North American Construction Group(NOA) - 2023 Q2 - Quarterly Report

Revenue Performance - Revenue for Q2 2023 was CAD 193.6 million, a CAD 25.5 million (or 15%) increase from Q2 2022[12] - Total combined revenue reached CAD 277.0 million, representing a CAD 49.0 million (or 21%) increase from Q2 2022[13] - For the three months ended June 30, 2023, revenue was $193.6 million, an increase of 15.3% from $168.0 million in the same period last year[29] - For the six months ended June 30, 2023, revenue was $436.2 million, up 27% from $344.7 million in the same period last year[30] - The company reported a combined revenue of $276.9 million for the three months ended June 30, 2023, up from $228.0 million in the same period last year[23] - Revenue generated from backlog for the six months ended June 30, 2023, was $364.8 million, with an estimated $222.2 million expected to be performed over the remainder of 2023[88] - The Company reported revenues of $158,485 million and $347,970 million for the three and six months ended June 30, 2023, respectively, compared to $125,774 million and $251,204 million for the same periods in 2022, reflecting a year-over-year increase of 26% and 38%[192] Profitability Metrics - Adjusted EBITDA for Q2 2023 was CAD 51.8 million, an increase of CAD 10.2 million (or 24%) from Q2 2022[14] - Adjusted EPS was CAD 0.47, up 176% from the prior year figure of CAD 0.17[18] - Gross profit margin for Q2 2023 was 11.1%, an increase of 3.8% from Q2 2022[12] - Gross profit for the three months ended June 30, 2023, was $21.5 million, with a gross profit margin of 11.1%, compared to $12.4 million and 7.4% in the same period last year[31] - Adjusted EBITDA for the three months ended June 30, 2023, was $51.8 million, representing an adjusted EBITDA margin of 18.7%[25] - Operating income for the three months ended June 30, 2023, was $10.3 million, an increase of $4.0 million from $6.3 million in the same period last year[36] - Net income for the three months ended June 30, 2023, was $12.3 million, compared to $7.5 million in the same period last year[25] - Net income for the six months ended June 30, 2023, was CAD 34,108 thousand, compared to CAD 21,071 thousand for the same period in 2022, representing a 62% increase[140] Cash Flow and Capital Expenditures - Free cash flow was a use of cash of CAD 4.3 million, impacted by sustaining capital additions of CAD 38.3 million[19] - Cash provided by operating activities was CAD 40.2 million, up CAD 4.7 million from CAD 35.5 million in Q2 2022[12] - Cash provided by operating activities for Q2 2023 was $40.2 million, an increase of 13.5% compared to $35.5 million in Q2 2022[58] - Cash used in investing activities for Q2 2023 was $39.2 million, compared to $25.1 million in Q2 2022, primarily for the purchase of property, plant, and equipment[61] - Capital expenditures for Q2 2023 were $41.1 million, significantly higher than $22.3 million in Q2 2022[53] - Cash used in investing activities for the six months ended June 30, 2023, was $80.2 million, an increase from $51.9 million in the same period of 2022[62] Debt and Financial Obligations - Total debt as of June 30, 2023, was $416.0 million, down from $424.9 million at the end of 2022, a decrease of 2.1%[50] - The company has $98.7 million in unused borrowing availability under its Credit Facility as of June 30, 2023, compared to $88.0 million at the end of 2022[165] - The company has entered into a commitment letter to amend its Credit Facility to a maximum amount of $450.0 million[76] - Total contractual obligations as of June 30, 2023, were $514.1 million, down from $537.5 million as of December 31, 2022[70] - Long-term debt decreased to $369.74 million as of June 30, 2023, from $378.45 million at the end of 2022[163] Market and Operational Insights - The company signed a definitive share purchase agreement to acquire MacKellar Group for an estimated consideration of CAD 395 million, expected to close in Q4 2023[20] - The company maintained a strong backlog, with expectations that demand for heavy construction services will exceed contractually committed demand[127] - The company anticipates stable commodity prices for the remainder of 2023, which is crucial for its operational performance[127] - The company has experienced no material change in market risk as of the quarter ended June 30, 2023[130] - The company is exposed to concentration risk, with Customer A accounting for 31% of revenue for the three months ended June 30, 2023[193] Employee and Workforce Metrics - The company had 208 salaried employees and 1,617 hourly employees as of June 30, 2023, compared to 195 salaried and 1,576 hourly employees a year earlier, reflecting growth in workforce[120] - Approximately 83% of the hourly employees are union members, maintaining the same percentage as in June 2022[120] Stock and Shareholder Information - The TSX closing price of the shares as of June 30, 2023, was $25.35, up from $18.08 at the end of 2022, indicating a positive market trend[85] - The company declared dividends of $0.10 per share for Q1 and Q2 2023, totaling $2.64 million paid or payable to shareholders[183]