Stock in the News: North American Construction Group Ltd. (NYSE: NOA)

ACHESON, Alberta, May 13, 2020 – For the quarter, North American Construction Group Ltd. (NYSE: NOA) reported revenue of $166.30M, contrast to $84.90M for the prior year, a boost of $81.40M (or 96%). Adjusted EBITDA for the quarter was $37.20M contrast to $19.10M for the prior year, a boost of $18.20M (or 95%) meaning the profit trend was consistent with the revenue trend despite the non-routine operational challenges faced in July & August of this year.

Adjusted net earnings of $10.50M in the quarter was $5.90M higher than the prior year as the increase in Adjusted EBIT and the deferred income tax benefit were partially offset by a boost in interest expense.

Results for the Third Quarter:

For the three months ended September 30, 2019, revenue was $166.30M, up from $84.90M in the same period last year. The revenue growth in the current year is mostly attributable to the fleet attained in Q4 2018, which offered new work at the Fort Hills and Aurora mine sites and noteworthy incremental work at the Millennium mines. Current year revenue at the Suncor site was mainly because of a boost in mine support services revenue and overburden removal activity, despite the abnormally wet weather practiced at the mine during the summer months. These increases were partially offset by reduced scope during the quarter at the Kearl mine. Revenue from Nuna of $12.80M reflected peak activity volumes in their busy summer season with major project execution work on Baffin Island and in northern Saskatchewan. Of note, factoring in the Company’s share of equity accounted revenue from Nuna of $12.60M, the Company’s share of combined revenue of $25.40M is a record quarter for the Nuna Group of Companies as momentum continues to build and revenue synergies are realized.

For the three months ended September 30, 2019, gross profit was $18.30M, and a 11.0% gross profit margin, up from a $14.30M gross profit and down from a 16.9% gross profit margin in the same period last year. The gross profit increase of 27.6% was a direct result of the higher revenue in the quarter, but the decrease in margin was mainly because of the difficult operating conditions in July and August as a result of consistent rainfall. Increases in site clean-up activities which are not billable to the client and a larger proportion of low margin sub-contract activities were the primary specific drivers of margin reduction. In Addition To, margins were influenced by increased equipment maintenance activities as the Company’s equipment fleet was more readily available for required repairs and maintenance during these months. Partially offsetting these decreases were improved operating efficiency at the Kearl mine and strong gross margins achieved by Nuna.

For the three months ended September 30, 2019, depreciation was $21.90M, or 13.2% of revenue, up from $10.90M in the same period last year but comparable to the 12.9% of revenue in Q3 2018.

For the three months ended September 30, 2019, the Company recorded operating income of $10.30M, a boost of $6.70M from the $3.70M for the same period last year. General and administrative expense, excluding stock-based compensation expense, was $5.00M (or 3.0% of revenue) for the quarter, lower than the $6.20M (or 7.3% of revenue) in the prior year. Stock-based compensation expense reduced $1.80M contrast to the prior year from the fluctuating share price on the carrying value of the Company’s liability classified award plans.

For the three months ended September 30, 2019, the Company recorded $7.60M net income and comprehensive income available to shareholders (basic income per share of $0.29 and diluted income per share of $0.26), contrast to $1.50M net income and comprehensive income available to shareholders (basic income per share of $0.06 and diluted income per share of $0.05) recorded for the same period last year.

For the three months ended September 30, 2019, the Company generated cash from operating activities before changes in working capital of $29.80M contrast to $17.50M for the same period last year. The year over year cash flow improvement of $12.30M is because of the $18.10M increase in Adjusted EBITDA offset mainly by a boost in interest expense of $3.80M. Free Cash Flow for the three months ended September 30, 2019 was a use of cash of $25.30M mainly because of temporary changes in working capital balances which had a $35.00M impact in the quarter.

The Company offered net profit margin of 6.80% while its gross profit margin was 13.40%. The stock, as of recent close, has shown the weekly upbeat performance of 13.73% which was maintained at -54.21% in this year.

Robert  Campbell

I am Robert Campbell and I’m passionate about capitalism and news with over 4 years in the industry starting as a writer working my way up into senior positions. I am the driving force behind Liberty Headquarters with a vision to broaden the company’s readership throughout 2016. I am an editor and reporter of free markets, conservative news and gun rights category. Address: 3516 Candlelight Drive, Houston, TX 77042, USA Phone: (+1) 281-430-8376 Email: robertcampbell@libertyheadquarters.com

Robert  Campbell

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