- Full year 2021 results include revenue of $612.2 million and adjusted EBITDA of
$60.0 million
- Reported 24-month backlog at the end of Q4 2021 was
$2.1 Billion, an increase of 22.0%
over year end 2020
- Fourth quarter 2021 results include revenue of $147.1
million and adjusted EBITDA of $4.0
million
- Successfully completed four acquisitions and added
significant new contract awards
BLUE
BELL, Pa., March 31, 2022 /PRNewswire/ -- QualTek
Services Inc. ("QualTek" or the "Company") (NASDAQ: QTEK), a
leading turnkey provider of infrastructure services to the North
American 5G wireless, telecom, power grid modernization, and
renewable energy sectors, announced today a strong 2021 fourth
quarter and full-year financial results of its subsidiary QualTek
HoldCo, LLC.
For the Fourth Quarter:
Fourth quarter 2021 revenue was up 11.0% to $147.1 million, compared to $132.4 million for the fourth quarter of 2020.
Net loss from continuing operations for the fourth quarter 2021 was
$81.1 million compared to net loss
from continuing operations of $56.3
million in the fourth quarter of 2020. Excluding
one-time impairment of goodwill, Net loss from continuing
operations for the fourth quarter 2021 was $28.6 million compared to a net loss from
continuing operations of $27.5
million in the fourth quarter of 2020. Fourth quarter
2021 adjusted EBITDA was $4.0 million
compared to a loss of $13.5 million
for the fourth quarter of 2020. Backlog at the end of the
fourth quarter was $2.1 billion which
is a 22% increase over the fourth quarter 2020.
For the Full Year:
Full year 2021 revenue was $612.2
million, a decline of 6.7% from $656.5 million for the full year 2020. Net loss
from continuing operations for 2021 was $101.6 million compared to net loss from
continuing operations of $94.2
million in 2020. Excluding one-time impairment of
goodwill, Net loss from continuing operations for 2021 improved to
$49.1 million compared to a net loss
from continuing operations of $65.4
million in 2020. Full year 2021 adjusted EBITDA
increased 356.9% to $60.0 million,
compared to $13.1 million for the
full year 2020. The increase in adjusted EBITDA was driven
primarily by margin improvement initiatives across both the Telecom
and Renewables & Recovery segments. On a pro-forma basis,
assuming the recently closed acquisitions had been owned for the
full year ending December 31, 2021,
QualTek estimates adjusted EBITDA would be approximately 72.0
million. For the full year 2022, guidance remains unchanged.
As QualTek has indicated in the past, strong industry tailwinds
including grid modernization and infrastructure improvements along
with the C-band spectrum deployment are expected to drive major 5G
infrastructure buildouts and provide significant growth
opportunities across the business. The company is also seeing
reductions in COVID-19 health and safety protocols in key regions
allowing for a return to pre-covid scale and efficiency. QualTek
expects continued growth in both segments during 2022 and
beyond.
Scott Hisey, QualTek's Chief
Executive Officer, said, "2021 was a critical year for the
company. We successfully closed our SPAC transaction creating
over $80 million of additional
liquidity to allow us to execute on our strategic growth
plan. Full year 2021 adjusted EBITDA grew to $60.0 million, a $47
million increase from 2020. QualTek remains on a path to be
a significant industry player across the telecommunications and
power industries. We successfully grew our rolling two-year backlog
by 22% to $2.1 billion during the
year. This growth is a testament to our strong performance and our
customer's reliance on QualTek to play a critical role in building
out 5G networks and participating in the long-term grid
modernization initiatives. We are very excited for the future of
QualTek."
Management will hold a conference call to discuss these results
on Friday, April 1, 2022, at
9:00 a.m. Eastern Time. The call-in
number for the conference call is 1 (888) 330 – 2454 or 1 (240) 789
- 2714 using passcode 2965812. Additionally, the call will be
broadcast live over the Internet and can be accessed and replayed
through the investor relations section of the Company's website at
qualtekservices.com.
The following tables set forth the financial results for the
periods ended December 31, 2021 and 2020:
BCP QUALTEK HOLDCO,
LLC
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(in thousands,
except per unit information)
|
|
|
|
|
For the Years Ended
December 31,
|
|
2021
|
2020
|
Revenue
|
$
612,241
|
$
656,524
|
Costs and
expenses:
|
|
|
Cost of
revenues
|
502,688
|
597,583
|
General and
administrative
|
50,994
|
47,049
|
Transaction
expenses
|
3,826
|
988
|
Loss on legal
settlement
|
2,600
|
-
|
Change in fair value of
contingent consideration
|
(4,780)
|
(7,081)
|
Impairment of
goodwill
|
52,487
|
28,802
|
Depreciation and
amortization
|
53,675
|
46,475
|
Total costs and
expenses
|
661,490
|
713,816
|
Loss from
operations
|
(49,249)
|
(57,292)
|
Other income
(expense):
|
|
|
Gain on sale/ disposal
of property and equipment
|
587
|
729
|
Interest
expense
|
(50,477)
|
(37,659)
|
Loss on extinguishment
of convertible notes
|
(2,436)
|
-
|
Total other
expense
|
(52,326)
|
(36,930)
|
Loss from continuing
operations
|
(101,575)
|
(94,222)
|
Loss
from discontinued operations
|
(8,851)
|
(3,865)
|
Net
loss
|
(110,426)
|
(98,087)
|
Other comprehensive
income (loss):
|
|
|
Foreign currency
translation adjustments
|
111
|
239
|
Comprehensive
loss
|
$
(110,315)
|
$
(97,848)
|
Earnings per
unit:
|
|
|
Basic earnings per unit
from continuing operations
|
$
(47.24)
|
$
(48.61)
|
Basic earnings per unit
from discontinued operations
|
(4.05)
|
(1.93)
|
Basic earnings per unit
from net loss
|
$
(51.29)
|
$
(50.54)
|
Basic weighted average
common units outstanding
|
2,184,696
|
2,005,824
|
BCP QUALTEK HOLDCO,
LLC
|
CONSOLIDATED BALANCE
SHEETS
|
(in thousands,
except unit information)
|
|
|
|
|
December
31,
|
|
2021
|
2020
|
Assets
|
|
|
Current
assets
|
226,523
|
192,223
|
Property and equipment,
net
|
50,682
|
33,794
|
Intangible assets,
net
|
364,174
|
345,816
|
Goodwill
|
28,723
|
58,522
|
Other long-term
assets
|
1,657
|
1,241
|
Non-current assets of
discontinued operations
|
-
|
9,272
|
Total
assets
|
$
671,759
|
$
640,868
|
Liabilities and
(Deficit) / Equity
|
|
|
Current
liabilities
|
$
130,533
|
$
139,231
|
Current portion of
long-term debt and capital lease obligations
|
127,375
|
27,249
|
Current portion of
contingent consideration
|
9,299
|
9,968
|
Capital lease
obligations, net of current portion
|
19,851
|
15,959
|
Long-term debt, net of
current portion and deferred financing fees
|
418,813
|
397,464
|
Contingent
consideration, net of current portion
|
21,457
|
8,161
|
Distributions
payable
|
11,409
|
11,409
|
Non-current liabilities
of discontinued operations
|
-
|
1,793
|
Total (deficit) /
equity
|
(66,978)
|
29,634
|
Total liabilities
and equity
|
$
671,759
|
$
640,868
|
|
|
|
BCP QUALTEK HOLDCO,
LLC
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
|
For the Years Ended
December 31,
|
|
2021
|
2020
|
Net cash (used in)
provided by operating activities
|
$
(17,942)
|
$
13,457
|
Net cash used in
investing activities
|
(43,532)
|
(3,963)
|
Net cash provided by
(used in) financing activities
|
63,373
|
(9,712)
|
Effect of foreign
currency exchange rate (translation) on cash
|
83
|
59
|
Net increase (decrease)
in cash
|
1,982
|
(159)
|
Cash:
|
|
|
Beginning of
year
|
169
|
328
|
End of year
|
$
2,151
|
$
169
|
|
|
|
Supplemental
Disclosures and Reconciliation of Non-GAAP
Disclosures
|
(in
thousands)
|
|
|
|
For the Years
Ended
December 31,
|
Revenue:
|
|
|
|
2021
|
2020
|
Telecom
|
|
|
|
$
498,221
|
$
587,614
|
Renewables and Recovery
Logistics
|
|
|
|
114,020
|
68,910
|
Total consolidated
revenue
|
|
|
|
$
612,241
|
$
656,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Years
Ended
December 31,
|
Adjusted EBITDA
Reconciliation:
|
|
|
|
2021
|
2020
|
Telecom adjusted
EBITDA
|
|
|
|
$
32,542
|
$
2,409
|
Renewables and Recovery
Logistics adjusted EBITDA
|
|
|
44,869
|
28,943
|
Corporate adjusted
EBITDA
|
|
|
|
(17,376)
|
(18,213)
|
Total adjusted
EBITDA
|
|
|
|
$
60,035
|
$
13,139
|
Less:
|
|
|
|
|
|
Management
fees
|
|
|
|
(889)
|
(518)
|
Transaction
expenses
|
|
|
|
(3,826)
|
(988)
|
Loss on legal
settlement
|
|
|
|
(2,600)
|
-
|
Change in fair value of
contingent consideration
|
|
|
4,780
|
7,081
|
Impairment of
goodwill
|
|
|
|
(52,487)
|
(28,802)
|
Depreciation and
amortization
|
|
|
|
(53,675)
|
(46,475)
|
Interest
expense
|
|
|
|
(50,477)
|
(37,659)
|
Loss on extinguishment
of convertible notes
|
|
|
(2,436)
|
-
|
Loss from continuing
operations
|
|
|
|
$
(101,575)
|
$
(94,222)
|
|
|
|
|
|
|
The following tables set forth the financial results for the
three-month periods ended December 31, 2021 and 2020:
BCP QUALTEK HOLDCO,
LLC
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(in thousands,
except per unit information)
|
(unaudited)
|
|
|
|
|
For the Three Months
Ended December 31,
|
|
2021
|
2020
|
Revenue
|
$
147,057
|
$
132,444
|
Costs and
expenses:
|
|
|
Cost of
revenues
|
130,192
|
134,823
|
General and
administrative
|
13,032
|
11,389
|
Transaction
expenses
|
951
|
421
|
Loss on legal
settlement
|
2,600
|
-
|
Change in fair value of
contingent consideration
|
(236)
|
(7,081)
|
Impairment of
goodwill
|
52,487
|
28,802
|
Depreciation and
amortization
|
14,539
|
11,714
|
Total costs and
expenses
|
213,565
|
180,068
|
Loss from
operations
|
(66,508)
|
(47,624)
|
Other income
(expense):
|
|
|
Gain on sale/ disposal
of property and equipment
|
73
|
153
|
Interest
expense
|
(14,699)
|
(8,835)
|
Total other
expense
|
(14,626)
|
(8,682)
|
Loss from continuing
operations
|
(81,134)
|
(56,306)
|
Loss
from discontinued operations
|
(737)
|
(2,157)
|
Net
loss
|
(81,871)
|
(58,463)
|
Other comprehensive
income (loss):
|
|
|
Foreign currency
translation adjustments
|
36
|
483
|
Comprehensive
loss
|
$
(81,835)
|
$
(57,980)
|
Earnings per
unit:
|
|
|
Basic earnings per unit
from continuing operations
|
$
(36.49)
|
$
(28.46)
|
Basic earnings per unit
from discontinued operations
|
(0.33)
|
(1.08)
|
Basic earnings per unit
from net loss
|
$
(36.82)
|
$
(29.54)
|
Basic weighted average
common units outstanding
|
2,223,554
|
2,005,824
|
Supplemental
Disclosures and Reconciliation of Non-GAAP
Disclosures
|
(in
thousands)
|
(unaudited)
|
|
|
|
For the Three Months
Ended
December 31,
|
Revenue:
|
|
|
|
2021
|
2020
|
Telecom
|
|
|
|
$
138,201
|
$
118,885
|
Renewables and Recovery
Logistics
|
|
|
|
8,856
|
13,559
|
Total consolidated
revenue
|
|
|
|
$
147,057
|
$
132,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
December 31,
|
Adjusted EBITDA
Reconciliation:
|
|
|
|
2021
|
2020
|
Telecom adjusted
EBITDA
|
|
|
|
$
5,635
|
$
(13,619)
|
Renewables and Recovery
Logistics adjusted EBITDA
|
|
|
2,688
|
4,716
|
Corporate adjusted
EBITDA
|
|
|
|
(4,279)
|
(4,585)
|
Total adjusted
EBITDA
|
|
|
|
$
4,044
|
$
(13,488)
|
Less:
|
|
|
|
|
|
Management
fees
|
|
|
|
(138)
|
(127)
|
Transaction
expenses
|
|
|
|
(951)
|
(421)
|
Loss on legal
settlement
|
|
|
|
(2,600)
|
-
|
Change in fair value of
contingent consideration
|
|
|
236
|
7,081
|
Impairment of
goodwill
|
|
|
|
(52,487)
|
(28,802)
|
Depreciation and
amortization
|
|
|
|
(14,539)
|
(11,714)
|
Interest
expense
|
|
|
|
(14,699)
|
(8,835)
|
Loss from continuing
operations
|
|
|
|
$
(81,134)
|
$
(56,306)
|
|
|
|
|
|
|
About QualTek
Founded in 2012, QualTek is a leading technology-driven
provider of infrastructure services to the 5G wireless, telecom,
power grid modernization, and renewable energy sectors across
North America. QualTek has a
national footprint with more than 80 operation centers across the
U.S. and a workforce of over 5,000 people. QualTek has established
a nationwide operating network to enable quick responses to
customer demands as well as proprietary technology infrastructure
for advanced reporting and invoicing. The Company will report
within two operating segments: Telecommunications and Renewables
and Recovery. For more information, please
visit qualtekservices.com.
Forward Looking
Statements
This communication contains forward-looking statements for
purposes of the safe harbor provisions under the United States
Private Securities Litigation Reform Act of 1995, including
statements about the financial condition, results of operations,
earnings outlook and prospects of QualTek. Forward-looking
statements are typically identified by words such as "plan,"
"believe," "expect," "anticipate," "intend," "outlook," "estimate,"
"forecast," "project," "continue," "could," "may," "might,"
"possible," "potential," "predict," "should," "would" and other
similar words and expressions, but the absence of these words does
not mean that a statement is not forward-looking.
The forward-looking statements are based on the current
expectations of the management of QualTek and are inherently
subject to uncertainties and changes in circumstances and their
potential effects and speak only as of the date of such statement.
There can be no assurance that future developments will be those
that have been anticipated. These forward-looking statements
involve a number of risks, uncertainties or other assumptions that
may cause actual results or performance to be materially different
from those expressed or implied by these forward-looking
statements. These risks and uncertainties include, but are not
limited to, those discussed and identified in public filings made
with the SEC by QualTek.
Should one or more of the risks or uncertainties materialize or
should any of the assumptions made by the management of QualTek
prove incorrect, actual results may vary in material respects from
those projected in these forward-looking statements.
All pro forma numbers are used for illustrative purpose only,
are not forecasts and may not reflect actual results.
All subsequent written and oral forward-looking statements
concerning the matters addressed in this communication and
attributable to QualTek or any person acting on its behalf are
expressly qualified in their entirety by the cautionary statements
contained or referred to in this communication. Except to the
extent required by applicable law or regulation, QualTek undertakes
no obligation to update these forward-looking statements to reflect
events or circumstances after the date of this communication to
reflect the occurrence of unanticipated events.
Media Contact:
QualTek IR/Communications
Gianna Lucchesi
PR@qualtekservices.com
(484) 804 - 4585
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SOURCE QualTek Services Inc.