North American Construction Group Ltd. (“NACG”) (TSX:NOA/NYSE:NOA)
today announced results for the second quarter ended June 30,
2022. Unless otherwise indicated, financial figures are expressed
in Canadian dollars, and comparisons are to the prior period ended
June 30, 2021.
Second Quarter 2022
Highlights:
- Revenue was $168.0 million, up from $139.3 million in the same
period last year. The majority of this quarter-over-quarter
positive variance was based on a full quarter of operations at the
Fort Hills mine. In addition, DGI Trading Pty Ltd ("DGI"), acquired
in Q3 2021, and sales of ultra-class trucks generated positive
variances. Top-line revenue was again impacted by shortages in
heavy equipment technicians required to maintain the equipment
which is directly correlated to equipment availability and
utilization.
- Combined revenue of $228.0 million represented a $52.0 million
(or 30%) increase as our share of revenue generated in Q2 2022 by
joint ventures and affiliates was $59.9 million compared to $36.6
million in Q2 2021. Nuna Group of Companies achieved another strong
quarter driven by activity at the gold mine in Northern Ontario
while the Mikisew North American Limited Partnership ultra-class
haul trucks and the joint ventures dedicated to the Fargo-Moorhead
flood diversion project were the drivers of quarter-over-quarter
improvements.
- Adjusted EBITDA of $41.6 million represents a $0.7 million
decrease over the prior year and reflects difficult operating
challenges primarily related to the aforementioned vacancies of
heavy equipment technician roles. Other challenges were primarily
related to inflation including i) higher costs experienced on site
from supplier and vendor price increases and ii) the delayed timing
impact of equipment rate escalations which lag based on published
index values. When comparing to Q2 2021, the Canadian Emergency
Wage Subsidy ("CEWS") program, which concluded in Q4 2021, was a
factor in quarter-over-quarter margin comparisons. Slightly
offsetting the challenges in the quarter were the strong margins
realized from parts and component sales made by DGI as well as the
profitable sales of ultra-class trucks made during the
quarter.
- Gross profit was $12.4 million with a 7.4% gross profit margin,
down from gross profit of $14.5 million and 10.4% gross profit
margin in the same period last year. The primary drivers of this
negative variance were the aforementioned operational impacts
related to shortages in heavy equipment technicians, the inflation
drivers discussed above and the discontinued CEWS program.
- Free cash flow ("FCF") in the quarter was positive $10.4
million as adjusted EBITDA generated $41.6 million, detailed above,
and when netted against sustaining capital additions ($22.3
million) and cash interest paid ($5.8 million) produced positive
cash of $13.5 million and translated well into overall free cash
flow.
- On April 6, 2022, we announced a Normal Course Issuer Bid
("NCIB") to purchase, for cancellation, up to 2,113,054 common
shares. This represented approximately 7.1% of the issued and
outstanding common shares as of March 31, 2022. This NCIB commenced
on April 11, 2022 and will terminate no later than April 10,
2023.
NACG President and CEO, Joe Lambert, commented: "Despite the
growth we experienced in revenue, the second quarter of 2022 was
challenging for our organization as we battled several factors
outside of our direct control. In response, we have been busy
executing our mitigation plans and are witnessing results starting
in late Q2 in reduced skilled trade vacancies and improved
equipment utilization."
Mr. Lambert added: "We are confident in our long-standing
customer relationships and the skills of our corporate and
operations teams to progress through these near-term inflationary
pressures and skilled labour shortages to achieve prompt, effective
outcomes. We are likewise confident and excited for the future
based on our backlog, bid pipeline, growing industry and indigenous
partnerships, commodity and geographic diversification, commitment
to safety, and ingrained low-cost culture."
Consolidated Financial Highlights
| |
Three months
ended |
|
Six months
ended |
|
|
June 30, |
|
June 30, |
| (dollars in thousands,
except per share amounts) |
|
2022 |
|
|
2021(iii) |
|
|
2022 |
|
|
2021(iii) |
| Revenue |
$ |
168,028 |
|
|
$ |
139,333 |
|
|
$ |
344,739 |
|
|
$ |
307,180 |
|
| Project costs |
|
74,632 |
|
|
|
41,557 |
|
|
|
136,747 |
|
|
|
92,159 |
|
| Equipment costs |
|
54,616 |
|
|
|
56,954 |
|
|
|
116,569 |
|
|
|
111,839 |
|
| Depreciation |
|
26,340 |
|
|
|
26,369 |
|
|
|
57,032 |
|
|
|
57,540 |
|
| Gross profit |
$ |
12,440 |
|
|
$ |
14,453 |
|
|
$ |
34,391 |
|
|
$ |
45,642 |
|
| Gross profit margin |
|
7.4 |
% |
|
|
10.4 |
% |
|
|
10.0 |
% |
|
|
14.9 |
% |
| General and administrative expenses (excluding stock-based
compensation) |
|
6,895 |
|
|
|
5,969 |
|
|
|
11,850 |
|
|
|
12,938 |
|
| Stock-based compensation expense (benefit) |
|
(1,843 |
) |
|
|
7,651 |
|
|
|
(566 |
) |
|
|
10,025 |
|
| Operating income |
|
6,301 |
|
|
|
1,187 |
|
|
|
21,943 |
|
|
|
23,291 |
|
| Interest expense, net |
|
5,565 |
|
|
|
4,395 |
|
|
|
10,247 |
|
|
|
8,937 |
|
| Net income |
|
7,514 |
|
|
|
2,742 |
|
|
|
21,071 |
|
|
|
22,128 |
|
| |
|
|
|
|
|
|
|
| Adjusted EBITDA(i) |
|
41,649 |
|
|
|
42,373 |
|
|
|
99,389 |
|
|
|
103,513 |
|
| Adjusted EBITDA margin(i)(ii) |
|
18.3 |
% |
|
|
24.1 |
% |
|
|
21.4 |
% |
|
|
28.1 |
% |
| |
|
|
|
|
|
|
|
| Per share information |
|
|
|
|
|
|
|
| Basic net income per share |
$ |
0.27 |
|
|
$ |
0.10 |
|
|
$ |
0.75 |
|
|
$ |
0.78 |
|
| Diluted net income per share |
$ |
0.25 |
|
|
$ |
0.09 |
|
|
$ |
0.69 |
|
|
$ |
0.72 |
|
| Adjusted EPS(i) |
$ |
0.17 |
|
|
$ |
0.31 |
|
|
$ |
0.69 |
|
|
$ |
0.97 |
|
(i)See "Non-GAAP Financial Measures". (ii)Adjusted EBITDA margin
is calculated using adjusted EBITDA over total combined revenue.
(iii)The prior year amounts are adjusted to reflect a change in
accounting policy. See "Accounting Estimates, Pronouncements and
Measures".
| |
Three months
ended |
|
Six months
ended |
| |
June 30, |
|
June 30, |
|
(dollars in thousands) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| Cash provided by operating activities |
$ |
35,485 |
|
|
$ |
25,267 |
|
|
$ |
59,670 |
|
|
$ |
67,096 |
|
| Cash used in investing activities |
|
(25,092 |
) |
|
|
(21,885 |
) |
|
|
(51,903 |
) |
|
|
(43,202 |
) |
| Capital additions financed by leases |
|
— |
|
|
|
— |
|
|
|
(8,695 |
) |
|
|
(15,023 |
) |
| Add back: |
|
|
|
|
|
|
|
|
Growth capital additions |
|
— |
|
|
|
48 |
|
|
|
— |
|
|
|
48 |
|
| Free cash
flow(i) |
$ |
10,393 |
|
|
$ |
3,430 |
|
|
$ |
(928 |
) |
|
$ |
8,919 |
|
(i)See "Non-GAAP Financial Measures".
Declaration of Quarterly
Dividend
On July 26th, 2022, the NACG Board of Directors
declared a regular quarterly dividend (the “Dividend”) of eight
Canadian cents ($0.08) per common share, payable to common
shareholders of record at the close of business on August 31, 2022.
The Dividend will be paid on October 7, 2022 and is an eligible
dividend for Canadian income tax purposes.
Financial Results for the Three Months Ended
June 30, 2022
Revenue of $168.0 million represented a $28.7 million (or 21%)
increase from Q2 2021. The remobilization of fleet at the Fort
Hills mine and revenue earned by DGI Trading Pty Ltd. ("DGI"),
which was acquired on July 1, 2021, were the primary drivers of the
quarter-over-quarter increase. A secondary driver which contributed
approximately 5% of the overall positive variance was the sale of
rebuilt ultra-class trucks to the Mikisew North American Limited
Partnership ("MNALP") that took place during the quarter. Operating
utilization in the quarter of 59% was higher than Q2 2021 of 52%
but lower than management expectation. It is estimated again that
between $15 and $20 million of revenue in the quarter was deferred
as a result of heavy equipment technician vacancies which was the
key factor among many in the overall equipment utilization achieved
in the quarter.
Combined revenue of $228.0 million represented a $52.0 million
(or 30%) increase from Q2 2021. Our share of revenue generated in
Q2 2022 by joint ventures and affiliates was $59.9 million compared
to $36.6 million in Q2 2021 (an increase of 64%). Nuna Group of
Companies again achieved another strong quarter of top-line
performance driven by the activity at the gold mine in Northern
Ontario and was the primary driver of the increase. Secondary
drivers of the increase in combined revenue include: i) the
top-line revenue impacts the rebuilt ultra-class haul trucks now
owned by MNALP, ii) the increasing throughput of the component
rebuild programs managed and performed by the Brake Supply North
American joint venture, and lastly iii) the recently formed joint
ventures dedicated to the Fargo-Moorhead flood diversion project.
The ground-breaking ceremony is scheduled for early August and
initial earthworks in the Fargo-Moorhead region is scheduled to
commence in mid to late Q3 2022.
Adjusted EBITDA of $41.6 million was a decrease from the Q2 2021
result of $42.4 million reflecting difficult and problematic
operating challenges in the quarter primarily related to the
aforementioned vacancies of heavy equipment technician roles.
Adjusted EBITDA margin of 18.3% reflected these challenges along
with inflation drivers including i) higher costs experienced on
site from supplier & vendor price increases and ii) the delayed
timing impact of equipment rate escalations which lag based on
published index values. When comparing to Q2 2021, the Canadian
Emergency Wage Subsidy ("CEWS") program, which concluded in Q4
2021, was a factor in quarter-over-quarter comparisons. Slightly
offsetting these margins challenges in the quarter were the higher
margins realized from parts and component sales made by DGI as well
as the profitable sales of ultra-class trucks made during the
quarter.
General and administrative expenses (excluding stock-based
compensation) were $6.9 million, or 4.1% of revenue, compared to
$6.0 million, or 4.3% of revenue and were considered stable for the
quarter. Cash related interest expense for the quarter was $5.3
million at an average cost of debt of 5.2% compared to 4.0% in Q2
2021 as posted interest rates have increased noticeably over the
past twelve months.
Adjusted EPS of $0.17 on adjusted net earnings of $4.7 million
is 45% down from the prior year figure of $0.31 and is correlated
with adjusted EBITDA performance as depreciation, tax and interest
tracked as expected. Weighted-average common shares outstanding for
the second quarters of 2022 and 2021 were stable at 27,968,510 and
28,077,514, respectively, as the majority of share cancellations in
Q2 2022 occurred late in the quarter. For reference, the quarter
ended with 27,314,372 common shares issued and outstanding.
Free cash flow was $10.4 million in the quarter as adjusted
EBITDA generated $41.6 million, detailed above, and when netted
against sustaining capital additions ($22.3 million) and cash
interest paid ($5.8 million) produced positive cash of $13.5
million and translated well into overall free cash flow. Changes in
working capital balances as well as the cash managed within the
various joint venture did not have a significant overall impact in
the quarter. That said, the ultra-class rebuild program notably
reduced work-in-progress inventories by $9.7 million in the quarter
as commissioning and sale of certain units occurred during the
second quarter.
BUSINESS UPDATES
Focus & Priorities for the Remainder of
2022
Safety - Focus on people and relationships,
maintain an uncompromising commitment to health and safety while
elevating the standard of excellence in the field.
Sustainability - Commitment to the continued
development of sustainability targets and constant measurement of
progress to those targets.
Diversification - Continue to pursue
diversification of customer, resource and geography through
strategic partnerships, industry expertise and our investment in
Nuna.
Execution - Enhancement of operational
excellence in fleet utilization and maintenance through reliability
programs and technical improvements. For the remainder of 2022, we
have specifically prioritized the:
- Sourcing and staffing of our critical heavy equipment
technician roles and
- Focused attention on contract administration during these times
of high inflation and cost escalation.
Normal Course Issuer Bid
("NCIB")
On April 6, 2022, we announced a NCIB to
purchase, for cancellation, up to 2,113,054 of our voting common
shares, representing 10.0% of our public float and 7.1% of our
issued and outstanding common shares as of March 31, 2022. In order
to comply with applicable securities laws, we can purchase a
maximum of 1,498,716 common shares (or approximately 5.0% of the
issued and outstanding voting common shares) on the NYSE and
alternative trading systems. This NCIB commenced on April 11, 2022
and will terminate no later than April 10, 2023.
Liquidity
|
|
June 30,2022 |
|
December 31,2021 |
| Credit
Facility limit |
$ |
325,000 |
|
|
$ |
325,000 |
|
| Finance lease borrowing limit |
|
150,000 |
|
|
|
150,000 |
|
| Other debt borrowing
limit |
|
20,000 |
|
|
|
20,000 |
|
| Total borrowing
limit |
$ |
495,000 |
|
|
$ |
495,000 |
|
| Senior debt(i) |
|
(244,177 |
) |
|
|
(225,876 |
) |
| Letters of credit |
|
(30,585 |
) |
|
|
(33,884 |
) |
| Joint venture guarantee |
|
(39,260 |
) |
|
|
(18,719 |
) |
| Cash |
|
11,717 |
|
|
|
16,601 |
|
| Total capital
liquidity |
$ |
192,695 |
|
|
$ |
233,122 |
|
(i)See "Non-GAAP Financial Measures".
NACG’s Outlook for 2022
Given our visibility into the remainder of 2022,
management has decided to provide stakeholders with guidance
through 2022. This guidance is predicated on contracts currently in
place and the heavy equipment fleet that we own and operate.
|
Key measures |
|
2022 |
| Adjusted EBITDA |
|
$200 -
$230M |
| Adjusted EPS |
|
$1.65 -
$2.05 |
| Sustaining capital |
|
$90 -
$100M |
| Free cash flow |
|
$65 -
$90M |
| |
|
|
| Capital
allocation |
|
|
| Deleverage |
|
$15 -
$40M |
| Shareholder activity (dividends, NCIB, trust purchases) |
|
$30 -
$40M |
| Growth spending |
|
$10 -
$15M |
| |
|
|
| Leverage
ratios |
|
|
| Senior debt |
|
1.1x -
1.5x |
| Net debt |
|
1.4x - 1.8x |
Conference Call and Webcast
Management will hold a conference call and
webcast to discuss our financial results for the quarter ended
June 30, 2022 tomorrow, Thursday, July 28, 2022 at 7:00
am Mountain Time (9:00 am Eastern Time).
The call can be accessed by dialing: Toll free: 1-888-396-8049
Conference ID: 82943569
A replay will be available through August 28, 2022, by dialing:
Toll Free: 1-877-674-7070 Conference ID: 82943569
The Q2 2022 earnings presentation for the webcast will be
available for download on the company’s website at
www.nacg.ca/presentations/
The live presentation and webcast can be accessed at:
https://app.webinar.net/QZ8arRAxJqe
A replay will be available until August 28, 2022 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 quarter ended June 30, 2022 for further detail on the
matters discussed in this release. In addition to the MD&A,
please reference the dedicated Q2 2022 Results Presentation for
more information on our results and projections which can be found
on our website under Investors - Presentations.
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.
The material factors or assumptions used to develop the above
forward-looking statements and the risks and uncertainties to which
such forward-looking statements are subject, are highlighted in the
MD&A for the three and six months ended June 30, 2022. 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.sedar.com.
Non-GAAP Financial Measures
This press release presents certain non-GAAP financial measures
because management believes that they may be useful to investors in
analyzing our business performance, leverage and liquidity. The
non-GAAP financial measures we present include "gross profit",
"adjusted net earnings", "adjusted EBIT", "equity investment EBIT",
"adjusted EBITDA", "equity investment depreciation and
amortization", "adjusted EPS", "margin", "liquidity", "net debt",
"senior debt", "sustaining capital", "growth capital", "cash
provided by operating activities prior to change in working
capital" and "free cash flow". 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. These non-GAAP measures do not have
any standardized meaning and therefore are unlikely to be
comparable to similar measures presented by other companies. They
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP. Each
non-GAAP financial measure used in this press release is defined
and reconciled to its most directly comparable GAAP measure in the
“Non-GAAP Financial Measures” section of our Management’s
Discussion and Analysis filed concurrently with this press
release.
Reconciliation of total reported revenue to total
combined revenue
| |
|
Three months
ended |
| |
|
June 30, |
| (dollars in
thousands) |
|
|
2022 |
|
|
2021(ii) |
| Revenue from
wholly-owned entities per financial statements |
|
$ |
168,028 |
|
|
$ |
139,333 |
|
| Share of revenue from investments in affiliates and joint
ventures |
|
|
125,774 |
|
|
|
72,164 |
|
| Adjustments for joint
ventures |
|
|
(65,848 |
) |
|
|
(35,525 |
) |
| Total combined
revenue(i) |
|
$ |
227,954 |
|
|
$ |
175,972 |
|
(i)See "Non-GAAP Financial Measures".(ii)The prior year amounts
are adjusted to reflect a change in accounting policy. See
"Accounting Estimates, Pronouncements and Measures".
A reconciliation of net income to adjusted net earnings,
adjusted EBIT and adjusted EBITDA is as follows:
| |
Three months
ended |
|
Six months
ended |
|
|
June 30, |
|
June 30, |
| (dollars in
thousands) |
|
2022 |
|
|
2021(ii) |
|
|
2022 |
|
|
2021(ii) |
| Net
income |
$ |
7,514 |
|
|
$ |
2,742 |
|
|
$ |
21,071 |
|
|
$ |
22,128 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
Loss (gain) on disposal of property, plant and equipment |
|
1,087 |
|
|
|
(354 |
) |
|
|
1,164 |
|
|
|
(612 |
) |
|
Stock-based compensation expense (benefit) |
|
(1,843 |
) |
|
|
7,651 |
|
|
|
(566 |
) |
|
|
10,025 |
|
|
Net realized and unrealized gain on derivative financial
instruments |
|
— |
|
|
|
(253 |
) |
|
|
— |
|
|
|
(2,737 |
) |
|
Write-down on assets held for sale |
|
— |
|
|
|
700 |
|
|
|
— |
|
|
|
700 |
|
|
Equity investment net realized and unrealized gain on derivative
financial instruments |
|
(2,215 |
) |
|
|
— |
|
|
|
(2,215 |
) |
|
|
— |
|
|
Tax effect of the above items |
|
174 |
|
|
|
(1,679 |
) |
|
|
(138 |
) |
|
|
(2,165 |
) |
| Adjusted net earnings(i) |
|
4,717 |
|
|
|
8,807 |
|
|
|
19,316 |
|
|
|
27,339 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
Tax effect of the above items |
|
(174 |
) |
|
|
1,679 |
|
|
|
138 |
|
|
|
2,165 |
|
|
Interest expense, net |
|
5,565 |
|
|
|
4,395 |
|
|
|
10,247 |
|
|
|
8,937 |
|
|
Income tax (benefit) expense |
|
1,557 |
|
|
|
(540 |
) |
|
|
5,201 |
|
|
|
4,410 |
|
|
Equity earnings in affiliates and joint ventures(i) |
|
(8,335 |
) |
|
|
(5,157 |
) |
|
|
(14,576 |
) |
|
|
(9,447 |
) |
|
Equity investment EBIT(i) |
|
9,421 |
|
|
|
5,666 |
|
|
|
17,109 |
|
|
|
10,057 |
|
| Adjusted EBIT(i) |
|
12,751 |
|
|
|
14,850 |
|
|
|
37,435 |
|
|
|
43,461 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
26,572 |
|
|
|
26,436 |
|
|
|
57,459 |
|
|
|
57,475 |
|
|
Write-down on assets held for sale |
|
— |
|
|
|
(700 |
) |
|
|
— |
|
|
|
(700 |
) |
|
Equity investment depreciation and amortization(i) |
|
2,326 |
|
|
|
1,787 |
|
|
|
4,495 |
|
|
|
3,277 |
|
| Adjusted
EBITDA(i) |
$ |
41,649 |
|
|
$ |
42,373 |
|
|
$ |
99,389 |
|
|
$ |
103,513 |
|
(i)See "Non-GAAP Financial Measures". (ii)The prior year amounts
are adjusted to reflect a change in accounting policy. See
"Accounting Estimates, Pronouncement and Measures".
A reconciliation of equity earnings in affiliates and
joint ventures to equity investment EBIT is as
follows:
| |
Three months
ended |
|
Six months
ended |
|
|
June 30, |
|
June 30, |
| (dollars in
thousands) |
|
2022 |
|
2021(ii) |
|
|
2022 |
|
2021(ii) |
| Equity
earnings in affiliates and joint ventures |
$ |
8,335 |
|
$ |
5,157 |
|
$ |
14,576 |
|
$ |
9,447 |
| Adjustments: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
555 |
|
|
84 |
|
|
1,312 |
|
|
164 |
|
Income tax expense |
|
480 |
|
|
239 |
|
|
1,170 |
|
|
313 |
|
Gain on disposal of property, plant and equipment |
|
51 |
|
|
186 |
|
|
51 |
|
|
133 |
| Equity
investment EBIT(i) |
$ |
9,421 |
|
$ |
5,666 |
|
$ |
17,109 |
|
$ |
10,057 |
| Depreciation |
$ |
2,150 |
|
$ |
1,611 |
|
$ |
4,143 |
|
$ |
2,935 |
| Amortization of
intangible assets |
|
176 |
|
|
176 |
|
|
352 |
|
|
342 |
| Equity
investment depreciation and amortization(i) |
$ |
2,326 |
|
$ |
1,787 |
|
$ |
4,495 |
|
$ |
3,277 |
(i)See "Non-GAAP Financial Measures". (ii)The prior year amounts
are adjusted to reflect a change in accounting policy. See
"Accounting Estimates, Pronouncements and Measures".
About the Company
North American Construction Group Ltd. (www.nacg.ca) is one of
Canada’s largest providers of heavy civil construction and mining
contractors. For more than 65 years, NACG has provided services to
large oil, natural gas and resource companies.
For further information contact:
Jason Veenstra, CPA, CAChief Financial OfficerNorth American
Construction Group Ltd.(780) 960-7171IR@nacg.cawww.nacg.ca
Interim Consolidated Balance Sheets
(Expressed in thousands of Canadian
Dollars)(Unaudited)
|
|
Note |
|
June 30,2022 |
|
December 31,2021 |
| Assets |
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
Cash |
|
|
$ |
11,717 |
|
|
$ |
16,601 |
|
|
Accounts receivable |
4 |
|
|
67,160 |
|
|
|
68,787 |
|
|
Contract assets |
5(b) |
|
|
9,906 |
|
|
|
9,759 |
|
|
Inventories |
6 |
|
|
47,402 |
|
|
|
44,544 |
|
|
Prepaid expenses and deposits |
|
|
|
4,461 |
|
|
|
6,828 |
|
|
Assets held for sale |
|
|
|
43 |
|
|
|
660 |
|
| |
|
|
|
140,689 |
|
|
|
147,179 |
|
| Property, plant and equipment, net of accumulated depreciation
of $361,173 (December 31, 2021 – $339,505) |
|
|
|
641,580 |
|
|
|
640,950 |
|
| Operating lease right-of-use assets |
|
|
|
16,437 |
|
|
|
14,768 |
|
| Investments in affiliates and joint ventures |
7 |
|
|
59,761 |
|
|
|
55,974 |
|
| Other assets |
|
|
|
4,726 |
|
|
|
6,000 |
|
| Goodwill and intangible assets |
|
|
|
6,616 |
|
|
|
4,407 |
|
| Deferred tax
assets |
|
|
|
374 |
|
|
|
— |
|
| Total
assets |
|
|
$ |
870,183 |
|
|
$ |
869,278 |
|
| Liabilities and shareholders’ equity |
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
Accounts payable |
|
|
$ |
73,645 |
|
|
$ |
76,251 |
|
|
Accrued liabilities |
|
|
|
19,499 |
|
|
|
33,389 |
|
|
Contract liabilities |
5(b) |
|
|
519 |
|
|
|
3,349 |
|
|
Current portion of long-term debt |
8 |
|
|
20,575 |
|
|
|
19,693 |
|
|
Current portion of finance lease obligations |
|
|
|
23,294 |
|
|
|
25,035 |
|
|
Current portion of operating lease liabilities |
|
|
|
3,542 |
|
|
|
3,317 |
|
| |
|
|
|
141,074 |
|
|
|
161,034 |
|
| Long-term debt |
8 |
|
|
328,486 |
|
|
|
306,034 |
|
| Finance lease obligations |
|
|
|
26,416 |
|
|
|
29,686 |
|
| Operating lease liabilities |
|
|
|
13,028 |
|
|
|
11,461 |
|
| Other long-term obligations |
|
|
|
21,385 |
|
|
|
26,400 |
|
| Deferred tax
liabilities |
|
|
|
60,928 |
|
|
|
56,200 |
|
| |
|
|
|
591,317 |
|
|
|
590,815 |
|
| Shareholders' equity |
|
|
|
|
|
| Common shares (authorized – unlimited number of voting common
shares; issued and outstanding – June 30, 2022 - 28,889,027
(December 31, 2021 – 30,022,928)) |
9(a) |
|
|
237,897 |
|
|
|
246,944 |
|
| Treasury shares (June 30, 2022 - 1,574,655 (December 31, 2021 -
1,564,813)) |
9(a) |
|
|
(17,997 |
) |
|
|
(17,802 |
) |
| Additional paid-in capital |
|
|
|
30,550 |
|
|
|
37,456 |
|
| Retained earnings |
|
|
|
28,398 |
|
|
|
11,863 |
|
| Accumulated other
comprehensive income |
|
|
|
18 |
|
|
|
2 |
|
| Shareholders'
equity |
|
|
|
278,866 |
|
|
|
278,463 |
|
| Total
liabilities and shareholders’ equity |
|
|
$ |
870,183 |
|
|
$ |
869,278 |
|
See accompanying notes to interim consolidated financial
statements.
Interim Consolidated Statements of Operations andComprehensive
Income
(Expressed in thousands of Canadian Dollars, except per share
amounts)(Unaudited)
| |
|
|
Three months
ended |
|
Six months
ended |
| |
|
|
June 30, |
|
June 30, |
| |
Note |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
Note 13 |
|
|
|
|
|
Note 13 |
|
| Revenue |
5 |
|
$ |
168,028 |
|
|
$ |
139,333 |
|
|
$ |
344,739 |
|
|
$ |
307,180 |
|
| Project costs |
10(b) |
|
|
74,632 |
|
|
|
41,557 |
|
|
|
136,747 |
|
|
|
92,159 |
|
| Equipment costs |
10(b) |
|
|
54,616 |
|
|
|
56,954 |
|
|
|
116,569 |
|
|
|
111,839 |
|
| Depreciation |
|
|
|
26,340 |
|
|
|
26,369 |
|
|
|
57,032 |
|
|
|
57,540 |
|
| Gross profit |
|
|
|
12,440 |
|
|
|
14,453 |
|
|
|
34,391 |
|
|
|
45,642 |
|
| General and administrative expenses |
10(b) |
|
|
5,052 |
|
|
|
13,620 |
|
|
|
11,284 |
|
|
|
22,963 |
|
| Loss (gain) on
disposal of property, plant and equipment |
|
|
|
1,087 |
|
|
|
(354 |
) |
|
|
1,164 |
|
|
|
(612 |
) |
| Operating income |
|
|
|
6,301 |
|
|
|
1,187 |
|
|
|
21,943 |
|
|
|
23,291 |
|
| Interest expense, net |
11 |
|
|
5,565 |
|
|
|
4,395 |
|
|
|
10,247 |
|
|
|
8,937 |
|
| Equity earnings in affiliates and joint ventures |
7 |
|
|
(8,335 |
) |
|
|
(5,157 |
) |
|
|
(14,576 |
) |
|
|
(9,447 |
) |
| Net realized and
unrealized gain on derivative financial instruments |
|
|
|
— |
|
|
|
(253 |
) |
|
|
— |
|
|
|
(2,737 |
) |
| Income before income taxes |
|
|
|
9,071 |
|
|
|
2,202 |
|
|
|
26,272 |
|
|
|
26,538 |
|
| Current income tax expense |
|
|
|
335 |
|
|
|
— |
|
|
|
497 |
|
|
|
— |
|
| Deferred income tax
(benefit) expense |
|
|
|
1,222 |
|
|
|
(540 |
) |
|
|
4,704 |
|
|
|
4,410 |
|
| Net income |
|
|
$ |
7,514 |
|
|
$ |
2,742 |
|
|
$ |
21,071 |
|
|
$ |
22,128 |
|
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
| Unrealized foreign
currency translation gain |
|
|
|
25 |
|
|
|
— |
|
|
|
16 |
|
|
|
— |
|
| Comprehensive
income |
|
|
$ |
7,539 |
|
|
$ |
2,742 |
|
|
$ |
21,087 |
|
|
$ |
22,128 |
|
| Per share information |
|
|
|
|
|
|
|
|
|
|
Basic net income per share |
9(b) |
|
$ |
0.27 |
|
|
$ |
0.10 |
|
|
$ |
0.75 |
|
|
$ |
0.78 |
|
|
Diluted net income per share |
9(b) |
|
$ |
0.25 |
|
|
$ |
0.09 |
|
|
$ |
0.69 |
|
|
$ |
0.72 |
|
See accompanying notes to interim consolidated financial
statements.
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