Mr. Robert Blackadar reports

BADGER INFRASTRUCTURE SOLUTIONS LTD. ANNOUNCES STRONG 2023 THIRD QUARTER REVENUE AND ADJUSTED EBITDA

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

2023 third quarter financial and operational highlights:

• The company achieved revenue of $195.6-million, up 20 per cent from 2022;
• Gross profit of $62.8-million, up 40 per cent from 2022;
• Gross profit margin improved to 32.1 per cent, up from 27.4 per cent in 2022;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $52.7-million, up 49 per cent from 2022;
• Adjusted EBITDA margin also improved in the quarter to 26.9 per cent, up from 21.6 per cent in 2022;
• Earnings per share was 68 cents, up 62 per cent from 42 cents per share in 2022;
• Consolidated revenue per truck per month (RPT) (1) for the quarter was $49,079, up 5 per cent from 2022;
• The board of directors has approved the quarterly cash dividend of 17.25 Canadian cents per share for the fourth fiscal quarter of 2023, with payment to be made on or about Jan. 15, 2024, to all shareholders of record at the close of business on Dec. 31, 2023.

"We are pleased to report the continued growth in our business as we report another record revenue quarter of $195.6-million, up 20 per cent from last year. These results continue to show that our commercial strategy launched last year and the renewed focus on our pricing strategies for 2023 are working. Importantly, our adjusted EBITDA margin improved to 26.9 per cent, up from 21.6 per cent last year. The team has performed exceptionally well through the busy construction season, which positions Badger for the balance of the year," said Robert Blackadar, president and chief executive officer.

"We remain focused on capital discipline. In that regard, we are planning to produce at the midpoint of our range between 200 to 230 units and retire between 75 to 85 units, at the lower end of our previously provided range. As of Sept. 30, 2023, we have produced 169 units, retired 66 units and completed the refurbishment of two units. We are now expecting to complete the refurbishment of between 15 to 20 units for 2023. We are very pleased with the results of the two units finished to date and expect to continue this program to smooth the upcoming retirement needs of our fleet," concluded Mr. Blackadar.

2023 business outlook

The company continues to focus on increasing revenues through its sales and national accounts commercial strategy to capture pricing opportunities and asset utilization throughout its branch network, particularly in the major urban centers in North America that are seeing strong end-market demand growth. Accordingly, Badger's sales resources are aligned with market and customer opportunities to continue to drive market penetration in key markets. The company continues to see strong and growing demand in its end-markets, which include infrastructure, energy and non-residential construction. Badger continues to grow its customer base and national accounts program, which is expected to contribute to continued year-over-year growth. The company remains focused on both operational and functional scalability to drive operating leverage and continue growing adjusted EBITDA margins.

Badger is focused on asset management and utilization to support near-term growth needs and will continue to leverage its vertically integrated manufacturing capabilities to support its medium- and long-term growth requirements. The company plans to produce at the midpoint of its previously provided range between 200 and 230 non-destructive excavation units. It is targeting retirements between 75 and 85 units, at the lower end of the previously provided range of 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, Badger expects to complete the refurbishment of between 15 to 20 units, down from the range previously provided of between 40 and 50 units due to vendor delays. The company continues to expect an average refurbishment cost per unit at $150,000. During the third quarter, two refurbished units were completed and placed back into operations.

The need for near- 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. Growth in end-market demand remains strong across all of the company's U.S. regions. Badger remains well positioned to capture this growing market demand. The company has seen a slowdown in Canada in the third quarter, as a result of the pause in some large continuing projects. Growth in the Canadian market is expected to remain soft through the balance 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.

2023 third quarter results conference call

A conference call and webcast for investors, analysts, brokers and media representatives to discuss the 2023 third quarter results is scheduled for 7 a.m. MT on Friday, Nov. 3, 2023. Participants can join the webcast with audio only or join the call to ask a question.

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

2023 third quarter disclosure documents

Badger's 2023 third quarter MD&A (management's discussion and analysis) and interim condensed consolidated financial statements for the three and nine months ended Sept. 30, 2023, along with all previous public filings of Badger, 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. See the section on non-IFRS financial measures in the company's 2023 third quarter MD&A for detailed reconciliations of non-IFRS financial measures.

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