North American Construction Group Ltd. (“NACG” or “the Company”) announced results for the first quarter ending March 31, 2019.
Martin Ferron, Chairman and Chief Executive Officer of the Company stated; “Spring break up arrived early and abruptly this year, particularly in comparison to 2017 and 2018, causing a premature end to some of our winter work revenue opportunities. Despite this, we were pleased to exceed our EBITDA objective for the quarter, which augers very well for the rest of the year, particularly as we only achieved break even gross profit on two assumed legacy contracts that will soon run their course.”
“In a welcome period of stock price appreciation, we achieved another objective of layering in some junior debt into our capital structure, on favorable terms. However, the non-cash, mark to market accounting for our stock based compensation, together with one time acquisition related restructuring costs, reduced our basic EPS by 23 cents.”
Mr. Ferron concluded; “Q2 has started with the award of another long-term contract which will provide work for many of our recently acquired heavy equipment assets. Therefore, going forward, we believe that we have the contracted work to provide sufficient free cash flow to both de-lever our balance sheet significantly and pursue many opportunities to continue our impressive growth profile.”
The Company has prepared its consolidated financial statements in conformity with accounting principles generally accepted in the United States (US GAAP). Unless otherwise specified, all dollar amounts discussed are in Canadian dollars. Please see the Company’s Management’s Discussion and Analysis (“MD&A”) for the quarter ending March 31, 2019 for further detail on the matters discussed in this release.
Highlights of the First Quarter:
- Revenue for the quarter was $186.4 million, compared to $114.7 million for the prior year, an increase of 62.5 percent.
- Adjusted EBITDA for the quarter was $52.1 million compared to $39.1 million for the prior year, an increase of 33.2 percent.
- On March 20, 2019, the Company closed an offering of a 5.00 percent convertible unsecured subordinated debenture for aggregate gross proceeds of $55.0 million.
- On April 1, 2019, the Company announced a long-term Multiple Use Contract and an associated term contract with a major oil sands customer. The agreement runs through December 2023 and the backlog included in the March 31, 2019 balance is approximately $400 million.
Declaration of Quarterly Dividend
On April 30, 2019, the NACG Board of Directors declared a regular quarterly dividend (the “Dividend”) of two Canadian cents ($0.02) per common share, payable to common shareholders of record at the close of business on May 31, 2019. The Dividend will be paid on July 5, 2019 and is an eligible dividend for Canadian income tax purposes.
Read the full report here.