Orion180 Insurance Group Inc.

Good day and welcome to the Orbital Infrastructure Group's second quarter 2022 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. A question and answer session will follow management's remarks. Please note this event is being recorded. I would now like to turn the conference over to Mr. John Beisler, Investor Relations. Please go ahead, sir.

Thank you, Operator. Good morning, everyone, and welcome to the Orbital Infrastructure Group's second quarter 2022 conference call. Earlier this morning, the company issued a press release with its second quarter 2022 earnings results. A copy of this release is available in the newsroom under the investor relations section of the Orbital website. Speaking on today's call are Jim O'Neill, Vice Chairman and Chief Executive Officer, and Nick Grindstaff, Chief Financial Officer. Today, management will review the highlights and financial results for the second quarter, as well as recent developments. Following the formal remarks, management will answer questions. I would like to remind everyone that today's call will contain certain forward-looking statements made under the Securities Act of 1933 and Security and Exchange Act of 1934 as amended. Such statements are subject to risks and uncertainties that could cause actual results to vary materially from those projected in these forward-looking statements. The company may experience significant fluctuations in future operating results due to a number of economic, competitive, and other factors, such as COVID-19, the company's reliance on third-party manufacturers, supply and service providers, government agency, budgetary and political constraints, new increased competition, changes in market demand, and the performance or liability of its products, integrated solutions, and services. These factors and others could cause operating results to vary significantly from those in prior periods and to those projected in our forward-looking statements. Additional information with respect to these and other factors which could materially affect the company and its operations are included in certain forms the company has filed with the Securities and Exchange Commission. These forward-looking statements are based on information available to Orbital Infrastructure Group as of today August 11, 2022, and the company assumes no obligation to update these statements as circumstances change. With that, I would like to turn the call over to Jim O'Neill, Vice Chairman and CEO of Orbital Infrastructure Group. Jim, please go ahead.

Good morning, and thank you for joining us today to discuss Orbital Infrastructure Group's second quarter 2022 results. Before I begin my commentary, I want to thank our employees for their commitment to safely delivering exceptional service to our customers, especially this time of year when many of our employees are exposed to the risk of heat-related injuries while working in extreme temperatures. Our number one objective each and every day is for our employees and the stakeholders we interact with to return home safely to their families. I sincerely appreciate your efforts. Our name change from Orbital Energy Group to Orbital Infrastructure Group, or OIG, Better represents our strategy to build infrastructure across the three segments of our business, electric power, telecommunications, and renewables. It supports our goal to provide services that contribute to reducing the world's overall carbon footprint. Our website and other related items will be updated in the next few weeks to reflect this change. The asset sale of our subsidiary, Orbital Gas Systems North America, to Mangan Incorporated is expected next week. and will complete the divestiture of our legacy orbital gas operations. The only remaining business in our discontinued legacy gas operations is our VE technology proprietary sampling probe. We believe there is value in this technology and we are currently pursuing several avenues to divest this business by the end of the year. Finally, before I get into my operational commentary, We had stated on our first quarter earnings call that our number one objective was to restructure our balance sheet, specifically our debt structure. Over the last several months, we have engaged many lenders and equity firms that have presented a wide range of solutions, and we remain deliberate in our actions to achieve the optimum structure for both the company and our shareholders. Nick will provide more details in his commentary. Now to the developments of the second quarter and our outlook for the rest of the year. Second quarter results continued our solid performance this year with record revenues in the quarter of $93.9 million. Demand for our services continued to be driven by broad-based business strength from utility grid modernization and system hardening initiatives and telecom 5G deployments, as well as our reputation for solid and safe execution. We also believe momentum is building for continued profitable growth next year and we continue to see opportunities for multi-year expansion across our service lines. Consolidated revenues for the quarter increased 33.6% sequentially compared to revenues for the first quarter of 2022, primarily from the increase in construction activity from our two utility-scale solar project awards, as well as a ramp in Rural Digital Opportunity Fund or RDOF construction under contract in a five-state area. Adjusted EBITDA for the quarter decreased 44.7% sequentially compared to the adjusted EBITDA for the first quarter of 2022. This decrease was attributed solely to operating losses experienced on the Black Bear Solar project during the quarter. On a consolidated basis, we will increase our revenue guidance for the full year of 2022 to a range of $405 million to $450 million, from our previous revenue range of $375 million to $425 million. Our annual revenue guidance increase is primarily due to the increasing demand for our services and our elective power and telecommunication segments. The increase in revenue is largely under master service agreements and long-term contracts and is offset somewhat by a decrease in uncommitted solar revenue projected in the second half this year. Our adjusted EBIDOT guidance for the full year of 2022 remains unchanged with a range of $38 million to $43 million As results from our electric power and telecommunication segment operations in the first six months of the year were better than expected, and we anticipate these segments will deliver similar results for the remainder of the year, offset by the renewal of the segment, specifically margin shortfalls recognized on the Black Bear Solar project. The market drivers and outlook for our business opportunities in our electric power and telecommunication infrastructure segments remain strong. In our electric power segment, we continue to experience unprecedented demand from our investor-owned utility customers to provide our skilled workforce to upgrade electric distribution and substation infrastructure. In our telecommunications segment, we are experiencing increasing demand for our engineering design and construction expertise to support the rollout of RDOF programs as well as enhancements to 4G LTE and the upgrade of the 5G spectrum. Also, the synergies we are experiencing from our telecommunication tuck-in companies are bringing opportunities to provide additional engineering design and construction services with existing and new customers. Last month, the bipartisan infrastructure investment legislation that was enacted will bolster an already prolific market environment in both our electric power and telecommunication segments. This is a historic investment in the nation's core infrastructure It includes $130 billion to upgrade the nation's electric grid and expand broadband access to underserved areas. These funds will be deployed over the next five years through 2026. The utility-scale solar market so far this year has been negatively impacted by high commodity prices and supply chain constraints exacerbated by the Department of Commerce anti-circumvention investigations. These headwinds have been somewhat mitigated through an executive order by President Biden on June 6, declaring an emergency with respect to the inadequate supply of solar cells and modules, which resulted in regulation for up to 24 months of duty-free access to solar cells and modules from Southeast Asia. Additionally, the recently enacted Inflation Reduction Act will provide tax credits to companies building renewable energy products in America. We believe legislation over the past two months is a positive for the renewable industry and will be a catalyst to increase solar project developments in the future. We remain very confident in the outlook for our business, our electric power and telecommunications segment outlook for the remainder of the year and beyond remain strong. We acquired two exceptional platform companies that are performing beyond our expectations We've acquired tucking companies into our telecom platform where synergies to expand our service offerings and customer base are being realized, as well as leveraging synergies in our electric power segment to improve our legacy electric power and foundation operation performance and profitability. In our renewable segment, we will shift our utility scale solar strategy away from providing EPC or engineering procurement and construction services to be a specialized contractor providing skilled resources to EPC companies. This strategy reduces the risk profile of being an EPC, and margins are enhanced as we don't have to share profits with our joint venture partner. The Jingoli JV will continue to operate. However, Jingoli will take on the EPC role, and Orbital Solar will provide construction services to the JV. Our JV relationship with Jim Goley is not exclusive, and we are currently in discussions with other EPCs to be a contractor on their projects. I will now turn the call over to our CFO, Nick Ronstadt, for his financial overview.