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North American Construction Group fourth quarter and year ended results


February 19, 2020
By Newswire

Acheson, Alta. – North American Construction Group announced results for the fourth quarter and year ended December 31, 2019.

Financial Highlights

  • Revenue for the quarter was $189.5 million, compared to $131.0 million for the same period in the prior year, an increase of $58.5 million (or 45%).
  • Full year revenue was $719.1 million, compared to $410.1 million for the prior year, an increase of $309.0 million (or 75%).
  • Adjusted EBITDA for the quarter was $47.8 million, compared to $28.4 million for the same period in the prior year, an increase of $19.3 million (or 68%).
  • Full year adjusted EBITDA was $174.2 million, compared to $101.8 million for the prior year, an increase of $72.4 million (or 71%).
  • Adjusted EPS for the quarter was $0.38, compared to $0.18 for the prior year, an increase of $0.20 (or 111%).
  • Full year adjusted EPS was $1.72, compared to $0.99 for the prior year, an increase of $0.73  (or 74%).
  • Full year free cash flow was $25.6 million, compared to $60.7 million for the prior year, a decrease of $35.1 million (or 58%).
  • Senior debt at year-end was $296.4 million, compared to $321.5 million for the prior year, a decrease of $25.1 million (or 8%).

“We entered 2019 with the expectation to achieve adjusted EBITDA of $160 million and adjusted EPS of $1.60 and so we are delighted to have exceeded these stretch targets, despite many challenges. We successfully integrated the two significant acquisitions made in late 2018 and overcame the negative impacts of the imposed Alberta oil production curtailment program, together with an early spring break up and an extremely wet August,” said NACG chairman and CEO Martin Ferron. “Early in 2020, we remain in solid growth mode with expectations of more than 15 per cent improvements in both adjusted EBITDA and EPS, with the exciting dual targets of $200 million and $2.00 respectively, firmly within our reach. Also, importantly we anticipate that this year will be marked by strong cash flow generation and further diversification by natural resource, customer and geography.”

Other Highlights

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  • On March 20, 2019, NACG issued $55.0 million in aggregate principal amount of 5.00% convertible unsecured subordinated debentures which mature on March 31, 2026. The annual interest rate of 5.00% is payable semi-annually on March 31 and September 30 of each year, commencing September 30, 2019.
  • On June 21, 2019, a mine management services agreement for a coal mine operation in Wyoming, USA was executed.
  • On August 7, 2019, NACG announced a change to our dividend policy whereby the regular dividend was doubled to $0.16 per common share per year, payable on a quarterly basis, up from the previous rate of $0.08 per year.
  • On August 8, 2019, NACG announced the appointments of Maryse Saint-Laurent and Kristina Williams to the Board of Directors.
  • In December 2019, the first rebuilds of heavy equipment haul trucks (CAT 793 and 797) from cores were completed in our primary maintenance facility in Acheson.
  • Total Recordable Incident Rate (“TRIR”) in 2019 was again below 0.5, indicating top decile safety management performance.

Early 2020 Highlights

  • In January 2020, construction of a component rebuild shop in Acheson was completed to enhance maintenance capabilities for both our internal need and external customers.
  • On January 30, 2020, a management services agreement for coal mine operation in Texas, USA was executed with formal handover from the existing manager expected in Q2 2020.

Declaration of Quarterly Dividend

On February 18, 2020, the NACG Board of Directors declared a regular quarterly dividend (the “Dividend”) of four Canadian cents ($0.04) per common share, payable to common shareholders of record at the close of business on March 5, 2020. The Dividend will be paid on April 3, 2020 and is an eligible dividend for Canadian income tax purposes.