QualTek Announces 2nd Quarter 2022 Financial Results.

BLUE BELL, Pa: 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 strong 2022 second quarter financial results of its subsidiary QualTek HoldCo, LLC.

Second quarter 2022 revenue was $184.2 million, compared to $130.6 million for the second quarter of 2021, a 41% increase. The increase in revenue was attributable to significant volume increases in 5G and Fiber rollouts in the Company's Telecom segment. Net loss for the second quarter 2022 was $25.6 million compared to $21.8 million for the prior year period. The increase is largely driven by public company readiness costs, stock compensation, and costs related to being a public company, which did not exist in the same quarter prior year. Second quarter 2022 adjusted EBITDA was $10.2 million compared to $6.4 million, inclusive of discontinued Canadian operations, for the second quarter of 2021, a 59% increase. Backlog at the end of the second quarter 2022 was $2.3 billion, up from year-end 2021 of $2.1 billion and up from first quarter 2022 of $2.2 billion. As previously discussed, the Company will issue updated guidance after Q3.

Scott Hisey, QualTek's Chief Executive Officer, said "We continue to experience unprecedented demand for our services. In this past quarter, we recorded the highest second quarter revenue in the Company's history, up 41% year-over-year. It's important to note that 96% of revenue was generated under Master Service Agreements. This growth, coupled with our estimated $2.3 billion backlog, has positioned QualTek to capitalize on what we continue to believe will be the largest telecommunications 5G and fiber builds in our nation's history."

Management will hold a conference call to discuss these results on Tuesday, August 9, 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 July 2, 2022, and July 3, 2021:

QUALTEK SERVICES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited - in thousands, except share and per share information)

For the Three Months Ended

For the Six Months Ended

July 2, 2022

July 3, 2021

July 2, 2022

July 3, 2021

Revenue

$

184,222

$

130,609

$

332,383

$

249,722

Costs and expenses:

Cost of revenues

164,180

111,828

296,285

215,339

General and administrative

16,637

11,396

38,778

23,923

Transaction expenses

1,320

903

10,588

1,452

Depreciation and amortization

14,794

13,023

29,560

25,645

Total costs and expenses

196,931

137,150

375,211

266,359

Loss from operations

(12,709)

(6,541)

(42,828)

(16,637)

Other income (expense):

Gain on sale/disposal of property and equipment

145

114

2,060

304

Interest expense

(13,085)

(11,227)

(25,428)

(21,138)

Loss on extinguishment of convertible notes

--

(2,436)

--

(2,436)

Total other expense

(12,940)

(13,549)

(23,368)

(23,270)

Loss from...

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