Centuri Holdings, Inc. · NYSE:CTRI
Centuri — Q2 2024 Earnings Presentation
25 slides from Centuri's earnings presentation, Jul 29, 2024
Slide 1: 2Q 2024 Earnings Presentation
2Q 2024 Earnings Presentation July 29, 2024 Centuri.com 1
Slide 2: Forward Looking Statements Disclaimer
Forward Looking Statements Disclaimer Unless the context otherwise requires, in this presentation, references to “we,” “us,” and “our” are to Centuri Holdings, Inc. (NYSE: CTRI) (“Centuri” or the “Company”), together with its consolidated subsidiaries, which include, among others, Centuri Group, Inc
Slide 3: Today's Speakers
Today’s Speakers Bill Fehrman Gregory Izenstark Paul Caudill Outgoing President & EVP, Incoming Interim Chief Chief Executive Officer Chief Financial Officer Executive Officer 3
Slide 4: Successful Initial Public Offering
Successful Initial Public Offering April 22, 2024 Completed IPO 16.9 MM (1) $328 MM(2) in funding shares issued * Proceeds used to de-lever Notes: 1. 14.3 million shares of common stock sold in IPO (including the underwriters' full exercise of their over-allotment options), plus the completed concur
Slide 5: Investment Highlights
Investment Highlights Who We Are Compelling Investment Drivers » 110+ years of operating history and a track record of delivering world-class safety and quality performance A leading pure-play North American utility » Scaled platform with extensive North American footprint translates to a leading in
Slide 6: Company Overview
Company Overview Geographic Footprint Representative Utility Customers Operating Footprint Gas Locations (49 Locations) Electric Locations (35 Locations) Other (3 Locations) (1) Business Mix Other 1% Other (2) 21% Union US Gas Electric 48% 28% Revenue Revenue by Electric Utility by Gas Utility Custo
Slide 7: 2Q 2024 Results Overview
2Q 2024 Results Overview Notable Drivers Impacting 2Q 2024 » Master Service Agreement (MSA) revenues lower $672 10.2% year over year, reflecting: • Customer regulatory challenges in certain Revenue Adj. EBITDA jurisdictions (MM) Margin(1) • Extended utility customer caution toward capital allocation
Slide 8: Commercial & Business Momentum Remain Strong
Commercial & Business Momentum Remain Strong Customer Growth July’s Hurricane Beryl • 650+ union and non-union employees deployed to assist a dozen major Master Service Agreements (MSAs) utility customers with storm restoration after a category 1 hurricane left an • Secured seven customer awards ref
Slide 9: Cost Savings Initiatives Well Underway
Cost Savings Initiatives Well Underway Operating Cost Savings ~$29 » Extensive 2-phase review of corporate and operating company overheads through CEO-led process: million » Phase 1 | ~$15 million in identified annualized savings from non- Annualized revenue generating corporate functions & activiti
Slide 10: Leadership Transition, Unchanged Strategic Focus
Leadership Transition, Unchanged Strategic Focus • Served several years as a Centuri Advisory Board member, and is a highly experienced former utility executive • Served as an advisor to outgoing CEO Bill Fehrman since January 2024 • Worked hand in hand with Bill to drive the cost and efficiency sav
Slide 11: 2Q 2023 vs. 2024
2Q | 2023 vs. 2024 ($MM, except per share amounts) 2Q 2024 2Q 2023 GAAP Metrics Revenue $ 672.1 $ 805.8 Net Income Attributable to Common Stock $ 11.7 $ 17.1 Diluted Earnings Per Share $ 0.14 $ 0.24 Non-GAAP Metrics(1) Adjusted EBITDA $ 68.6 $ 92.9 Adjusted Net Income $ 17.0 $ 25.0 Adjusted Diluted
Slide 12: 2Q23 vs. 2Q24 Key Differences
2Q | 2Q23 vs. 2Q24 Key Differences Revenue ($ in millions) Year-over-year drivers include: favorable impact unfavorable impact Revenues ~$134 million - Total decrease • $49 million - Decreased revenues due to a large bid project in the prior year that did not recur • $21 million - Decreased offsho
Slide 13: Revenue & Gross Profit By Segment 2Q23 – 2Q24
Revenue & Gross Profit By Segment1 | 2Q23 – 2Q24 Revenues by Segment ($MM) Gross Profit by Segment ($MM) 900 100 800 90 80 700 70 600 60 500 Union Electric Union Electric Non-union Electric 50 Non-union Electric 400 Canada Gas Canada Gas US Gas 40 US Gas 300 30 200 20 100 10 0 0 2Q23 2Q24 2Q23 2Q24
Slide 14: Free Cash Flow (FCF) and Leverage Overview
Free Cash Flow (FCF) and Leverage Overview FCF(1) & FCF Conversion(1) Net Debt ($MM)(1) Net Debt to Adj. EBITDA(2) Ratio (1) FCF ($MM) % FCF Conversion 70 80% 1,292 4.36 4.38 60 70% 1,041 60% 50 50% 40 $MM 40% 30 30% 20 20% 10 10% 0 0% 2Q22 2Q23 2Q24 2Q23 2Q24 2Q23 2Q24 Notes: (1) These are non-GAAP
Slide 15: 2024 Outlook
2024 Outlook FY 2024 FY 2024 Adj. Net Capex Revenue (MM) EBITDA margin(1) (MM)(2) $2,500 – $2,700 9.0% – 9.6% $90 - $99 Notes: (1) This is a non-GAAP measure and as such, may not be comparable to a similarly titled measure of other companies. Please refer to the appendix to this presentation for the
Slide 16: Continued Execution of Our Strategic Plan
Continued Execution of Our Strategic Plan » Enhancing commercial strategy and action plans to drive growth across operations » Ongoing implementation of identified overhead cost savings initiatives » Continued review of supply chain & fleet optimization savings and implementation » Focus on capital
Slide 17: Strong Secular Tailwinds Underpinning Growth
Strong Secular Tailwinds Underpinning Growth Electric Utility Services Gas Utility Services $168bn(1) 40+ Years(4) Public Investor-Owned U.S. Electric Sustainability Aging Utility Average Age of U.S. Gas Distribution / ESG Infrastructure Utility 2023E Capex Pipelines ~409k / 50+ Years(4)(5) 50+ Year
Slide 18: Appendix
Appendix - THINK AHEAD»: se ae i pe Va” 3 Zim Sa
Slide 19: Use of Non-GAAP Measures
Use of Non-GAAP Measures We prepare and present our financial statements in accordance with GAAP. However, management believes that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt to Adjusted EBITDA ratio, Free Cash Flow, Free Cash Flow Conversion, Adjusted Net Income (Loss), and Adjusted
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation $mm 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Net income (loss) $ 12.9 $ (165.9) $ (7.1) $ 18.5 $ 16.9 $ (212.8) $ (25.2) $ 11.7 Net interest deductions 16.6 21.0 22.4 24.5 26.1 24.4 24.1 22.6 Income tax expense (benefit) 8.9 0.7 (4.2) 11.0 10.0 (7.3) (20.8) (0.5) Deprec
Slide 21: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation $mm 2Q22 2Q23 2Q24 Net income $ 4.9 $ 18.5 $ 11.7 Net interest deductions 12.6 24.5 22.6 Income tax expense (benefit) 3.4 11.0 (0.5) Depreciation expense 31.0 30.2 27.7 Amortization of intangible assets 7.8 6.7 6.7 EBITDA 59.8 90.9 68.2 Non-cash share-based compensation
Slide 22: Net Debt Reconciliation
Net Debt Reconciliation $mm 2Q23 2Q24 Debt Current portion of long-term debt $ 42.1 $ 31.2 Current portion of finance lease liabilities 11.9 10.6 Long-term debt, net of current portion 1,050.7 866.7 Line of credit 184.3 143.6 Finance lease liabilities, net of current portion 29.7 19.4 Total Debt 1,3
Slide 23: Adjusted Net Income
Adjusted Net Income $’mm 2Q23 2Q24 Net income $ 18.5 $ 11.7 Strategic review costs 1.1 (1.9) Severance costs 0.2 2.2 Amortization of intangible assets 6.7 6.7 Non-cash stock-based compensation 0.7 0.1 Income tax impact of adjustments (1) (2.2) (1.8) Adjusted net income $ 25.0 $ 17.0 (1) Calculated b
Slide 24: Adjusted Earnings Per Share
Adjusted Earnings Per Share 2Q23 2Q24 Diluted earnings per share attributable to common stock (GAAP as reported) $ 0.24 $ 0.14 Add-back income attributable to NCI 0.02 ----- Strategic review costs 0.02 (0.02) Severance costs ----- 0.03 Amortization of intangible assets 0.09 0.07 Non-cash stock-based
Slide 25: Centuri contact details
19820 North 7th Avenue, #120 • Phoenix, Arizona 85027 • investors@centuri.com Centuri.com 25