North American Construction Group Ltd. ("NACG") (TSX:NOA/NYSE:NOA)
today announced results for the fourth quarter and year ended
December 31, 2023. Unless otherwise indicated, figures are
expressed in Canadian dollars with comparisons to prior periods
ended December 31, 2022.
Fourth Quarter 2023
Highlights:
- Closure of the
MacKellar Group ("MacKellar") acquisition on October 1, 2023, a
seamless change in control, and three months of strong equipment
utilization provided a full quarter of operating results in
Australia, and a step change in geographic diversification.
- The allocated
purchase price of MacKellar was $369.7 million, net of cash
acquired, along with growth capital spending of $35.9 million
incurred in the quarter was fully funded with senior and
vendor-provided debt and establishes a strong platform for
opportunities in Australia.
- Combined revenue of
$403.4 million is a company quarterly record based on the
transformative acquisition of MacKellar. Revenue of $326.3 million,
compared to $233.4 million in the same period last year, includes
this step-change increase along with steady and consistent
operations in the Fort McMurray region.
- Our net share of
revenue from equity consolidated joint ventures was $77.1 million,
compared to $86.7 million in the same period last year.
Quarter-over-quarter increases at the Fargo-Moorhead project were
offset by the successful 2023 Q3 completion of the construction
project at the gold mine in Northern Ontario.
- Adjusted EBITDA of
$101.1 million, also a company record, and EBITDA margin of 25.1%
compared to the prior period metrics of $85.9 million and 26.8%,
respectively. Margins were impacted by project losses posted by the
Nuna Group of Companies; restructuring efforts are well underway to
resolve temporary challenges.
- Cash flows generated
from operating activities of $160.9 million in the quarter,
compared to $78.1 million in the prior year quarter, resulting from
higher earnings and changes in working capital balances when
comparing to the same period in the prior year.
- Free cash flow
("FCF") of $110.6 million in the quarter was the result of strong
revenues, steady and consistent margins, modest capital spending,
and positive changes in working capital balances.
- Net debt was $720.9
million at December 31, 2023, an increase of $325.6 million from
September 30, 2023, resulting from the debt-funded purchase price
and growth spending in Australia offset by free cash flow directed
to debt reduction during the quarter.
NACG President and CEO, Joseph Lambert, commented: "The
acquisition of the MacKellar Group is a milestone moment for our
company and I'd like to thank all the employees for the hard work
that has been put in to make these first few months in Australia
such a success. In both Queensland and Western Australia, we are
excited by the many prospects we have in front of us and look
forward to sharing best practices and in-house maintenance
expertise, as well as equipment where appropriate, to facilitate
these growth opportunities.
As we've geographically diversified, I continue to closely
monitor our various regions. In North Dakota and based on a recent
trip there, construction at Fargo-Moorhead is progressing well into
this most important period for the project. In northern Canada, we
are undergoing a restructuring initiative within the Nuna Group of
Companies which will return it to its legacy of operational
excellence. In Fort McMurray, our fleet continues to operate day-in
day-out as we work with our customers in their goal to achieve
low-cost operations in the oil sands region. 2024 will be a busy
year for us and we are looking forward to executing and delivering
another record year."
Consolidated Financial
Highlights
|
|
Three months ended |
|
Year ended |
|
|
December 31, |
|
December 31, |
(dollars in thousands, except per share
amounts) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
$ |
326,298 |
|
|
$ |
233,417 |
|
|
$ |
957,220 |
|
|
$ |
769,539 |
|
Cost of sales |
|
|
218,853 |
|
|
|
154,967 |
|
|
|
671,684 |
|
|
|
548,723 |
|
Depreciation |
|
|
41,990 |
|
|
|
35,860 |
|
|
|
131,319 |
|
|
|
119,268 |
|
Gross profit |
|
$ |
65,455 |
|
|
$ |
42,590 |
|
|
$ |
154,217 |
|
|
$ |
101,548 |
|
Gross profit margin |
|
|
20.1 |
% |
|
|
18.2 |
% |
|
|
16.1 |
% |
|
|
13.2 |
% |
General and administrative
expenses (excluding stock-based compensation)(i) |
|
|
18,702 |
|
|
|
6,648 |
|
|
|
41,016 |
|
|
|
25,075 |
|
Stock-based compensation
expense |
|
|
(496 |
) |
|
|
4,910 |
|
|
|
15,828 |
|
|
|
4,780 |
|
Operating income |
|
|
45,779 |
|
|
|
31,565 |
|
|
|
95,714 |
|
|
|
71,157 |
|
Interest expense, net |
|
|
14,007 |
|
|
|
7,774 |
|
|
|
36,948 |
|
|
|
24,543 |
|
Net income |
|
|
17,646 |
|
|
|
26,081 |
|
|
|
63,141 |
|
|
|
67,372 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(i) |
|
|
101,136 |
|
|
|
85,875 |
|
|
|
296,963 |
|
|
|
245,352 |
|
Adjusted EBITDA
margin(i)(ii) |
|
|
25.1 |
% |
|
|
26.8 |
% |
|
|
23.3 |
% |
|
|
23.3 |
% |
|
|
|
|
|
|
|
|
|
Per share
information |
|
|
|
|
|
|
|
|
Basic net income per
share |
|
$ |
0.66 |
|
|
$ |
0.99 |
|
|
$ |
2.38 |
|
|
$ |
2.46 |
|
Diluted net income per
share |
|
$ |
0.58 |
|
|
$ |
0.84 |
|
|
$ |
2.09 |
|
|
$ |
2.15 |
|
Adjusted EPS(i) |
|
$ |
0.87 |
|
|
$ |
1.10 |
|
|
$ |
2.83 |
|
|
$ |
2.41 |
|
(i) See "Non-GAAP Financial Measures". (ii)Adjusted EBITDA
margin is calculated using adjusted EBITDA over total combined
revenue.
|
|
Three months ended |
|
Year ended |
|
|
December 31, |
|
December 31, |
(dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Consolidated Statements of Cash Flows |
|
|
|
|
|
|
|
|
Cash provided by operating activities |
|
$ |
160,870 |
|
|
$ |
78,099 |
|
|
$ |
270,391 |
|
|
$ |
169,201 |
|
Cash used in investing activities |
|
|
(137,756 |
) |
|
|
(17,524 |
) |
|
|
(244,879 |
) |
|
|
(97,469 |
) |
Effect of exchange rate on changes in cash |
|
|
3,167 |
|
|
|
(94 |
) |
|
|
1,705 |
|
|
|
304 |
|
Add back of growth and
non-cash items included in the above figures: |
|
|
|
|
|
|
|
|
Acquisition of MacKellar(i) |
|
|
51,671 |
|
|
|
— |
|
|
|
51,671 |
|
|
|
— |
|
Acquisition costs |
|
|
5,934 |
|
|
|
— |
|
|
|
7,095 |
|
|
|
— |
|
Growth capital additions(ii) |
|
|
35,941 |
|
|
|
— |
|
|
|
40,416 |
|
|
|
— |
|
Acquisition of ML Northern(iii) |
|
|
— |
|
|
|
7,207 |
|
|
|
— |
|
|
|
7,207 |
|
Non-cash changes in fair value of contingent consideration |
|
|
(8,268 |
) |
|
|
— |
|
|
|
(8,268 |
) |
|
|
— |
|
Capital additions financed by leases(ii) |
|
|
(931 |
) |
|
|
(236 |
) |
|
|
(28,159 |
) |
|
|
(8,931 |
) |
Free cash flow(i) |
|
$ |
110,628 |
|
|
$ |
67,452 |
|
|
$ |
89,972 |
|
|
$ |
70,312 |
|
(i)See "Non-GAAP Financial Measures".
Results for the Three Months
Ended December 31, 2023
Combined revenue of $403.4 million, compared to $320.1 million
in the same period last year, and revenue from wholly-owned
entities was $326.3 million, up from $233.4 million in the same
period last year. The majority of the quarter-over-quarter increase
in revenue was driven by the October 2023 acquisition of MacKellar.
MacKellar generated a full quarter of revenue totaling $122.5
million. Aside from MacKellar, revenue was down over the same
period in 2022 as a result of changes in timing of reclamation
projects beginning later than the previous year and certain
construction scopes concluding earlier in 2023, relative to the
same period in 2022.
Combined gross profit margin of 18.4% was up from 17.8% in the
prior year. The improvement in combined gross profit in the current
period was driven by the acquisition of MacKellar. MacKellar
generated gross profit of 23.7% in the quarter.
General and administrative expenses (excluding stock-based
compensation expense) were $18.7 million, or 5.7% of revenue for
the three months ended December 31, 2023, up from $6.6 million, or
2.8% of revenue in the same period last year. General and
administrative expenses in the quarter include one-time costs of
$5.9 million related to the acquisition of MacKellar. MacKellar's
administrative cost profile is similar to the Canadian and U.S.
operations.
Cash related interest expense of $13.2 million represents an
average cost of debt of 8.8% (compared to $7.5 million and 7.1%,
respectively, for the three months ended December 31, 2022). The
increase in interest expense is primarily attributed to the higher
balance on the Credit Facility and increases in the variable
rate.
Net income of $17.6 million in Q4 2023 compared to $26.1 million
in the same period last year as higher gross profit was more than
offset by increased interest expense, increased general and
administrative expenses from the one-time acquisition costs, and
lower equity earnings from our joint ventures.
Free cash flow in the quarter was $110.6 million driven
primarily by adjusted EBITDA of $101.1 million less sustaining
capital spending of $40.8 million and cash interest paid of $13.2
million.
Liquidity
Including equipment financing availability and factoring in the
amended Credit Facility agreement, total available capital
liquidity of $292.6 million includes total liquidity of $217.9
million, $60.1 million of unused finance lease borrowing
availability, and $14.6 million of unused other borrowing
availability as at December 31, 2023. Liquidity is primarily
provided by the terms of our $478.0 million credit facility which
allows for funds availability based on a trailing twelve-month
EBITDA as defined in the agreement, and is now scheduled to expire
in October 2026.
Business Updates
Strategic Focus Areas for 2024
- Safety - now on a
global basis, maintain our uncompromising commitment to health and
safety while elevating the standard of excellence in the
field;
- Execution - enhance
equipment availability in Canada and Australia through in-house
fleet maintenance, reliability programs, technical improvements,
and management systems;
- Operational
excellence - with a specific focus on Nuna Group of Companies, put
into action practical and experienced-based protocols to ensure
predictable high-quality project execution;
- Integration -
implement ERP and best practices at MacKellar, including
identification of opportunities to better utilize our capital and
equipment in Australia;
- Diversification -
pursue diversification of customers and resources through strategic
partnerships, industry expertise and investment in Indigenous joint
ventures; and
- Sustainability -
further develop and deliver into our environmental, social, and
governance targets as disclosed and committed to in our annual
reporting.
Outlook for 2024
The following table provides projected key measures for 2024 and
actual results of 2023 and 2022. The measures for 2024 are
predicated on contracts currently in place, including expected
renewals and the heavy equipment fleet that we own and operate.
Key measures |
|
2022 Actual |
|
2023 Actual |
|
2024 Outlook |
Combined revenue |
|
$1.1B |
|
$1.3B |
|
$1.5 - $1.7B |
Adjusted EBITDA(i) |
|
$245M |
|
$297M |
|
$430 - $470M |
Sustaining capital(i) |
|
$113M |
|
$169M |
|
$170 - $190M |
Adjusted EPS(i) |
|
$2.41 |
|
$2.83 |
|
$4.25 - $4.75 |
Free cash flow(i) |
|
$70M |
|
$90M |
|
$160 - $185M |
|
|
|
|
|
|
|
Capital allocation |
|
|
|
|
|
|
Growth spending |
|
$13M |
|
$40M |
|
$55 - $70M |
Net
debt leverage(i) |
|
1.5x |
|
1.7x |
|
Targeting 1.5x |
(i)See "Non-GAAP Financial Measures".(ii)Shareholder activity
includes common shares purchased under a NCIB, dividends paid and
the purchase of treasury shares.
Conference Call and Webcast
Management will hold a conference call and webcast to discuss
our financial results for the three months and year ended December
31, 2023, tomorrow, Thursday, March 14, 2024, at 9:00 am
Eastern Time (7:00 am Mountain Time).
The call can be accessed by dialing:
Toll free: 1-888-886-7786Conference ID: 29416987
A replay will be available through April 12, 2024, by
dialing:
Toll Free: 1-877-674-7070Conference ID: 29416987Playback
Passcode: 416987
A slide deck for the webcast will be available for download the
evening prior to the call and will be found on the company’s
website at www.nacg.ca/presentations/
The live presentation and webcast can be accessed at:
https://onlinexperiences.com/scripts/Server.nxp?LASCmd=AI:4;F:QS!10100&ShowUUID=E7B12076-0168-45B4-8211-E024A0E31C5D
A replay will be available until April 12, 2024, using the link
provided.
Basis of Presentation
We have prepared our 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 Management’s Discussion and Analysis ("MD&A")
for the three months and year ended December 31, 2023, for further
detail on the matters discussed in this release. In addition to the
MD&A, please reference the dedicated Q4 2023 Results
Presentation for more information on our results and projections
which can be found on our website under Investors -
Presentations.
Change in significant accounting policy
- Basis of presentation
During the first quarter of 2023, the Company updated the
presentation of finance lease obligations within the Consolidated
Balance Sheets to be included in long-term debt. Within the
long-term debt note, finance lease obligations, financing
obligations, and promissory notes have been combined as equipment
financing. Finance lease obligations are the finance lease
liabilities recognized in accordance with the Company's lease
policy which is disclosed in our Annual Report. Financing
obligations arise when the Company finances its owned equipment.
There has been no change in the Company’s accounting policy for
finance lease obligations or change in the recognition or
measurement of the related balances now recognized within long-term
debt. The change in presentation had no effect on the reported
results of operations. The comparative period has been updated to
reflect this presentation change.
Recent accounting pronouncements not yet
adopted
Joint venture formations
In August 2023, the FASB issued ASU 2023-05, Business
Combinations - Joint Venture Formations. This accounting standard
update was issued to create new requirements for valuing
contributions made to a joint venture upon formation. This standard
is effective January 1, 2025, with early adoption permitted. We are
assessing the impact the adoption of this standard may have on its
consolidated financial statements.
Segment reporting
In November 2023, the FASB issued ASU 2023-07, Segment
Reporting: Improvements to Reportable Segment Disclosures. This
accounting standard update was issued to improve reportable segment
disclosure requirements, primarily through enhanced disclosures
about significant segment expenses. This standard is effective for
the fiscal year beginning January 1, 2024. We are assessing the
impact the adoption of this standard may have on its consolidated
financial statements.
Income taxes
In December 2023, the FASB issued ASU 2023-09, Income Taxes:
Improvements to Income Tax Disclosures. This accounting standard
update was issued to increase transparency by improving income tax
disclosures primarily related to the rate reconciliation and income
taxes paid information. This standard is effective for the fiscal
year beginning January 1, 2025, with early adoption permitted. We
are assessing the impact the adoption of this standard may have on
its consolidated financial statements.
Forward-Looking Information
The information provided in this release contains
forward-looking statements. Forward-looking statements include
statements preceded by, followed by or that include the words
"anticipate", "believe", "expect", "should" or similar expressions
and include guidance with respect to financial metrics provided in
our outlook for 2024.
The material factors or assumptions used to develop the above
forward-looking statements include, and the risks and uncertainties
to which such forward-looking statements are subject, are
highlighted in the MD&A for the three months and year ended
December 31, 2023. Actual results could differ materially from
those contemplated by such forward-looking statements because of
any number of factors and uncertainties, many of which are beyond
NACG’s control. Undue reliance should not be placed upon
forward-looking statements and NACG undertakes no obligation, other
than those required by applicable law, to update or revise those
statements. For more complete information about NACG, please read
our disclosure documents filed with the SEC and the CSA. These free
documents can be obtained by visiting EDGAR on the SEC website at
www.sec.gov or on the CSA website at www.sedarplus.ca and
on our company website at www.nacg.ca.
Non-GAAP Financial
Measures
This press release presents certain non-GAAP financial measures,
non-GAAP ratios, and supplementary financial measures that may be
useful to investors in analyzing our business performance,
leverage, and liquidity. A non-GAAP financial measure is defined by
relevant regulatory authorities as a numerical measure of an
issuer's historical or future financial performance, financial
position or cash flow that is not specified, defined or determined
under the issuer’s GAAP and that is not presented in an issuer’s
financial statements. A "non-GAAP ratio" is a ratio, fraction,
percentage or similar expression that has a non-GAAP financial
measure as one or more of its components. Non-GAAP financial
measures and ratios do not have standardized meanings under GAAP
and therefore may not be comparable to similar measures presented
by other issuers. They should not be considered in isolation or as
a substitute for measures of performance prepared in accordance
with GAAP. A "supplementary financial measure" is a financial
measure disclosed, or intended to be disclosed, on a periodic basis
to depict historical or future financial performance, financial
position or cash flows that does not fall within the definition of
a non-GAAP financial measure or non-GAAP ratio. The non-GAAP
financial measures and ratios we present include, "adjusted EBIT",
"adjusted EBITDA", "adjusted EBITDA margin" "adjusted EPS",
"adjusted net earnings", "backlog", "capital additions", "capital
expenditures, net", "capital inventory", "capital work in
progress", "cash provided by operating activities prior to change
in working capital", "combined gross profit", "combined gross
profit margin", "equity investment depreciation and amortization",
"equity investment EBIT", "free cash flow", "general and
administrative expenses (excluding stock-based compensation)",
"gross profit", "growth capital", "invested capital", "net debt",
"sustaining capital", "total capital liquidity", "total combined
revenue", and "total debt". We also use supplementary financial
measures such as "gross profit margin" and "total net working
capital (excluding cash and current portion of long-term debt)" in
our MD&A. Each non-GAAP financial measure used in this press
release is defined under "Financial Measures" in our Management's
Discussion and Analysis filed on EDGAR on the SEC website at
www.sec.gov or on the CSA website at www.sedarplus.ca and
on our company website at www.nacg.ca.
Reconciliation of total reported revenue to total
combined revenue
|
|
Three months ended |
|
Year ended |
|
|
December 31, |
|
December 31, |
(dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue from wholly-owned entities per financial statements |
|
$ |
326,298 |
|
|
$ |
233,417 |
|
|
$ |
957,220 |
|
|
$ |
769,539 |
|
Share of revenue from
investments in affiliates and joint ventures |
|
|
169,662 |
|
|
|
183,006 |
|
|
|
686,299 |
|
|
|
596,033 |
|
Elimination of joint venture subcontract revenue |
|
|
(92,522 |
) |
|
|
(96,315 |
) |
|
|
(369,891 |
) |
|
|
(311,307 |
) |
Total combined revenue(i) |
|
$ |
403,438 |
|
|
$ |
320,108 |
|
|
$ |
1,273,628 |
|
|
$ |
1,054,265 |
|
(i) See "Non-GAAP Financial Measures".
Reconciliation of reported gross profit to combined
gross profit
|
|
Three months ended |
|
Year ended |
|
|
December 31, |
|
December 31, |
(dollars in thousands) |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Gross profit from wholly-owned entities per financial
statements |
|
$ |
65,455 |
|
$ |
42,590 |
|
$ |
154,217 |
|
$ |
101,548 |
Share
of gross profit from investments in affiliates and joint
ventures |
|
|
8,670 |
|
|
14,541 |
|
|
49,638 |
|
|
49,581 |
Combined gross profit(i) |
|
$ |
74,125 |
|
$ |
57,131 |
|
$ |
203,855 |
|
$ |
151,129 |
(i) See "Non-GAAP Financial Measures".
Reconciliation of net income to adjusted net earnings,
adjusted EBIT and adjusted EBITDA
|
|
Three months ended |
|
Year ended |
|
|
December 31, |
|
December 31, |
(dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
|
$ |
17,646 |
|
|
$ |
26,081 |
|
|
$ |
63,141 |
|
|
$ |
67,372 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Loss (gain) on disposal of property, plant and equipment |
|
|
1,470 |
|
|
|
(533 |
) |
|
|
1,659 |
|
|
|
536 |
|
Stock-based compensation (benefit) expense |
|
|
(496 |
) |
|
|
4,910 |
|
|
|
15,828 |
|
|
|
4,780 |
|
Acquisition costs |
|
|
5,934 |
|
|
|
— |
|
|
|
7,095 |
|
|
|
— |
|
Loss on equity investment customer bankruptcy claim settlement |
|
|
— |
|
|
|
— |
|
|
|
759 |
|
|
|
— |
|
Loss (gain) on derivative financial instruments |
|
|
916 |
|
|
|
(778 |
) |
|
|
(6,063 |
) |
|
|
(778 |
) |
Equity investment (gain) loss on derivative financial
instruments |
|
|
(713 |
) |
|
|
364 |
|
|
|
(1,362 |
) |
|
|
(4,776 |
) |
Tax effect of the above items |
|
|
(1,589 |
) |
|
|
(1,006 |
) |
|
|
(5,829 |
) |
|
|
(1,222 |
) |
Adjusted net earnings(i) |
|
$ |
23,168 |
|
|
$ |
29,038 |
|
|
$ |
75,228 |
|
|
$ |
65,912 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Tax effect of the above items |
|
|
1,589 |
|
|
|
1,006 |
|
|
|
5,829 |
|
|
|
1,222 |
|
Change in fair value of contingent consideration |
|
|
4,681 |
|
|
|
— |
|
|
|
4,681 |
|
|
|
— |
|
Interest expense, net |
|
|
14,007 |
|
|
|
7,774 |
|
|
|
36,948 |
|
|
|
24,543 |
|
Income tax expense |
|
|
10,930 |
|
|
|
6,889 |
|
|
|
22,822 |
|
|
|
17,073 |
|
Equity earnings in affiliates and joint ventures(i) |
|
|
(2,401 |
) |
|
|
(8,401 |
) |
|
|
(25,815 |
) |
|
|
(37,053 |
) |
Equity investment EBIT(i) |
|
|
1,787 |
|
|
|
9,363 |
|
|
|
25,545 |
|
|
|
42,148 |
|
Adjusted EBIT(i) |
|
$ |
53,761 |
|
|
$ |
45,669 |
|
|
$ |
145,238 |
|
|
$ |
113,845 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
42,277 |
|
|
|
36,094 |
|
|
|
132,516 |
|
|
|
120,124 |
|
Equity investment depreciation and amortization(i) |
|
|
5,098 |
|
|
|
4,112 |
|
|
|
19,209 |
|
|
|
11,383 |
|
Adjusted EBITDA(i) |
|
$ |
101,136 |
|
|
$ |
85,875 |
|
|
$ |
296,963 |
|
|
$ |
245,352 |
|
Adjusted EBITDA
margin(i)(ii) |
|
|
25.1 |
% |
|
|
26.8 |
% |
|
|
23.3 |
% |
|
|
23.3 |
% |
(i) See "Non-GAAP Financial Measures".(ii)Adjusted EBITDA margin
is calculated using adjusted EBITDA over total combined
revenue.
Reconciliation of equity earnings in affiliates and
joint ventures to equity investment EBIT
|
|
Three months ended |
|
Year ended |
|
|
December 31, |
|
December 31, |
(dollars in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
Equity (earnings) loss in affiliates and joint
ventures |
|
$ |
2,401 |
|
|
$ |
8,401 |
|
|
$ |
25,815 |
|
|
$ |
37,053 |
Adjustments: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(268 |
) |
|
|
688 |
|
|
|
(1,183 |
) |
|
|
2,589 |
Income tax expense |
|
|
(324 |
) |
|
|
275 |
|
|
|
970 |
|
|
|
2,442 |
(Gain) loss on disposal of property, plant and equipment |
|
|
(22 |
) |
|
|
(1 |
) |
|
|
(57 |
) |
|
|
64 |
Equity investment EBIT(i) |
|
$ |
1,787 |
|
|
$ |
9,363 |
|
|
$ |
25,545 |
|
|
$ |
42,148 |
Depreciation |
|
|
4,983 |
|
|
|
3,936 |
|
|
|
18,555 |
|
|
|
10,679 |
Amortization of intangible assets |
|
|
115 |
|
|
|
176 |
|
|
|
654 |
|
|
|
704 |
Equity investment depreciation and
amortization(i) |
|
$ |
5,098 |
|
|
$ |
4,112 |
|
|
$ |
19,209 |
|
|
$ |
11,383 |
(i) See "Non-GAAP Financial Measures"
About the Company
North American Construction Group Ltd. is a premier provider of
heavy civil construction and mining services in Canada, the U.S.
and Australia. For 70 years, NACG has provided services to the
mining, resource and infrastructure construction markets.
For further information contact:
Jason Veenstra, CPA, CAChief Financial OfficerNorth American
Construction Group Ltd.(780) 960.7171ir@nacg.cawww.nacg.ca
Consolidated Balance Sheets
As at December 31 (Expressed in thousands of Canadian
Dollars)
|
|
|
2023 |
|
|
|
2022 |
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash |
|
$ |
88,614 |
|
|
$ |
69,144 |
|
Accounts receivable |
|
|
97,855 |
|
|
|
83,811 |
|
Contract assets |
|
|
35,027 |
|
|
|
15,802 |
|
Inventories |
|
|
64,962 |
|
|
|
49,898 |
|
Prepaid expenses and deposits |
|
|
7,402 |
|
|
|
10,587 |
|
Assets held for sale |
|
|
1,340 |
|
|
|
1,117 |
|
|
|
|
295,200 |
|
|
|
230,359 |
|
Property, plant and
equipment |
|
|
1,142,946 |
|
|
|
645,810 |
|
Operating lease right-of-use
assets |
|
|
12,782 |
|
|
|
14,739 |
|
Intangible assets |
|
|
6,971 |
|
|
|
6,773 |
|
Investments in affiliates and
joint ventures |
|
|
81,435 |
|
|
|
75,637 |
|
Other assets |
|
|
7,144 |
|
|
|
5,808 |
|
Deferred tax assets |
|
|
— |
|
|
|
387 |
|
Total assets |
|
$ |
1,546,478 |
|
|
$ |
979,513 |
|
Liabilities and shareholders' equity |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
$ |
146,190 |
|
|
$ |
102,549 |
|
Accrued liabilities |
|
|
94,726 |
|
|
|
43,784 |
|
Contract liabilities |
|
|
59 |
|
|
|
1,411 |
|
Current portion of long-term debt |
|
|
81,306 |
|
|
|
42,089 |
|
Current portion of operating lease liabilities |
|
|
1,742 |
|
|
|
2,470 |
|
|
|
|
324,023 |
|
|
|
192,303 |
|
Long-term debt |
|
|
611,313 |
|
|
|
378,452 |
|
Operating lease
liabilities |
|
|
11,307 |
|
|
|
12,376 |
|
Other long-term
obligations |
|
|
134,357 |
|
|
|
18,576 |
|
Deferred tax liabilities |
|
|
108,824 |
|
|
|
71,887 |
|
|
|
|
1,189,824 |
|
|
|
673,594 |
|
Shareholders' equity |
|
|
|
|
Common shares (authorized –
unlimited number of voting common shares; issued and outstanding –
December 31, 2023 - 27,827,282 (December 31, 2022 –
27,827,282)) |
|
|
229,455 |
|
|
|
229,455 |
|
Treasury shares (December 31,
2023 - 1,090,187 (December 31, 2022 - 1,406,461)) |
|
|
(16,165 |
) |
|
|
(16,438 |
) |
Additional paid-in
capital |
|
|
20,739 |
|
|
|
22,095 |
|
Retained earnings |
|
|
123,032 |
|
|
|
70,501 |
|
Accumulated other comprehensive (loss) income |
|
|
(407 |
) |
|
|
306 |
|
Shareholders' equity |
|
|
356,654 |
|
|
|
305,919 |
|
Total liabilities and shareholders' equity |
|
$ |
1,546,478 |
|
|
$ |
979,513 |
|
Consolidated Statements of Operations and Comprehensive
Income
For the years ended December 31(Expressed in thousands of
Canadian Dollars, except per share amounts)
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
$ |
957,220 |
|
|
$ |
769,539 |
|
Cost of sales |
|
|
671,684 |
|
|
|
548,723 |
|
Depreciation |
|
|
131,319 |
|
|
|
119,268 |
|
Gross profit |
|
|
154,217 |
|
|
|
101,548 |
|
General and administrative
expenses |
|
|
56,844 |
|
|
|
29,855 |
|
Loss on
disposal of property, plant and equipment |
|
|
1,659 |
|
|
|
536 |
|
Operating income |
|
|
95,714 |
|
|
|
71,157 |
|
Equity earnings in affiliates
and joint ventures |
|
|
(25,815 |
) |
|
|
(37,053 |
) |
Interest expense, net |
|
|
36,948 |
|
|
|
24,543 |
|
Change in fair value of
contingent consideration |
|
|
4,681 |
|
|
|
— |
|
Gain on
derivative financial instruments |
|
|
(6,063 |
) |
|
|
(778 |
) |
Income before income taxes |
|
|
85,963 |
|
|
|
84,445 |
|
Current income tax
expense |
|
|
6,841 |
|
|
|
1,627 |
|
Deferred income tax expense |
|
|
15,981 |
|
|
|
15,446 |
|
Net income |
|
|
63,141 |
|
|
|
67,372 |
|
Other comprehensive
income |
|
|
|
|
Unrealized foreign currency translation loss (gain) |
|
|
713 |
|
|
|
(304 |
) |
Comprehensive income |
|
$ |
62,428 |
|
|
$ |
67,676 |
|
|
|
|
|
|
Per share
information |
|
|
|
|
Basic net income per share |
|
$ |
2.38 |
|
|
$ |
2.46 |
|
Diluted net income per share |
|
$ |
2.09 |
|
|
$ |
2.15 |
|
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