Charah Solutions, Inc. · OTC:CHRB
Charah Solutions — Q1 2019 Earnings Presentation
20 slides from Charah Solutions's earnings presentation, May 15, 2019
Slide 1: Q1 2019 Financial Results Supplement
Q1 2019 Financial Results Supplement May 15, 2019 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 Financial Highlights and Business Update Scott Sewell, President and CEO Financial Results for Q1 2019 Review of 2019 Guidance and 2020 Outlook Nick Jacoby, Interim CFO and Treasurer
Slide 4: Q1 2019 Business Updates
Q1 2019 Business Updates Bids outstanding now in excess of $3.5 billion Opened additional fly ash storage terminal in MA Continued to receive strong customer interest in MP618TM fly ash beneficiation technology; expect to convert this interest to awards in the second half of 2019 Two slag grinding f
Slide 5: First Quarter 2019 Highlights
Revenue growth of 5%, in line with the Company’s expectations, driven by the acquisition of SCB Materials International in March 2018 Gross profit decrease of 19%, primarily driven by adverse weather-related impacts and specific issues at three sites leading to unanticipated cost increases Year-over
Slide 6: Growth Potential and Drivers
Growth Potential and Drivers Expanding Pipeline of Opportunities Compelling Value Proposition to Customers ~15% of current bid pipeline has been verbally awarded to Charah, exclusive negotiations underway Expected to announce new awards over remainder of 2019 Overwhelmingly Positive Response to Tech
Slide 7: Progress on Technology Rollout
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; expected to be online in Q3; sales in Q4 New MA fly ash storage terminal Most cost-effective technologies av
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: Q1 2019 Financial Review
= Charah Solutions Q1 2019 Financial Review
Slide 11: Business Segment Performance
Business Segment Performance First Quarter 2019 vs. First Quarter 2018 Revenue 14.2% 26.1% Gross Profit Revenue 6.8% 6.2% Gross Profit Maintenance & Technical Services 3% Revenue Decrease Environmental Solutions 22% Revenue Growth Revenue decrease driven by reduced scope of nuclear outages Strong re
Slide 12: Q1 2019 Cash Flow
Q1 2019 Cash Flow Cash flow from operations (pre-changes in W/C) $5.4 Change in W/C 0.7 Operating cash flow 6.2 Capex Maintenance and growth (3.3) Technology (3.4) Free cash flow (0.5) Positive operating cash flow; improvement from prior quarters Capex spend expected to increase over remainder of 20
Slide 13: Debt & Leverage
$ Millions (Pre-IPO) As of 3/31/2018 As of 12/31/2018 As of 3/31/2019 Cash and Cash Equivalents $9 $7 $6 $50 Revolver ($45 prior to refinance) -- $20 $21 Equipment Financing $21 $35 $38 Senior Secured Term Loan $245 $202 $200 Total Debt3 $266 $257 $258 Net Debt $257 $250 $252 LTM Adj. EBITDA $78 $99
Slide 14: 2019 Guidance & 2020 Outlook
= Charah Solutions Eee Fee & 2019 Guidance & 2020 Outlook for USTED NYSE
Slide 15: Revised 2019 Guidance
Revised 2019 Guidance Original 2019 Guidance Range Revised 2019 Guidance Range Revenue $650 - $800 $550 - $650 Net Income attributable to Charah Solutions $5 - $20 $5 - $15 Adjusted EBITDA $50 - $65 No change ($ in millions) Lower revenue guidance driven by delays in timing of new business awards Lo
Slide 16: 2020 Outlook: Our Expectations
2020 Outlook: Our Expectations Well positioned for at least 20% revenue growth in 2020 from previous 2019 guidance range of $650M to $800M Size and quality of outstanding bids Verbal awards received to date Prospects for additional conversion in 2H 2019 and 2020 Favorable market and regulatory dynam
Slide 17: Appendix
oon BENE APPENDIX
Slide 18: Additional Detail: Key Expense Items in 2018 and Outlook for 2019
Additional Detail Key Expense Items in 2018 and Outlook for 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 relate
Slide 19: Non-GAAP Reconciliation: Adjusted EBITDA
Non-GAAP Reconciliation Adjusted EBITDA 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. Negative amounts represent insurance recoveries related to these matters. Represents non-recurri
Slide 20: Non-GAAP Reconciliation: Adjusted EPS
Non-GAAP Reconciliation Adjusted EPS 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. Negative amounts represent insurance recoveries related to these matters. Represents non-recurring