Mr. Teri McKibbon reports

BIRD CONSTRUCTION INC. ANNOUNCES 2019 FOURTH QUARTER AND ANNUAL FINANCIAL RESULTS

Bird Construction Inc. has released its fourth quarter 2019 and 2019 annual financial results.

Highlights:

• In the fourth quarter of 2019, the company recorded net income of $8.2-million on construction revenue of $420.6-million compared with net income of $6.4-million on $385.9-million of construction revenue, respectively, in 2018. The year-over-year increase of revenue in the fourth quarter of 9.0 per cent was driven by growth in the industrial work programs more than offsetting a decline in the institutional work programs. The year-over-year increase in fourth quarter net income is reflective of the improvement in earnings attributable to the mix of higher-margin self-perform industrial work programs in the fourth quarter of 2019.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted EBITDA margin in the fourth quarter of 2019 were $16.0-million and 3.81 per cent, respectively. Adjusted EBITDA increased $4.2-million or 36 per cent from $11.8-million in the fourth quarter of 2018. Adjusted EBITDA margin increased 75 basis points from the 3.06 per cent recorded in fourth quarter of 2018.
• In 2019, the company recorded net income of $9.5-million on construction revenue of $1,376.4-million compared with a net loss of $1.0-million on $1,381.8-million of construction revenue in 2018. Although volume was stable year over year, the mix of revenue was more diversified as the company's higher-margin industrial work program ramped up throughout the year. The year-over-year income improvement was primarily driven by the increase in gross profit from the shift in the mix of revenue in 2019.
• Adjusted EBITDA and adjusted EBITDA margin for fiscal 2019 were $32.3-million and 2.35 per cent, respectively. Adjusted EBITDA increased $21.4-million or 196 per cent compared with $10.9-million in fiscal 2018. Adjusted EBITDA margin increased 156 basis points from the 0.79 per cent recorded in fiscal 2018.
• The company, through its joint venture with Atco Structures, continues to progress on-site construction work for the LNG Canada Cedar Valley Lodge. Construction commenced in the first quarter of 2019 and is planned to continue through spring 2021. Throughout the year, modules were delivered and installed on site, and core buildings continued to be erected and enclosed. The facility is being built to house workers involved in the construction of LNG Canada's natural gas liquefaction and export facility. The project is one of the largest accommodation facilities ever built in Canada.
• In 2019, the company secured $1,627.9-million of new contract awards and change orders and executed $1,376.4-million of construction revenues. The new contract awards through the year contributed to a backlog of $1,547.4-million for the company at Dec. 31, 2019, an increase of $251.5-million, or 19.4 per cent, from the $1,295.9-million of backlog recorded at Dec. 31, 2018. Key new contract awards in 2019 that demonstrate the company's success in diversifying its work program include:
  • In the fourth quarter of 2019, the company executed a subcontract with East-West Connectors, the consortium contracted by the City of Ottawa to design, build and finance the Stage 2 Confederation Line Extension (CLE) project in Ottawa, Ont. Bird will construct seven Confederation Line Stage 2 light rail transit stations and one light maintenance and storage facility. Substantial completion of the East Extension is expected in 2024 with the West Extension to achieve substantial completion in 2025.
  • In the third quarter of 2019, the company signed multiple contracts for services for an undisclosed amount at an LNG liquefaction export terminal facility in Kitimat, B.C. The contracts include a site civil works program and the engineering, procurement and construction (EPC) of 16 administrative and service buildings. The EPC buildings program will consist of a combination of pre-engineered and modular buildings. The contracts have commenced and will continue into 2022.
  • In the third quarter of 2019, the company signed a construction management contract with Westwood Construction to build a mixed-use development located in north Halifax. The contract will be constructed over a three-year period and will include two high-rise towers and two levels of underground parking. The full project value is approximately $140-million, but, due to the agency nature of the contract with Bird, only the construction management services portion of the project was added to backlog.
• In 2019, cash and cash equivalents increased $21.8-million, net of the effects of foreign exchange, to $180.3-million from $158.9-million at the end of 2018. Most of the changes in cash and equivalents during the year relate to changes in the non-cash net current asset/liability position, which can fluctuate significantly in the normal course of business.
• The board has declared monthly eligible dividends of 3.25 cents per common share for March, 2020, and April, 2020.
• Subsequent to year-end, the company achieved substantial performance on a PPP project as defined in the provincial lien legislation.

"I am pleased with both the continued improvement in our financial performance as a result of success in diversifying our work program and in achieving substantial performance on a challenging project subsequent to 2019 fiscal year-end," said Teri McKibbon, president and chief executive officer. "The company is well positioned going forward to deliver more consistent earnings with almost $2.2-billion in backlog and pending backlog at the end of the fourth quarter of 2019. The risk profile of this work aligns with the company's overall targeted risk profile range, and the margin profile is higher than recent years due to our disciplined approach to project selection. The company will continue to benefit from this disciplined approach and diversification efforts as we head into our 100th year of operations."

                                       FINANCIAL RESULTS   
                        (in thousands of dollars, except per-share amounts)      

                                                   Three months ended Dec. 31,             Year ended Dec. 31,
                                                         2019            2018            2019            2018

Construction revenue                                 $420,612        $385,854      $1,376,408      $1,381,784
Net income (loss)                                       8,167           6,379           9,484          (1,013)
Basic and diluted earnings (loss) per share              0.19            0.15            0.22           (0.02)
Adjusted EBITDA (1)                                    16,012          11,793          32,292          10,914
Cash flows from operations before changes
in non-cash working capital                            15,525          11,045          30,201          12,320

(1) Note the non-generally accepted accounting principle measure.

• Cash flows from operations before changes in non-cash working capital increased $17.9-million year over year from the $12.3-million cash generated in fiscal 2018 primarily due to the $10.5-million improvement in net income, a higher non-cash addback for amortization and depreciation of $4.5-million compared with 2018, and a higher non-cash addback for income tax expense year over year of $4.1-million from 2018. These increases were partially offset by other non-cash changes of $1.2-million.

Bird Construction also announced that its board of directors has approved monthly eligible dividends for the months of March, 2020, and April, 2020, in the amount of 3.25 cents per common share to be paid as follows:

1. The March dividend of 3.25 cents per share will be paid on April 20, 2020, to the shareholders of record as of the close of business on March 31, 2020.
2. The April dividend of 3.25 cents per share will be paid on May 20, 2020, to the shareholders of record as of the close of business on April 30, 2020.

A conference call for analysts and investors will be held at 10 a.m. EDT on March 11, 2020, to discuss the quarterly results. The dial-in number is 1-855-328-1925. Attendees are asked to be on the line 10 minutes prior to the start of the call.

Related financial documents will be filed and available on SEDAR.

We seek Safe Harbor.