Visionary Holdings, Inc. Q3 FY2020 earnings call

Management Statement and Operational Highlights

• Leadership and Strategy: The management team continues John Sottile's strategy, focusing on expanding electrical construction geographically, growing and enhancing capabilities through service line expansion, and capitalizing on industry dynamics like aging infrastructure and renewables.
• Financial Performance: Consolidated revenue for Q3 2020 was $48.4 million, a 8.2% increase year-over-year. Electrical construction revenue grew 11.3%, offsetting a decline in real estate revenue. Gross margin on electrical construction improved. Depreciation/amortization and SG&A expenses increased due to various factors.
• Backlog: Total backlog at September 30, 2020, increased 105% to $385.2 million. The 12-month electrical construction backlog rose 57.5% to $151.2 million, driven by new MSAs.
• Pandemic Adaptation: The company adapted to COVID-19 with protocols, work-from-home policies, and operated as an essential business with minimal impact on project execution.

Segment Performance

• Electrical Construction Operations: In the third quarter of 2020, electrical construction revenue was $48.1 million, an increase of 11.3% from the same period in 2019. The gross margin on electrical construction operations increased to 17.5% compared to 14.8% in the prior year. This segment contributed the majority of the consolidated revenue.
• Real Estate Development Operations: Revenue from real estate development operations decreased to $365,000 for the three months ended September 30, 2020, from $1.6 million in the same period in 2019, primarily due to fewer units sold and timing of available units for sale.

Guidance

• Management highlights strong backlog and ample growth opportunities in the near and longer term due to strong demand for electric power services and utility capital investments in modernization.
• Notes that while backlog has fluctuations due to project mix, the company expects to continue benefiting from industry dynamics and ongoing projects.

Risks

• Impact of COVID-19 on future initiatives remains uncertain and could affect growth.
• Fluctuations in backlog due to the short lifecycle of many projects and mix of long and short-term projects.
• Dependence on renewing MSAs and winning new bids to maintain revenue and backlog levels.

Question and Answer Q: Stock market reaction to backlog decrease and bidding A: Steve Wherry explains backlog is dependent on MSA renewals and project lifecycle; revenues often exceed previous 12-month backlog due to short project durations Q: Thoughts on changing company name to Power Corporation of America A: Steve Wherry says under consideration but not acted on at this time Q: Analyst coverage and potential name change A: Steve Wherry mentions reaching out to analysts and considering name change to better represent the company Q: Utility CapEx and impact on business A: Steve Wherry states utility capital expenditures provide additional opportunities for the company Q: Real estate outlook and debt A: Steve Wherry discusses real estate plans and notes efforts to manage debt and explore opportunities