Charah Solutions, Inc. · OTC:CHRB
Charah Solutions — Investor Presentation (April 2019)
27 slides from Charah Solutions's investor presentation, Apr 9, 2019
Slide 1: Investor Presentation April 2019
Investor Presentation April 2019 Exhibit 99.1
Slide 2: Forward Looking Statements
Forward Looking Statements Forward Looking Statements This presentation and our accompanying comments include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “e
Slide 3: Why Invest in Charah Solutions?
Why Invest in Charah Solutions? Substantial Growth Prospects Accelerating demand for remediation and recycling of coal ash New technology offerings expected to provide competitive advantage More than $3B in bids outstanding, largest ever in Company history (multi-year revenue opportunity) Potential
Slide 4: A Leading Provider of Environmental and Maintenance Services to the Power Generation Industry
A Leading Provider of Environmental and Maintenance Services to the Power Generation Industry Service Location Corporate Headquarters Service Area Expanding National Footprint Diverse Customer Portfolio 37+ Coal-Fired Power Plants 14 Nuclear Power Plants 30+ MultiSourceTM Materials Network Locations
Slide 5: Investment Highlights
Investment Highlights Contract-Based Financial Model Provides Long-Term Stability and Financial Protection Long-term partnerships with leading power generators; ~90% renewal rates in Fossil Services Cost-reimbursable or unit-price contracts; no commodity exposure; little cyclicality to business Net
Slide 6: Multi-Faceted Growth Strategy
Multi-Faceted Growth Strategy Increase Market Share, Diversify Customer Base & Expand Services 2 Capitalize on Growing Need for Environmental Remediation 1 Execute on Technology Deployment 3
Slide 7: Capitalize on Growing Need for Remediation
Capitalize on Growing Need for Remediation Significant total addressable market for ash pond and landfill closure or remediation Estimated 1,100+ Ash Ponds and Landfills Require Closure or Remediation 90%+ Still require closure or remediation <10% Closed or remediated in last 5 years Large and Highl
Slide 8: Regulatory and Public Policy Trends Driving Customer Need
Regulatory and Public Policy Trends Driving Customer Need Coal ash cleanup bill wins bipartisan backing in Virginia North Carolina Requires Duke Energy to Remove Coal Ash From All Storage Basins Virginia Governor approves law requiring Dominion to excavate all coal ash Coal ash contaminating groundw
Slide 9: Recent Regulatory Developments
Recent Regulatory Developments Virginia Clean Closure Legislation Signed into law in March 2019 Affects more than 27M tons of ash stored in CCR lagoons for four Dominion Energy power plants; requires beneficiation of at least 25% and clean closure of remainder Represents significant opportunities fo
Slide 10: Increase Market Share
Increase Market Share Well-positioned to grow market share Proven track record Industry-leading quality, safety and compliance Unmatched broad suite of services Customer trend toward consolidating service providers Customers looking for more sophisticated partner Investing in technology and process
Slide 11: Byproduct Sales
Byproduct Sales Opened first slag grinding facility – Albany, NY Launched first MP618TM Thermal Fly Ash Beneficiation Facility – Sulphur, LA Constructing slag grinding facility – Houston, TX Most cost-effective technologies available Executing on Technology Rollout Charah Solutions’ MultiSource Mate
Slide 12: 2018 Financial Review
=> Charah Solutions 2018 Financial Review
Slide 13: Fourth Quarter and Full Year 2018 Highlights
Revenue growth of 20% driven by early completion of Brickhaven Adjusted EBITDA1 growth of 12% Comparable year-over-year EBITDA margins Please refer to the supplemental slides in the Appendix for Adjusted EBITDA reconciliation to the most directly comparable GAAP financial measure. Revenue Fourth Qua
Slide 14: Liquidity of $50M; Debt & Leverage
Liquidity of $50M Cash: $7M Revolver2: $18M DDTL3: $25M Expect to receive significant cash payment from Brickhaven customer in 2H19; portion to repay debt Expect leverage ratio in 2.5x – 3.5x range over course of 2019 (due to lower EBITDA) ($ in millions) (Pre-IPO) As of 3/31/2018 As of 9/30/2018 As
Slide 15: 2018 Cash Flow
2018 Cash Flow Cash flow from operations (pre-changes in W/C) $48.6 Change in W/C (62.2) Operating cash flow (13.6) Capex Maintenance and growth (32.0) Technology (3.5) Free cash flow before SCB acquisition (35.7) Change in working capital inclusive of $79M increase in CIE primarily driven by the ea
Slide 16: 2019 Guidance & 2020 Outlook
= Charah Solutions Eee Fee & 2019 Guidance & 2020 Outlook for USTED NYSE
Slide 17: 2019 Guidance
2019 Guidance 2018 Actual 2019 Guidance Range Revenue $740 $650 - $800 Net income (loss) attributable to Charah Solutions $(9) $5 - $20 Adjusted EBITDA1 $99 $50 - $65 ($ in millions) Midpoint of 2019 revenue guidance is ~ 2% below 2018 actual Lower ES revenues due to Brickhaven acceleration, partial
Slide 18: 2019 Guidance Bridge
2019 Guidance Bridge ($ in millions) Brickhaven acceleration offset by no second feeder pond Loss of Brickhaven and no second / third feeder pond(s) Numbers are rounded for presentation purposes and may differ from actual results or forecasts 2019 guidance range $50-$65 2018 actual of $98.8
Slide 19: 2019 Outlook
2019 Outlook Business Segment Segment Commentary Consolidated Environmental Solutions Remediation and Compliance Services Lower revenue due to early completion of Brickhaven contract (booked in 2018 rather than future years) Gross margin (%) expected to be lower in 2019 due to completion of some hig
Slide 20: 2020 Outlook: Our Expectations
2020 Outlook: Our Expectations Well positioned for at least 20% revenue growth in 2020 Size and quality of outstanding bids Prospects for conversion in 2H 2019 and 2020 Favorable market and regulatory dynamics accelerating need for remediation Increased market penetration of our technologies Potenti
Slide 21: Charah Solutions: Poised for Continued Growth
Poised for Continued Growth Charah Solutions: Poised for Continued Growth Leading Provider of Environmental and Maintenance Services to the Power Generation Industry Partner of Choice with Unmatched Broad Suite of Services Significant Free Cash Flow in 2019 Industry Leader in Quality, Safety and Com
Slide 22: Appendix
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Slide 23: Additional Detail on Key Expense Items (2018 – 2019)
Additional Detail on Key Expense Items (2018 – 2019) General & administrative expense Reported G&A expense $76.8 Add back: Amortization of purchase option liability 15.2 Less: Non-recurring and non-operating legal costs and expenses 25.4 Non-recurring startup costs 1.5 Transaction related expenses a
Slide 24: Environmental Solutions
Environmental Solutions Revenue growth drivers: coal ash remediation, byproduct sales and the acquisition of SCB in March 2018 Q4 and FY 2018: Revenue increase driven by acquisition of SCB and remediation and compliance projects, including accelerated revenues due to Brickhaven early completion Bypr
Slide 25: Maintenance and Technical Services
Revenue Gross Profit Maintenance and Technical Services Both Fossil and Nuclear Services operate under long-term contracts; recurring revenue Significant revenue growth in 2017 and 2018 driven by addition of low-risk, lower-margin Nuclear Services business in mid-2017 Q4 2018: Lower revenues due to
Slide 26: Non-GAAP Reconciliation: Adjusted EBITDA and Adjusted EBITDA Margin
Non-GAAP Reconciliation Adjusted EBITDA and Adjusted EBITDA Margin Represents non-recurring legal costs and expenses, which amounts are not representative of those that we historically incur in the ordinary course of our business. Represents non-recurring costs associated with the startup of Allied
Slide 27: Non-GAAP Reconciliation: Adjusted Net Income and Adjusted EPS
Non-GAAP Reconciliation Adjusted Net Income and Adjusted EPS Represents non-recurring costs associated with our term loan refinancing. Represents non-recurring legal costs and expenses, which amounts are not representative of those that we historically incur in the ordinary course of our business. R
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