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SUGAR LAND, Texas, Nov. 11, 2024 (GLOBE NEWSWIRE) — Team, Inc. TISI (“TEAM” or the “Company”), a global, leading provider of specialty industrial services offering clients access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services, today reported its financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Highlights:

• Generated revenue of $210.8 million, up 2% over third quarter 2023.
• Maintained gross margin of 25.4%.
• Improved operating income to $3.2 million, up $4.4 million over third quarter 2023.
• Reported third quarter 2024 net loss of $11.1 million, an 8.3% improvement year over year.
• Delivered consolidated Adjusted EBITDA¹ of $11.3 million (5.4% of consolidated revenue) for the 2024 third quarter, and $39.6 million (6.2% of consolidated revenue) for the first nine months of 2024.
• Adjusted Selling, General and Administrative Expense¹ declined to 21.7% of consolidated revenue.
• Successfully amended and extended the Company’s ABL Credit Facility to provide additional liquidity and improved pricing as announced on September 30, 2024.

¹ See the accompanying reconciliation of non-GAAP financial measures at the end of this press release.

“We remain encouraged by the overall trajectory of our business, with our third quarter results demonstrating the benefits from our ongoing operational and commercial initiatives. Overall revenue grew 2% over the prior year period, with revenue in the core U.S. business up 6%, offset by lower year over year revenue in Canada and, to a lesser extent, our other international operations. Although our overall third quarter Adjusted EBITDA of $11.3 million was consistent with the prior year, we generated a 33% year over year improvement in Adjusted EBITDA from our Inspection and Heat Treating segment driven by 8% year over year revenue growth in the U.S. business. Furthermore, we are seeing encouraging results from commercial initiatives targeting growth in higher margin revenue streams as demonstrated by a 41% increase in heat treating revenue and a 32% increase in aerospace revenue in the third quarter. We also showed tangible progress in our ongoing efforts to improve cash flow generation, delivering free cash flow of $3.9 million during the quarter, up $4.7 million over 2023. Additionally, through the first nine months of 2024, our Adjusted EBITDA grew by 21% to $39.6 million, a significant improvement over the prior year,” said Keith D. Tucker, Team’s Chief Executive Officer.

“We remain aggressively focused on margin improvement across the organization and in September, as part of our ongoing cost reduction initiatives, launched targeted actions that, in the near term, are expected to yield annualized cost savings of between $6 million and $8 million. We are also taking steps to address the underperformance of our Canadian and certain international operations through a mix of top-line initiatives and cost actions. We are keenly focused on maintaining our positive margin trajectory and cash flow generation through both top line growth and cost discipline,” commented Tucker.

“Looking ahead to the fourth quarter, we see healthy activity levels across both segments and improved Adjusted EBITDA margin performance versus the 2023 period. Turning to 2025, based upon the early success of our commercial initiatives, continued cost discipline and anticipated improvement in our Canadian and other international operations, we expect top line growth in the low to mid-single digits and continued progress towards our targeted Adjusted EBITDA margin of at least 10%. Finally, this management team is committed to strengthening our financial performance and growing shareholder value by leveraging our unparalleled technical capabilities, operational excellence and safety culture,” concluded Tucker.

Financial Results

Third quarter revenues increased $4.0 million or 2% to $210.8 million compared to the prior year period, primarily driven by a 6% increase in U.S. revenue due to higher activity in nested and turnaround activity in Inspection and Heat Treating (“IHT”) and valves services within our Mechanical Services (“MS”) segment, partially offset by lower year over year revenue from our Canadian operations. Third quarter consolidated gross margin improved by $0.7 million to $53.5 million, or 25.4% of revenue, consistent with the prior year period’s gross margin percentage.

Selling, general and administrative expense for the third quarter was $50.4 million, down $3.7 million or 6.8%, from the third quarter of 2023. Adjusted Selling, General, and Administrative Expense, which excludes expenses not representative of TEAM’s ongoing operations such as non-recurring professional, legal, financing and severance expenses as well as non-cash expenses such as depreciation and amortization and share-based compensation expense, was essentially flat compared to the 2023 period, and declined to 21.7% of consolidated revenue.

Net loss in the third quarter of 2024 was $11.1 million (a loss of $2.52 per share) compared to a net loss of $12.1 million (a loss of $2.78 per share) in the 2023 third quarter. The Company’s Adjusted EBIT, a non-GAAP measure, increased to $1.8 million in the third quarter of 2024 versus $1.5 million in the prior year quarter. Consolidated Adjusted EBITDA, a non-GAAP measure, increased to $11.3 million (5.4% of consolidated revenue) in the third quarter versus $11.1 million (5.4% of consolidated revenue) in the prior year quarter.

Adjusted net loss, Adjusted EBIT, Adjusted EBITDA and Adjusted Selling, General and Administrative Expense are non-GAAP financial measures that exclude certain items that are not indicative of TEAM’s core operating activities. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is at the end of this earnings release.

Segment Results

The following table illustrates the composition of the Company’s revenue and operating income (loss) by segment for the quarter ended September 30, 2024 and 2023 (in thousands):

Revenues. IHT revenues increased by $3.7 million or 3.6%, in the third quarter of 2024 compared to the prior year quarter, primarily due to a $6.7 million increase in the U.S. revenue resulting from higher activity in nested and turnaround services, partially offset by a $3.0 million decrease in Canadian revenue resulting from lower nested and turnaround activity. MS revenues increased by $0.3 million primarily due to higher turnaround and valve services revenue from U.S. operations of $2.3 million, partially offset by lower revenue of $2.0 million from Canada and other international regions generally attributable to lower project work.

Operating income (loss). IHT’s third quarter 2024 operating income increased by $3.4 million or 53.8% to $9.9 million, mainly due to a $4.7 million improvement in U.S. operating income driven by higher revenue and lower costs, partially offset by a $1.2 million decrease in operating income from Canada due to lower activity. MS operating income decreased by approximately $2.0 million, mainly due to lower revenue attributable to Canada and other international regions, partially offset by a $0.6 million increase from U.S. operations. Corporate and shared support services costs were lower by $3.0 million or 21.1%, mainly due to lower professional fees and the reversal of legal reserve in the current quarter. Consolidated operating income improved by $4.4 million driven by the factors discussed above.

Revenues. IHT revenues were lower by $2.1 million, primarily due to reduced call out and turnaround activities in Canada and other international regions of $10.5 million, partially offset by higher U.S. revenue of $8.4 million driven mainly by higher heat treating and other activity. MS revenue decreased by $7.4 million or 2.3%, mainly due to a $7.6 million decrease in Canada revenue related to lower project activity.

Operating income (loss). IHT operating income increased by $9.8 million or 55.5%, reflecting lower costs and improved margins. MS operating income decreased by $3.2 million primarily due to lower combined operating income from Canada and other international operations of $6.0 million due to lower year over year revenue attributable to projects from the prior year period that did not repeat in 2024, partially offset by an increase from U.S. operations of $2.8 million reflecting higher activity and improved margins. Corporate operating loss decreased by $5.7 million primarily due to a reduction in professional fees and the reversal of legal reserve in the current year period.

Balance Sheet and Liquidity

At September 30, 2024, the Company had $42.9 million of total liquidity, consisting of consolidated cash and cash equivalents of $14.9 million, (excluding $4.2 million of restricted cash) and $28.0 million of undrawn availability under its various credit facilities, consisting of $18.0 million available, following the execution of ABL Amendment No.5, under the Revolving Credit Loans and $10.0 million available under the Incremental Term Loan.

The Company’s total debt as of September 30, 2024 was $321.2 million as compared to $311.4 million as of fiscal year end 2023. The increase is mainly due to $9.7 million of paid in kind interest during the period and the incurrence of a new equipment finance facility in March 2024, offset by principal payments made on our various credit facilities. The Company’s net debt (total debt less cash and cash equivalents), a non-GAAP financial measure, was $302.1 million at September 30, 2024.

2024 Outlook

The Company updated the following operating and cash flow guidance for the 2024 fiscal year:

• Total Company Revenue of $845 million to $860 million (from $850-$900 million previously)
• Gross Margin of between $220 million and $228 million (from $235-$265 million previously)
• Adjusted EBITDA of between $53 million and $55 million (from $58-$68 million previously)
• Capital expenditures of between $9 million to $11 million (unchanged)

Conference Call

As previously announced, the Company will hold a conference call to discuss its third quarter 2024 financial and operating results on Tuesday, November 12, 2024, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). Interested parties in the United States may participate toll-free by dialing (877) 270-2148. Interested parties internationally may dial (412) 902-6510. Participants should ask to join “TEAM, Inc. Third Quarter 2024 Conference Call.” The Company will not host questions during the call. This call will also be webcast on TEAM’s website at www.teaminc.com. An audio replay will be available on the Company’s website following the call.

Non-GAAP Financial Measures

The non-GAAP measures in this earnings release are provided to enable investors, analysts and management to evaluate Team’s performance excluding the effects of certain items that management believes impact the comparability of operating results between reporting periods. These measures should be used in addition to, and not in lieu of, results prepared in conformity with generally accepted accounting principles (“GAAP”). A reconciliation of each of the non-GAAP financial measures to the most directly comparable historical GAAP financial measure is contained in the accompanying schedule for each of the fiscal periods indicated.

About Team, Inc.

Headquartered in Sugar Land, Texas, Team, Inc. TISI is a global, leading provider of specialty industrial services offering clients access to a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services. We deploy conventional to highly specialized inspection, condition assessment, maintenance, and repair services that result in greater safety, reliability, and operational efficiency for our clients’ most critical assets. Through locations in 15 countries, we unite the delivery of technological innovation with over a century of progressive, yet proven integrity and reliability management expertise to fuel a better tomorrow. For more information, please visit www.teaminc.com.

Certain forward-looking information contained herein is being provided in accordance with the provisions of the Private Securities Litigation Reform Act of 1995. We have made reasonable efforts to ensure that the information, assumptions, and beliefs upon which this forward-looking information is based are current, reasonable, and complete. However, such forward-looking statements involve estimates, assumptions, judgments, and uncertainties. They include but are not limited to statements regarding the Company’s financial prospects and the implementation of cost-saving measures. There are known and unknown factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking information. Although it is not possible to identify all of these factors, they include, among others: the Company’s ability to generate sufficient cash from operations, access its credit facility, or maintain its compliance with covenants under its credit facility and debt agreement, the duration and magnitude of accidents, extreme weather, natural disasters, and pandemics and related global economic effects and inflationary pressures; the Company’s liquidity and ability to obtain additional financing, the Company’s ability to continue as a going concern, the Company’s ability to execute on its cost management actions, the impact of new or changes to existing governmental laws and regulations and their application, including tariffs; the outcome of tax examinations, changes in tax laws, and other tax matters; foreign currency exchange rate and interest rate fluctuations; the Company’s ability to successfully divest assets on terms that are favorable to the Company; our ability to repay, refinance or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; the Company’s continued listing on the New York Stock Exchange, and such known factors as are detailed in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission, and in other reports filed by the Company with the Securities and Exchange Commission from time to time. Accordingly, there can be no assurance that the forward-looking information contained herein, including statements regarding the Company’s financial prospects and the implementation of cost-saving measures, will occur or that objectives will be achieved. We assume no obligation to publicly update or revise any forward-looking statements made today or any other forward-looking statements made by the Company, whether as a result of new information, future events or otherwise, except as may be required by law.

Contact:
Nelson M. Haight
Executive Vice President, Chief Financial Officer
(281) 388-5521

The following table includes the details of depreciation and amortization expense:

___________________
^{1   See the accompanying reconciliation of non-GAAP financial measures at the end of this earnings release.}

TEAM, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures
(Unaudited)

The Company uses supplemental non-GAAP financial measures which are derived from the consolidated financial information, including adjusted net income (loss); adjusted net income (loss) per share; earnings before interest and taxes (“EBIT”); Adjusted EBIT; adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), free cash flow and net debt to supplement financial information presented on a GAAP basis.

The Company defines adjusted net income (loss) and adjusted net income (loss) per share to exclude the following items: non-routine legal costs and settlements, non-routine professional fees, (gain) loss on debt extinguishment, severance charges, non-routine write off of assets and certain other items that we believe are not indicative of core operating activities. Consolidated Adjusted EBIT, as defined by the Company, excludes the costs excluded from adjusted net income (loss) as well as income tax expense (benefit), interest charges, foreign currency (gain) loss, pension credit, and items of other (income) expense. Consolidated Adjusted EBITDA further excludes depreciation, amortization and non-cash share-based compensation costs from consolidated Adjusted EBIT. Segment Adjusted EBIT is equal to segment operating income (loss) excluding costs associated with non-routine legal costs and settlements, non-routine professional fees, severance charges, and certain other items as determined by management. Segment Adjusted EBITDA further excludes depreciation, amortization, and non-cash share-based compensation costs from segment Adjusted EBIT. Adjusted Selling, General and Administrative Expense is defined to exclude non-routine legal costs and settlements, non-routine professional fees, severance charges, certain other items that we believe are not indicative of core operating activities and non-cash expenses such as depreciation and amortization and non-cash compensation. Free Cash Flow is defined as net cash provided by (used in) operating activities minus capital expenditures. Net debt is defined as the sum of the current and long-term portions of debt, including finance lease obligations, less cash and cash equivalents.

Management believes these non-GAAP financial measures are useful to both management and investors in their analysis of our financial position and results of operations. In particular, adjusted net income (loss), adjusted net income (loss) per share, consolidated Adjusted EBIT, and consolidated Adjusted EBITDA are meaningful measures of performance which are commonly used by industry analysts, investors, lenders, and rating agencies to analyze operating performance in our industry, perform analytical comparisons, benchmark performance between periods, and measure our performance against externally communicated targets. Segment Adjusted EBIT and segment Adjusted EBITDA are also used as a basis for the Chief Operating Decision Maker (Chief Executive Officer) to evaluate the performance of the Company’s reportable segments. Free cash flow is used by the management and investors to analyze the Company’s ability to service and repay debt and return value directly to its stakeholders.

Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures and should be read only in conjunction with financial information presented on a GAAP basis. Further, the Company’s non-GAAP financial measures may not be comparable to similarly titled measures of other companies who may calculate non-GAAP financial measures differently, limiting the usefulness of those measures for comparative purposes. The liquidity measure of free cash flow does not represent a precise calculation of residual cash flow available for discretionary expenditures. Reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure are presented below.

____________________________
^{1  For the three and nine months ended September 30, 2024, includes $0.3 million and $2.7 million, respectively, related to debt financing, and for the nine months ended September 30, 2024, includes $0.2 million related to support costs. For the three and nine months ended September 30, 2023, includes $1.5 million and $4.7 million, respectively, related to debt financing, and for the nine months ended September 30, 2023, $1.1 million related to lease extinguishment charges and other project costs.}

^{2  Primarily relates to accrued legal matters and legal fees. Legal credits during the three and nine months ended September 30, 2024 relate to a $2.0 million reduction in the legal accrual.}

^{3  Represents customary severance costs associated with staff reductions.}

^{4  Represents the tax effect of the adjustments.}

^{5  Represents pension credits for the U.K. pension plan based on the difference between the expected return on plan assets and the cost of the discounted pension liability. The pension plan was frozen in 1994 and no new participants have been added since that date.}

___________________
^{1  Represents customary severance costs associated with staff reductions.}

^{2  For the three and nine months ended September 30, 2024, includes $0.3 million and $2.7 million, respectively, related to debt financing, and for the nine months ended September 30, 2024, includes $0.2 million related to support costs. For the three and nine months ended September 30, 2023, includes $1.5 million and $4.7 million, respectively, related to debt financing, and for the nine months ended September 30, 2023, $1.1 million related to lease extinguishment charges and other project costs.}

^{3  Primarily relates to accrued legal matters and legal fees. Legal credits during the three and nine months ended September 30, 2024 relate to a $2.0 million reduction in the legal accrual.}

^{4  Represents pension credits for the U.K. pension plan based on the difference between the expected return on plan assets and the cost of the discounted pension liability. The pension plan was frozen in 1994 and no new participants have been added since that date.}

___________________
^{1  For the three and nine months ended September 30, 2024, includes $0.3 million and $2.7 million, respectively, related to debt financing, and for the nine months ended September 30, 2024, includes $0.2 million related to support costs. For the three and nine months ended September 30, 2023, includes $1.5 million and $4.7 million, respectively, related to debt financing, and for the nine months ended September 30, 2023, $1.1 million related to lease extinguishment charges and other project costs.}

^{2  Primarily relates to accrued legal matters and legal fees. Legal credits during the three and nine months ended September 30, 2024 relate to a $2.0 million reduction in the legal accrual.}

TORONTO, Nov. 11, 2024 /CNW/ – TERAGO Inc. (“TERAGO” or the “Company”) TGO (https://terago.ca/), a leading provider of Managed Fixed Wireless Internet and SD-WAN solutions today reported financial and operating results for the third quarter ended September 30, 2024.

The Company announced another quarter of positive performance, demonstrating the ongoing success of its smart growth strategy and operational enhancements. TERAGO has achieved strong third quarter results, including a 1.2% increase in gross margin, a 31% reduction in customer churn, a 2.8% rise in Adjusted EBITDA, an 8.1% growth in ARPA, and a 56% increase in cash flows from operations.

The Company’s commitment to enhancing client experience has set the stage for future success, positioning TERAGO for profitable business growth. TERAGO’s sales pipeline continues to expand, with notable recent wins, including a multi-million-dollar contract with a national retailer, as announced last week.

“Our latest quarter of strong results is a clear affirmation that TERAGO’s strategy is delivering”, said Daniel Vucinic, CEO of TERAGO. “We are now five quarters into the transformation of TERAGO. My first order of business was to address the cash flow profile of the business. Today, we see a better gross margin, a reduction in operating expenditures, superior deal-level economics and a more efficient approach to capital expenditures. Now my focus is on driving the top line of TERAGO by reenergizing the sales engine. The growing demand for our services, supported by a diverse range of network solutions, sound execution, and strong industrial tailwinds, positions us well for continued success and long-term value creation for all our stakeholders.”

Selected Financial Highlights and Key Developments

(in thousands of dollars, except with respect to gross profit margin¹, loss per share, backlog MRR¹, and ARPA¹)

• Total revenue increased by 0.8% to $6,544 for the three months ended September 30, 2024 compared to $6,491 in the same quarter in the prior year period. For the nine months ended September 30, 2024, total revenue marginally increased by 0.4% to $19,593 compared to $19,516 in the same period in the prior year. The increase in revenue in both periods is the result of higher bookings¹ and lower churn¹ in the current year period.
• Adjusted EBITDA¹ for the three months ended September 30, 2024 increased by 2.8% to $944 as compared to an Adjusted EBITDA¹ of $918 for the comparative period in 2023. Adjusted EBITDA¹ for the nine months ended September 30, 2024 increased by 25.4% to $2,815 as compared to $2,245 for the comparative period in 2023. The increase is a result of overall lower operating expenses combined with higher revenues in the current period compared to same periods in the prior year.
• Net loss for the three months ended September 30, 2024 was $3,338, or $(0.17) per share (basic and diluted) compared to a loss of $3,087, or $(0.16) per share (basic and diluted) in the same period in 2023. The increased net loss position is the result of higher term debt interest costs due to additional drawdowns in the prior and current year period, partially offset by lower depreciation and other operating expenses. For the nine months ended September 30, 2024, net loss was $10,097, or $(0.51) per share (basic and diluted) compared to a loss of $9,624, or $(0.49) per share (basic and diluted) in the same period in 2023 resulting from higher term debt interest costs partially offset by lower salaries and related costs, depreciation and other operating expenses.
• ARPA¹ for the connectivity business for the three and nine months increased by 8.3% to $1,221 and by 7.4% to $1,193, respectively, compared to $1,127 and $1,111, respectively, for the same periods in 2023. The improvement in ARPA¹ is a result of changes in customer base and product mix and a new pricing strategy implemented in the last quarter of the prior year.
• Churn¹ for the connectivity business for the three months ended September 30, 2024 decreased to 0.9% compared to 1.3% for the same period in 2023. Churn¹ for the connectivity business for the nine months ended September 30, 2024 decreased to 0.9% compared to 1.1% for the same period in 2023. The decrease in customer churn¹ was due to the continued execution of the Company’s value creation strategy to focus on mid-market and large-scale customers, as well as implementing new strategies for customer renewals and retention.
• Backlog MRR¹ in the connectivity business increased year over year to $114,136 as of September 30, 2024, compared to $75,963 for the same period in 2023. The increase in backlog MRR¹ was a result of increase in sales bookings along with Company’s continued focus on larger multisite customer deals and on profitable revenue generation.

_____________________________
^{(1) See “Non-IFRS Measures”}

Conference Call

Management will host a conference call on Tuesday, November 12, 2024, at 10:00 AM ET to discuss these results.

To access the conference call, please dial 888-506-0062 or 973-528-0011 and use conference ID 497348 if applicable. Please call the conference telephone number 15 minutes prior to the start time so that you are in the queue for an operator to assist in registering and patching you through. An archived recording of the conference call will be available through Thursday, August 22, 2024. To listen to the recording, call 877-481-4010 or 919-882-2331 and enter passcode 51555# if applicable.

RESULTS OF OPERATIONS

Comparison of the three and nine months ended September 30, 2024 and 2023

(in thousands of dollars, except with respect to gross profit margin¹, loss per share¹, backlog MRR¹, churn¹ and ARPA¹) 

⁽¹⁾Non-IFRS Measures

This press release contains references to “Cost of Services”, “Gross Profit Margin”, Salaries and Related Costs”, “Other Operating Expenses”, “Adjusted EBITDA”, “Backlog MRR”, “Churn” and “ARPA” which are not measures prescribed by International Financial Reporting Standards (IFRS).

Cost of Services consists of expenses related to delivering service to customers and servicing the operations of our networks. These expenses include costs for the lease of intercity facilities to connect our cities, internet transit and peering costs paid to other carriers, network real estate lease expense, spectrum lease expenses, salaries and related costs of staff directly associated with the cost of services.

Gross Profit Margin % consists of gross profit margin divided by revenue where gross profit margin is revenue less cost of services.

Salaries and related costs includes regular payroll related expenses, commissions and consulting fees.  All share based compensation, restructuring, other related costs are excluded from Salaries and related costs.

Other operating expenses includes sales commission expense, advertising and marketing expenses, travel expenses, administrative expenses including insurance and professional fees, communication expenses, maintenance expenses and rent expenses for office facilities. All restructuring and other related costs are excluded from other operating expenses.

_____________________________
^{(1) See “Non-IFRS Measures”}

Adjusted EBITDA – The Company believes that Adjusted EBITDA is useful additional information to management, the Board and investors as it provides an indication of the operational results generated by its business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and amortization and it excludes items that could affect the comparability of our operational results and could potentially alter the trends analysis in business performance. Excluding these items does not necessarily imply they are non-recurring, infrequent or unusual. Adjusted EBITDA is also used by some investors and analysts for the purpose of valuing a company. The Company calculates Adjusted EBITDA as earnings before deducting interest, taxes, depreciation and amortization, foreign exchange gain or loss, finance costs, finance income, gain or loss on disposal of network assets, property and equipment, impairment of property, plant & equipment and intangible assets, stock-based compensation and restructuring costs. Investors are cautioned that Adjusted EBITDA should not be construed as an alternative to operating earnings (losses), or net earnings (losses) determined in accordance with IFRS as an indicator of our financial performance or as a measure of our liquidity and cash flows. Adjusted EBITDA does not take into account the impact of working capital changes, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows. 

A reconciliation of net loss to Adjusted EBITDA is found below and in the MD&A for the three and nine months ended September 30, 2024. Adjusted EBITDA does not have any standardized meaning under IFRS/GAAP. TERAGO’s method of calculating Adjusted EBITDA may differ from other issuers and, accordingly, Adjusted EBITDA may not be comparable to similar measures presented by other issuers.

The table below reconciles Adjusted EBITDA¹ to net loss for the three and nine months ended September 30, 2024 and 2023.

Backlog MRR – The term “Backlog MRR” is a measure of contracted monthly recurring revenue (MRR) from customers that have not yet been provisioned. The Company believes backlog MRR is useful additional information as it provides an indication of future revenue. Backlog MRR is not a recognized measure under IFRS and may not translate into future revenue, and accordingly, investors are cautioned in using it. The Company calculates backlog MRR by summing the MRR of new customer contracts and upgrades that are signed but not yet provisioned, as at the end of the period. TERAGO’s method of calculating backlog MRR may differ from other issuers and, accordingly, backlog MRR may not be comparable to similar measures presented by other issuers.

ARPA – The term “ARPA” refers to the Company’s average revenue per account per month in the period. The Company believes that ARPA is useful supplemental information as it provides an indication of our revenue from an individual customer on a per month basis. ARPA is not a recognized measure under IFRS and, accordingly, investors are cautioned that ARPA should not be construed as an alternative to revenue determined in accordance with IFRS as an indicator of our financial performance. The Company calculates ARPA by dividing our total revenue before revenue from early terminations by the number of customers in service during the period and we express ARPA as a rate per month. TERAGO’s method of calculating ARPA has changed from the Company’s past disclosures to exclude revenue from early termination fees, where ARPA was previously calculated as revenue divided by the number of customers in service during the period. TERAGO’s method may differ from other issuers, and accordingly, ARPA may not be comparable to similar measures presented by other issuers.

Churn – The term “churn” or “churn rate” is a measure, expressed as a percentage, of customer cancellations in a particular month. The Company calculates churn by dividing the number of customer cancellations during a month by the total number of customers at the end of the month before cancellations. The information is presented as the average monthly churn rate during the period. The Company believes that the churn rate is useful supplemental information as it provides an indication of future revenue decline and is a measure of how well the business is able to renew and keep existing customers on their existing service offerings. Churn and churn rate are not recognized measures under IFRS and, accordingly, investors are cautioned in using it. TERAGO’s method of calculating churn and churn rate may differ from other issuers and, accordingly, churn may not be comparable to similar measures presented by other issuers.

About TERAGO

TERAGO provides managed network and security services to businesses across Canada ensuring highly secure, reliable, and redundant connectivity including private 5G wireless networks, Fixed Wireless access, fiber, and cable wireline network connectivity. As Canada’s biggest mmWave spectrum holders, the Company possesses exclusive spectrum licences in the 24 GHz and 38 GHz spectrum bands, which it utilizes to provide secure, dedicated SLA guaranteed enterprise grade performance that is technology diverse from buried cables ensuring high availability connectivity services. TERAGO serves over 1,800 Canadian and Global businesses operating in major markets across Canada, including Toronto, Montreal, Calgary, Edmonton, Vancouver, Ottawa and Winnipeg, and has been providing wireless services since 1999. For more information about TERAGO and its suite of wireless internet and SD-WAN solutions, please visit www.terago.ca.

Forward-Looking Statements

This news release includes certain forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond TERAGO’s control. Forward-looking statements may include but are not limited to statements regarding the further developing our 5G Fixed Wireless Access program, consistently executing across all fronts of the business, success in providing Canadian enterprises with managed services and the 5G fixed wireless trials being conducted by the Company. All such statements constitute “forward-looking information” as defined under, applicable Canadian securities laws. Any statements contained herein that are not statements of historical facts constitute forward-looking information. The forward-looking statements reflect the Company’s views with respect to future events and is subject to risks, uncertainties and assumptions, including those risks set forth in the “Risk Factors” sections in the annual MD&A of the Company for the year ended December 31, 2023 and risks set forth in the “Financial Risk Management” section in the interim MD&A for the three and nine months ended September 30, 2024 available on www.sedarplus.com under the Company’s corporate profile. Factors that could cause actual results or events to differ materially include the inability to consistently achieve sales growth across all lines of TERAGO’s business including managed services, inability to complete successful 5G technical trials, the results of the 5G trials not being satisfactory to TERAGO or any of its technology partners, regulatory requirements may delay or inhibit the trial, the economic viability of any potential services that may result from the trial, the ability for TERAGO to further finance and support any new market opportunities that may present itself, and industry competitors who may have superior technology or are quicker to take advantage of 5G technology. Accordingly, readers should not place undue reliance on forward-looking statements as several factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed with the forward-looking statements. Except as may be required by applicable Canadian securities laws, TERAGO does not intend, and disclaims any obligation, to update or revise any forward-looking statements whether in words, oral or written as a result of new information, future events or otherwise.

SOURCE TeraGo Inc.

View original content: http://www.newswire.ca/en/releases/archive/November2024/11/c3016.html

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