Centuri Holdings, Inc.

Please stand by, we're about to begin. Good day, everyone, and welcome to Century's second quarter 2024 earnings conference call. At this time, all participants are in the listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Jason Wilcock, Chief Legal and Administrative Officer and Corporate Secretary for Century. Please go ahead, sir.

Thank you, Bo, and hello, everyone. We appreciate you joining our call. This morning, we issued and posted to Century Holdings' website our second quarter 2024 earnings release. The slides accompanying today's call are also available on Century Holdings' website. Please note that on today's call, we will address certain factors that may impact this year's earnings and provide some longer-term guidance. Some of the information that will be discussed today contains forward-looking statements These statements are as of today's date and based on management's assumptions on what the future holds, but are subject to several risks and uncertainties, including uncertainties surrounding the impacts of future economic conditions and regulatory approvals. This cautionary note, as well as a note regarding non-GAAP measures, is included on slides 2 and 19 of this presentation. These risks and uncertainties may cause actual results to differ materially from statements made today. We caution against placing undue reliance on any Gregory Eisenstark, Chief Financial Officer of Century Holdings and other members of the Century Holdings Management Team. I'll now turn the call over to Bill.

Thank you, Jason, and thank you all who have joined Century's second quarter 2024 earnings call. Shortly, I'll discuss the quarter and recent developments. First, being that this is our inaugural earnings call, I'll spend a few minutes talking about our organization, how we're differentiated, and our compelling value propositions. During the second quarter, Century concluded its initial public offering and a concurrent private placement. We listed on the New York Stock Exchange and raised just under $330 million. It was a special occasion to join colleagues at the New York Stock Exchange a few weeks later to ring the opening bell and commemorate this important milestone for our company. I again want to thank all my colleagues at the company for their dedication and commitment. Through completion of the IPO, we are proud to have brought to market a leading pure-play North American utility infrastructure services company. We partner with our customers to maintain, upgrade, and expand North American energy networks. Our roots go back more than a century, with our company well-known for delivering world-class safety and quality performance. For these reasons, Sentry has earned the trust and partnership of a well-established blue-chip utility customer base. The average tenure for our top 20 customers is 23 years. infrastructure and is in 43 states and two Canadian provinces. In both our gas and electric market segments, we have historically focused on and continue to target local distribution work primarily through master service agreements or MSAs. A much smaller portion of our revenue is currently focused on smaller scale bid work. This means we lean primarily into the blocking and tackling maintenance and smaller scale construction work our customers recurring revenue profile and visibility over their longer-term spending plans. Over the last decade, Century has delivered consistent and resilient growth. And perhaps more importantly, as we look ahead, we see multiple levers to pull which will drive continued expansion. Demand for utility CapEx growth, and in turn for our services, is underpinned by multi-decade secular tailwinds spanning gas, electric, and renewables. We are extremely energized by this backdrop and are keenly identifying, capturing, and expanding opportunities being forecasted in energy and utility infrastructure. To that end, we experienced ongoing commercial momentum during the second quarter of 2024 across MSAs, which represented 83% of the quarter's revenues, and bid work, which comprised the remaining 17%. Bid work historically accounts for 15% to 20% of our annual revenues, as we maintain a very selective risk-adjusted criteria for the work we pursue. Illustrating our long-term customer relationships, we secured seven customer awards in the second quarter with a total multi-year estimated revenue potential of more than $250 million through MSA extensions, including an early renewal with one of our top customers. The quarter continues our track record of never having lost a material customer MSA. During the period, we also secured an estimated $150 million in bid project awards. Combined with our MSA work, this represents more than $400 million in estimated revenue and brings our total current backlog to $4.7 billion. We were pleased to secure the 230 kV Cardiff substation expansion While offshore windward remains a diminished part of our business mix, this project highlights the ancillary infrastructure required to connect renewables to the grid and ultimately to end customers and taps into our core capabilities. Also during the second quarter, we were awarded a $35 million gas project, replacing 30 miles of 20-inch steel pipe and building support stations as part of a major system upgrade in the Midwest. While small to start, total scope of work to be done under future phases of this project will result in a revenue potential that is several multiples higher, and we look forward to participating in future bids. These wins are examples of early successes in our strategy to selectively expand our bid work while staying within our core competencies. We have no plans to pursue cross-country transmission work. However, doing work in areas such as substations, generators, interconnections, and utility-scale transmission projects as well as larger diameter pipe for gas utilities can be attractive from a margin and returns perspective. When needed, it can also nicely balance any slowdowns in MSA volumes. Now to our results. Several factors contributed to our financial performance in the second quarter. As reports from the financial community have observed, there has been a broad-based slowdown in transmission and distribution construction spending since the beginning of the year. In recent weeks, Commentary has suggested a widespread deepening in this slowdown during the second quarter, and particular softness in gas and electric distribution, which is our main focus area. At Century, we experienced this dynamic during the period. Several customers across multiple regulatory jurisdictions across our territories, including Illinois, California, and Maryland, among others, experienced delayed or unfavorable rate case decisions. This drove lower which in turn resulted in sluggish food growth for a century. Further, we were impacted by delayed bid work and a bid job that was canceled by a customer. Despite these revenue headwinds, our adjusted EBITDA margin was in line with historical second quarter levels, evidencing our strong focus on cost control. Further, we tightened controls on capex spend and continued to focus on capital allocations. Our focus has resulted in significantly less capex spend versus the prior year period. Together, these initiatives helped drive solid free cash flow conversion on adjusted EBITDA during the period. Moving on to our cost-focused strategic initiatives and the progress we made during the quarter on these fronts. With an aim to drive efficiencies and improve bottom line results, earlier this year we commenced the process of identifying chain and fleet management systems. During the second quarter, we finalized our two-phase review of corporate and operating company overhead. In total, we identified approximately $229 million in annualized savings for 2025, split between non-revenue generating functions and activities at the corporate level and overhead in our operating companies. We've seen very strong buy-in from our leadership team. They are energized by our organizational structure and the efficiencies and accountability that are enabled by structure where there is direct reporting of operating company presidents to the CEO and daily line of sight into and across our businesses. We also made headway on our fleet and supply chain savings initiatives by leveraging our scale at the century level to secure better contract pricing across the business. During the period, we negotiated 10 major supply chain contracts with another five contracts currently under renegotiation. This work resulted in contract discounts on average of approximately 10%. The savings achieved today represent approximately 17% of the spend with our top 100 vendors and reflects only the beginning of this process as we work toward becoming a more capital-efficient organization. Before turning the time over to Greg for more details on second quarter results, As announced on June 26th, I will be stepping down as President and CEO of Century. My last day is Wednesday, July 31st. I have enjoyed my time here tremendously. This is an incredible organization and I'm proud of what we have achieved together. My decision to leave was a tough one, but ultimately reflects a once-in-a-career type of opportunity to take on the Chief Executive role at one of To be clear, I have no concerns with the company, the board, management team, or overall business strategy that will drive a very successful future for the business. Century has a seamless transition plan in place, with Paul Caudill set to take over as interim president and CEO later this week. Paul is uniquely and expertly situated to step into this role at this time. He is a highly experienced utility executive, having served previously as CEO of Envy Energy, part of the Berkshire Hathaway family, among other roles. He is a prior Century Advisory Board member and was most recently a special advisor to me and an architect of the cost reduction and efficiency programs I just spoke about. Over to Paul now for a few words.