Bird Construction Inc. Announces 2017 Third Quarter Results

LISTING:  TORONTO STOCK EXCHANGE
SYMBOL: BDT

MISSISSAUGA, ON, Nov. 8, 2017 /CNW/ -

HIGHLIGHTS:

• During the third quarter of 2017, the Company generated a net income of $5.5 million on construction revenue of $385.1 million compared with net income of $6.0 million and $407.7 million of construction revenue in 2016. The year-over-year decline in the amount of third quarter net income is reflective of the lower construction revenues in the quarter. 
  
  
• During the first nine months of 2017, the Company generated a net income of $6.9 million on construction revenue of $1,040.7 million compared with net income of $19.2 million and $1,159.2 million of construction revenue in 2016. The decrease in the amount of year to date 2017 earnings is reflective of the low volume of industrial project backlog carried into 2017 as several large industrial projects were substantially completed in the fourth quarter of 2016. In the first nine months of 2016, the Company benefited from a higher proportion of higher margin industrial work than in 2017, which has shifted to predominantly commercial and institutional projects. 
  
  
• In the first nine months of 2017, the Company secured $1,250.3 million of new contract awards and change orders which is 52% higher year-over-year, and executed $1,040.7 million of construction revenues. The success in securing new work through the first nine months of the year contributed to a Backlog of $1,346.6 million for the Company at September 30, 2017, an increase of $209.6 million from the $1,137.0 million of Backlog recorded at December 31, 2016. 
  
  
• In the third quarter of 2017, the Company announced that it was part of the Niagara Falls Entertainment Partners consortium that had executed a contract to design, build, finance and maintain an entertainment facility for the Ontario Lottery and Gaming Corporation in the City of Niagara Falls. The Company will design and build the project and has taken a minority equity interest in the concession responsible for the design, construction, financing and maintenance of the project through Bird Capital, a wholly owned subsidiary.
  
  
• In September 2017, the Company announced that it had acquired 50% of the outstanding shares of Stack Modular Structures Ltd. and 50% of Stack Modular Structures Hong Kong Limited (together the "Stack Modular Group of Companies" or "Stack"). The purchase price and related transaction expenses were funded with existing working capital. Stack is a modular construction company with production operations in China. Stack produces steel frame modules for permanent construction. The modules are suited for the hotel, senior housing, office space and general housing sectors in the North American market. Bird and Stack have complementary knowledge, resources and expertise that positions them well to serve the permanent modular construction market in Canada and the United States.
  
  
• The Company achieved substantial completion on three Public Private Partnership and alternative finance ("PPP") projects in the nine months ended September 30, 2017:
  
  
• Calgary Composting Facility - The plant is the largest composting facility in Canada and has an administration and educational building that is the first commercial building in Alberta registered under LEED® v4.
• Casey House Redevelopment – The project is a four-storey addition to a heritage-designated Victorian mansion in downtown Toronto and is a specialized health care facility that will service 200 registered clients and has 14 new inpatient rooms.
• Saskatchewan Joint-Use Schools – The Company delivered 18 new schools on nine sites in Regina and the Saskatoon region representing the largest new schools project in Saskatchewan's history. Each joint-use site includes two schools: one public and one Catholic, along with a 90-space childcare centre and community space. Joint-use schools are co-located so that they share a roof and spaces such as gymnasiums and multipurpose rooms.
  
  
• Through its equity investments in associates to the end of September 2017, the Company has realized equity income of $1.55 million, compared with equity investment losses recognized during the same period in 2016.
  
  
• Cash used for property and equipment additions have increased $8.4 million compared with the first three quarters of 2016. The additions support increased activity with self-perform activities on energy and resource related projects as well as diversification of the Company's service offerings to clients in these sectors.
  
  
• As part of the Safe Production strategic initiative, the Company completed an organization wide Safety Culture Assessment in the third quarter which will form the basis for the development of a long-term safety strategy for the organization.
  
  
• The Board has declared monthly eligible dividends of $0.0325 per common share for November 2017, December 2017, January 2018 and February 2018.

"Financial results in the third quarter were in line with our expectations, improving through the course of 2017 and driven by strong execution of our institutional work program and increasing contribution from our industrial operations." said Ian Boyd, President and CEO of Bird Construction Inc. "Margins have stabilized and are anticipated to grow moving forward, driven primarily by the high level of activity in the PPP market combined with a more steadied environment in the energy and resource sectors. The Company is making good progress with the implementation of our diversification strategy. As we continue along the path of rebuilding our earnings base following the completion of our strong industrial work program at the end of 2016, we expect 2018 earnings to improve relative to the current year though not yet to the level achieved in 2016."

Financial Results
(in thousands of Canadian dollars, except per share amounts)
					Three months ended						Nine months ended
					September 30,						September 30,
					2017			2016			2017			2016
Construction revenue				$	385,090		$	407,663		$	1,040,726		$	1,159,152
Net income and comprehensive income				$	5,528		$	5,975		$	6,884		$	19,204
Basic and diluted earnings per share				$	0.13		$	0.14		$	0.16		$	0.45
Cash flows from operations before changes in non-cash working capital				$	9,681		$	10,602		$	16,932		$	34,168

• During the nine months of 2017, the Company generated a net income of $6.9 million on construction revenue of $1,040.7 million compared with net income of $19.2 million and $1,159.2 million of construction revenue in 2016. The decrease in the amount of net income year-over-year is reflective of the low volume of industrial project backlog carried into 2017 as several large industrial projects were substantially completed in the fourth quarter of 2016. In the first nine months of 2016, the Company benefited from a greater proportion of higher margin industrial work than in 2017, which has shifted to predominantly commercial and institutional projects. 
  
  
• The $12.3 million year-over-year reduction in net income for the nine months ended September 30 was the primary driver of the $17.2 million year-over-year reduction in cash flows from operations before changes in non-cash working capital. The year-over-year change in income tax expense of $4.1 million accounts for most of the remaining difference.

Bird Construction Inc. also announced that its Board of Directors has approved monthly eligible dividends for the months of November 2017, December 2017, January 2018 and February 2018 in the amount of $0.0325 per common share to be paid as follows:

i)	The November dividend of $0.0325 per share will be paid on December 20, 2017, to the shareholders of record as of the close of business on November 30, 2017.
ii)	The December dividend of $0.0325 per share will be paid on January 19, 2018, to the shareholders of record as of the close of business on December 29, 2017.
iii)	The January dividend of $0.0325 per share will be paid on February 20, 2018, to the shareholders of record as of the close of business on January 31, 2018.
iv)	The February dividend of $0.0325 per share will be paid on March 20, 2018, to the shareholders of record as of the close of business on February 28, 2018.

A conference call for analysts and investors will be held at 10:00AM EDT on Thursday, November 9, 2017, 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.

This press release contains forward-looking statements that involve a number of risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

SOURCE Bird Construction Inc.

For further information: I.J. Boyd, President & C.E.O or W.R. Gingrich, C.F.O, Bird Construction Inc., 5700 Explorer Drive, Suite 400, Mississauga, ON L4W 0C6, Phone: [phone], Fax: [phone]

Related Links

http://www.bird.ca