Charge Enterprises, Inc.

Good day, everyone, and welcome to the Charge Enterprises first quarter 2023 financial results webcast. I am Matthew. I'll be your operator for today's webcast. Today's webcast is being broadcast over the Internet and is also recorded for playback purposes. After the speaker's remarks, there will be a previously solicited question and answer session. For opening remarks and introductions, I would like to turn today's webcast over to Vice President, Investor Relations with Charge Enterprises, Christine Cannella. Please go ahead, Ms. Cannella.

Thank you, Matthew. Good morning, everyone. I'm Christine Cannella, Vice President of Investor Relations with Charge Enterprises. Welcome to Charge Enterprises' first quarter 2023 financial results webcast. You will find our press release and our 10-Q, along with a copy of today's slide presentation, on the Investors section of our website at www.investor.com. charge dot enterprises. If you're following along today with our earnings presentation, please turn to slide two. Joining me for today's discussion are Andrew Fox, founder, chairman, and CEO, and Leah Schweller, chief financial officer. Andrew will give a review of our key business highlights from the quarter. Leah will then walk you through a review of our financial performance. And then we will answer your questions. We are conducting a moderated Q&A session, answering the questions you have submitted. We thank you for your questions. Moving on to slide three. We would like to remind you that much of the information we will be speaking to you about today, including the answers we give in response to questions, may include forward-looking statements within the provisions of the Federal Security Safe Harbor Law. In today's press release and in our SEC filings, we detail material risks and uncertainties, many of which are beyond our control and could cause our actual results to differ materially from our expectations. These forward-looking statements apply as of today, and we undertake no obligation to update these statements after the call. For a more detailed description of certain factors that could cause actual results to differ, Please refer to our Form 10-Q filed with the SEC and our earnings release posted on our website and filed with the SEC on Form 8-K. Please note that our press release and our webcast today include non-GAAP financial measures. Reconciliations of these non-GAAP financial measures are set forth in the press release we issued today and the slide presentation with today's webcast. which are provided on the company's website. With that, I am pleased to turn today's webcast over to Andrew.

Thank you, Christine, and welcome to CHARGE's first quarter 2023 earnings webcast. Starting on slide four, for those of you who are new to our story, I'd like to begin by providing an overview of our business. I will then outline our business accomplishments along with factors that have led to our achievements during the first quarter of 2023. At Charge Enterprises, we make it easy for our customers and their clients to go electric. We offer turnkey, scalable, one-stop solutions and services. We design, engineer, install, and maintain critical infrastructure for both EV charging and broadband. We have two Capital Light segments, our infrastructure segment, which includes A&S, our wireless 5G infrastructure and smart monitoring business, BW Electrical Services, our electrical contracting services business, EV Depot, our real estate solution for commercial and fleet operators, and Charge Infrastructure, our EV charging infrastructure business, also known as CI, and our telecommunications segment, which provides connection of voice calls, SMS, and data service to global carriers. I'd like now to discuss our accomplishments during the first quarter of 2023. Revenues for the quarter were 19% higher year over year, at 194 million. We benefited from strong underlying trends in our EV charging, broadband, and electrical infrastructure businesses. We expect these strong tailwinds to drive positive adjusted EBITDA in the first quarter of 2024. We are incredibly pleased to have surpassed a milestone for our infrastructure segment, booking approximately $107 million in backlog at the end of the first quarter of 2023. demonstrating growing demand for our product offerings while establishing a reputation for delivering to our clients in the industry. During the first quarter, we continued to add and scale partnerships with top electric vehicle supply equipment, or EVSEs, jointly pursuing opportunities to become a preferred vendor for several automotive OEMs and large retail groups. Let me elaborate on just one segment of the entire EV infrastructure market, the automotive retail industry, which has about 18,000 franchise dealerships. We have initial stated goal to win project engagements with a thousand of these dealerships by the end of 2025. To the end of the first quarter, we've engaged with 15% of our targeted goal. Experience so far indicates that the average project size for dealership is approximately $365,000, which could also vary depending on the size of the dealership, type of charges to be installed and transmission needs. If we capture and provide full solution for 1,000 dealerships, we could achieve 365 million in aggregate revenue and 65 to 80 million in gross profits on the initial installation services on auto dealers alone over the next three years. It's important to note this is just one customer segment and only their initial investment. We also continue to develop strategic alliances during the quarter, including our recently announced partnership with Eaton and Oktel Energy. and continue to actively evaluate opportunity with first movers and conformers in the electric vehicle industry as the adoption of EV advances. For example, Eaton and Ochtel Energy, global manufacturers of EV SE and energy storage, together with Charge, will be able to provide complete EV charging infrastructure solutions for fleet electrification, energy storage, and charging as a service, and in the future, possibly much more complex solutions such as micro grids moving on i wanted to take a few minutes to give an update on our ci business in the second half of 2021 we formed our ci business unit that focuses on ev charging infrastructure and is capitalizing on the unprecedented opportunity to facilitate the nationwide transition to electric vehicles during 2022 we accomplished a meaningful build out of our ci team and strategically pursued our customer base We were able to make these investments with profits generated by our other subsidiaries. We have recruited an experienced team of auto industry and veterans and have built a foundation for growth by creating a high touch multi-phase process offering to customers within our EV charging infrastructure business. We viewed dealerships as a platform to create and grow a diversified future revenue streams as various products and services develop in the years ahead. We are planting the seeds for future growth by investing in software development, establishing partnerships, and adding monitoring and maintenance services. These investments position us to expand into other customer segments beyond the dealer network, including fleets, depots, malls, churches, multifamily and commercial office space, and other destinations. We are currently focusing on what we believe are the first movers of the critical EV charging infrastructure requirements. the nation's 18,000 franchised auto dealers, to whom the auto manufacturers have articulated a significant mandated spend for onsite EV charging infrastructure to support the transition from combustion to electric vehicles. Our goal is to capture a significant portion of this market, beginning with the automotive industry needs. Today, our infrastructure segment has both completed and active projects in 39 states, with our CI business currently working on projects in 28 states, and engaging with approximately 24 automotive OEMs. Today, the environment supporting EV charging infrastructure has never been stronger. The current political, economic, and technological climate are all key macro drivers favoring the demand for electric vehicles. The tailwind for EV adoption are being supported by the many recent mandates of the federal government, such as the Infrastructure Investment and Jobs Act, the IRA EV tax credit, and the recent EPA proposal for more aggressive guidelines to reduce emissions. In addition, there are aggressive investment plans by the major auto OEMs that are propelling the EV industry into the forefront and Charge, with its scalable white glove solutions, is well positioned to service this essential EV infrastructure need. While we are committed to developing this business, becoming a long-term partner for our customers and strategically investing in our fast-growing EV charging infrastructure operations, we are laying the foundation that will enable us to diversify our customer base and allow for future growth as EV adoption proliferates. This is only the beginning. The lack of adequate charging infrastructure is one of the greatest roadblocks to EV adoption. We at Charge are excited to deliver our services to clients to further enable electric vehicle adoption throughout the country. We believe that Charge is at the forefront of overcoming this hurdle, positioning us to lead, succeed, and help create a more sustainable future. Building and continually maintaining the infrastructure to EVs is paramount to electric vehicle adoption, which is the cornerstone to Charge's mission. Now I'd like to turn today's webcast over to Leah to go over our financial performance.