Mr. T.L. McKibbon reports

BIRD CONSTRUCTION INC. ANNOUNCES 2020 FIRST QUARTER FINANCIAL RESULTS

Bird Construction Inc. has released its first quarter 2020 financial results.

Highlights:

• During the first quarter of 2020, the company recorded net income of $1.1-million on construction revenue of $321.6-million compared with a net loss of $6.5-million on $261.8-million of construction revenue in 2019. The 22.9-per-cent year-over-year increase in revenue in the first quarter was driven by growth in the industrial work program while the commercial and institutional work program was effectively flat. The year-over-year increase in first quarter net income is reflective of the improvement in earnings attributable to the mix of higher-margin industrial work program. The first quarter of 2019 was negatively impacted by a public private partnership (PPP) project that had performance issues and incurred additional cost due to design-related scope growth and acceleration expenses. There were substantial changes to the scope of the project requested by the client that are in commercial negotiation. This PPP project achieved substantial performance in the first quarter of 2020.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted EBITDA margin in the first quarter of 2020 were $7.6-million and 2.35 per cent, respectively. Adjusted EBITDA increased $10.7-million from the adjusted EBITDA of negative $3.1-million in the first quarter of 2019. Adjusted EBITDA margin increased 355 basis points from the adjusted EBITDA margin of negative 1.20 per cent recorded in the first quarter of 2019. The year-over-year improvement was driven by an increase in gross profit due to the revenue mix and the impact of increased costs on a certain contract incurred in 2019 that did not recur in 2020.
• The COVID-19 pandemic has added uncertainty to the construction industry as each provincial government has responded with different measures to address the threat to public health. The duration of these measures is unknown, and the corresponding impacts to the company's work force, supply chain and project sites are key variables that have uncertainty as a result. The financial results of first quarter 2020 were generally not impacted by the COVID-19 pandemic, but the company has seen impacts in April and early May related to temporary project shutdowns and reduced productivity on project sites. The health and safety of the company's employees are paramount and, as a result of the pandemic, have increased health and safety initiatives such as physical distancing and added additional measures to normal safety protocols. The situation remains extremely fluid; however, the company is well positioned to respond to fluctuating scenarios in the near term.
• In 2020, the company secured $220.8-million of new contract awards and change orders, and executed $321.6-million of construction revenues. The backlog of $1,426.6-million for the company at March 31, 2020, increased 11.2 per cent from the $1,283.1-million backlog a year ago. However, backlog decreased by $120.8-million or 7.8 per cent from the $1,547.4-million of backlog recorded at Dec. 31, 2019, as awards expected in the first quarter of 2020 were delayed as a result of the COVID-19 pandemic.
• In 2020, cash and cash equivalents decreased $36.0-million before the effects of foreign exchange to $144.4-million from $180.3-million at the end of 2019. Most of the changes in cash and equivalents during the period relate to changes in the non-cash net current asset/liability position, which can fluctuate significantly in the normal course of business. The company drew $16.3-million from one of its committed bank facilities in the quarter for working capital purposes.
• The board has declared an eligible dividend of 3.25 cents per common share for May, 2020, and, as it is meeting monthly through the COVID-19 crisis, will communicate a dividend declaration monthly on a go-forward basis.
• Subsequent to quarter-end, the company announced the award of the Eric Hamber Secondary School replacement project in Vancouver, B.C., for approximately $92-million, under a design-build contract.

"I want to thank all of our employees for their resilience and for the sacrifices they have made to ensure the company remains healthy in our 100th year of operation. Our field staff deserve a special recognition for having continued to work on our projects with the utmost professionalism and dedication while quickly embracing new safety practices and procedures. Our primary concern is always the health and safety of our employees. We hope our strong safety culture also permeates into the daily lives of our employees and serves to help protect their families and the communities in which we live and work," said Teri McKibbon, president and chief executive officer.

"The first quarter of 2020 represents the sixth sequential quarter where our trailing 12-month adjusted EBITDA has improved. The discipline and focus of the team over the past several years on reducing the risk profile and increasing the diversification of the work program will help the company emerge from this crisis with a healthy backlog and maintain a strong balance sheet," said Teri McKibbon, president and chief executive officer. "We have sufficient cash and liquidity to support our anticipated work program while maintaining the current dividend based on our current expectations of the impact of COVID-19. Despite those impacts, we still expect 2020 to be more profitable than recent years."

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

                                                                          Three months ended March 31, 
                                                                                    2020         2019   
                                                                                                      
Construction revenue                                                            $321,646     $261,777
Net income (loss)                                                                  1,123       (6,466)
Basic and diluted earnings (loss) per share                                         0.03        (0.15)
Adjusted EBITDA (1)                                                                7,562       (3,132)
Cash flows from operations before changes in non-cash working capital              7,059       (5,687)
                                                                                                      
(1) A non-generally accepted accounting principle measure.

• Cash flows from operations before changes in non-cash working capital increased $12.7-million year over year from the $5.7-million in cash utilized in 2019 primarily due to the $7.6-million improvement in net income, a $2.8-million higher non-cash addback for income tax expense year over year, a $1.6-million higher non-cash addback of finance and other costs, and a $700,000 higher non-cash addback for amortization and depreciation.

Bird Construction also announced that its board of directors had approved a monthly eligible dividend for the month of May, 2020, in the amount of 3.25 cents per common share to be paid as follows:

1. The May dividend of 3.25 cents per share will be paid on June 19, 2020, to the shareholders of record as of the close of business on May 31, 2020.

A conference call for analysts and investors will be held at 10 a.m. EDT on May 13, 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.