Charah Solutions, Inc. Reports Third Quarter 2020 Results

Business Developments

The Company has won $1.2 billion in new awards through the third quarter of 2020. Approximately $950 million of those awards are within our nuclear services component, primarily driven by the extension of the Exelon fleet-wide nuclear maintenance and modification contract from July 2022 to August 2025. The balance of the awards are primarily within our Environmental Solutions segment, and with additional contract awards in this segment for the balance of the year, we will far exceed last year's record in new awards of $583 million. We expect the positive trajectory in new work awards within our Environmental Solutions segment to continue as coal ash regulation at the state level drives remediation and byproduct sales opportunities. Though the timing of future awards is difficult to determine, we believe these recent accomplishments demonstrate we are well-positioned to benefit from the market momentum for responsibly recycling and remediating coal ash and capture a significant portion of the growing market opportunity.

We are seeing increasing opportunities for our proprietary MP618® ash beneficiation technology. During the quarter, we have accelerated our customer interactions, deployment planning and financing activities, and we hope to be able to announce the start of our first project soon, with more to follow. With the increasing focus on CO2 emissions and reduction of greenhouse gasses, more states, regulatory authorities and concrete producers are realizing the environmental benefit of substituting fly ash for Portland cement. Utilizing recycled fly ash as a substitute for energy-intensive Portland cement results in a pound for pound reduction in CO2 emissions. Recycled fly ash also results in cost savings versus Portland cement for ready-mix producers. As more coal-fired power generation plants have been taken offline, however, the supply-demand imbalance for recycled fly ash is growing, particularly in the Western U.S. Charah Solutions' MP618 technology is uniquely suited to help meet this growing demand while also facilitating on-going ash impoundment remediation.

We also see increasing opportunities to provide creative solutions to utilities' environmental remediation and compliance challenges through the expansion of our environmental risk transfer ("ERT") services. We are successfully performing on our first ERT project with a utility in the upper Midwest, and we recently announced that we are in negotiations with a public utility agency in Texas to deliver our unique ERT solution. We believe our ERT offerings deliver turn-key environmental solutions to utilities while providing attractive growth opportunities and returns to Charah Solutions.

As a sustainability leader in utility services for over 30 years, we intend to begin providing comprehensive reporting and disclosure on our Environmental, Sustainability and Governance ("ESG") to the market and our investors beginning in late-2020 and going forward with our year-end annual report. Sustainability is a Charah Solutions core value, and our focus is on developing innovative solutions to complex environmental issues for the betterment of the planet. We believe reporting on sustainability is critical for our stakeholders' growing need for information, and we are pleased to begin this vital initiative.

As we head into the winter season and the potential for an uptick in COVID-19 cases, we remain vigilant in keeping our employees safe, keeping our customers' operations running, reducing expenses, and taking actions expected to preserve cash, strengthen our balance sheet, and enhance long-term value while positioning ourselves to take advantage of the expanding market opportunities. Our highest priority continues to be the safety and well-being of our employees and customers.

2020 Updated Guidance

We provide mission-critical services to a diversified customer base, 80% of whom are investment-grade regulated utilities that must continue to produce power through the current economic uncertainties. Though we have not experienced significant work stoppages at our on-site operations as a direct result of the COVID-19 pandemic due to the critical nature of our customers' operations, we believe that the COVID-19 pandemic has resulted in decreased energy demand across the U.S., and therefore decreased ash production by our utility customers. This decrease in ash production has affected both our byproduct sales activities and our daily ash operations volumes. We continue to see the risk of lower ash production going forward, as well as significant business disruptions beyond our control, creating a high level of uncertainty. We also were affected by the unprecedented hurricane activity in the Southeastern U.S. during the third quarter. The significant rainfall in the Southeast U.S. resulting from the hurricanes affected work activities at a large ash pond closure project as well as ash production at several of our customer utility locations. For this reason, we are adjusting 2020 guidance at this time based on our expectations of our backlog of business and executed contracts.

Our 2020 outlook has been updated as follows:

• Revenues of $545 million
• Net loss attributable to Charah Solutions, Inc. of $21 million
• Adjusted EBITDA⁽²⁾ of $33 million
• Free cash flow⁽²⁾ of $20 million

Included in our revised 2020 guidance is approximately $6 million of Adjusted EBITDA resulting from a gain associated with an ERT project. We continue to believe that this gain will occur in the fourth quarter, but there is a risk that this transaction could slip into 2021. This updated guidance continues to be based on our current expectations of no material worsening of the COVID-19 pandemic, and specifically including, but not limited to, no material customer work stoppages, no significant employee absences, and no government-mandated quarantines. Any worsening of the COVID-19 pandemic could materially affect our 2020 outlook.

2. The forward-looking measures of 2020 Adjusted EBITDA and Free cash flow are non-GAAP financial measures that cannot be reconciled to net loss attributable to Charah Solutions, Inc. and cash flows from operating activities, respectively, as the most directly comparable GAAP financial measure without unreasonable effort primarily because of the uncertainties involved in estimating forward-looking measures.

CONFERENCE CALL

Charah Solutions will host a conference call at 8:30 a.m. ET on Wednesday, November 11, 2020 to discuss the third quarter results. Information contained within this press release will be referenced and should be considered in conjunction with the call.

To register to participate live on this conference call, please visit directeventreg.com using conference ID 3288238. After registering, a confirmation email will be sent, including dial-in details and a unique code for entry. We recommend registering at least 15 minutes prior to the scheduled start time of the call. Participants may also listen to the conference call live via webcast by visiting the Investor Relations section of the Charah Solutions website at ir.charah.com.

A webcast replay will be available on the Investors section of the Charah Solutions website at ir.charah.com after 11:30 a.m. ET on Wednesday, November 11, 2020. In addition, an audio replay will be available for one week following the call and will be accessible by dialing (800) 585-8367 within the United States or (416) 621-4642 outside the United States. The replay ID is 3288238.

A supplementary presentation will also be available on the Investors section of the Charah Solutions website at ir.charah.com.

ABOUT CHARAH SOLUTIONS

With 30 years of experience, Charah Solutions, Inc. is a leading provider of environmental and maintenance services to the power generation industry, with operations in fossil fuel and nuclear power generation sites across the country. Based in Louisville, Kentucky, Charah Solutions assists utilities with all aspects of managing and recycling ash byproducts generated from the combustion of coal in the production of electricity as well as routine power plant maintenance and outage services for the fossil fuel and nuclear power generation industry. The Company also designs and implements solutions for ash pond management and closure, landfill construction, fly ash and slag sales, and structural fill projects. Charah Solutions is the partner of choice for solving customers' most complex environmental challenges, and as an industry leader in quality, safety, and compliance, the Company is committed to reducing greenhouse gas emissions for a cleaner energy future. For more information, please visit www.charah.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements are identified by their use of terms and phrases such as "may," "expect," "estimate," "project," "plan," "believe," "intend," "achievable," "anticipate," "will," "continue," "potential," "should," "could," and similar terms and phrases. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. See the Company's Form 10-K for the fiscal year ended December 31, 2019 and other periodic reports as filed with the Securities and Exchange Commission for further information regarding risk factors.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA and Adjusted EBITDA margin are not financial measures determined in accordance with GAAP. Charah Solutions defines Adjusted EBITDA as net loss attributable to Charah Solutions, Inc. before loss on extinguishment of debt, impairment expense, interest expense, income taxes, depreciation and amortization, equity-based compensation, non-recurring legal and start-up costs and expenses, Brickhaven termination revenue reversal, and transaction-related expenses and other items. Adjusted EBITDA margin represents the ratio of Adjusted EBITDA to total revenue.

Management believes Adjusted EBITDA and Adjusted EBITDA margin are useful performance measures because they allow for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital structure. Management excludes the items listed above from net loss attributable to Charah Solutions, Inc. in arriving at Adjusted EBITDA because these amounts are either non-recurring or can vary substantially within Charah Solutions' industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net loss attributable to Charah Solutions, Inc. determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Charah Solutions' presentation of Adjusted EBITDA should not be construed as an indication that the Company's results will be unaffected by the items excluded from Adjusted EBITDA. Charah Solutions' computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. Charah Solutions uses Adjusted EBITDA margin to measure the success of the Company's business in managing its cost base and improving profitability. A reconciliation between Adjusted EBITDA to net loss attributable to Charah Solutions, Inc., Charah Solutions' most directly comparable financial measure calculated and presented in accordance with GAAP, along with a calculation of the Company's Adjusted EBITDA margin is included in the supplemental financial data attached to this press release.

Adjusted net loss attributable to Charah Solutions, Inc. and adjusted loss per basic/diluted share are not financial measures determined in accordance with GAAP. Charah Solutions defines adjusted net loss attributable to Charah Solutions, Inc. as net loss attributable to Charah Solutions, Inc. plus, on a post-tax basis, loss on extinguishment of debt, impairment expense, non-recurring legal and start-up costs and expenses and transaction-related expenses and other items. Adjusted loss per basic/diluted share is calculated using adjusted net loss attributable to Charah Solutions, Inc. Management excludes the items listed above to provide a more meaningful comparison of the Company's operating performance when compared to prior periods. Adjusted net loss attributable to Charah Solutions, Inc. and adjusted loss per basic/diluted share should not be considered as an alternative to, or more meaningful than, net loss attributable to Charah Solutions, Inc. or loss per basic/diluted share determined in accordance with GAAP. A reconciliation of adjusted net loss attributable to Charah Solutions, Inc. and adjusted loss per basic/diluted share to the most directly comparable financial measure calculated and presented in accordance with GAAP is provided in the supplemental financial data attached to this press release.

Free cash flow is not a financial measure determined in accordance with GAAP. We define free cash flow as cash flows from operating activities, less cash used for capital expenditures, net of proceeds. We exclude capital expenditures because we consider them to be a necessary component of our ongoing operations. We consider free cash flow to be a measure that provides useful information to management and investors about the amount of cash generated by the business that can be used for investing in our business and strengthening our balance sheet, but it is not intended to represent the amount of cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from this measure.

The Company uses non-GAAP measures internally as a key performance measure of the results of operations for purposes of evaluating performance. These measures facilitate comparison of operating performance between periods and help investors to better understand the operating results of the Company by excluding certain items that may not be indicative of the Company's core business or operating results. The Company believes the use of these measures enables management and investors to evaluate and compare, from period to period, the Company's operating performance in a meaningful and consistent manner. The non-GAAP measures are a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP, and should not be considered as an alternative to, or more meaningful than, comparable financial measures as determined in accordance with GAAP as a measure of our operating results.

CHARAH SOLUTIONS, INC.
Condensed Consolidated Balance Sheets
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CHARAH SOLUTIONS, INC.
Condensed Consolidated Statement of Operations
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CHARAH SOLUTIONS, INC.
Condensed Consolidated Statement of Cash Flows
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CHARAH SOLUTIONS, INC.
Segment Results
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CHARAH SOLUTIONS, INC.
Non-GAAP Reconciliation: Net Loss Attributable to Charah Solutions, Inc. to Adjusted EBITDA
(in thousands)
(Unaudited)

We define Adjusted EBITDA as net loss attributable to Charah Solutions, Inc. before loss on extinguishment of debt, impairment expense, interest expense, income taxes, depreciation and amortization, equity-based compensation, non-recurring legal costs and expenses, the Brickhaven contract deemed termination revenue reversal and transaction-related expenses and other items. Adjusted EBITDA margin represents the ratio of Adjusted EBITDA to total revenue. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful performance measures because they allow for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital structure.

The following table presents a reconciliation of Adjusted EBITDA to net loss attributable to Charah Solutions, Inc., our most directly comparable financial measure calculated and presented in accordance with GAAP, along with our Adjusted EBITDA margin.

1. Represents non-recurring legal costs and expenses, which amounts are not representative of those that we historically incur in the ordinary course of our business. Negative amounts represent insurance recoveries related to these matters.
2. Represents expenses associated with the Amendment to the Credit Facility, SCB transaction expenses, executive severance costs, IPO-related costs, and other miscellaneous items.
3. Adjusted EBITDA margin is a non-GAAP financial measure that represents the ratio of Adjusted EBITDA to total revenue. We use Adjusted EBITDA margin to measure the success of our businesses in managing our cost base and improving profitability.

CHARAH SOLUTIONS, INC.
Non-GAAP Reconciliation: Net Loss Attributable to Charah Solutions, Inc. to
Adjusted Net Income (Loss) Attributable to Charah Solutions, Inc. and Adjusted Income (Loss) per Basic/Diluted Share
(in thousands, except per share data)
(Unaudited)

Adjusted net income (loss) attributable to Charah Solutions, Inc. and adjusted income (loss) per basic/diluted share are non-GAAP financial measures. We define adjusted net income (loss) attributable to Charah Solutions, Inc. as net loss attributable to Charah Solutions, Inc. plus, on a post-tax basis, loss on extinguishment of debt, impairment expense, non-recurring legal costs and expenses, the Brickhaven contract deemed termination revenue reversal and transaction-related expenses and other items. Adjusted income (loss) per basic/diluted share is based on adjusted net income (loss) attributable to Charah Solutions, Inc.

The following represents a reconciliation of net loss attributable to Charah Solutions, Inc., our most directly comparable financial measure calculated and presented in accordance with GAAP, to adjusted net income (loss) attributable to Charah Solutions, Inc. and adjusted income (loss) per basic/diluted share.

1. Represents non-recurring legal costs and expenses, which amounts are not representative of those that we historically incur in the ordinary course of our business. Negative amounts represent insurance recoveries related to these matters.
2. Represents SCB transaction expenses, executive severance costs, IPO-related costs, expenses associated with the amendments to the Credit Facility and other miscellaneous items.
3. Represents the statutory tax rate of 27.3% for the three months ended September 30, 2020 and the effective tax rate of 3.0% for the nine months ended September 30, 2020 and the effective tax rate of 32.3% for the three months ended September 30, 2019 and the effective tax rate of 25.5% for the nine months ended September 30, 2019 respectively, multiplied by adjusted income (loss) before income taxes attributable to Charah Solutions, Inc.
4. As a result of the adjusted net loss per share for the three months September 30, 2019, and the nine months ended September 30, 2020 and 2019, the inclusion of all potentially dilutive shares would be anti-dilutive. Therefore, dilutive shares of 1,510 were excluded from the computation of the weighted-average shares for diluted net loss per share for the three months ended September 30, 2019, and dilutive shares of 1,494 and 1,299 were excluded from the computation of the weighted-average shares for diluted net loss per share for the nine months ended September 30, 2020 and 2019, respectively.