Charah Solutions, Inc. · OTC:CHRB
Charah Solutions — Q3 2018 Earnings Presentation
18 slides from Charah Solutions's earnings presentation, Nov 13, 2018
Slide 1: Q3 2018 Financial Results Supplement
Q3 2018 Financial Results Supplement November 13, 2018 Exhibit 99.2
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: Agenda
Agenda Third Quarter Highlights & Regulatory Update Charles Price, President and CEO Business Operations Update Scott Sewell, COO Financial Review and Outlook Bruce Kramer, CFO and Treasurer
Slide 4: Highlights vs. Third Quarter 2017
Revenue growth of 56% driven by: Growth in coal ash remediation Addition of Nuclear Services Acquisition of SCB International Adjusted EBITDA1 growth of 57% Comparable year-over-year EBITDA margins Please refer to the supplemental slides in the Appendix for further Adjusted EBITDA reconciliation to
Slide 5: Business Developments
Third Quarter 2018 Business Developments Significant Milestones Refinancing of long-term debt; results in significant interest savings and improved financial flexibility Deployment of MP618TM fly ash beneficiation technology Near completion of first slag grinding facility utilizing proprietary techn
Slide 6: Regulatory Updates
Third Quarter 2018 Regulatory Updates U.S. Court of Appeals for the Fourth Circuit Ruled all unlined coal ash ponds must be closed, including clay-lined and legacy inactive ponds, which were previously excluded from the EPA CCR regulations Significantly increases the addressable market and further v
Slide 7: Business Operations Update
Byproduct Sales Opening first slag grinding facility – Albany, NY Launched first MP618TM Thermal Fly Ash Beneficiation Facility – Louisiana Added fly ash storage – Oklahoma City ENVIRONMENTAL SOLUTIONS Third Quarter 2018 Business Operations Update Charah Solutions’ MultiSource Materials Network Addi
Slide 8: Debt Refinance
Debt Refinance Restructured from Term Loan B to Term Loan A Highlights Details Term Loan A Structure $205 million term loan $25 million delayed draw option Revolver $50 million (interest only) no borrowing base formulas Upsized from $45 million previously Maturity 5 Years (September 21, 2023) Term L
Slide 9: Business Impacts Update
Third Quarter 2018 Business Impacts Update Commentary Takeaway Expected Early Completion of Brickhaven Contract As result of change in North Carolina law, Duke Energy expected to discontinue ash deliveries to Brickhaven once Riverbend project is completed (~Dec. 2018) Contract includes financial pro
Slide 10: Key Financial Highlights
Third Quarter 2018 Key Financial Highlights GAAP Metrics ($ millions) Q3 2018 Q3 2017 Revenues $186.0 $118.9 Gross Profit 26.7 23.2 Gross Margin % 14.4% 19.5% Operating income (loss) (5.9) 3.2 Interest expense (17.0) (1.5) Income tax expense (benefit) (5.7) 0.0 Net income (loss) attributable to Char
Slide 11: Business Segment Performance vs. Third Quarter 2017
Business Segment Performance Third Quarter 2018 vs. Third Quarter 2017 Revenue $ Millions 19.1% 28.3% Gross Profit Margin %’s Gross Profit $ Millions Revenue $ Millions 8.3% 8.4% Gross Profit Margin %’s Gross Profit $ Millions Maintenance & Technical Services 55% Revenue Growth Environmental Solutio
Slide 12: Full Year 2018 Guidance
Full Year 2018 Guidance Nine Months Ended September 30, 2018 Guidance Range ($ millions) Full Year 2018 Revenue $537 $720 - $730 Net Income (loss) attributable to Charah Solutions $(13) $(5) - $2 Adjusted EBITDA $76 $98 - $105 Guidance Considerations Additional acceleration of revenues and expenses
Slide 13: Poised for Continued Growth
Poised for Continued Growth Expect to exceed current consensus estimates for 2018 Adjusted EBITDA Strong Pipeline – over $3 billion in bids outstanding Robust Growth Strategy Capitalize on growing needs for environmental remediation Increase market share and expand services Execute on technology dep
Slide 14: Appendix
@ fet APPENDIX mace Fe Al i, va Aiai!
Slide 15: Business Segment Performance Nine Months Ended September 30, 2018
Business Segment Performance Nine Months Ended September 30, 2018 vs. Nine Months Ended September 30, 2017 Revenue $ Millions 22.5% 27.7% Gross Profit Margin %’s Gross Profit $ Millions Revenue $ Millions 7.4% 13.5% Gross Profit Margin %’s Gross Profit $ Millions Maintenance & Technical Services 276
Slide 16: Non-GAAP Reconciliation Adjusted EBITDA
Non-GAAP Reconciliation Adjusted EBITDA The successor columns represent the combined financial information of Charah and Allied for the period from January 13, 2017 through September 30, 2017 and January 1, 2018 through September 30, 2018 as applicable, as reflected in our financial statements inclu
Slide 17: Non-GAAP Reconciliation Adjusted EPS
Non-GAAP Reconciliation Adjusted EPS 1. Represents non-recurring costs associated with our term loan refinancing. 2. Represents non-recurring legal costs and accruals associated with outstanding legal claims, which amounts are not representative of legal costs that we historically incur in the ordin
Slide 18: Debt & Leverage
Leverage ratio reduced nearly a full turn from pre-IPO Ratio now comparable to industry peers Liquidity of $36 million (cash plus revolver less amount drawn and $12.5 million outstanding letters of credit) $ Millions (Pre-IPO) As of 3/31/2018 (Post-IPO) As of 6/30/2018 As of 9/30/2018 Cash and Cash