Earning Date, Transcript Summary & Report

Quarterly Revenue Surge: Fourth quarter revenue increased 24% year-over-year to $58 million, supported by broad-based growth across all revenue streams.

Record Rental Revenue Growth: Rental revenues increased by 28% year-over-year, reaching a new single quarter record, driven by growing demand from core utilities, transmission, and critical infrastructure customers.

Gross Margin Improvement: Gross margin improved by nearly 500 basis points to 39.2%, the strongest level in two years, indicating improved profitability.

EBITDA Improvement and Growth: Adjusted EBITDA improved to $17.1 million in the fourth quarter, a 35% increase versus the prior year and doubling sequentially, reflecting higher revenue and improved operating leverage.

Revenue Performance Overview: For the full year, total revenue increased by 5% year-over-year, with a 7% increase in rental revenue and a 24% increase in product sales, showcasing strong performance despite a decline in service revenues.

Record Product Sales Success: Record level of product sales at $72 million in 2024, illustrating the success of the strategy to displace traditional timber matting with DURA-BASE composite matting.

Rental Fleet Expansion Investment: Invested $33 million in the expansion of the rental fleet in 2024, including $10 million in the fourth quarter, enhancing customer responsiveness for critical infrastructure projects.

2025 Revenue and EBITDA Outlook: Expectations for 2025 include total revenues in the $230 million to $250 million range and adjusted EBITDA in the $60 million to $70 million range, indicating positive growth outlook.

Cost Optimization Strategy: Continued focus on operational efficiencies and cost optimization, targeting SG&A as a percentage of revenue to reach mid-teens range by early 2026, reflecting commitment to improving profitability.

Share Repurchase Authorization: $50 million share repurchase authorization in 2025, demonstrating commitment to returning capital to shareholders.

Service Revenue Decline: Service revenues declined by 15% compared to last year, reflecting a strategic shift away from service-intensive projects that did not meet return thresholds, impacting revenues by over $10 million.

Revenue Growth Challenges: Despite a strong finish to the year, the overall full year revenue growth was only 5%, indicating potential challenges in sustaining growth across all segments.

Sector Revenue Diversification Issues: The utility sector, while a significant contributor to revenue, also saw declines in other sectors such as pipeline and oil and gas, suggesting a lack of diversification in revenue streams.

Foreign Exchange Losses: The company experienced foreign exchange losses of $700,000 in the fourth quarter, contrasting with gains in the previous quarters, indicating potential volatility in international operations.

Negative Operating Cash Flow: Operating cash flow was negative at $4 million in the fourth quarter, primarily due to $20 million used to fund revenue-driven growth in receivables, raising concerns about cash flow management.

Rising SG&A Expenses: The company faced increased SG&A expenses, which were up 5% year-over-year, despite a decrease from the prior quarter, indicating ongoing cost pressures.

Effective Tax Rate Impact: The anticipated effective tax rate for the full year was 32%, which could impact net income and cash flow available for reinvestment or shareholder returns.