North American Construction Group(US:NOA)2022-02-17 02:08Revenue and Profitability - Revenue for the year ended December 31, 2021, was $654.1 million, representing a $155.7 million (31.2%) increase from 2020[60]. - Total combined revenue reached $812.2 million, a $228.8 million (39.2%) year-over-year increase, with joint ventures contributing $158.1 million, up 86.0% from $85.0 million in 2020[64]. - Gross profit was $90.4 million, or 13.8% of revenue, down from $92.2 million and 18.5% in the previous year[65]. - Adjusted EBITDA was $207.3 million, an 18.9% increase from $174.3 million in 2020, with an adjusted EBITDA margin of 25.5%[68]. - Adjusted EPS increased to $2.06, up 19.1% from $1.73 in the prior year, consistent with the adjusted EBITDA growth[69]. - Net income for 2021 was $51.4 million, up from $49.2 million in 2020, with diluted net income per share increasing to $1.64 from $1.60[77]. - Basic net income per share for the year ended December 31, 2021, was $1.81, compared to $1.75 in the previous year[100]. - The company reported a comprehensive income of $51.4 million for 2021, compared to $49.2 million in 2020[74]. Cash Flow and Capital Expenditures - Free cash flow for the year was $67.2 million, driven by adjusted EBITDA less sustaining capital additions of $102.2 million and cash interest paid of $17.0 million[70]. - Cash provided by operating activities for the three months ended December 31, 2021 was $65.9 million, compared to $62.5 million for the same period in 2020, and for the year ended December 31, 2021 was $165.2 million, compared to $146.6 million in 2020[127]. - Cash used by investing activities for the year ended December 31, 2021 was $99.3 million, down from $112.8 million in 2020, primarily due to the acquisition of DGI for $11.4 million and $112.6 million for property, plant, and equipment[131]. - Cash used by financing activities for the year ended December 31, 2021 was $92.8 million, compared to $4.5 million in 2020, reflecting significant long-term debt repayments[133]. - Sustaining capital expenditures for the year ended December 31, 2021, were $102.2 million, primarily for routine maintenance of the existing fleet[122]. Debt and Equity - Total debt at the end of 2021 was $385.6 million, down from $429.3 million in 2020[74]. - Total shareholders' equity increased to $278.5 million as of December 31, 2021, up from $248.4 million at the end of 2020, reflecting a growth of $30.0 million[110]. - The company completed the Normal-Course Issuer Bid (NCIB) for 1,076,903 common shares at an average price of $14.86, resulting in a decrease to common shares of $8.679 million[159]. - The balance of common shares increased to $246,944 thousand by December 31, 2021, compared to $255,064 thousand in 2020, indicating a decrease of approximately 4.4%[256]. Operational Performance - The company faced challenges from increased operating costs due to pandemic-related measures, impacting gross profit margins[66]. - The company reported minimal changes in routine working capital balances, indicating stable operational cash flow management[70]. - The company completed three haul truck rebuilds and acquired the Australian component supplier DGI, contributing to revenue growth in Q4 2021[84]. - The company anticipates sufficient cash flow from operations to meet annual expenses, capital spending, and debt servicing requirements in 2022[117]. Backlog and Future Projections - The total backlog as of December 31, 2021, was $841.0 million, an increase of $104.5 million from the previous year, with $355.8 million of revenue recognized from backlog during the year[163]. - The company expects to generate $215 million to $245 million in Adjusted EBITDA for 2022, compared to $207 million in 2021[169]. - The projected Adjusted EPS for 2022 is between $2.15 and $2.55, up from $2.06 in 2021[169]. - The company anticipates $481.6 million of its backlog to be performed over 2022[211]. Risks and Challenges - The company faces a shortage of skilled labor, particularly in remote locations, which may impact profitability[215]. - Project suspensions, terminations, or reductions in scope may materially impact the reported backlog and future revenues[219]. - The company is exposed to foreign exchange fluctuations, particularly in short-term transactions involving Canadian and US dollars, but past impacts have not been significant[220]. - The company faces risks related to climate change, including potential increased costs for compliance with environmental regulations and the impact on client operations[221]. - Extreme weather conditions and natural disasters pose risks that could delay projects and result in revenue loss while incurring ongoing costs[221]. Accounting and Compliance - The company has been audited by KPMG LLP since 1998, ensuring compliance with PCAOB standards[249]. - The company reported no impairment of long-lived assets as of December 31, 2021, indicating stable economic conditions compared to March 31, 2020[223]. - The company has implemented a system of internal controls to mitigate risks of material misstatements in financial reporting, ensuring compliance with U.S. GAAP[229].