Charah Solutions Inc (CHRA) 2021 Q1 法說會逐字稿

Good morning, ladies and gentlemen. And welcome to Charah Solutions Inc.'s First Quarter 2021 Earnings Conference Call.

(Operator Instructions)

I would now like to hand the conference over to Steven Brehm, Vice President of Legal Affairs and Corporate Secretary for Charah Solutions. Go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us today. We appreciate your participation in our first quarter 2021 earnings call and look forward to sharing our prepared remarks and answering your questions. We hope that you have had a chance to review the press release we issued yesterday after market closed. If not, you can find the press release as well as our supplemental investor presentation. You may follow during our prepared remarks, on the Investors section of our website at www.charah.com or ir.charah.com.

Joining me today on our call are Scott Sewell, President and Chief Executive Officer; and Roger Shannon, Chief Financial Officer and Treasurer. Following their prepared remarks, we will conduct the customary question-and-answer session. Before we begin, I would like to remind you that our remarks regarding Charah Solutions include statements that are forward-looking statements within the meaning of the private securities Litigation Reform Act.

These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those being disclosed in our earnings press releases and conference calls. Those risks include, among others, matters that we have described in our earnings press release as well as in our filings with the Securities and Exchange Commission, including our quarterly reports on Form 10-Q and our annual reports on Form 10-K. We disclaim any obligation to update these forward-looking statements. During this call, we will refer to certain non-GAAP financial measures. We provide reconciliations to the nearest applicable GAAP measures in our earnings press release and supplemental presentation.

Again, thank you for joining us today. Now I would like to turn the call over to Scott Sewell, our President and CEO. Scott?

Thank you, Steve, and good morning, everyone. It's great to have you join us for our earnings call today. I'm happy to be speaking with you again and providing an update on our first quarter performance. This morning, I'll briefly review our accomplishments year-to-date, provide an update on current business developments and update you on our pipeline of opportunities. I'll then transition the call to Roger to review our financial performance during the quarter.

We are very pleased with the start of our 2021 fiscal year. When we spoke to you 7 weeks ago on our year-end 2020 earnings call, we announced that we had won approximately $500 million in new awards in 2021 to date. These included 2 long-term ash pond closure by removal projects at a major southeastern utility and the acquisition of the Gibbons Creek, Texas, facility, as part of our environmental risk transfer, or ERT, suite of services.

Since then, we have won another $26 million of new awards, including an ash marketing contract with a new customer in Nevada. And sales and operations contract extensions with 2 aluminum facilities. The $527 million in total of new awards so far this year is a continuation of the strong momentum we have coming off our record $715 million of new awards in 2020.

As we stated on our last call, these new business awards, coupled with our existing backlog and opportunities for additional business wins with new and existing customers, position Charah Solutions for strong growth in revenue, earnings and cash flow in 2021 and beyond. We remain confident at the increasing emphasis at the federal and state levels on environmental remediation and the growing demand for fly ash and concrete will continue to create opportunities for Charah Solutions' one-stop platform for remediation and compliance services, by product sales, fossil services and environmental risk transfer services for years to come.

During the first quarter of 2021, we mobilized operations at Dominion Energy's Chesterfield ash pond for the beneficial use of 8.1 million tons of reclaimed ponded coal ash and at the major southeastern utility that I mentioned earlier. We also completed the acquisition of a Texas municipal power agency's Gibbon's Creek steam electric station and reservoir in Grimes County, Texas. And we have begun decommissioning remediation and redevelopment activities at the site.

We are very excited about the Gibbons Creek project. We are also very excited about the opportunity to expand our innovative ERP solutions further to help our utility partners retire and decommission older or less economically viable generating assets. While minimizing costs, maximizing the value of the assets and improving the environment. We continue to see and evaluate new opportunities to provide creative solutions to utilities environmental remediation and compliance challenges through our ERP services, and we expect to have further ERT win announcements soon.

Finally, I want to touch on the strong momentum for our new opportunities that we continue to see as well as our excitement about the outlook for the company. The future remains bright for our business. And we expect to continue announcing more new awards in 2021.

Following our 2020 and year-to-date 2021 wins, we still have over $3 billion of pending proposals. We are in contract negotiations on several projects, and we expect to make additional official award announcements soon. Conversion of opportunities into more new wins will further add to our predictable revenue stream and earnings growth. We also have visibility into an additional $7 billion of opportunities on which we intend to submit proposals between now and the end of 2022.

Our ability to continue to add new customers and new awards with our power generation partners speaks to the essential nature of our services and the reputation, experience and resiliency of our industry-leading team. As we have discussed on previous calls, states are becoming more prescriptive regarding the means and methods of ash pond remediation.

In addition, we believe that the Environmental Protection Agency, under the new administration, will accelerate its efforts on its regulatory requirements, beneficiation guidelines and ash impoundment closure deadlines. We continue to see these movements as positive for Charah Solutions.

As a partner of choice for solving our customers' most complex environmental challenges and as an industry leader in quality, safety and compliance, we are ideally situated to help power producers deliver on their impoundment closure requirements and needs. I am very proud of the way we have partnered with our customers to maintain service continuity safely. And I want to thank again our dedicated Charah Solutions employees who are working every day to help our customers address their environmental and recycling needs. We remain committed to keeping our people safe supporting our customers and growing the business. With that, I'll turn it over to Roger, our CFO.

Thanks, Scott. I'll continue with a review of our financial results and provide an update on our cash flow, balance sheet, liquidity and 2021 guidance. I'll begin with a review of our first quarter results. Our revenue increased $800,000 or 1.6% for the 3 months ended March 31, 2021, to $52.1 million as compared to $51.3 million for the 3 months ended March 31, 2020, primarily driven by an increase of $7.5 million in remediation and compliance and fossil services revenue from the commencement of new projects and additional time and materials work.

Partially offset by a decrease of $6.7 million in byproduct sales offerings due to lower plant production that we believe was due to lower power demand as a result of the COVID-19 pandemic. Gross profit increased $700,000 or 14.1% for the 3 months ended March 31, 2021 to $5.6 million as compared to $4.9 million for the 3 months ended March 31, 2020. This increase is primarily driven by higher remediation and compliance revenue from the commencement of new project work and an increase in gross profit margin on byproduct sales, partially offset by the previously mentioned decrease in byproduct sales offerings.

The net loss attributable to Charah Solutions decreased $13 million or 91% for the 3 months ended March 31, 2021, to $1.3 million as compared to $14.3 million for the 3 months ended March 31, 2020. The improvement was primarily due to the absence of $8.6 million of expenses incurred as a result of an amendment to our credit facility during the first quarter of 2020, again, on a sales-type lease of $5.6 million as part of our ERT offerings recognized during the first quarter of 2021, a decrease in general and administrative expenses resulting from reductions in staff and other cost-cutting measures implemented in April 2020 in response to the COVID-19 pandemic and the previously mentioned increase in gross profit.

We also recorded $500,000 of gains and losses on sales of fixed assets and other operating income from ERT services, resulting from the commencement of operations at the Gibbons Creek ERT project. These increases were partially offset by the absence of $3 million of income from discontinued operations, net of tax, and an increase in transaction-related expenses and other items of $800,000.

Adjusted EBITDA increased $8.1 million or 562% to $9.5 million for the 3 months ended March 31, 2021, compared to $1.4 million for the 3 months ended March 31, 2020. The increase in adjusted EBITDA is due to the previously mentioned gain on sales type lease, the decrease in general and administrative expenses, the increase in gross profit and the gains and losses on sales of fixed assets and other operating income from ERT services.

These changes were partially offset by the previously mentioned absence of income from discontinued operations net of tax. As I've mentioned on previous investor calls, the accounting for our environmental risk transfer projects is different from that of remediation projects at customer-owned properties. In addition to the recognition of the acquired ERT assets and liabilities on our balance sheet, there are now changes to the income statement or consolidated statement of operations and the cash flow statement.

On the income statement, you will see that we've added 2 lines above the operating income line, gains and losses on the sale of fixed assets and other operating income from ERT services and other operating expenses from ERT services. This is where the P&L impacts of our ERT transactions will be reflected. I'll discuss the cash flow implications next.

Now turning to our cash flow, balance sheet and liquidity. In the first quarter of 2021, we recognized operating cash flow of positive $14.1 million. We made capital expenditures of $1.1 million, and we received cash and restricted cash from the Gibbons Creek transaction of $34.9 million, resulting in adjusted free cash flow of positive $47.9 million. As I referenced above, the accounting requirements for our ERT transactions dictate how cash flows are recorded. We believe this necessitated a change to how we define free cash flow in order to align ERT operational activities with ERT cash receipts.

We now define adjusted free cash flow as cash flows from operating activities plus cash and restricted cash received from ERT transactions, which is included in the investing section of the cash flow statement, less cash used for capital expenditures, net of proceeds.

We include cash and restricted cash received from ERT transactions and exclude capital expenditures because we consider them to be a necessary component of our ongoing operations. Specifically, reductions to asset retirement obligations, or AROs, acquired as part of ERT transactions results in the use of operating cash flow. But those remediation activities are funded by cash and restricted cash received from ERT transactions that is reflected in investing cash flow.

Therefore, to provide an accurate picture of our free cash flows, we include these ERT cash and restricted cash receipts to arrive at adjusted free cash flow. Our cash and restricted cash balances increased to $72.3 million as of March 31, 2021, an increase of $43.1 million from December 31, 2020, and due to the receipt of restricted cash from the Gibbons Creek ERT transaction and for a specific remediation and compliance project.

At March 31, 2021, we had gross consolidated debt of $169.8 million. The increase in total debt during the quarter is primarily due to an increase in outstanding borrowings on our line of credit, partially offset by principal payments on our equipment and term loans.

Our liquidity was approximately $39.4 million as of March 31, 2021, compared to $51.7 million at year-end 2020. The decrease in our liquidity was driven by a decrease in revolver availability due primarily to higher letters of credit utilization and increased borrowings to fund working capital. Our, as reported, gross leverage ratio decreased to 7.7x at March 31, 2021, from 11.9x at December 31, 2020. And our net leverage, calculated as net debt to adjusted EBITDA, decreased to 6.6x as of March 31, 2021, from 10.1x at year-end. Both improvements due to higher trailing 12-month adjusted EBITDA.

Next, I'll address our 2021 guidance. As we've discussed in previous calls, we provide mission-critical services to a diversified base of customers, a majority of whom are investment-grade regulated utilities that must continue to produce power through the current economic uncertainties. Though we are not currently seeing any significant disruptions to our business due to the critical nature of our customers' operations, but COVID-19 pandemic and resulting potential for significant business disruptions beyond our control have created a higher level of uncertainty, including, but not limited to, further uncertainties around demand driven power generation.

There are also timing uncertainties associated with the start-up of recently announced customer awards, including ERT awards. As with our 2020 results, the impact of weather, including hurricanes, excessive rain or moderate temperatures could adversely affect our results.

We are, at this time, reaffirming our guidance within the following ranges: revenue of $260 million to $300 million, net loss attributable to Charah Solutions, Inc. of $5 million to 0. Adjusted EBITDA of $35 million to $40 million. And free cash flow of $33 million to $38 million. With that, I'll turn the call back to Scott.

Thanks, Roger. In closing, we hope you agree that our growth in contract awards, expansion of service offerings and our laser focus on environmental sustainability will continue to position the company for long-term success. We remain committed to enhancing long-term value and positioning ourselves to take advantage of the expanding market opportunities, while continuing to strengthen our balance sheet, and reduce our debt levels and improve our leverage ratios.

Importantly, we are closely aligned with our power generation partners, environmental remediation and sustainability initiatives. Which should provide Charah Solutions with significant growth potential for many years to come. Thank you again for your interest and participation. With that, operator, let's begin the Q&A session.

(Operator Instructions) You do have a question from the line of Michael Hoffman.

And nice beginning to the year. But to that, could we talk about cadence? Because if I think about your guidance at the midpoint, you basically did 25% of your EBITDA in the first quarter, but you only did 20% of the sales. So just to get this out there, we're going to see a revenue trend improving, but the actual margin may come down based on mix to flow through the remainder of the EBITDA through the year and -- but continue to expand into the midpoint of the revenue?

Yes. Michael, this is Roger. Thanks for the question. I think -- one of the things that I'll point to when you look at the EBITDA for the first quarter is the gain on the sales-type lease associated with an ERT transaction. So we've got -- we've talked about increase in ERT activity. We -- as we discussed in the press release and Scott's comments had just mobilized on the Gibbons Creek, but you'll recall, we had a transaction that we thought or had expected to close in Q4 of last year, but that could slip. We talked at our year-end call on March 24, that, that, in fact, did slip. So we did adjust our guidance for EBITDA based on that closing in the first quarter, which it did.

So that's kind of the primary driver of a kind of a single item that's positively affecting EBITDA for the quarter. But you're right, the cadence would pick up in terms of sales over the next couple of quarters and then probably expect to see typical seasonality even in the fourth quarter again.

Okay. Just so everybody is clear on how to follow the model through, pull out 5.6 and the association of sales to EBITDA proportioning over the quarters makes a little more sense.

That's right.

Okay. And then you've all filed an S3 on the behest of BCP from the Capital Partners. I remember from the IPO, they have registration rights, and they can and, in fact, ask for this at any time. So they have -- they've asked for all of the shares, which is interesting, so I'm curious if you could give some perspective on why all the shares and then what is their plan, not that selling some of it is not a bad idea, it would help the liquidity. But what is their plan?

Thanks, Michael. This is Scott. No, you're exactly right. We did have a pre-existing registration rights agreement with BCP. They exercised that right, obviously, to have their common shares registered under that S3 that we filed yesterday. And although it's not -- still have been declared effective by the SEC. So that has a process it has to go through. But as it relates to the business and where we see it go, obviously, that we can't say a lot on the subject. We also can't speak for BCP, but we're not currently aware of any specific plans that BCP has to offer any of their shares for our Charah Solutions for sale.

But I think your point that you just mentioned, focused on liquidity. I think we can all agree on that, that any potential shares would serve to improve our trading liquidity and it will also broaden the base of our shareholders, which we believe will be a positive. So excited to see more folks come into the stock.

And is there any indication of a ratable plan like a 10b5-1? I think I've got that right. I always get that acronym wrong, either 105b or 10b5. But anyway, you know what I mean. Is there any thoughts about putting a plan like that, and it just becomes a very programmatic process?

Yes, Michael, I guess I think Scott and I would probably be speculating on that a little bit. It would -- it would probably be maybe an intelligent speculation a little, but again, not having specific knowledge. But obviously, they BCP remains on the Board, control of the Board, as such, are considered insiders. There's a shareholder rights agreement, as we referenced. So our -- again, our guess would be that, that's something that they would -- that might be a logical approach that they would take. Again, we're not aware of any program or any specific plans to do that?

And I guess, related to your question on doing all of it versus just blocks of shares at a time. I think just in kind of brief conversation when they provided the direction. I think they acknowledge that. They -- again, while they don't have specific plans, they bought it better just to kind of rather than create questions of doing piecemeal, just exercise their right and just kind of put it all out there at once, although they certainly wouldn't expect them to do. As we discussed, anything specific that we know of.

Okay. And then there are -- there is some change of control language in the revised credit agreement. So they couldn't do it all at once anyway, right? I mean, it's...

That's a great point. It's absolutely right. There certainly are limitations under the credit agreement. So there are very specific limitations on what they can do. And there's also other kind of limitations related to Section 3 to their -- the tax on inner wells. So we've obviously made them aware of that.

Okay. All right. And like I said, it wouldn't be bad to get some incremental liquidity in the market. So that's -- it's...

No, absolutely. Like Scott said, we see that as a positive. We obviously, have seen the trading volume pick up from what it has been, there's certainly more interest. So we see anything that would increase the liquidity is positive.

Okay. And then with regards to byproduct sales, given your fossil services relationship to utilities, you have, I would think, a pretty good feeling for the rate of generation. So are seeing generation activity start to recover and therefore, enough ash is being produced to support a recovery of the by-product sales revenues?

Yes, Michael, we saw your note yesterday evening, and again, kind of reiterate, I kicked off the comments. It's a good start to the year overall as a company. We did have a lag on the byproduct sales side, a fair bit of that due to weather and low production. But as we see the rest of the year play out, we're hopeful and our expectation is that we continue to see an upward trend. Typically, the first quarter is a low quarter on the byproduct sales side, just from a generation as well as a demand perspective, and we see that ramp throughout the remainder of the year, and we fully expect that to happen this year as well.

Okay. And then you all shared in the queue a revenue comparison year-over-year to March by byproduct, construction and then services. Do you have the same breakdown for 2Q '20, so at least we know what we're comparing to in 2Q '20?

We can certainly provide that. Let me go back to the -- looking through the (inaudible) We got that at our fingertips, so we can certainly get that to you. We'll be reporting that into a net revenue footnote each quarter.

Yes. It's just -- I mean, for the guys who have to make a living modeling, knowing what I'm comparing to helps. So if -- one, I love that data just for 2Q, but if it was possible to do an 8-K and just put out a table that showed it for remainder of the quarters in 2020, that would be very helpful.

Yes. Let's work on that.

Yes, we can make sure we get that out there in the future.

Yes. If we can get this before we end the call, we'll certainly tell you that, but we'll certainly get -- provide that.

Okay. And then last question for me. What's the visibility on any of your EnviroSource contract opportunities? I've now managed to expunge MP618 from my brain, but...

No, Michael, good question. We're continuing to advance conversation with multiple customers. To really moving forward at a good pace. Happy to report also, we're getting good feedback on financing options as well. So that's really moving in a positive direction. My hope would be, at least by the Q2 call, we're able to publicly report some really positive news there, but good -- continued great reception from the customers' and from a testing perspective. And as you know, we kind of -- we're going to slowed through COVID based on some third-party financing opportunities there, and that's picking back up and just seeing a lot of positive reception there. So hopefully, reporting some really good news here in the near term.

Yes. And I -- Roger-- just to add to that. As you know, we published the -- our inaugural ESG report. In that report, environmental social governance in that, we talked a lot about the sustainability and recycling in specifically EnviroSource. And I don't know if it's coincidental or not, but we've certainly seen a great deal of increased interest and some specifics around financing, which had been more of a challenge last year. Obviously, our improvement in our balance sheet over the past year. That is not hurt either. So we're very optimistic about the way that's moving right now.

Yes, I would think to -- I mean, there are multiple drivers here. One, you hit the sustainability button, which is huge; two, the cement industry is just slammed given the housing cycle that's going on. And if we get any infrastructure spend, real infrastructure, I would think that only increases. And you're a cost advantage, by providing them materials as an offset to the virgin approach. So...

Yes -- Michael, you're spot on. We're very excited to see the infrastructure bill and then also e may or may not have seen the Portland Cement Association came out here recently and projected 2021 and 2022 to be increasing year-over-year from a demand perspective and all those things are good tailwinds for us.

Your next question is from Tony Bowers.

We've heard a lot about inflation and tightness in supply chain. Are you -- I guess you cut back expenses and perhaps some staff during the slow period, do you anticipate any bottlenecks of being able to re ramp as the wins that you hope for come through?

Yes, Tony, thanks. This is Scott. Good question. I know there's a lot of tightening across the country and across the globe from a supply chain standpoint and you're right, we did take the right measures in 2019 and 2020 to right size our staff. But as we move forward, we are still going to be able to deliver our materials and supplies and services to all of our customers, and we don't see any disruption there as far as the Charah team is concerned on this end.

Good. And the April 11 date that it came and went, do you hear behind the scenes that, that has motivated more potential customers to take it to the next step in terms of RFPs?

You're talking about the CCR reg, the April 11 deadline on the CCR reg. I assume that's what you're asking about.

Exactly.

Yes. We continue to see out there regardless of deadlines like that. We're continuing to see positive trends, regulatory trends at both the federal and the state level. And I think as we've reminded folks in the past, a lot of the activity we see driving new RFPs and new awards and new business for us is really coming from the state level and really coming from the specific drivers in those regional areas where environmental groups as well as state regulators and utilities are all partnering together to drive to a conclusion. And typically, that conclusion is the right conclusion, and it's one that involves remediation and recycling. So yes, no impact on the April 11 date.

And Tony, it's Roger. I would just add a little bit. We did reference -- me and Steve did reference this in our press release talking about kind of this next wave of business that we see coming. Obviously, the utilities knew about the April 11 deadline under the CCR regs, they have prepared and have been preparing. We've seen kind of a wave of the large utilities that we've consistently talked about and obviously have recently given some award -- announced some awards on.

But going forward, I think what we've mentioned in our press release is kind of seeing the next wave of medium to smaller size that would kind of manifest in mediation compliance contracts as well as ERT. It's the environmental risk transfer model is very well suited for some of the participants of that type, especially the medium to smaller size. So kind of reference it in both places, talking about the next wave as well as the opportunities we're seeing within ERT.

Great. And has there been anything that traded away from you that surprised you? Should we still believe that your win rate should be in the 30% kind of range?

Yes. Thanks, Tony. Nothing surprising on that front that we weren't already predicting or thinking about. We've never thrown a number out there on win percentage, but I will say we're still confident we're going to win our fair share or more than our fair share, hopefully, as we move forward.

$3 billion or $7 billion, they're large numbers. So yes.

They really are. And Tony, that's what excites us. Again, that's $3 billion that we're already kind of noodling on and then $7 billion in that near term. As I've mentioned in the prepared remarks, that we'll be proposing on between now and the end of 2022. And to Roger's point on that related to ERT, there's continued upside on that side of the business for us. As we move forward as well. That's not really contemplated in those numbers. So we feel very confident about the future of the business. We -- '19 and 2020, both being record award years for us on new award generation, and we're really excited to the start that we got this year in our ability to eclipse 2020's record as well.

Operator, if I could, before taking the next question, I just want to circle back to Michael Hoffman's question on the breakdown for Q2 2020 numbers by the different categories. For Q2 2020, the revenue was $52.304 million in total. And the way that breaks down is that byproduct sales was $21.400 million. Construction was $15.347 million, and Services was $15.557 million, and that comes to the $52.304 million. So just wanted to close the loop on that question.

And your next question is from Craig Samuels.

I'm relatively new to the story. And I'm hoping that you can quantify a little bit the -- on the EnviroSource front, what a typical deal may look like?

Craig, that is not really something that we have put out yet. It's -- we have -- I guess the easiest way to say that is that there isn't necessarily a typical deal with the utilities. We've consistently talked about the fact that we believe our EnviroSource cost profile certainly pencils out very, very favorably to the competition. We've talked about the very high cost of the competition being essentially like a mini power plant or kind of a one size fits all. They tend to need to be subsidized by the utility in order to even make sense at all. And even then, they're often driven by regulations, whereas the EnviroSource is modular. It's scalable. It is at a kind of a, I'd say, a fraction of -- on the cost basis without giving you specific numbers that we've not given publicly for competitive reasons, a fraction of the cost of the competitive units.

But when I say maybe they're not typical, we have some utilities. And in fact, one that we are negotiating on now would be a situation of where we own the equipment and provide and finance equipment. There are others that we're in discussions with where the utility would be able to finance it under their CapEx program and get rate payer relief for it. So there's many different models. It could even be a JV with the end use customers, like the ready mix. So that's the beauty of it. It's going to meet a demand where there is more and more plants are taken off-line in the supply of live coal ash diminishes that's going to need to be replaced. And it's just a fantastic way to both do a remediation at a kind of a scalable level and it gives the utility a lot of options to get a win-win, to clean up their site as well as the very positive PR from being able to take it out the ground or recycle it.

Got it. Do you plan to provide additional color, going forward, in this in this...

Yes. I mean I -- yes. I mean, I think you'll be able to see -- depending on the type of structure that I just defined, I mean you'd see things in our financial statements, especially if we owned it, you'd see that come through in our balance sheet. And -- but we all talk about that. Now I will just caveat that by saying that we're not going to come out and say exactly what these costs again for competitive reasons. But what our -- what we had discussed and what our plan is, is that we would be constructing these and deploying these in markets and regions where the price per ton of spec fly ash is higher. And you think about kind of the Rockies West, things like Texas, Florida, the Northeast, basically areas to where there's not a live supply of fly ash, but certainly a large demand from an infrastructure and construction building perspective. That's where they really pencil out nicely.

Got it. I haven't seen anything regarding toxic wastewater. And as you know, in Florida, there's been a lot of media discussion surrounding the wastewater reservoir near collapse. Do you guys have an offering for any type of a wastewater remediation?

So that's a good question, Craig. And we've been following everything in Florida as well. So from a wastewater perspective, no, that's not something that's in our core. However, we are watching closely the situation down there, I believe it's Piney Point. And how that impacts all of those other impoundments in Florida as well because our suite of services that we use from a remediation and recycling standpoint kind of fit nicely down there as well. We are working down there on some similar type projects, and we'll continue to watch what happens from a regulatory standpoint on that basis. So that could definitely be something that we move into in the future. But as far as waste -- pure wastewater treatment is concerned, that's not something that we focus on.

Got it. Okay. And then as far as the competitive landscape, somebody mentioned, although you haven't explicitly stated that your win rate is typically around 30%. I'm not sure I've seen any other public company that you compete with for comping purposes. So who exactly are the other 70%?

Yes. So we -- you're exactly right. There's no one that comps to us. And there's really no one that offers the full depth and breadth of these services that we do. When you think about all the different services that we provide, our customer base and our sole focus on remediation compliance, byproduct sales, ERT, all these things that we do at a very high level of safety and quality and performance. So there's really not a straight comp. But when you ask a question about who's winning the other projects, it's very fragmented on a service by service basis. And it's also somewhat fragmented geographically when you get into some of the service offerings. So no one providing all of these services at the same scale and depth that we are for this customer base.

Got it. And then on the $3 billion of pending proposals, when would you expect to have answers?

Yes. I mean, that $3 billion continues to be fluid. We win some, we lose some over the course of the years. So I mean, I think that's something that we would hope to cycle through some of those here in the next year to 2 years, and then we'll start bidding on the other $7 billion here as well that we've talked about and hopefully get proposals in hand. By the end of -- like we said before, between now and the end of 2022.

Got it. And then last question, it's just kind of a bigger picture. You guys went public in 2018, so just a couple of years ago. And you're a $12 IPO. Things change and your shares dropped considerably lower and are now moving back upwards. I'm wondering if you could give a little bit of a bigger term perspective on what the company looked like at the time of IPO and what the street's excitement was versus where you are now with the stock cut in half, I think, your balance sheet considerably better. And all of your lines of business is trending in the right direction and having divested the one business. Are you able to just give a little bit of perspective as to where you were then and where you are now?

Yes. No, thanks. Great question. 2018 is long in our rearview mirror. Right now, I think there's a lot of document highs and lows between '18 and today. And what we're really excited about, as you mentioned, we divested the one portion of our business at the tail end of last year that has really allowed us to focus on and pivot the business now that laser focus on where the growth is around the remediation, remediation, compliance and byproduct sales. All of the legacy ash business where we really see those tailwinds, and we really see that large addressable market. So that's really where we are today. A lot of transition in that time period. And we -- as you stated, we've really cleaned up the balance sheet, really put ourselves in on strong footing as we move forward year-over-year of new awards and really looking forward to the future here.

There are no further questions at this time.

All right. Thank you, operator. And thanks, everyone else, for joining. I appreciate the interest as always, and look forward to speaking with everyone again in August. Thank you.

This concludes today's conference call. You may now disconnect.