 50% nothing but less than 50% of outboards is scheduled for about three years right now.
And about 70% of the output is hedged for the rest of the yet for this particular here.
So that's that's where we are and and we look at the market Deli and I'd make.
At least one call myself and we watch it and if the market. This is right. We increased the amount of hedges we had in place and last time I think we were 55% to 60% hedged for the balance of this year and that we had up to 70%.
At relative prices than.
What do you have seen the them going on right now.
Excellent. Thank you for that coloring and congratulations again on the very strong quarter.
Thank you Greg Thanks very much.
Our next question comes from Eric Stine with Craig Hallum.
[laughter] everyone. Thanks for taking the questions.
Sure there.
Hey, so most most have been or have been touched on but just maybe on the M&A side I mean, I know you've had a.
History of opportunistic acquisitions I'm, just curious as you think about your offering whether its geographic expansion.
Product capabilities project capabilities.
You know thoughts there that you might want to fill in and then also you know just thoughts on weather on covert 19 might present, the opportunity that you can be a bit opportunistic here.
So Eric I think it's fair to say.
Anything specific to talk about however.
You do have a point about cobot 19, I would say the you know the.
Level of.
You know discussion an opportunity just as as we as we look out into the market to see what.
See what we might we might think about.
Is.
Is increasing but we're not.
We're not.
We're not going to go on some sort of you know blast of acquisitions just because.
It is something that you know bankers like to talk about we were being very very thoughtful and we're considering what are options are and I think that.
We were going to continue to be opportunistic same way that George always was from when he founded the company I think that's that opportunistic if I add and disciplined Indiana today, if we acquired a company we're going to make sure it's accretive.
And in addition to that's it serves what I call some strategic purpose, but I wouldn't pay for [laughter] does that it yes.
Maybe be in a geography that we have not very strong and we think that market is developing any of that particular.
Place in that particular company might be on divergence for what we can we think we can do with it or might be a product offering in this new environment that we think it's going to help us but.
Yeah, you know we have very good footprint across the United States, we are very good capabilities.
For us when did not have to overspend to acquire any company.
Given a very disciplined very careful because all we are we are growing organically and it's been very good for us and the bid we are pretty good base.
But it's a great opportunity comes along we will know let it go but.
No I understand thanks for that and then maybe last one for me just kind of high level well first of all to confirm I know on last call you thought that you'd have about $10 million that would get pushed at the third quarter, because the coal bid and given the strong result is it fair to say that did not happen in that that did get done in the second quarter.
And then maybe I mean from a high level is there a way to think about maybe linearity of results just based on what you're seeing from your project schedules today.
So the short answer is.
We we did experience some of those revenue slipping out, but then there were other projects, where we actually did some more pulling in.
So it and you saw the results from the quarter. So I think that's probably the best way to describe that as far as you know looking through the rest of the year I think that will continue to just kind of stick with the way we talk about our expectations for the year you know we still believe there's no.
Because of the case rise is going on there still uncertainty with respect to covert it's still very hard to tell kind of how things might take shape, but based on what we see in front of us we still feel good about the year and that's why we reaffirm guidance.
[laughter], Okay. That's great. Thank you.
Our next question comes from Chris I'll be would be where we I feel or.
Oh, Thanks for taking my question on the solar piece.
Well. Thank you you added seven megawatts the operation. So grew the development pipeline nicely can you walk through the pipeline from regional or type of customer perspective, where are you seeing the bulk of there's opportunities on how that competitive market is looking for these types of new projects.
Sure. The I I don't think we've we've really given much information in terms of detailed geographic breakdown, but I would say that we have a development groups strong development groups in the east coast in the Midwest Central as well.
I was in the southwest. So these assets are coming from each of those areas. I think if you look back to the company's history. Several years back you would've seen a lot of those assets here in the northeast. However, I think now we're a we're doing a good job kind of spreading that around.
We do have a mix of some community solar development here in the east we have of course, our traditional market customer the bush market, which is allowing us the opportunity to do solar on landfills solar on carports as well as rooftop work.
Both in the most market in the CNR space. So its Oh, you know the only thing that I didn't mention is kind of your traditional large 200 megawatt utility scale.
Ground mounted solar project, that's not a particular market that we're in right otherwise it's fairly evenly belt.
Yeah, and what am I add tools out on the competitive side. What he has helped US a lot and we think is going to continue to help us lot.
Manny projects to the solar brothers as we have they have behind lets say customers.
We have done business with like like say Whalen School system then we'd.
We did then as shape or form. This contract then we did the solar and that's important you can school system initial one and is.
And this is why we feel very excited about the market opportunities really distributed energy resources and of course solar is one of them economics kept come down and people who want to reduce the a couple of carbon footprint.
You see substantial amount of solar installations for the municipality is school systems and now colleges universities hospitals system, and so on and that's where we have a competitive advantage in the marketplace because eight would you ever distribution channels across the country and what are they see it sounds sold was the southwest.
Yeah, and B, we have the relationships and all the developers out there that they can start talking to the best where are you talking a solar developer okay because of the rights in Massachusetts. It was a great program that comes from Massachusetts event. That's good.
So as not as good they have to a pick up and go somewhere else. We don't have to do that and that gives us the grades competitive advantage in the marketplace plus that's how we leverage the organization.
No we have a great great platform, but that's why I feel excited about where we are.
And we see all he is a opportunities emerge we will take advantage of the platform that we have in place.
Understood that's very helpful color.
Called out strengthen a lot of different end markets, you're playing and <unk> are there any that had been kind of more impacted during covidien arcing slowdowns or it seems like there are lot an opportunity to capitalize on.
Looking at their budgets and looking for ways to save but can you just curious if the right Randy kinda softer spots.
I think just a glancing around the room here, maybe uniformly people think the hospital sector is probably one where you know site access might be a little bit more difficult and and.
As you yeah, as we talked about with the award cycle and award to contract cycle. You know you need the attention of senior executives at some of these institutions and they have a lot on their minds right now yeah, Oh I'm sure. Good if I might add though no a couple of jobs that we had we had some.
Closed they told US we cannot work and they want a couple of hospitals, but as the number of passions went down then they told US and we went back in.
And that's why is over the last call. We had mentioned that we got to a shutdown decides or a set aside the place and then start all over again remobilize insulin and we had that happen.
The only other had some with the school systems. They shut down they said they take us they seek us out first and then they say well now that we don't have anybody here come back [laughter]. So its a.
Lets hospitals I would say that it's probably the ones that have most challenging.
Understood and then you have just heavy into kind of the election or there should we expect any impact on federal contract cycle, how did that or is that no not really factor for most of the stuff. You guys are looking I will say this most of the federal sector continues to be very strong.
And one of the things that.
Makes us feel is very very good.
They have given seemed little bit more of a design build contracts and we have won a good chunk of this project in the past.
It seems like based on the activity that I see the that's the track record this continuing and.
You know we signed one contract this a less Florida, we anticipate that a little have another good here in the federal market.
Understood I'll hop in the queue. Thanks, guys.
Thank you Chris.
Last question comes from probably more troubling Brendan James.
Thanks for taking my question Ivan.
Given your skill set and developing our in G. project.
I'm curious what you think about green hydrogen this is something that we're seeing more and more headlines about probably not as much actual build out at least yet.
But I'm curious if that's something that you would look at participating in given me Jason Steed to what you have done for a long time.
Look I have you it's an area that we're looking at it very carefully and sometimes you fuel when a token live live but much more about it should talk to Michael back US who is running the.
Business for us, but are we talking to some people have if they are in that business.
And I think it you will see a b.
In the area that we will be doing something down the road until they have some specific thing talk too much about it but it's just technology that we're looking at it and I think Kevin the assets for example, the green gas plants, we Shouldnt go to hydrogen after that didn't have tremendous upside value in those plans that we have.
So it's something that we're cognizant and and we and I think by the way the market.
Huh hydrogen will develop.
No it might be to one or two years down the road, but it's coming.
Okay. That's helpful.
I forget get a common for me on me.
European opportunity I think since your last call we saw a lot more headlines.
Coming out of Brussels about the climate law and the European Green deal.
Of course, T.K. footprint by curious if you're looking at opportunities within the E U itself.
Ah, yes isn't a as we pointed out unless the last time, you know that will UK operation as they are picking up and we're very excited about the backlog that they have a over there and they are very good position right now and because we've been reading the same.
Articles that you have and I have us dollar stuff to see if we can think developed a flat and how to take advantage of whats coming down the pike. So we're very cognizant of the opportunity and ER.
We will look at it very very carefully and Oh I wouldn't be surprised that we will develop Atlanta.
That is going to make that unit in Europe growth for us.
Appreciate it.
Yeah, Okay, I mean, we have what I wouldn't call.
Good to <unk>.
Ooh, the wind behind the our sales and but based on what's happening in a quarter of poverty 19, and <unk> and across the globe I think the opportunities are growing rather than shrinking.
And then for us so we have to be careful that.
We developed plans and we move into especially in new markets very very carefully.
When we are in a very good truck right now, we're doing very well and we are going very well, but on the other had a these opportunities are they come and they go so take advantage and what are your cat.
Wisely.
Ladies and gentlemen, this does conclude todays presentation. We thank you for your participation you may now disconnect have a wonderful day.
Thank you very much.
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