Slide 1: Quarter 2 | Fiscal 2023 Results
Quarter 2 | Fiscal 2023 Results August 24, 2022
Slide 2: Participants and Agenda
• Q2 2023 Overview • Industry Update • Financial & Operational Highlights • Outlook • Closing Remarks • Q&A 2 Participants and Agenda Steven E. Nielsen President and Chief Executive Officer H. Andrew DeFerrari Chief Financial Officer Ryan F. Urness General Counsel
Slide 3: Important Information
Important Information Caution Concerning Forward-Looking Statements This presentation contains forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act. These statements include those related to the outlook for the quarters ending October 29, 2022 and January 2
Slide 4: Q2 2023 Overview
Q2 2023 Overview Contract Revenues • Contract revenues of $972.3 million increased 23.5% Operating Performance • Non-GAAP Adjusted EBITDA of $104.7 million, or 10.8% of contract revenues, compared to $73.8 million, or 9.4% of contract revenues, in the year ago period • Diluted earnings per common sh
Slide 5: Industry Update
Industry Update The effort to deploy high-capacity fiber networks continues to meaningfully broaden the set of opportunities for our industry • Major industry participants are constructing or upgrading significant wireline networks across broad sections of the country • High-capacity fiber networks
Slide 6: Contract Revenues
Contract Revenues 6 Q2 2023 Organic Growth: 23.5% 26.6% 17.4% Total Customers Top 5 Customers All Other Customers2 44.2% 33.7% 147.0% AT&T Lumen Frontier Top 5 customers represented 67.4% and 65.7% of contract revenues in Q2 2023 and Q2 2022, respectively Fiber construction revenue from electric uti
Slide 7: Backlog, Awards and Employees
Backlog, Awards and Employees 7 Customer Description of Services Area Term Lumen Fiber Construction WA, OR, AZ, CO, MN 3 years Brightspeed Fiber Construction PA, NJ, VA, NC 1 year Verizon Construction & Maintenance PA 3 years Frontier Construction & Maintenance CA 3 years Fiber Construction OH, PA 1
Slide 8: Financial Highlights
Financial Highlights 8 Contract Revenues Non-GAAP Adjusted EBITDA Diluted EPS • Contract revenues of $972.3 million increased 23.5% • Non-GAAP Adjusted EBITDA of $104.7 million, or 10.8% of contract revenues • Diluted earnings per common share of $1.46 As % of Contract Revenues
Slide 9: Debt and Liquidity Overview
Debt and Liquidity Overview Debt maturity profile and liquidity provide financial flexibility 9 • Solid liquidity of $366.3 million at Q2 2023 • Capital allocation prioritizes organic growth, followed by opportunistic share repurchases and M&A, within the context of the Company’s historical range of
Slide 10: Cash Flow Overview
Cash Flow Overview 10 Operating Cash Flow • Operating cash flow used to support strong organic growth during Q2 2023 • Repurchased 104,030 common shares for $10.0 million during Q2 2023 4 Qtrs Ended Q2 2023
Slide 11: Outlook
Outlook CONTRACT REVENUES Increase low- to mid-teens as a percentage of contract revenues compared to Q3 2022 NON-GAAP ADJUSTED EBITDA % OF CONTRACT REVENUES Increase modestly compared to Q3 2022 11 Q3 2023 (October 29, 2022): INTEREST EXPENSE $10.8 million EFFECTIVE INCOME TAX RATE Approximately 26
Slide 12: Closing Remarks
Closing Remarks We maintain significant customer presence throughout our markets and are encouraged by the breadth in our business Our extensive market presence has allowed us to be at the forefront of evolving industry opportunities • Telephone companies are deploying FTTH to enable gigabit high sp
Slide 13: Notes
Notes 1. Organic growth (decline) % adjusted for contract revenues from storm restoration services, and for the additional week of operations during the fourth quarter as a result of the Company’s 52/53 week fiscal year, when applicable. 2. Q2 2023 % of contract revenues for customers #6 through #10
Slide 14: The people connecting America
The people connecting America® 14