Infrastructure and Energy Alternatives Inc (IEA) 2020 Q3 法說會逐字稿

Good morning and welcome to Infrastructure and Energy Alternatives Third Quarter 2020 Conference Call. (Operator Instructions)

And with that, I'll turn the call over to Kimberly Esterkin, Investor Relations for IEA. Kimberly, please go ahead.

Hello, and thank you for joining us today to discuss IEA's third quarter 2020 financial results. With us from management are JP Roehm, President and Chief Executive Officer; and Peter Moerbeek, Executive Vice President and Chief Financial Officer.

Before turning the call over to management, I would like to note that today's discussion contains forward-looking statements about IEA's future growth and financial expectations. Any forward-looking statements should be considered in conjunction with the cautionary statements in yesterday's press release and the risk factors included in the company's SEC filings. Except as required by law, IEA undertakes no obligation to update its forward-looking statements after today's call. Since management will be presenting some non-GAAP financial measurements as references, including adjusted EBITDA, the appropriate GAAP financial reconciliations can be found in yesterday's press release.

And with that, I'll now turn the call over to JP Roehm, Chief Executive Officer. Please go ahead, JP.

Well, thank you, Kimberly, and good morning to everyone. We appreciate you joining our Third Quarter 2020 Earnings Conference Call, and hope that everyone listening today is continuing to stay safe and healthy.

IEA had another successful quarter as we continued the momentum of the first half of this year into the third quarter of 2020 and recorded our best ever quarterly revenues. We increased revenue and adjusted EBITDA across both of our operating segments when compared to the third quarter of 2019 and the second quarter of 2020. Our ability to achieve such success even during the COVID-19 pandemic speaks volumes to the hard work of all of IEA's employees.

As you would expect, we are seeing some natural impact from the pandemic as we abide by increased safety protocols, and we continue to practice social distancing. While those inefficiencies in our business may be hard to measure precisely, our safety metrics, which are always of top of importance to IEA, continue to impress.

Our total recordable incident rate, for example, is at its lowest in our company's history. Although, we have received force majeure letters from customers, and we've had some of our construction crews impacted by COVID-19, the timing, scheduling and resource management on all of our projects remains relatively consistent with what we experienced prior to the pandemic.

One area where we have noticed an impact of COVID-19 is in adding new projects to our backlog. Our bidding activity continues at very high levels, but the final approval process for some projects has been slowed due to COVID-19. Despite that, we were able to add $150 million to our backlog in the third quarter, and since quarter end, we've added more than $400 million in new projects.

For our Renewables segment, we continue to see a tremendous push towards the installation of noncarbon energy alternatives. Our solar division, in particular, is excelling, and we are actively bidding on EPC projects. In August, we broke ground on a $77 million EPC solar contract in Texas that is expected to be completed in June 2021. Texas ranks 5th in the nation for total solar capacity installed. And the Solar Energy Industries Association expects another 4 gigawatts will be installed in the state over the next 5 years.

During the third quarter, IEA was also awarded an 11-megawatt solar farm in Fort Valley, Georgia. This solar farm is being constructed on a 107-acre plot of land at Fort Valley State University and will be used not only to power the surrounding region with renewable energy, but also as a living laboratory for Fort Valley students and professors, who together are working to build Georgia's energy future.

Also in Georgia, just post quarter end, we began construction on a 98-megawatt solar farm, which is expected to be completed in the first quarter of 2022. $54 million of this project has already been booked into our third quarter backlog. We remain very bullish on the solar market where module cost declines, performance improvement and optimized racking systems are reducing the cost of installation and driving significant opportunities.

Our wind division also remains an area of strength. With the extension of the production tax credits for wind through 2021, construction opportunities abound as customers look to make use of these incentives before they expire. During the third quarter, we announced a 302-megawatt wind EPC project here in our home state of Indiana. Once complete, this wind farm will power more than 83,000 homes with clean electricity. We expect to announce additional wind projects in the near future.

In our Specialty Civil segment, our William Charles and Ragnar Benson divisions have been bidding on several new infrastructure and transportation projects. During the third quarter, Ragnar Benson began work on a $130 million rail EPC project in Port Arthur, Texas. This award is for the construction of a new bulk liquids terminal transfer on a 480-acre site, approximately 90 miles east of Houston, Texas. The terminal is being constructed in several phases and is anticipated to be completed by June 2021. The terminal will receive crude oil and transport that oil as well as other crude supplies to the Gulf Coast.

Ragnar Benson was also recently selected as part of a high-profile joint venture team with FH Paschen for the construction of the West Lake Corridor commuter rail extension of Chicago's South Shore Line. The project includes the construction of a 9-mile track extension of the existing South Shore Line as well as the construction of 4 additional rail stations to reach high-growth areas in Lake County, Indiana. Work on the West Lake Corridor railway extension began last month, and the project is expected to be completed in October 2024. This project is anticipated to add over $135 million in revenues.

Although Department of Transportation projects are a smaller part of our Specialty Civil revenues, we have had some recent success. Just post the third quarter, we secured a $17 million heavy civil contract from the California Department of Transportation to rehabilitate the Sacramento River bridge. Work on the bridge will begin this month and is anticipated to be completed by next September. IEA will self-perform the majority of this project, including replacing deck, bridge deck overlays and constructing bridge joints, seals and drainage systems.

Like most of us in the engineering and construction industry, we believe we would benefit from passage of a long-term infrastructure bill in the near term. As state DOTs may not have the necessary funding to continue their bridge, roadway and highway work in the coming year without some additional funding. In the meantime, however, we are pleased with our pipeline of state and local infrastructure work, even if the bidding environment is becoming more challenging.

With that as an overview of the quarter, I'll now turn the call over to Pete to review our third quarter financial results and 2020 guidance in further detail. Pete?

Thanks, JP, and thanks to everyone for listening. Last night, we filed our third quarter Form 10-Q and issued our earnings release.

Revenues for the third quarter totaled an all-time best of $522.2 million, an increase of 23.7% compared to the third quarter of 2019. Renewable segment revenues were $327.1 million, up 34.8% year-over-year primarily due to the significant expansion of our solar division and favorable weather conditions.

For the quarter, Specialty Civil segment revenues were $195.2 million, up 8.8% year-over-year, primarily due to the strength of heavy civil and rail. For the first 9 months of 2020, our revenues increased by almost 45% as compared to the first 9 months of 2019 to a total of $1.36 billion.

For the third quarter, gross margin was 11.3% of revenues compared to 12.5% of revenues in the third quarter of 2019. This year-over-year decrease in margin was mainly the result of the mix of work in our Specialty Civil segment, which carried lower gross margins than that of the prior year, and of our decision to create a COVID-19 contingency at the job level in our larger projects. We established a total contingency amount of $10 million in the first quarter, which was carried as an expected expense, thereby reducing percentage of completion and revenues and margin at these projects.

To date, we have used approximately $1.5 million of that amount. As projects approach completion, we evaluate the need for the contingency amounts at each job level. If we were to complete the projects without needing the contingency, fourth quarter revenue and margin could benefit by $6 million to $7 million depending on the substantial completion date of the jobs. Even with COVID-19 contingency, on a year-to-date basis, gross margin was 10.7% of revenue, a 110 basis point improvement compared to the first 9 months of 2019. SG&A expenses as a percent of revenues were 5.7% for the third quarter and 7.4% for the first 9 months of the year.

Our income from operations grew from 5.1% of Q3 2019 revenues to 5.6% of Q3 2020 revenue. At 4.3% of 2020 year-to-date revenues, the 9-month operating income was far ahead of last year's 0.5% of revenues. Interest expense for the quarter totaled $15 million, up from $14 million in the third quarter of 2019. Third quarter 2020 interest expense included $6.3 million of dividends paid on our Series B preferred stock.

We recorded an income tax expense of $6.2 million for the quarter compared to a benefit of $0.6 million for the same period in 2019. The effective tax rate for the period ended September 30, 2020, was 35.3%. The Series B preferred stock dividends are nondeductible for federal and state income taxes.

Net income was $0.32 per diluted share for the quarter compared to $0.24 per diluted share in the 2019 third quarter. Our adjusted EBITDA of $43.1 million increased 11.3% over last year's third quarter. At September 30, 2020, we had $57.3 million in cash on our balance sheet. While we had no draw on our $50 million revolving credit facility, we did have outstanding letters of credit of $23.5 million, leaving $26.5 million available. At the start of this month, we added $25 million in capacity to our revolver. We do not anticipate needing the additional amount at this time, but believe that it is a prudent move.

Our term loan balance remains at $173.3 million, and we have no amortization payments due until December 2022. Capital expenditures for the third quarter totaled $26 million, of which $19.3 million was financed through leases. We continue to expect that capital expenditures will be approximately 2% of our revenues for 2020 and 2021.

Cash provided by operations for the third quarter totaled $5.8 million compared to $5.4 million in the same period a year ago. Our expectation remains that we will generate positive cash flow in the final quarter of this year.

Third quarter was a strong quarter for bookings. We added $150 million to our quarter end backlog. And as JP mentioned, we have seen strong fourth quarter bookings to date. That said, we do not anticipate notices to proceed for the majority of the larger renewables projects until early 2021. This is unlike the fourth quarter of 2019, where we were able to begin several projects early allowing us to continue strong into Q1 2020. Based on the extension of the production tax credit for wind through the end of 2021 and the discussions that we're having with our customers, we expect almost a strong year for wind in 2021 as 2020.

However, at this time, we anticipate reduced revenues in the fourth quarter of this year, both compared to our record Q3 2020 and the fourth quarter of 2019. We also anticipate reduced revenues in the first quarter of 2021 compared to the first quarter of 2020.

For 2020, we now expect full year revenues between $1.7 billion and $1.75 billion, up from $1.6 billion to $1.7 billion previous guidance. We are also narrowing our adjusted EBITDA range to $117.5 million to $125 million as compared to $110 million to $125 million previously. Our guidance assumes no additional major disruptions to our business from COVID-19.

Future government-mandated quarantines that prevent our crews from being on-site that inhibit delivery of equipment or that cause customers to cancel or delay construction projects could adversely impact our operations. While it is way too early for us to give guidance for 2021, we expect that as much as 65% of our revenues will come in the second and third quarters, reflecting the later start dates of projects while still meeting the 2021 PTC requirements.

Let me conclude by wishing everyone a safe and happy Thanksgiving and Christmas holiday seasons. We have all earned that much this year. JP?

Well, thank you, Pete. With our bidding opportunities at an all-time high, we are seeing continued strong prospects in both our Renewable and Specialty Civil segments.

In terms of dollars spent and number of construction projects completed, the 2 most successful noncarbon energy alternatives are wind and solar, and IEA is a leader in both. In the most recent rankings by Engineering News-Record, IEA ranked 2nd for wind and 12th for solar in terms of revenues. In wind, we continue to see the benefits of the 1-year extension of the production tax credit. As Pete noted, we will not benefit from the push forward of projects in Q1 2021 that we did in Q1 2020, but we do believe 2021 will be a strong year for wind as 2020.

The American Wind Energy Association recently issued its Q3 report, which noted that new wind power capacity installed in the third quarter of 2020 was the highest third quarter on record. In addition, year-to-date projects commissioned by the industry increased 72% compared to the first 3 quarters of 2019. Currently, 20 states have over 1,000 megawatts of installed wind capacity, and IEA is very active in many of these geographies.

As many of you know, when IEA completes a wind project, our revenues and services end. In an effort to extend the life of the partnership with our clients and find new pathways for revenue when tax credits expire, we recently formed a wind services team. Our services team will leverage our in-house engineering capabilities and specialized expertise to offer extended services to our customers. Those services range from blade repairs and major component change-outs to repowering, life extension and much more. Essentially, we will be able to see the project through construction and service it potentially for 2-plus decades. We look forward to providing this full life cycle offering to our current customers as well as leveraging this offering to win new customers.

Solar is ramping even quicker than wind, and we anticipate that our solar backlog will increase significantly in 2021 compared to 2020, making up for any potential drop in wind construction post the tax expirations. Average annual solar installations according to the National Renewable Energy Laboratory, are expected to grow from approximately 10 gigawatts per year in 2019 to 2022 to 18 to 20 gigawatts per year from 2023 to 2030. This is a long runway ahead for the solar industry, and we are actively bidding on solar EPC projects.

Even with all the available opportunities, we must remain strategic in our efforts. We are selective in the work we take on, ensuring we only assume responsibility for projects where we can: one, perform successfully; and two, achieve competitive margins. Our ability to provide turnkey solutions help strengthen relationships with solar customers, create barriers to entry and improves our long-term margins. Many of the customers and the competition we are now seeing in the solar renewable market are the same as we see in the wind renewable market.

We are also very bullish on the rail market, where we expect to continue to see many smaller-to-mid-sized projects come up for bid. The society of civil engineers expects that U.S. transport and road construction, which includes rail, is expected to increase approximately 14% from 2020 to 2023 to total over $183 billion. We are proud to have exceptional rail construction talent led by our teams at William Charles and Ragnar Benson.

In addition to rail construction, we are also active in public infrastructure. As I mentioned earlier, the pandemic has had a devastating impact on the budgets of federal and state transportation agencies. While we continue to see opportunities with state DOTs, the go-forward strength of this business will likely be based on the future passage of a federal infrastructure bill.

We also continue to see opportunities to increase our coal ash work. In 2018, the most recent production data available, more than 102.3 million tons of coal ash were generated, but only 42% were disposed. As a result of the large push towards carbon-neutral energy to replace coal, an increasing number of coal ash ponds will need to be cleaned up before wind or solar energy can be placed on site.

In addressing the future of our end markets, I would be remiss if I did not comment on the prospects for IEA's business with the change in administration. Infrastructure has been one of those political issues that is received bipartisan support. The Biden campaign said its goal was to invest $2 trillion to build a modern, sustainable infrastructure and clean energy future. With Biden now our President elect, we anticipate we will see an increased push to get a federal infrastructure plan path, including increased funding for wind, solar, road and rail projects.

Our environmental work and specifically coal ash cleanup could also flourish under a presidency that provides much more support for the EPA. There's also a possibility that we see additional wind or solar tax credits as part of another tax extension or relief stimulus package in the next 2 months. Overall, we expect that there will be strong support for the type of work IEA conducts under a Biden presidency. It is important to keep in mind, however, that IEA builds utility-scale projects. So even with a strong emphasis on noncarbon energy, our customers still need to complete site evaluations and receive governmental permitting and obtain financing before construction can begin. Those efforts take time, but we are encouraged by the potential opportunities.

With so many prospects ahead of us, we are well aware that in order to continue to succeed, we will need to perform our work in a responsible, safe and sustainable manner. To that end, we've recently begun to more formally focus on our environmental, social and governance efforts. We recognize that the development of a full ESG plan will take some time, and we are aware of some of the traditional limitations of the construction industry, but we are making progress.

Recently, we appointed our first Vice President of Diversity and Inclusion, Morayma Da Silva. Morayma has over 15 years of diversity and compliance experience with our company, having led the diversity program for our subsidiary, William Charles, and established the organization's first equal employment opportunity and diversity compliance departments. Morayma's appointment is just the beginning of a robust effort underway at IEA. Diversity and inclusion plans include, but are not limited to, the establishment of a diversity and inclusion committee and task force, regular internal trainings, mentorship programs, on-the-job training to attract more diverse candidates, partnerships with local schools on construction training and material purchases from diverse suppliers. We are very confident of Morayma's ability to successfully lead these important efforts for our company.

In addition, just yesterday, we announced the appointment of Michael Della Rocca as an independent director to our Board of Directors. Michael brings over 3 decades of E&C experience to our Board, and will be an excellent addition to our bid review and compensation committees.

In summary, IEA is moving in the right direction. Our revenues and profitability are growing, and our end markets are robust. Even with these positive industry drivers, we will always maintain our focus on executing our projects profitably, providing our clients with high-quality service and generating value for our shareholders.

Thank you again for joining us this morning and for your continued support of IEA. On behalf of our entire company and Board of Directors, I wish you a safe and healthy holiday season. We look forward to speaking on our fourth quarter call in March of 2021.

Operator, would you please open the call to questions?

(Operator Instructions) Our first question is from the line of Brent Thielman with D.A. Davidson.

JP, I think you mentioned that the wind side of the business, you expected it to do, call it, something in and around this year's levels. You put a number on it, $900-odd million into 2021. I guess I'm curious, are you actively looking at work already into 2022 on the wind side?

I'm just wondering, could that represent a potential role as we exit these PTCs? And then do you think the wind side of the market is in need of, whatever, more federal stimulus or regulation in order to get growth back in that side of the business?

Well, good question. So most of the activity we're seeing right now, Brent, is mostly 2021. I think, as you recall, midway through the year, in response to COVID, the IRS issued guidance that essentially extended the PTC at 100% 1 year into 2021. So it caused a lot of our clients to do a midyear pivot, and reset not only their 2021 plans but their 2022. So everything is just moving a little slower because of that reset. But as you probably recall, 2022 is now 80% of the PTC or a 20% step down. So not -- as we've talked in previous calls, we don't look at that to be too substantial with the kind of the oncoming technological advancement of taller turbines and larger rotor diameters. Efficiency kind of offsets that decline in the credit.

But all that being said, I think our current snapshot of the way the Congress and administration is appearing. And I guess we're all looking at Georgia and what really happens with that if the Senate would flip. But with a Republic -- or with a Blue White House and a Blue House and a Red Senate, we think that probably, traditionally, would probably support extensions of more of the traditional tax credits rather than maybe the Green New Deal and some of the other rhetoric we've heard.

But one would think, currently, what we're seeing that we could see some longer-term extensions of those tax credits. But that being said, we revert back to all the comments we've said in the past is solar will continue to offset any downturn in wind and the greater inefficiency in these taller and larger wind turbines will offset the increase -- or decrease in the tax credits going forward if they do so.

And JP, I mean, the solar side of the business is obviously growing really quickly. I guess I'm curious is that continues to become a sort of bigger piece of the segment and the pie overall? Can that business still support kind of gross margins in that 10% to 12% range you're accustomed to seeing in the Renewables segment?

Yes. Our expectation is that it will. And what we're seeing so far is it does. I think I would draw you to our strategy of doing that -- of our growth strategy in solar being very cautious and thoughtfully laid out. We probably -- in all honestly, we probably could have went out and got 2 or 3x as much solar revenue in 2020 as what we did. But I don't think we would have been successful. And many contractors have gone down that road. It's a very labor-intensive business. And one that to really understand your cost and mitigate your risk, you need to have experienced train crews that you know their productivity hands down.

So we're growing much as we systematically grew our wind crews out. We got the wind business in 2004. We certainly weren't able to build 12 to 15 wind projects a year in 2004. It took us several years to gear that up. Hopefully, we can gear this a little quicker, but we're going to be very strategic and systematic at that.

Sure. Okay. The Specialty Civil segment looks like a little bit of a mix headwind here in the quarter, maybe the last couple of quarters, at least relative to last year. It sounds like that mix may start to trend back in your favor in 2021 as you're picking up more of these rail and environmental jobs. Is that fair?

Yes. That's how we look at it. We certainly -- we think rail and environmental are well positioned. And basically, I don't think any of us would disagree that coming out of the election, no matter what happened, I think we were pretty bullish on the fact that an infrastructure bill will get some momentum. Everything that we still see post-election expects an infrastructure bill to get momentum in the spring. So we remain confident of that hope and certainly, like all, we'll be following that. I think it's very important for the country. And we'll be certainly positioning our business to get our fair share of it.

Okay. And then the $6 million to $7 million in contingency costs you took earlier in the year that I assume would unlock if you get these jobs done before year-end. Is any of that embedded in the outlook or the updated outlook?

Without me giving you totally precise guidance, yes. We are expecting that some will fall to the bottom line. We don't know how much yet. And quite frankly, like any other contingency, it's somewhat fungible in the sense that it's great if we can use it and don't need it on COVID reserve, on the other hand, there may be other issues with the job. So it's still a potential upside, and we'll see what happens over the next 1.5 months here.

Yes. And I guess one more on the fourth quarter and just the implied outlook for the top -- the revenue side. You talked a bit about sort of delays or some delays and some push in terms of timing. The fourth quarter is seasonally more challenging or slower as it is. I'm just wondering whether you've encountered any unusual sort of adverse conditions, nature and the like? Or is this strictly -- the sort of implied revenue base really strictly just for the timing of jobs?

It was a little bit of a mixture. We were very fortunate that we were not significantly impacted by the hurricanes that came through the south and the Gulf Coast. We've not had -- obviously, we're only halfway through, but we've not had major, major problems with weather to date, we've had some outbreaks at COVID, but nothing that is giving us major concern at this point that we can meet our deadlines. Having said that, we still have a ways to go and some stuff may get pushed out slightly.

Yes. And Pete, maybe you talked about positive cash flow going into the end of the year. You care to put any parameters on that, I mean, just based on the year-to-date?

We traditionally do well in fourth quarter because we're in a position that is as the revenues step down or actually as the cost step down, we have the ability to generate more cash, but there is -- it's way too early. And again, it kind of depends when we finish some of the jobs. The sooner we finish the jobs, the faster we get releases when people are withholding money from us. So our goal is to do it as soon as possible. And would love to give you a number, but it's pretty difficult at this point.

Yes. I'll try 1 more. And JP, just thinking about the growth of the solar business and the bookings you've had there. I mean do you feel comfortable that business can double in 2021 just based on all the work that you've got lined up already?

Well, I think we're cautious. Certainly, we think the business is on a tremendous growth trajectory. I'd be careful to characterize it as double. But we're certainly confident over the next several years that it provides a great strategy for any potential decline in wind.

The next question is from the line of Adam Thalhimer with Thompson Davis.

Congrats on a good Q3. JP, I wanted to -- I don't have a great sense for -- I mean you mentioned that you're 12th on the list for solar construction. What's the kind of competitive environment like? I mean how many contractors are showing up on these bids? Is it a lot of it competitively bid? Or is there some negotiated bidding going on as well?

No. It's pretty similar to our wind business. And the fact there are -- the competitive nature is a little bit more than the wind business. But particularly, if you look at kind of the top contractors in solar, they are the same cast of characters we're seeing in the wind space. We're, honestly, a little bit behind in our entrance to solar. So a few of our competitors are further up that list. But when you look at the top 5, the top 10, it's mostly who we see in wind and a few others that have chosen to specialize in solar.

Okay. And then how important are these -- the tax credits? I mean I know the utilities are kind of running as fast as they can towards renewables. So do we really need the tax credits at this point?

Yes, a good question. I mean, obviously, in the past, before the maturation of the technologies, circa 3 to 5 to 10 years ago, they were certainly very important. As we go forward, going to be less important with the increase in technology, both in the wind and solar space. The advent of storage that makes them more of a 24/7 dispatchable form of power rather than just a point of use, so to speak. And also the -- what we don't see is a decline in demand. Certainly, there's decline in demand overall in the country for electricity, especially since COVID. But not a decline in demand for renewable energy, actually just the opposite. And it's being driven by several things. One, state. Over 35, I believe now, 35 states in the country have renewable portfolio standards that are over and above any federal type of policies. So 35 states require their utilities to have a blend of renewables in their offerings. You also have the continued trend of utilities decarbonizing. It even happened -- even the momentum really started in the -- during the last 4 years, during the Trump administration. And one would only think that it's going to -- the velocity is going to increase.

There's a lot of news articles out there right now that are forecasting such that the retirements of coal, the pace will only increase. And then kind of lastly, half of renewable energy procurements in the last 2 to 3 years have not been utility customers, but they've been corporate America that are going directly to these large utility-scale projects and buying their entire offtake for factories, in their office buildings and their various facilities across the country. And that's been very substantial, and that market is ever increasing.

So all that be said, we've always felt good about renewables with a step down in tax credits. Although given the environment that we've learned about here in the last week or so in the -- with our new federal government, I wouldn't expect those subsidies or credits to go away anytime soon.

Okay. Good. And then last one for me. You kind of touched on a delay, a little bit of timing impact just between -- what was it? The contract award and the actual start date of the project. And I'm just curious if you could flush that out. And if you're just being a little bit conservative there or if there's really cause for concern?

We're not concerned because we see projects coming into backlog. Certainly, we start with our pipeline and then our bidding queue and then projects that are in negotiation and ultimately, backlog. So we're not concerned about it. We can see the process happening. But it's quite simple when you think about COVID. Many of the areas around the country, particularly municipalities and such are still working from home. So the whole permitting process of projects has extended or lengthened, if you will. It doesn't move as fast as it was in a pre-COVID environment. And the second thing, I don't know a customer of ours -- as a construction company, we're back in the office. We've been back in the office for several months.

But I don't know a customer of ours that is back in the office. So just general approvals and the bidding and contracting process for our clients has been elongated because of this. And really, it's kind of elongated by about a quarter. Projects are coming into backlog about a quarter later for 2021 than what we expected. And when they come in the backlog, hence, they start a little later. But one thing that is certain, particularly on the renewable side, they all want them done next year come about third quarter.

So you're going to see compression, more of a compression of revenues likely next year in the middle part of the year than -- we had some big quarters this year. And next year, we'll see what happens. But certainly, with those projects coming in late, things could be more compressed in the year.

(Operator Instructions) At this time, we've reached the end of our question-and-answer session. And I will now turn the floor back to JP Roehm for closing remarks.

Well, we appreciate all of you joining our call today. And certainly excited about releasing these quarter's results. As I said earlier, it's -- I hope everybody has a safe and healthy holiday season. And we'll see you all or talk to you all back again here in early March of 2021, talking about year-end 2020. Take care, everybody.

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.