Mr. Robert Blackadar reports

BADGER INFRASTRUCTURE SOLUTIONS LTD. ANNOUNCES RECORD 2023 SECOND QUARTER REVENUE AND ADJUSTED EBITDA

Badger Infrastructure Solutions Ltd. released its second quarter 2023 results today. All results are presented in U.S. dollars unless otherwise stated.

2023 second quarter financial and operational highlights:

• The company achieved revenue of $171.9-million, up 19.2 per cent from 2022.
• Gross profit of $50.1-million was up 40.0 per cent from 2022.
• Gross profit margin improved to 29.1 per cent, up from 24.8 per cent from 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $39.2-million was up 51.1 per cent from 2022.
• Adjusted EBITDA margin also improved in the quarter to 22.8 per cent, up from 18.0 per cent from 2022.
• Earnings per share were 32 cents, over double from 14 cents per share in 2022.
• Consolidated revenue per truck per month (RPT) (1) for the quarter was $44,502, up 10.5 per cent from 2022.
• The board of directors has approved the quarterly cash dividend of 17.25 cents per share for the third fiscal quarter of 2023, with payment to be made on or about Oct. 16, 2023, to all shareholders of record at the close of business on Sept. 29, 2023.

"We are pleased with our record second quarter revenue of $171.9-million, which was 19 per cent higher than the second quarter of 2022. We've had a strong start to the year as a result of focused efforts on our enhanced commercial strategy and improved utilization. We also achieved record second quarter adjusted EBITDA of $39.2-million, up over 50 per cent compared with last year. We continue to be encouraged with our financial performance, with our trailing-12-month adjusted EBITDA trending towards prepandemic levels," said Robert Blackadar, president and chief executive officer.

"We are now in our busy construction season and our focus on sales, pricing and asset utilization continues to drive revenue growth and our bottom line margins. This focus positions Badger well for the balance of the year. We remain on track to produce between 200 to 230 non-destructive excavation units and to retire between 80 to 100 in the year, with 112 units manufactured and 38 units retired in the first half of the year," concluded Mr. Blackadar.

2023 business outlook

The company continues to focus on increasing revenues through its sales and national accounts commercial strategy, pricing improvements, asset utilization, and is exercising both operational and functional cost discipline to continue growing adjusted EBITDA margins. Badger has aligned its sales resources with market and customer opportunities while leveraging its existing branch network. The company continues to see strong demand in its end-markets, which include infrastructure, energy and non-residential construction.

Badger is focused on fleet management and utilization to support near-term growth needs and will continue to leverage its vertically integrated manufacturing capabilities to support its medium-term and long-term growth requirements. The company's fleet is well positioned to take advantage of market demand in 2023. The company continues to target production of between 200 and 230 non-destructive excavation units and retire between 80 and 100 units in 2023. In the second quarter of 2023, Badger initiated a refurbishment program to extend the useful life of a select number of non-destructive excavation units. These costs will be capitalized and are expected to extend the useful life of these select units by five years and increase the return on invested capital. In 2023, the company expects to refurbish between 40 and 50 non-destructive excavation units at an average cost of approximately $150,000 per unit. At June 30, 2023, 14 units were undergoing refurbishment. Badger continues to be comfortable with chassis and key component availability and does not expect to be materially impacted by supply chain disruptions, based on the company's supplier relationships and inventory planning completed in 2022.

The need for near-term and long-term reinvestment in North America's critical infrastructure, including the addition of new infrastructure to support sustainable energy technologies remains a growing trend across Badger's operating footprint. Badger continues to be well positioned to capture this growing market demand for non-destructive excavation across North America. Badger has managed through the recent inflationary environment by increasing its focus on sales activities, pricing improvements, fleet utilization and operating cost management. Badger continues to see strong and growing demand for its services. The company's focus on growing its customer base and national accounts program is expected to contribute to continued growth in the second half of 2023.

About Badger Infrastructure Solutions Ltd.

Badger is North America's largest provider of non-destructive excavating services. Badger works for contractors and facility owners in a broad range of infrastructure industries and in general commercial construction. Badger's customers typically operate near high concentrations of underground power, communication, water, gas and sewer lines, where safety and economic risks are high and where non-destructive excavation provides a safe alternative for certain customer excavation requirements.

The company's key technology is the Badger Hydrovac, which is used primarily for safe excavation around critical infrastructure and in congested underground conditions. The Badger Hydrovac uses a pressurized water stream to liquify the soil cover, which is then removed with a powerful vacuum system and deposited into a storage tank. To complement the Badger Hydrovac, the company introduced the Badger Airvac (1) in late 2021. The Badger Airvac is also used for safe excavation but utilizes compressed air instead of water to loosen the cover soil before vacuuming and depositing excavation materials into a storage tank. Badger is unique in the non-destructive excavation industry because it designs and manufactures all of its hydrovac and airvac units at its plant in Red Deer, Alta., which has an annual production capacity of more than 350 hydrovac and airvac units.

(1) Badger Airvac is a registered trademark in Canada. The trademark is currently pending in the United States.

2023 second quarter results conference call

A conference call and webcast for investors, analysts, brokers and media representatives to discuss the 2023 second quarter results is scheduled for 6 a.m. MT on Friday, Aug. 4, 2023. Participants can join the webcast with audio only or join the call to ask a question.

2023 second quarter disclosure documents

Badger's 2023 second quarter MD&A (management's discussion and analysis) and interim condensed consolidated financial statements for the three and six months ended June 30, 2023, along with all previous public filings of Badger Infrastructure may be found on SEDAR+.

Non-IFRS (international financial reporting standards) financial measures

This news release contains references to certain financial measures, including some that do not have any standardized meaning prescribed by IFRS and that may not be comparable with similar measures presented by other companies or entities. These financial measures are identified and defined below. See non-IFRS financial measures in the company's 2023 second quarter MD&A for detailed reconciliations of non-IFRS financial measures.

We seek Safe Harbor.