Slide 1: Q3 Fiscal 2023 Results
Q3 Fiscal 2023 Results November 22, 2022
Slide 2: Participants and Agenda
• Q3 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: Caution Concerning Forward-Looking Statements
Important Information Caution Concerning Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the 1995 Private Securities Litigation Reform Act. These forward-looking statements include those related to the outlook for the quarter ending January 28,
Slide 4: Q3 2023 Overview
Q3 2023 Overview Contract Revenues • Contract revenues of $1.042 billion increased 22.1% Operating Performance • Non-GAAP Adjusted EBITDA of $114.6 million, or 11.0% of contract revenues, compared to $83.1 million, or 9.7% 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 by Customer
Contract Revenues 6 Q3 2023 Organic Growth: 22.1% 27.4% 13.3% Total Customers Top 5 Customers All Other Customers2 29.4% 64.5% 1.7% 115.4% AT&T Lumen3 Verizon Frontier Top 5 customers represented 66.5% and 65.4% of contract revenues in Q3 2023 and Q3 2022, respectively Fiber construction revenue fro
Slide 7: Backlog, Awards and Employees
Backlog, Awards and Employees 7 Customer Description of Services Area Term Lumen Construction & Maintenance WA, OR, NV, UT, WY, CO, SD, NE, MN, IA, FL 3 years AT&T Utility Line Locating FL 3 years Charter Construction & Maintenance TX, MI, OH, NY, FL 3 years Windstream Construction GA 1 year Various
Slide 8: Financial Highlights
Financial Highlights 8 Contract Revenues Non-GAAP Adjusted EBITDA Diluted EPS • Contract revenues of $1.042 billion increased 22.1% • Non-GAAP Adjusted EBITDA of $114.6 million, or 11.0% of contract revenues • Diluted earnings per common share of $1.80 • Diluted earnings per common share included in
Slide 9: Debt and Liquidity Overview
Debt and Liquidity Overview Debt maturity profile and liquidity provide financial flexibility 9 • Ample liquidity of $444.3 million at Q3 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 fiscal 2023 • Capital expenditures, net of disposals, for fiscal 2023 expected to range from $165 million to $175 million, a decrease compared to the low end of $180 million in the outlook pr
Slide 11: Outlook for Quarter Ending January 28, 2023 (Q4 2023)
INTEREST EXPENSE, NET $11.8 million EFFECTIVE INCOME TAX RATE Approximately 27.0% DILUTED SHARES 30.1 million Outlook for Quarter Ending January 28, 2023 (Q4 2023) CONTRACT REVENUES Increase by mid- to high-single digit as a percentage of contract revenues compared to Q4 2022 NON-GAAP ADJUSTED EBITD
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. Q3 2023 % of contract revenues for customers #6 through #10
Slide 14: The people connecting America
The people connecting America® 14