Charge Enterprises, Inc.

Good day, everyone, and welcome to Charge Enterprises' second quarter 2023 financial results webcast. I am Matthew. I'll be the 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 Charger Enterprises. Welcome to Charger Enterprises' second quarter 2023 financial results webcast. 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 questions previously 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 includes 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 filing, we detail material risks and uncertainty, many of which are beyond our control and could cause 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 thank you all for joining us today. In addition to reviewing the highlights from the second quarter of 2023, we'll spend some time discussing our strategic roadmap the progress we are achieving across our multiple business lines, and the recent acquisition of Green Speed Solutions. I'm pleased to report another strong execution quarter for our infrastructure segment, posting second quarter revenue of $30 million, up 18% from the comparable period in 2022. We continue to benefit from strong underlying trends in our EV charging and electrical infrastructure business. Leah will expand on our telecommunications segment in her comments. Moving on to our backlog, we're pleased to report our second consecutive quarter of record backlog for our infrastructure segment. Our backlog now stands at approximately $138 million at the end of second quarter, an increase of 43% year over year. The increase in our EV charging infrastructure business is particularly noteworthy, representing over 28% of our total backlog at the end of the second quarter. This is a testament to our remarkable work from our employees and a signal of the momentum in our EV infrastructure business as we look to the remainder of 2023 and into 2024. Beneath the top line results, we are very focused on our path to profitability by improving our gross margins, optimizing our operations, and carefully managing our operating defenses while making the necessary investments to ensure we deliver on our commitments to our customers. We will focus on three key factors to get us where we need to be next year, scale, gross margin expansion, and management of operating expenses. We believe growth in our EV charging infrastructure business will play a leading role in transitioning us to a profitable company. As such, scaling any business is challenging, but growth is critical, and we've begun to establish our brand and build a business that we believe is well positioned in this enormous market. As we've shared on previous earnings calls, our initial strategic focus for EV charging infrastructure business is on the automotive retail industry, which today encompasses some 18,000 franchise dealerships. Many of these dealerships have received mandates from their respective OEMs to prepare for the transition to EVs by installing charging infrastructure. As previously communicated, our goal has been to engage with 1000 dealerships by the end of 2025. Through the end of the second quarter, Not including our recently announced acquisition of Green Speed, we have engaged with approximately 20% of our targeted goal. In addition, we are encouraged by the increased interest from our broadband customers in our remote monitoring and maintenance software tool, Peel It, also known as PeelIt.com. Our goal is to build this brand and offer it to our broader base of customers. We've also stated our desire to grow through acquisition, especially in the EV charging category. We are successfully executing this commitment with our recently announced acquisition of Green Speed Energy Solutions, a leading provider of sustainable energy solutions in the electrical, EV charging infrastructure, solar, and energy storage industries. Their focus and execution have led to successful completion of over 200 EV electrification projects across 14 states. Before discussing some of the strategic rationale and benefits of combining the strengths of CI those of green speed i will touch upon the terms of the acquisition and the financial expectations charge acquired green speed for a purchase price of up to 15 million dollars net of closing adjustments which includes 6 million in cash and 2 million of charge common stock along with a potential earn out payments of up to 7 million total cash contingent upon achieving certain EBITDA milestones for each of the two years following closing of the transaction. As to the financial impact, we expect this transaction to be accretive to both gross margin and EBITDA in the first full year of ownership. In order to provide an understanding of the benefit of acquiring Greenspeed and how it supports the scaling of our EV infrastructure business, let's take a deeper dive into the combined EV charging infrastructure Green Speed business in terms of geography, backlog, customer engagements, and other relevant operating metrics. With little overlap in customer base, Charge will grain a broader geographic presence by integrating Green Speed's established operations across the Mid-Atlantic and Southeast regions. Green Speed has successfully completed over 200 EV electrification projects across 14 states. Their success in scale and combined with our operation creates exciting opportunities to enter new geographies and generate revenues through a broader set of customer segments, cross-selling, and incremental product offering. The combined companies have the capability to now self-perform EV charging infrastructure work in 25 states and have installed approximately 600 total charging stations to date. Of those, 410 are level 2, with the remaining 190 being DC fast charging stations. In addition to these charging stations, both Greenspeed and Charge have installed infrastructure to accommodate additional chargers that our customers may purchase in the near future. Our primary focus is delivering top-notch customer service, ensuring that we cater to all our customers' EV charging infrastructure requirements, both now and in the future. With the acquisition of Greenspeed, we've added approximately $12 million in backlog as of June 30, 2023. We are excited about combining our EV businesses to both increase revenue and backlog of our infrastructure segment at a faster rate. Strategically, we believe the acquisition accelerates our business transformation with the goal of expanding the percentage of revenue from infrastructure and better positioning the company for growth and margin expansion. These combined metrics help us illustrate the scale of our business today. We believe the addition of Greenspeed's experience management engineers, and salespeople, along with their expertise in construction and electrical fields, gives us the added resource and capability to rapidly grow our market share within the retail dealership ecosystem. Greenspeed has 40 full-time members, and when combined with Charge, we will now have 425 team members, of which a significant number are field personnel consisting of engineers, project managers, foremen, and electricians actively working in the field. We are also excited about the opportunity to participate more aggressively in other verticals where EV infrastructure is also growing rapidly. Greenspeed serves as an installer for Georgia Power, a utility company, and also for the city of Brookhaven, Georgia, a suburb of Atlanta, showcasing their involvement beyond just dealerships. Both Charge and Greenspeed are actively pursuing opportunities outside the retail dealership channel with business development underway in fleets, churches, multifamily, and commercial office space. Many of these customer categories present opportunities to build a reoccurring revenue. Today, when Green Speed installs a charger, they offer their customers the capability of a subscription based consumer payment solution, facilitating charging as a service. Although the financial impact of this initiative has yet to be realized, our focus lies in the future potential to capture reoccurring revenues. This objective will be achieved through the seamless integration of our operations software capabilities. I will end my remarks with a few comments on the after-sales opportunity of our combined teams plan to pursue across customer segments. The revenue opportunity and customer relations does not end with the installation of a charger. We believe that's just the beginning. Services and support should follow closely behind the installation and transform deals from one-off purchases into multi-year contracts with various upselling and cross-selling opportunities. As we work through the integration of the EV charging infrastructure, and Greenspeed's business, we plan to share more about the strategy and opportunities in the coming quarters. Now I'd like to turn today's webcast over to Leah to go over our financial performance.