Good morning. Good morning, everyone, and welcome to the Orbital Infrastructure Group's third quarter 2022 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star followed by the number one. Thank you. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Kevin McGrath, Investor Relations. Please go ahead, sir. Thank you, Colby, and good morning, everyone, and welcome to Orbital Infrastructure Group's third quarter 2022 conference call. Earlier this morning, the company issued a press release for its third quarter 2022 earnings results. A copy of this release is available in the Newsroom under the Investor Relations section of the company's website. Speaking on today's call are Jim O'Neil, Vice Chairman and Chief Executive Officer, and Nick Grindstaff, Chief Financial Officer. Today, management will review the highlights and financial results for the third quarter as well as recent developments. Following the formal remarks, management will answer questions. I would also like to remind everyone that today's call will contain certain forward-looking statements made under the Securities Act of 1933 and Securities 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 the 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 the 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 the forward-looking statements. In addition, during this conference call, we will make reference to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures are available on the Investors section of our website in our third quarter 2022 earnings press release. Additional information with respect to these and other factors which could materially affect the company's and its operations are included in certain forms the company has filed with the Securities and Exchange Commission. These forward statements are based on information available to Orbital Infrastructure Group as of today, November fourteenth, twenty twenty-two. The company assumes no obligation to update statements as circumstances change. That said, I'd like to turn the call over to Jim O'Neil, Vice Chairman and CEO of Orbital Infrastructure Group. Jim, please go ahead. Thank you, Kevin. Good morning, and thank you for joining us today to discuss Orbital Infrastructure Group's third quarter 2022 results. Before I begin with my quarterly commentary, I want to recognize and thank our employees for serving our customers in a safe and efficient manner. Each of our employees represent the OIG brand, and their efforts are recognized and very much appreciated. Now to the developments of the third quarter. Earlier this month, we announced that we were reducing both our revenue and EBITDA guidance for the full year of 2022. I am disappointed with our downward guidance revision. However, we have made much progress in advancing our infrastructure strategy throughout the year and believe the company is now positioned to accomplish several milestones in the near future. The primary contributor to our shortfall for the quarter and downward guidance revision for this year was in our renewables segment, specifically ongoing losses on the Black Bear Solar project. We are approximately 80% complete on this project, which we expect to be substantially completed by the end of this year. Poor performance on the Black Bear project has overshadowed the progress we have achieved in our electric power and telecommunications segments throughout this year. Our consolidated revenues for the quarter were $99.8 million, and our adjusted EBITDA from continuing operations was -$14.6 million. Without the renewable segment losses, our adjusted EBITDA for the third quarter is 9.9% of revenues. Our electric power segment continues to perform as expected as we continue to provide skilled resources and specialized equipment to meet the increasing demand from our investor-owned utility customers to provide infrastructure services to maintain, upgrade, and expand the electric distribution and substation infrastructure. Electric power revenues were $36.7 million, and adjusted EBITDA was $6.1 million for the third quarter of 2022. We expect profitable growth in this segment over the next several years as our customers are deploying record levels of CapEx to address aging infrastructure, storm hardening, cybersecurity, and grid reconfiguration from fossil fuel to renewable sources of generation. In the third quarter, we did experience a reduction in segment revenues for a several week period due to the summer as customers deferred electric distribution maintenance on critical areas of the electric power grid during a period of record high temperatures and elevated load on the electric power system. Our customers' decision to defer maintenance under these conditions is unusual, but does happen at times when conditions warm. Telecommunications segment generated $24.1 million in revenue and $4.5 million in adjusted EBITDA for the third quarter of this year. Profitable growth in this segment can be attributed to the increase in the Rural Digital Opportunity Fund or RDOF revenues. Synergies that are materializing from the three tuck-in acquisitions we acquired into our telecommunications segment platform, which has broadened our capabilities, allowing us to provide additional services to existing customers and build momentum with new customers and expanded geographies. The nation is significantly lacking the broadband and wireless infrastructure to deploy 4G LTE and 5G spectrum throughout rural areas, municipalities, and in many large population centers. Telecommunications infrastructure spending will be meaningful for years to come and will provide significant opportunity for profitable growth in this segment. Turning to our renewables segment, revenues were $39 million and adjusted EBITDA was a loss of $20.6 million for the third quarter of this year. As mentioned, losses were primarily associated with the performance on the Black Bear Solar project. We're making progress on our revised renewable strategy to pursue utility-scale solar, civil, and mechanical construction services as a subcontractor to solar developers and abandon our fixed-price contract EPC model. The primary reason for the annual financial guidance revision was poor performance in the renewables segment, as well as uncommitted solar project opportunities expected in the fourth quarter of this year that have been deferred into 2023. In addition, expected price increases for our electric power distribution services from an existing customer in the Eastern U.S. did not materialize. As a result, we have declined future work that was in the prior guidance. Demand for our electric power infrastructure services continues to be strong, and it is prudent for us to be selective toward meeting our margin expectations. I believe the equity market does not recognize the underlying value of Orbital Infrastructure Group. Despite challenges with our capital structure and renewables segment performance, the electric power and telecommunications segments have consistently increased profitable revenues over the past two years. This dynamic, coupled with our ongoing conversations with capital providers, gives us confidence that we will have a solution in place by year-end to restructure our balance sheet. I will now turn the call over to Nick Grindstaff, Orbital's CFO, to provide more detail on our balance sheet, restructuring efforts, and financial information for the quarter. Nick? Thank you, Jim. Today, we announced quarterly revenues of $99.8 million for the third quarter of 2022. Loss from continuing operations net of income taxes was $141.6 million, with an adjusted EBITDA loss of $14.6 million. As we stated in the past, we believe adjusted EBITDA is the best financial measure as an indicator of operational performance. You will find a reconciliation of EBITDA and adjusted EBITDA, both non-GAAP measures, to loss from continuing operations, a GAAP measure, as a supplement to our third quarter earnings press release. For the third quarter, GAAP loss from continuing operations was $1.22 per share. This compares to a loss from continuing operations for the third quarter of 2021 of $0.15 per share. As a reminder, the financial results I am providing today are from our continuing operations and do not include results from our Orbital Gas Systems North America Inc. entity, which was sold in the third quarter and reclassified to discontinued operations in December of last year. Detailed results from our discontinued operations are disclosed in our Form 10-Q. In the third quarter of 2022, our consolidated revenues were $99.8 million as compared to $24.8 million in the third quarter of 2021. This increase is due to acquisitions in our electric power and telecommunications segment and organic growth across all operating segments. Adjusted EBITDA was a loss of $14.6 million for the quarter as compared to a loss of $6.3 million in the third quarter of 2021. The adjusted EBITDA losses for the quarter included a $20.6 million loss in our renewables segment, primarily associated with the Black Bear project. Without the losses sustained in the renewables segment, adjusted EBITDA would have been $6 million or an adjusted EBITDA margin of 9.9%. In the third quarter of 2022, the electric power segment had a slight decrease in revenues to $36.7 million compared to $41.3 million in the second quarter of 2022. Adjusted EBITDA for this segment was $6.1 million or 16.6% of revenues for the third quarter as compared to $8.1 million or 19.6% of revenues for the second quarter of 2022. As Jim discussed, the unfavorable revenue and margin trends are primarily the result of a period of deferred maintenance in the quarter. Over the same period, the telecommunications segment increased revenues to $24.1 million, with adjusted EBITDA of $4.5 million or 18.7% as compared to revenues of $20.4 million and adjusted EBITDA of $2.7 million or 13.2% of revenues in the second quarter of 2022. These increases are due primarily to the ramp-up in construction on RDOF programs over a five-state area, operational synergies from tuck-in acquisitions, and absorption of fixed costs through organic growth. The renewables segment had revenues of $39 million and adjusted EBITDA loss of $20.6 million in the quarter, compared to revenues of $32.3 million and an adjusted EBITDA loss of $4.8 million in the second quarter of 2022. As previously stated, operational performance issues on the Black Bear project was the primary contributor to the disappointing results for this segment. Certain holding company costs exist outside of the defined operating segments. For the third quarter, these costs were $4.6 million. Total backlog was $472.3 million at the end of the third quarter of 2022, a 4.6% decrease from the second quarter of this year. This is due to a 51.6% decrease in backlog in the renewable segment as the utility scale solar EPC contracts near completion, offset by a 4.2% and 3.2% increase in backlog in the electric power and telecommunications segments, respectively. The significant increase in backlog for the electric power and telecommunications segments over sequential quarters is an indication of increasing demand for the services we provide in these markets. We have talked about the efforts underway to restructure the balance sheet. Substantial debt service continues to be a factor that puts pressure on our cash flow. Continued improvement in the performance of our electric power and telecommunications segments is attractive to both debt and equity providers. We are in the advanced stages of this process with multiple capital providers and believe we will be in a position to provide more definitive information to the market in the coming weeks. Turning to guidance, on November 2, 2022, the company announced its updated financial guidance for the full year 2022. The company lowered its full year 2022 consolidated revenue guidance to a range of $350 million-$375 million from its previous range of $405 million-$450 million, and lowered its full year 2022 adjusted EBITDA to a range of $4 million-$6 million from its previous range of $38 million-$43 million. This reduction in guidance was primarily due to the losses incurred in the quarter on the Black Bear project. Also contributing was uncommitted work in the renewables segment being deferred to 2023. To a lesser extent, there was deferred electric distribution maintenance in the third quarter and a reduction in work for the remainder of the year for an electric power segment customer that did not meet our profitability objectives. Our segment guidance is as follows. As it relates to the electric power segment, we believe 2022 revenues will range between $155 million-$160 million with adjusted EBITDA margins to be in excess of 20%. In our telecommunications segment, we expect revenues in the range of $85 million-$90 million, with adjusted EBITDA margin expectations for this segment in the mid-teens. Finally, in our renewables segment for the full year of 2022, we anticipate revenues in the range of $110 million-$120 million. We do not anticipate additional material losses for this segment's outlook at this time. Certain holding company costs exist outside of the defined operating segments. We estimate these costs to be $16 million for 2022. Now I will turn the call back over to Jim. Thank you, Nick. I believe our current stock price is a result of our challenged balance sheet and poor performance in the quarter. These disappointing third quarter results are primarily attributed to a single EPC project in the renewable segment. The electric power and telecommunications segments have performed beyond expectations throughout the year, and I'm highly confident that profitable growth will continue in these segments for years to come. Coupled with the shift away from providing fixed-price EPC construction services in the renewables segment, we are positioned to provide predictable and recurring profitability going forward. We believe we are very close to a balance sheet solution that will significantly improve the burdensome debt structure that exists today. Our revised business model and restructured balance sheet will significantly improve our cash flow and provide us the ability to self-fund organic growth, which we believe is the best course of action to achieve positive momentum in our stock price. Operator, that concludes our prepared remarks. I'll now open the call to Q&A. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We'll pause just for a moment to compile the Q&A roster. Your first question comes from the line of Eric Stine from Craig-Hallum. Your line is open. Hi, Jim. Hi, Nick. Hey, good morning, Eric. Hi, Eric. Good morning. I guess first of all, good to hear the confidence in the capital structure solution here by year-end. I guess we'll stay tuned on that, but maybe just as we think about fourth quarter, obviously, I mean, your guidance does imply a pretty meaningful step up in EBITDA, and I know that's related to solar, but just, you know, maybe how things have trended quarter to date, visibility you've got into that improvement and, you know, the solar challenges there are kind of ring-fenced and will be wrapped up by the end of the year. The electric and telecom are selling beyond expectations. Like I said on the call, Eric, telecom has grown threefold from when we bought GTS in about 18 months ago. Their margins have gone up significantly as we leveraged synergies and continue to ramp up on these RDOF opportunities, which we believe will be around for many years to come. Electric power is doing real well. They're back on the run rate that we expect them to be after the third quarter shortfalls that were caused during about a 2-week or 3-week period. Solar, the losses that we provided were as of 2 weeks ago or so when we closed out the books. On EPC projects, you recognize those losses as you expect them or experience them. That isn't a nine-thirty number. We feel with that project being close to completion, that hopefully we won't have you know, another quarter like we did in the third quarter. Certainly going into next year, we feel really good about the business and the recurring nature of the revenue streams as we move into the new model on solar, not to pursue fixed price EPC. The continuation of our telecommunications and electric power segment of revenue opportunities, which I feel really good about. Got you. Then, you know, just maybe to, I don't know, close the book or try to get past the solar challenges. I guess, first of all, I mean, maybe some of the changes you've made in that segment, and obviously you're making a shift to more or away from EPC, but just operational changes. Obviously, this thing must have been misbid, executional issues. Maybe just some color there so, you know, to give people confidence. Look, it's all of the above, right? It's all of the above. I mean, we had some challenges. I mean, it was a competitively bid job. We were the lowest bidder. We had some operational challenges on the project out of the gate. When that happens, you know, you can't get behind on these EPC projects because you're always in the catch-up mode. We made some leadership changes in the spring that I'm confident about. We're pursuing our new renewable strategy to pursue more civil and mechanical scope of work under much better contract structures from a risk standpoint. We've got to get through and finish these jobs we're on. The Black Bear is the one that's particularly been a challenge. The other project, the HAPI project is going much better. They both should be done by. That's helpful. Yeah, both should be done. The HAPI project should be done, you know, by the end of the first quarter next year. Okay. Maybe last one for me. I mean, does this change, you know, given the new role in getting away from EPC, does this change the visibility at all in that, in that work? I mean, I know sometimes and while it's very lumpy and visibility can be tough anyways, but, I mean, does this materially change that, or is it, you know, pretty much the same given, you know, you still have a high level of involvement? I think I actually think it improves visibility somewhat. It's still not the visibility we have in electric power and telecom, but when you're pursuing an EPC project, those can be very lumpy. Now, we're going to provide services to many different EPC providers. While there still may be some lumpiness, it should be better visibility because of the diversity of the customers that we can work for and the opportunities versus being on one or two EPC projects at a time. That can be pretty lumpy. Okay. Thank you. Thank you. Thanks, Eric. Your next question comes from the line of Jeffrey Campbell from Alliance Global. Your line is open. Good morning. Morning, Jeff. First, can you talk about the legacy renewables in relation to the current backlog and how, you know, how much of the current backlog still has the old business model in it? Yeah, that's all actually legacy EPC that we're burning off. We do have opportunities that we were hopeful would have transacted this quarter in our new renewable model, doing primarily mechanical scope of work and some pile driving. Those opportunities are still there. We're close to signing some contracts that will go into backlog. I would say that all of the renewable backlog right now is associated with the remaining construction that needs to be completed on the HAPI and Black Bear projects. Okay. That's helpful. I was just wondering, I mean, high level, can you give us some kind of idea of what revenue levels and margins as a special contractor might look like as compared to prior guidance as EPC? You know, meaning will it likely be a lower chunk of revenue but with better margins or, you know, what is it gonna look like? Ironically, they should be better. Typically, you know, when you do an EPC project, you do have more margins in that project because you're taking more risk. Since we were splitting margins with our joint venture partner, we actually will make better margins providing a mechanical scope or civil scope of work under our new construct, the margins will be better. I mean, you typically shoot for 15% margin at the project level, and you build in some contingency for some risk. On the EPC projects, we were expecting about a high single-digit return. I would say that the margins pursuing this less risky strategy will be close to double what we would have expected in the EPC model. Okay. That implies that, going forward with the new special contractor model, you're not gonna be having a joint venture partner that you're gonna be splitting. Is that correct? That's correct. That is correct. just to ask the question again, since you gave a great answer on the margins. Should we expect similar types of revenue levels as a special contractor or, you know, are they likely to be lower but less lumpy, as you discussed a little bit earlier? Just kinda trying to get some feel for revenue, so. Yeah. I mean, we're gonna wanna provide more color on that probably at the end of our fourth quarter earnings call. You know, on our fourth quarter earnings call. I do expect us to build some meaningful backlog in that segment comparable to what we would have expected as an EPC provider, right? Obviously, we need to build, it's gonna ramp. You know, we're looking at right now you know, some projects that are in the $20-$25 million range, you know. If you know, if you can get a few of those signed up, which I do expect some momentum, you know, we could have some meaningful backlog to announce by the end of the fourth quarter on our call in February. Okay. No, that's helpful. Thank you. With regard to telecommunications, I just wondered, you know, it sounds like the business itself is running great. Is it bidding on any new projects currently? We're actually not bidding on any work. It's all negotiated. I would say the greater majority, 80%-90% of what we do is trying to satisfy our current customers where we've built relationships, trying to meet their growth needs going forward. It's a good environment to be in right now, both in electric power and telecommunications, because most of what we do is not bid. We're just negotiating and partnering with customers to continue to meet their growth needs going forward. Okay. All right. That's good. My last question is, should we expect any kind of windfall performance in the electric power due to the heavy hurricane season that we've been experiencing in the Southeast U.S.? No, the customers that we work for, they had so much work going on that was critical in nature that we didn't get to release the 9 crews that we stated, I believe, in the press release that we did during the hurricane. I don't think there'll be any windfall. Obviously we'll have some good margins. We were there for probably 2 weeks maybe with 9 crews. You know, it will be additive, but it's not gonna be material. Okay, great. Thanks for all the answers to the questions. Appreciate it. Thank you, Jeff. Thanks, Jeff. There are no further questions at this time. I will now turn the call back over to Jim O'Neil, CEO, for closing remarks. Thank you all for participating on our third quarter call today. We hope everybody has a great day, and we look forward to following up with many of you in the future. Thank you and goodbye. This concludes today's conference call. You may now disconnect.
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