TSE:BDT Bird Construction Q3 2024 Earnings Report C$20.99 +0.31 (+1.50%) As of 04:00 PM Eastern Earnings HistoryForecast Bird Construction EPS ResultsActual EPSC$0.69Consensus EPS C$0.67Beat/MissBeat by +C$0.02One Year Ago EPSN/ABird Construction Revenue ResultsActual Revenue$898.94 millionExpected Revenue$961.37 millionBeat/MissMissed by -$62.43 millionYoY Revenue GrowthN/ABird Construction Announcement DetailsQuarterQ3 2024Date11/5/2024TimeN/AConference Call DateWednesday, November 6, 2024Conference Call Time10:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckInterim ReportEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Bird Construction Q3 2024 Earnings Call TranscriptProvided by QuartrNovember 6, 2024 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Welcome, ladies and gentlemen, to the Byrd Construction Third Quarter 2024 Results Conference Call and Webcast. We will begin with Terry McKibbin, President and Chief Executive Officer's presentation, which will be followed by a question and answer session. As a reminder, all participants are in listen only mode and the webcast is being recorded. Before commencing with the conference call, the company reminds those present that certain statements which are made express management's expectations or estimates of future performance and thereby constitute forward looking information. Forward looking information is necessarily based on a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Operator00:01:26Management's formal comments and responses to any questions that you might ask may include forward looking information. Therefore, the company cautions today's participants that such forward looking information involves known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of the company to be materially different from the company's estimated future results, performance or achievements expressed or implied by the forward looking information. Forward looking information does not guarantee future performance. The company expressly disclaims any intention or obligation to update or revise any forward looking information, whether as a result of new information, events or otherwise. In addition, our presentation today includes references to a number of financial measures, which do not have standardized meanings under IFRS and may not be comparable with similar measures presented by other companies and are therefore considered non GAAP measures. Operator00:02:27I would like to turn the call over to Terry McKibbin, President and CEO of Bird Construction. Please go ahead. Speaker 100:02:34Thank you, operator. Good morning, everyone. Thank you for joining our Q3 2024 conference call. With me today is Wayne Gingrich, Bird's Chief Financial Officer. Turning to today's presentation, Bird continues to build off its track record of sustainable growth, margin accretion and delivering strong shareholder returns. Speaker 100:02:54In the Q3, Bird was honored as a 2024 TSX 30 winner by the Toronto Stock Exchange, ranking 7th of the 30 top performing companies on the TSX. This recognition along with the announcement that Bird's common shares were added to the TSX comp Index in September, highlight the success of our strategic focus on being a leading collaborative construction company and the strength of our balance sheet, which positions us to invest in profitable organic growth and pursue attractive acquisitions in today's active market. Turning to our Q3 financial highlights, we had another great quarter of strong revenue growth and margin accretion. Revenue grew 15% compared to last year supported by 2 months of Jacob Brothers revenues included in the quarter, where its adjusted EBITDA margin of 7.8% was 1.5% higher than a year ago and drove 42% growth in adjusted EBITDA and 27% growth in adjusted EPS for the quarter fueled by higher embedded margins in the company's combined backlog and disciplined execution. Operational cash flow generation remains strong and the company's diverse and well balanced combined backlog at work continue to grow reflecting the robust demand environment and healthy pipeline of opportunities with accretive margins. Speaker 100:04:18With significant traction from our strategic focus on key sectors as outlined in the company's 2025 to 2027 strategic plan that was presented at our Investor Day in October, Bird is poised for continued revenue and profitability growth in 2025 and beyond. For its combined backlog continued to grow in the 3rd quarter reaching a record $7,900,000,000 at September 30. The company's backlog of contracted work remains highly collaborative in nature and continues to reflect higher embedded margins and grew to $3,800,000,000 at quarter end. The acquisition of Jacob Brothers added approximately $360,000,000 to backlog in the quarter, bringing total securements in addition to almost $1,300,000,000 pending backlog of awarded but not yet contracted work grew to 4,100,000,000 a 36% increase year to date and continues to include over 900,000,000 of MSA and other recurring revenue contracts to be earned over the next 6 years. Profitability, discipline, diversification and growth. Speaker 100:05:24These foundation of Bird's strategy have delivered substantial growth and margin accretion throughout the company's 2022 to 2024 strategic plan cycle and created considerable momentum as we head into our next 3 year strategic plan. Bird has built a reputation for operational excellence as a partner of choice on complex projects, our expanding capabilities to participate in greater scopes of work on large capital investment projects that drive profitable and sustainable growth and we expect this trend to accelerate in the future as a number of these types of projects grow in our portfolio. We are clear in our strategic direction focusing on growth in key markets and sectors that present robust opportunities over the long term including nuclear, mechanical and electrical, civil infrastructure and utilities with an emphasis on energy transition and data related infrastructure. During the Q3 of 2024, Bird announced the award of 5 projects with a combined total value exceeding $575,000,000 These projects include civil site works and foundations at 2 industrial projects in Alberta and Saskatchewan, a multiyear MSA in a strategic growth structure, expansion in scope of an existing multiyear task order in the nuclear sector in Ontario and a long term care project in British Columbia. Speaker 100:06:42Bert also announced the completion of the Jacob Brothers acquisition in August, which added approximately $360,000,000 of contracted work with accretive margins to Bird's extensive backlog. We continue to be intentional in our project selection as we increase our self perform capabilities and cross selling opportunities throughout organization and remain focused on long term value creation. Several key trends continue to fuel significant growth within the energy transition market. This market is expansive presenting substantial growth opportunities for Bird. There are a limited number of large sophisticated companies that can successfully take on these complex projects and we believe Bird is uniquely suited to participate in these large projects with significant capital investment. Speaker 100:07:25The company has already established a successful track record within key markets such as wind, hydroelectric, nuclear, critical mining critical mineral mining, battery manufacturing and EV supply chain support infrastructure. These sectors all contribute to Canada's clean energy system and 2,050 net zero goals. As we continue to support Tier 1 clients in their energy transition projects for its outlook for future opportunities across all divisions remains bright as we expand our work programs, attain additional nuclear certifications and continue to develop our deep electrical expertise. We continue to prioritize sectors that have longer cycle demand trends and substantial capital commitments for both public and private sectors across infrastructure buildings and industrial markets supporting future growth for years to come. The infrastructure market in Canada is attractive to Bird for several reasons. Speaker 100:08:20Current market research indicates Canada's infrastructure demand will remain strong due to government commitments to address significant infrastructure adjustments, deficits estimated to be between $110,000,000,000 $270,000,000,000 Demand in our building markets is substantial with macro pressures driving extensive demand for healthcare facilities due to population growth and aging population and a growing demand for data centers to respond to the growth of digital services and genera AI. All of these present major growth opportunities for Bert. Bert's proven expertise and collaborative innovative solutions make us uniquely positioned to respond not only to this level of demand, but to the complexity and sophistication of these types of projects. In our industrial business, the total addressable market is significant and being driven by the growth of electrification, emissions reductions and decarbonization efforts. Bird is already a highly sought after partner of choice in all scopes of work throughout the entire project lifecycle and it is positioned to win within our strategic markets due to our consistent execution and operational excellence. Speaker 100:09:28Wayne will now cover the financial highlights for the quarter. Speaker 200:09:31Thank you, Terry. 3rd quarter continued to deliver revenue growth and margin accretion, building upon the strong performance of the first half of the year. Construction revenue for the Q3 of $898,900,000 represented a 15% increase compared to the same period in 2023. On a year to date basis, revenues of $2,460,000,000 for the 1st 9 months of 2024 or $454,000,000 or 23 percent higher than 2023. The growth for the quarter was approximately 60% organic and year to date the growth was over 80% organic. Speaker 200:10:15The company's gross profit margin improved to 11.4% in the quarter compared to 9.3% in 2023. The improvement continues to be driven by the company's highly collaborative work program with higher embedded margins and backlog and pending backlog resulting from Bird's strategic focus on higher margin sectors, disciplined project selection and the benefits of leveraging Bird's self perform capabilities and cross selling opportunities across our business units. On a year to date basis, gross profit margin was 9.4 percent, up 110 basis points from the 8.3% margin in 2023. General and administrative expenses were 51,600,000 dollars or 5.7 percent of revenue for the quarter compared to $34,500,000 or 4.4 percent of revenue in the Q3 of 2023. G and A for the quarter includes an additional $1,900,000 of acquisition costs related to Jacob Brothers as well as 2 months of Jacob Brothers G and A costs. Speaker 200:11:18Adjusted EBITDA in the 3rd quarter was $70,100,000 compared to $49,300,000 reported a year ago, representing a 42% increase. Adjusted EBITDA margins continued to increase on a year over year basis, increasing 1.5% to 7.8% in the 3rd quarter compared to 6.3% in the same period last year. Turning to earnings, net income and earnings per share were $36,200,000 $0.66 compared to $28,800,000 $0.54 in 2023. Adjusted earnings and adjusted earnings per share were 37,700,000 dollars 0.69 dollars compared to the $29,000,000 $0.54 in 2023. The weighted average shares outstanding for the Q3 of 2024 was 1,100,000 shares higher than 2023 due to the acquisitions of Jacob Brothers and Norkan in the current year. Speaker 200:12:15FERC's healthy balance sheet and strong operating cash flow generation remain a differentiator for the company, supporting our strategic growth initiatives and balanced capital allocation approach. The company's liquidity position remains strong at the end of the 3rd quarter with $117,000,000 in cash and cash equivalents and an additional $232,000,000 available under our revolving credit facility. Fird's operating cash flow generation is expected to remain strong for the remainder of the year, commensurate with the significant revenue and profitability growth being delivered. Excluding seasonal and growth related investments in non cash working capital, operating cash flow generation for the quarter was up 44% compared to last year and up 56% year to date. We continue to expect operating cash flows inclusive of growth related investments in non cash working capital to be positive for the full year. Speaker 200:13:09At the end of the Q3, the company had working capital of $269,800,000 compared with $234,000,000 at December 31, 2023. The company's acquisition of Jacob Brothers reduced working capital by approximately 7 $100,000 in the quarter as Byrd used cash on hand to partially fund the transaction. That being said, the company's overall working capital along with liquidity available under a syndicated credit facility remain more than sufficient to allow the company to execute its backlog and support the expected growth in its diversified work program. The company's current ratio is 1.25x and our adjusted net debt to trailing 12 months adjusted EBITDA ratio stands at 1.12x. Berg's long term debt to equity ratio was 34%. Speaker 200:14:01As we noted in prior presentations, Perj's revenue, adjusted EBITDA and adjusted EBITDA margins have experienced a period of sustained growth over the past several years. The Q3 of 2024 continued to trend, bringing our trailing 12 months adjusted EBITDA margin to 5.7% on TTM revenue of almost $3,300,000,000 reflecting management's ongoing strategic focus on margin accretion with further opportunity to expand through 2024 and beyond. The company's margins continue to improve in our backlog and pending backlog, driven by efforts over the past several years to diversify into higher margin sectors. Our disciplined project selection and our appropriately risk balanced work program and greater use of collaborative contracting, which Byrd believes delivers better outcomes for all stakeholders. Byrd's expanding self perform capabilities and increased cross selling opportunities between our business units also contribute to the company's margin accretion. Speaker 200:15:00FERC's capital allocation strategy remains balanced, supporting the company's business growth, profitability and enhanced long term shareholder value through a combination of M and A, smart capital investments and returning capital to shareholders through dividends. In the current year, this balance is evident in the company's investment in equipment to support our growing work programs, our acquisitions of Norkan and Jacob Brothers so far this year, and our expectation to return approximately $30,000,000 to shareholders through our monthly dividends in 2024, including the 50% dividend increase announced in October and effective for the November December dividends. I will now turn the call back to Terry to comment on the outlook for the company. Speaker 100:15:45We're just a proven foundation of operational excellence and safe execution, which has resulted in considerable growth and the expected achievement of the company's 2022 to 2024 strategic plan targets. We are pleased with our 3rd quarter results with significant improvements in gross profit and adjusted EBITDA margins despite revenues being lower than anticipated due to minor delays to the start of a small number of new projects in the quarter, pushing some of the work into early 2025. With the considerable visibility provided by Burt's combined backlog, which continues to reflect higher embedded margins, the company expects full year revenues of approximately $3,400,000,000 with an adjusted EBITDA margin exceeding 6%. At Burt's recent Investor Day on October 9th, we laid out our progress against our current 2022 to 2024 strategic plan targets, which we are happy to say are on target to be met or exceeded and introduce our 2025 to 2027 strategic plan. We go deeper into each of our industrial buildings and infrastructure divisions and review the key sectors we are focused on that support our expectations for future growth. Speaker 100:16:52We also provided financial targets for the upcoming 3 years, which include 10% annual organic growth plus or minus 2% with 2025 receiving an additional 5% growth from the inclusion of Jacob Brothers for a full year compared to 2024. This would see the company's revenue reaching $4,800,000,000 for full year 2027. 8% adjusted EBITDA margin for full year 2027 with organic improvements each year and an additional bump from Jacob Brothers in 2025. 33% dividend payout ratio of net income, which would mean that by 2027, we would expect to have 5 successive years of dividend increases, including our recently announced 50% dividend increase. Over the past several years, Berg has transformed itself and built a resilient business model with unique and specialized services that will be in demand by our clients in any economic environment. Speaker 100:17:47Much of our work program is not subject to the same ups and downs of normal economic cycles and the business has considerable momentum. We expect Bert to benefit from the significant tailwinds stemming from our strategic focus on margin accretion, disciplined project selection and safe, collaborative, operational excellence and resilient sectors. I'll now turn the call over to the operator for questions. Operator00:18:12We will now begin the question and answer session. Our first question today is from Yuri Lynk with Canaccord Genuity. Please go ahead. Speaker 300:18:52Good morning, gentlemen. Speaker 200:18:54Good morning, Eric. Speaker 300:18:56Terry, can you tell us the if there's any commonality or common reason behind the delayed projects that you noted and maybe give us a flavor in terms of region and market? Speaker 100:19:15I'd say the common flavor that we see in Canada is typically permit delays that ultimately are really difficult to push through the system. I'd say that that is probably the times the elephant in the room, difficult to predict. You try to put together obviously the expectations and oftentimes municipal permits are in a system that sometimes is overloaded and it makes it difficult to get through. I'd say that would be that and it isn't specific to necessarily to a region. We see it, I'd say more frequently on the building side where we have delays. Speaker 100:20:03And in this case, we've had some delays in the building side in the Q3. Speaker 300:20:10Okay. And I would have thought a delay might get if it's just a permit issue, it gets delayed into the next quarter, but you're kind of pointing to 2025. Is that just to be a bit conservative there or what? Speaker 100:20:26Yes, it's just catching up, right. So you're not able to catch up on the delay. That's really what it is. Speaker 300:20:34Okay. Second one for me, just obviously really nice gross margin step up even above and beyond what I was expecting. Anything to call out on gross margin in the quarter and also tied with that the G and A expense was a bit higher than I expected. Are those kind of even taking into account only 2 months at Jacobs, but all else equal, is this kind of the rate we're at pro form a? Speaker 200:21:15I can take that one, Gary. I think for the summer months, like we generally have our highest margins in kind of Q3 and Q4, particularly if you get good weather all through Q4. And certainly, Jacob Brothers had a contribution there. But even if you take Jacob Brothers out, the strength in the industrial business and the strong work program we have there certainly was a factor as well. Terry mentioned some of the buildings projects that we're pushing to the right a bit. Speaker 200:21:44Well, of the 3 business units we have in terms of industrial infrastructure buildings, buildings has the lower gross profit percentage, generally speaking. So when those projects shift to the right, had they not shifted to the right, certainly we would have had additional gross profit dollars, but maybe the percentage might have been a little bit lower on a combined basis. So I'd say those are some of the factors. So yes, I think for this time of year, we should think about those are the types of margins we can deliver. There really wasn't anything unusual flowing through the quarter that drove it up, just again, kind of diversification being on multiple large capital investment project that type of thing. Speaker 200:22:28And then on the G and A side, year over year, we were $17,000,000 higher than a year ago. More than half of that would relate to compensation costs. And some of that is certainly we've had NARCAN, we've had Jacob Brothers. So those business combinations have added some overhead to the business. But we've also been making some investment hires in the business as well, in business development and estimating and so forth to be able to help support the growth in the business going forward. Speaker 200:23:06And certainly depreciation, integration and acquisition costs were almost $2,000,000 higher than a year ago. So it's kind of a combination of a few things adding into it. Speaker 300:23:18Okay. And just on that line of questioning, big move up in your stock after the end of the quarter. Just remind me if we should expect LTIP or stock based comp expense in G and A to be elevated because of that all else equal or do you strip it out? Speaker 200:23:44Yes. No, we run that through our G and A. I'd say that the run up that we had after Investor Day was after September 30, certainly. So in the Q4, the company certainly benefited from a higher share price following Investor Day. So at year end, we'll do another quarterly analysis that we do looking at the total shareholder return and part of the drivers of the long term incentive plan that we have in place for performance share units is how Bird's total shareholder return compares against that of the peer group. Speaker 200:24:21And if Bird's total shareholder return is stronger than that peer group, then there's a multiplier that happens on those PSUs. So I would say on a $30 share price or something like that, there could be an impact in Q4. It's kind of a one time adjustment, but we won't run those calculations until probably January until we know where share price is at the end of the year and that's what we'll base that on. Speaker 300:24:48Okay. Okay. Thanks. Operator00:24:52The next question is from Chris Murray with ATB Capital Markets. Please go ahead. Speaker 400:24:58Yes, guys. Thanks. So maybe just to follow on a little bit on just margins and just expectations for margins. I think you had talked about the fact that you're about 40 basis points accretive with Jacobs. Is 40 basis points the right way to think about the impact on EBITDA? Speaker 400:25:20Or is it also sort of 40 basis points on the gross profit margin as well? Speaker 200:25:27Yes. I think for Jacob Brothers, their G and A percent of revenue is higher than, say, birds. So you might pick up a bit more on gross profit, but then you get a little bit back on G and A. But when you look at the impact on EBITDA, those 2 are netted out, so they have the 40 basis point difference. Speaker 400:25:49Okay. That's helpful. And then Wayne, just kind of a quick question, I guess, on cash and capital. There's been certainly a lot of moving parts, I guess, in the credit facility, the acquisition of Jacobs, a lot of stuff moving around. But just looking at the kind of the cash kind of the mix between kind of what's your cash and what's in restricted cash and joint operations, it really seemed to have dropped out over the last few quarters. Speaker 400:26:18Just wondering because I don't think you're in a lot of joint venture operations right now, but maybe I'm misunderstanding that. Just can you kind of walk us through how you think cash is going to kind of move around period to period with the joint ventures in the mix? And if Jacob kind of changes how those Speaker 200:26:42work through your balance sheet? Yes. Maybe I'll just talk a little bit about the mix of the cash. We kind of bifurcate our cash into 3 categories. We call it accessible cash, trust cash and then joint venture cash. Speaker 200:27:01The trust cash plus or minus $5,000,000 kind of stays in a fairly tight range quarter to quarter driven on volumes, of course, in parts of the country that have that type of legislation in place, but not much movement there. I'd say in one of our large capital investment project, we are in a joint venture. And certainly, on that project, we have cash balances that are held in those joint venture accounts. And that's why year over year, you see the spike in cash held in JVs. At some point, that cash comes back to become accessible cash, if you will, because things like profits and overheads will get distributed from the joint venture accounts back to the joint venture partners over time. Speaker 200:27:53And then obviously, some of that cash is used to deliver the project certainly as well. It's accessible cash. Like we invested $15,000,000 in our Liberbank account to acquire the Jacob Brothers acquisition in Q3. So we had negative $6,000,000 in accessible cash now. But if you look at some of the cash we put on Jacob Brothers, you'd be plus 10% type thing. Speaker 200:28:21And then with the growth in the business, it's pretty significant year over year growth. So even though in Q3, we delivered positive $6,000,000 in cash from changes in non cash working capital accounts. On a year to date basis, we still have $148,000,000 invested in that. So Q4 is always our strongest cash generating quarter and we expect that trend to continue. I think in Q4 last year, we released maybe $65,000,000 in non cash working capital. Speaker 200:28:55And I think all things being equal, we'd expect that to occur again this year. And then all of that cash becomes accessible for the business as well. So I just think with the growth of the business, you're seeing more investment in that non cash working capital, but you're still going to see the same seasonality trends that we have in over the past several years. Speaker 400:29:19Okay. That's helpful. Thank you. Thanks, Chris. Operator00:29:24The next question is from Atharva Zaveri with TD Cowen. Please go ahead. Speaker 500:29:31Good morning. Atharva Zaveri here on behalf of Michael Tuphol. So impressive margin performance in Q3 and now you're expecting full year 'twenty four EBITDA margin of at least 6%, which is good. So how much year over year margin improvement do you expect in 2025? Operator00:30:24Pardon me, this is the conference operator. We appear to have lost audio with the speakers' location. Please stand by as we try to regain them. This is the conference operator. We've been rejoined by the speaker connection. Operator00:32:28Please go ahead. Speaker 200:32:32Hi there. Can you hear me okay? Yes. I'm not sure what happened there, but I'll just restate my answer. I'm not sure what point we got dropped off there. Speaker 200:32:41We're just talking about how can we think about EBITDA margins going into 2025. So what I was trying to say is that we said for the full year of 2027, we're going to be at 8%. And each year, we are going to see an improvement organically through improvements in the business and diversification, those types of things. But 2025 will get an additional lift in our EBITDA margins from having a full year of Jacob Brothers included in there. So I think we said in our outlook section this year that we're going to finish 2024 greater than 6% in EBITDA margin. Speaker 200:33:22And I think you're going to see for 2025 approaching 7% for the year. And then 26%, 27%, you'll pick up another 50 basis point improvement in each of those years as just organic improvements. Operator00:33:41The next question is from Frederic Bastien with Raymond James. Please go ahead. Speaker 600:33:49Hi, guys. This is Sean on for Fred. I just had a quick question to ask on LTIPs. So these are expected to have a growing impact over the next few years embedded in the new strategic plan outlook. I want to see if anything changes around the outlook and around investments as a result of last night's election results? Speaker 100:34:12So we certainly see continuous strength in the large capital investments. We don't see any changes. We don't anticipate any changes as a result of the American election. Typically, the kinds of things that we're focused on are largely agnostic to election cycles. So we like I said, we continue to see strength of projects that we're focused on our long term with significant investments, with significant strength by the entities that are making those investments and they're well along. Speaker 100:34:50So the landscape that we're in is quite exciting. Speaker 600:34:57Perfect. Okay. That's all for me guys. Thanks. Speaker 100:35:00Thank you. Operator00:35:06The next question is from Ian Gillies with Stifel. Please go ahead. Speaker 700:35:11Good morning, everyone. Speaker 200:35:13Good morning, Ian. Speaker 700:35:17As it pertains to some of the permitting delays you alluded to, It doesn't seem to have impacted your view on 2025 whatsoever. Can you maybe just talk about how you worked in, call it, some of these, call it, slower processes as it relates to permitting into the guidance? And whether you're seeing any steps by governments to rectify some of these issues? Speaker 100:35:43Yes, certainly, it's something that we're spending a tremendous amount of time on. I think it's a couple of things. I think in the percentage of projects that are larger scale are entering our business in a larger way and those typically don't have the same challenges. They're well developed. They have long period of and especially in the Calabrio focus we have, we're working with our clients in the municipalities and in provincial districts that are in. Speaker 100:36:18So the permits are further along and developed and there's more predictability in a lot of those. So I think in that regard, because that higher percentage entering into 25, we don't feel it will be something that will impact us as it has. And I think there's also still an overhang post COVID with government agencies deal not fully recovered and able to deliver the permitting that we need in a timely manner and it's something we talk on a regular basis with provincial governments about how do we get more predictability and more improvements in these areas. Speaker 700:37:05That's helpful. And maybe a follow on question from some of that. Is there any advantage for call it a large company such as yourselves versus some of the smaller private construction companies in going and obtaining these permits? Is there any moat there competitive advantage you could point to? Speaker 100:37:25I'd say the larger projects tend to have a better priority and better engagement. Smaller projects sometimes don't get the all parties kind of pulling in the same direction where the larger ones, especially when you're working in alliance with the government. You've got some major decision makers at the table and the smaller projects we do for various clients sometimes aren't the priority they need to be. So I think it's just a difference in the approach and I think some of the large ones have a much longer planning cycle. So it's just you can work through a lot of that. Speaker 700:38:07And maybe just one last one, just put one final point in around this issue. Nothing's materially changed around the permitting front since the Investor Day, call it a month ago? No, no. Understood. Thank you. Speaker 700:38:21I'll turn the call back over. Operator00:38:26This concludes our question and answer session. I will hand the call back over to Mr. McKibbin for any closing remarks. Speaker 100:38:34So I'd just like to thank everybody for joining our call today and have a safe balance of your year. Thank you. Operator00:38:44This brings to a close today's conference call and webcast. You may disconnect your lines. Thank you for participating and have a pleasant day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallBird Construction Q3 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckInterim report Bird Construction Earnings HeadlinesQ1 Earnings Forecast for TSE:BDT Issued By Atb Cap MarketsApril 26 at 1:49 AM | americanbankingnews.comEquities Analysts Offer Predictions for TSE:BDT Q2 EarningsApril 25 at 3:39 AM | americanbankingnews.comWho’s really running AmericaMost Americans have never heard his name… He was instrumental in Trump’s victory. He turned J.D. Vance from a Trump-hater into his vice president. 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Email Address About Bird ConstructionBird Construction (TSE:BDT) Inc operates as a general contractor in the Canadian construction market. The company focuses primarily on projects in the industrial, commercial and institutional sectors of the general contracting industry. It provides construction services such as new construction for industrial, commercial, and institutional markets; industrial maintenance, repair and operations (MRO) services, heavy civil construction and contract surface mining; as well as vertical infrastructure including, electrical, mechanical, and specialty trades.View Bird Construction ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Alphabet Rebounds After Strong Earnings and Buyback AnnouncementMarkets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Texas Instruments: Earnings Beat, Upbeat Guidance Fuel RecoveryMarket Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial Earnings Upcoming Earnings AstraZeneca (4/29/2025)Booking (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Regeneron Pharmaceuticals (4/29/2025)Starbucks (4/29/2025)American Tower (4/29/2025)América Móvil (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 8 speakers on the call. Operator00:00:00Welcome, ladies and gentlemen, to the Byrd Construction Third Quarter 2024 Results Conference Call and Webcast. We will begin with Terry McKibbin, President and Chief Executive Officer's presentation, which will be followed by a question and answer session. As a reminder, all participants are in listen only mode and the webcast is being recorded. Before commencing with the conference call, the company reminds those present that certain statements which are made express management's expectations or estimates of future performance and thereby constitute forward looking information. Forward looking information is necessarily based on a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Operator00:01:26Management's formal comments and responses to any questions that you might ask may include forward looking information. Therefore, the company cautions today's participants that such forward looking information involves known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of the company to be materially different from the company's estimated future results, performance or achievements expressed or implied by the forward looking information. Forward looking information does not guarantee future performance. The company expressly disclaims any intention or obligation to update or revise any forward looking information, whether as a result of new information, events or otherwise. In addition, our presentation today includes references to a number of financial measures, which do not have standardized meanings under IFRS and may not be comparable with similar measures presented by other companies and are therefore considered non GAAP measures. Operator00:02:27I would like to turn the call over to Terry McKibbin, President and CEO of Bird Construction. Please go ahead. Speaker 100:02:34Thank you, operator. Good morning, everyone. Thank you for joining our Q3 2024 conference call. With me today is Wayne Gingrich, Bird's Chief Financial Officer. Turning to today's presentation, Bird continues to build off its track record of sustainable growth, margin accretion and delivering strong shareholder returns. Speaker 100:02:54In the Q3, Bird was honored as a 2024 TSX 30 winner by the Toronto Stock Exchange, ranking 7th of the 30 top performing companies on the TSX. This recognition along with the announcement that Bird's common shares were added to the TSX comp Index in September, highlight the success of our strategic focus on being a leading collaborative construction company and the strength of our balance sheet, which positions us to invest in profitable organic growth and pursue attractive acquisitions in today's active market. Turning to our Q3 financial highlights, we had another great quarter of strong revenue growth and margin accretion. Revenue grew 15% compared to last year supported by 2 months of Jacob Brothers revenues included in the quarter, where its adjusted EBITDA margin of 7.8% was 1.5% higher than a year ago and drove 42% growth in adjusted EBITDA and 27% growth in adjusted EPS for the quarter fueled by higher embedded margins in the company's combined backlog and disciplined execution. Operational cash flow generation remains strong and the company's diverse and well balanced combined backlog at work continue to grow reflecting the robust demand environment and healthy pipeline of opportunities with accretive margins. Speaker 100:04:18With significant traction from our strategic focus on key sectors as outlined in the company's 2025 to 2027 strategic plan that was presented at our Investor Day in October, Bird is poised for continued revenue and profitability growth in 2025 and beyond. For its combined backlog continued to grow in the 3rd quarter reaching a record $7,900,000,000 at September 30. The company's backlog of contracted work remains highly collaborative in nature and continues to reflect higher embedded margins and grew to $3,800,000,000 at quarter end. The acquisition of Jacob Brothers added approximately $360,000,000 to backlog in the quarter, bringing total securements in addition to almost $1,300,000,000 pending backlog of awarded but not yet contracted work grew to 4,100,000,000 a 36% increase year to date and continues to include over 900,000,000 of MSA and other recurring revenue contracts to be earned over the next 6 years. Profitability, discipline, diversification and growth. Speaker 100:05:24These foundation of Bird's strategy have delivered substantial growth and margin accretion throughout the company's 2022 to 2024 strategic plan cycle and created considerable momentum as we head into our next 3 year strategic plan. Bird has built a reputation for operational excellence as a partner of choice on complex projects, our expanding capabilities to participate in greater scopes of work on large capital investment projects that drive profitable and sustainable growth and we expect this trend to accelerate in the future as a number of these types of projects grow in our portfolio. We are clear in our strategic direction focusing on growth in key markets and sectors that present robust opportunities over the long term including nuclear, mechanical and electrical, civil infrastructure and utilities with an emphasis on energy transition and data related infrastructure. During the Q3 of 2024, Bird announced the award of 5 projects with a combined total value exceeding $575,000,000 These projects include civil site works and foundations at 2 industrial projects in Alberta and Saskatchewan, a multiyear MSA in a strategic growth structure, expansion in scope of an existing multiyear task order in the nuclear sector in Ontario and a long term care project in British Columbia. Speaker 100:06:42Bert also announced the completion of the Jacob Brothers acquisition in August, which added approximately $360,000,000 of contracted work with accretive margins to Bird's extensive backlog. We continue to be intentional in our project selection as we increase our self perform capabilities and cross selling opportunities throughout organization and remain focused on long term value creation. Several key trends continue to fuel significant growth within the energy transition market. This market is expansive presenting substantial growth opportunities for Bird. There are a limited number of large sophisticated companies that can successfully take on these complex projects and we believe Bird is uniquely suited to participate in these large projects with significant capital investment. Speaker 100:07:25The company has already established a successful track record within key markets such as wind, hydroelectric, nuclear, critical mining critical mineral mining, battery manufacturing and EV supply chain support infrastructure. These sectors all contribute to Canada's clean energy system and 2,050 net zero goals. As we continue to support Tier 1 clients in their energy transition projects for its outlook for future opportunities across all divisions remains bright as we expand our work programs, attain additional nuclear certifications and continue to develop our deep electrical expertise. We continue to prioritize sectors that have longer cycle demand trends and substantial capital commitments for both public and private sectors across infrastructure buildings and industrial markets supporting future growth for years to come. The infrastructure market in Canada is attractive to Bird for several reasons. Speaker 100:08:20Current market research indicates Canada's infrastructure demand will remain strong due to government commitments to address significant infrastructure adjustments, deficits estimated to be between $110,000,000,000 $270,000,000,000 Demand in our building markets is substantial with macro pressures driving extensive demand for healthcare facilities due to population growth and aging population and a growing demand for data centers to respond to the growth of digital services and genera AI. All of these present major growth opportunities for Bert. Bert's proven expertise and collaborative innovative solutions make us uniquely positioned to respond not only to this level of demand, but to the complexity and sophistication of these types of projects. In our industrial business, the total addressable market is significant and being driven by the growth of electrification, emissions reductions and decarbonization efforts. Bird is already a highly sought after partner of choice in all scopes of work throughout the entire project lifecycle and it is positioned to win within our strategic markets due to our consistent execution and operational excellence. Speaker 100:09:28Wayne will now cover the financial highlights for the quarter. Speaker 200:09:31Thank you, Terry. 3rd quarter continued to deliver revenue growth and margin accretion, building upon the strong performance of the first half of the year. Construction revenue for the Q3 of $898,900,000 represented a 15% increase compared to the same period in 2023. On a year to date basis, revenues of $2,460,000,000 for the 1st 9 months of 2024 or $454,000,000 or 23 percent higher than 2023. The growth for the quarter was approximately 60% organic and year to date the growth was over 80% organic. Speaker 200:10:15The company's gross profit margin improved to 11.4% in the quarter compared to 9.3% in 2023. The improvement continues to be driven by the company's highly collaborative work program with higher embedded margins and backlog and pending backlog resulting from Bird's strategic focus on higher margin sectors, disciplined project selection and the benefits of leveraging Bird's self perform capabilities and cross selling opportunities across our business units. On a year to date basis, gross profit margin was 9.4 percent, up 110 basis points from the 8.3% margin in 2023. General and administrative expenses were 51,600,000 dollars or 5.7 percent of revenue for the quarter compared to $34,500,000 or 4.4 percent of revenue in the Q3 of 2023. G and A for the quarter includes an additional $1,900,000 of acquisition costs related to Jacob Brothers as well as 2 months of Jacob Brothers G and A costs. Speaker 200:11:18Adjusted EBITDA in the 3rd quarter was $70,100,000 compared to $49,300,000 reported a year ago, representing a 42% increase. Adjusted EBITDA margins continued to increase on a year over year basis, increasing 1.5% to 7.8% in the 3rd quarter compared to 6.3% in the same period last year. Turning to earnings, net income and earnings per share were $36,200,000 $0.66 compared to $28,800,000 $0.54 in 2023. Adjusted earnings and adjusted earnings per share were 37,700,000 dollars 0.69 dollars compared to the $29,000,000 $0.54 in 2023. The weighted average shares outstanding for the Q3 of 2024 was 1,100,000 shares higher than 2023 due to the acquisitions of Jacob Brothers and Norkan in the current year. Speaker 200:12:15FERC's healthy balance sheet and strong operating cash flow generation remain a differentiator for the company, supporting our strategic growth initiatives and balanced capital allocation approach. The company's liquidity position remains strong at the end of the 3rd quarter with $117,000,000 in cash and cash equivalents and an additional $232,000,000 available under our revolving credit facility. Fird's operating cash flow generation is expected to remain strong for the remainder of the year, commensurate with the significant revenue and profitability growth being delivered. Excluding seasonal and growth related investments in non cash working capital, operating cash flow generation for the quarter was up 44% compared to last year and up 56% year to date. We continue to expect operating cash flows inclusive of growth related investments in non cash working capital to be positive for the full year. Speaker 200:13:09At the end of the Q3, the company had working capital of $269,800,000 compared with $234,000,000 at December 31, 2023. The company's acquisition of Jacob Brothers reduced working capital by approximately 7 $100,000 in the quarter as Byrd used cash on hand to partially fund the transaction. That being said, the company's overall working capital along with liquidity available under a syndicated credit facility remain more than sufficient to allow the company to execute its backlog and support the expected growth in its diversified work program. The company's current ratio is 1.25x and our adjusted net debt to trailing 12 months adjusted EBITDA ratio stands at 1.12x. Berg's long term debt to equity ratio was 34%. Speaker 200:14:01As we noted in prior presentations, Perj's revenue, adjusted EBITDA and adjusted EBITDA margins have experienced a period of sustained growth over the past several years. The Q3 of 2024 continued to trend, bringing our trailing 12 months adjusted EBITDA margin to 5.7% on TTM revenue of almost $3,300,000,000 reflecting management's ongoing strategic focus on margin accretion with further opportunity to expand through 2024 and beyond. The company's margins continue to improve in our backlog and pending backlog, driven by efforts over the past several years to diversify into higher margin sectors. Our disciplined project selection and our appropriately risk balanced work program and greater use of collaborative contracting, which Byrd believes delivers better outcomes for all stakeholders. Byrd's expanding self perform capabilities and increased cross selling opportunities between our business units also contribute to the company's margin accretion. Speaker 200:15:00FERC's capital allocation strategy remains balanced, supporting the company's business growth, profitability and enhanced long term shareholder value through a combination of M and A, smart capital investments and returning capital to shareholders through dividends. In the current year, this balance is evident in the company's investment in equipment to support our growing work programs, our acquisitions of Norkan and Jacob Brothers so far this year, and our expectation to return approximately $30,000,000 to shareholders through our monthly dividends in 2024, including the 50% dividend increase announced in October and effective for the November December dividends. I will now turn the call back to Terry to comment on the outlook for the company. Speaker 100:15:45We're just a proven foundation of operational excellence and safe execution, which has resulted in considerable growth and the expected achievement of the company's 2022 to 2024 strategic plan targets. We are pleased with our 3rd quarter results with significant improvements in gross profit and adjusted EBITDA margins despite revenues being lower than anticipated due to minor delays to the start of a small number of new projects in the quarter, pushing some of the work into early 2025. With the considerable visibility provided by Burt's combined backlog, which continues to reflect higher embedded margins, the company expects full year revenues of approximately $3,400,000,000 with an adjusted EBITDA margin exceeding 6%. At Burt's recent Investor Day on October 9th, we laid out our progress against our current 2022 to 2024 strategic plan targets, which we are happy to say are on target to be met or exceeded and introduce our 2025 to 2027 strategic plan. We go deeper into each of our industrial buildings and infrastructure divisions and review the key sectors we are focused on that support our expectations for future growth. Speaker 100:16:52We also provided financial targets for the upcoming 3 years, which include 10% annual organic growth plus or minus 2% with 2025 receiving an additional 5% growth from the inclusion of Jacob Brothers for a full year compared to 2024. This would see the company's revenue reaching $4,800,000,000 for full year 2027. 8% adjusted EBITDA margin for full year 2027 with organic improvements each year and an additional bump from Jacob Brothers in 2025. 33% dividend payout ratio of net income, which would mean that by 2027, we would expect to have 5 successive years of dividend increases, including our recently announced 50% dividend increase. Over the past several years, Berg has transformed itself and built a resilient business model with unique and specialized services that will be in demand by our clients in any economic environment. Speaker 100:17:47Much of our work program is not subject to the same ups and downs of normal economic cycles and the business has considerable momentum. We expect Bert to benefit from the significant tailwinds stemming from our strategic focus on margin accretion, disciplined project selection and safe, collaborative, operational excellence and resilient sectors. I'll now turn the call over to the operator for questions. Operator00:18:12We will now begin the question and answer session. Our first question today is from Yuri Lynk with Canaccord Genuity. Please go ahead. Speaker 300:18:52Good morning, gentlemen. Speaker 200:18:54Good morning, Eric. Speaker 300:18:56Terry, can you tell us the if there's any commonality or common reason behind the delayed projects that you noted and maybe give us a flavor in terms of region and market? Speaker 100:19:15I'd say the common flavor that we see in Canada is typically permit delays that ultimately are really difficult to push through the system. I'd say that that is probably the times the elephant in the room, difficult to predict. You try to put together obviously the expectations and oftentimes municipal permits are in a system that sometimes is overloaded and it makes it difficult to get through. I'd say that would be that and it isn't specific to necessarily to a region. We see it, I'd say more frequently on the building side where we have delays. Speaker 100:20:03And in this case, we've had some delays in the building side in the Q3. Speaker 300:20:10Okay. And I would have thought a delay might get if it's just a permit issue, it gets delayed into the next quarter, but you're kind of pointing to 2025. Is that just to be a bit conservative there or what? Speaker 100:20:26Yes, it's just catching up, right. So you're not able to catch up on the delay. That's really what it is. Speaker 300:20:34Okay. Second one for me, just obviously really nice gross margin step up even above and beyond what I was expecting. Anything to call out on gross margin in the quarter and also tied with that the G and A expense was a bit higher than I expected. Are those kind of even taking into account only 2 months at Jacobs, but all else equal, is this kind of the rate we're at pro form a? Speaker 200:21:15I can take that one, Gary. I think for the summer months, like we generally have our highest margins in kind of Q3 and Q4, particularly if you get good weather all through Q4. And certainly, Jacob Brothers had a contribution there. But even if you take Jacob Brothers out, the strength in the industrial business and the strong work program we have there certainly was a factor as well. Terry mentioned some of the buildings projects that we're pushing to the right a bit. Speaker 200:21:44Well, of the 3 business units we have in terms of industrial infrastructure buildings, buildings has the lower gross profit percentage, generally speaking. So when those projects shift to the right, had they not shifted to the right, certainly we would have had additional gross profit dollars, but maybe the percentage might have been a little bit lower on a combined basis. So I'd say those are some of the factors. So yes, I think for this time of year, we should think about those are the types of margins we can deliver. There really wasn't anything unusual flowing through the quarter that drove it up, just again, kind of diversification being on multiple large capital investment project that type of thing. Speaker 200:22:28And then on the G and A side, year over year, we were $17,000,000 higher than a year ago. More than half of that would relate to compensation costs. And some of that is certainly we've had NARCAN, we've had Jacob Brothers. So those business combinations have added some overhead to the business. But we've also been making some investment hires in the business as well, in business development and estimating and so forth to be able to help support the growth in the business going forward. Speaker 200:23:06And certainly depreciation, integration and acquisition costs were almost $2,000,000 higher than a year ago. So it's kind of a combination of a few things adding into it. Speaker 300:23:18Okay. And just on that line of questioning, big move up in your stock after the end of the quarter. Just remind me if we should expect LTIP or stock based comp expense in G and A to be elevated because of that all else equal or do you strip it out? Speaker 200:23:44Yes. No, we run that through our G and A. I'd say that the run up that we had after Investor Day was after September 30, certainly. So in the Q4, the company certainly benefited from a higher share price following Investor Day. So at year end, we'll do another quarterly analysis that we do looking at the total shareholder return and part of the drivers of the long term incentive plan that we have in place for performance share units is how Bird's total shareholder return compares against that of the peer group. Speaker 200:24:21And if Bird's total shareholder return is stronger than that peer group, then there's a multiplier that happens on those PSUs. So I would say on a $30 share price or something like that, there could be an impact in Q4. It's kind of a one time adjustment, but we won't run those calculations until probably January until we know where share price is at the end of the year and that's what we'll base that on. Speaker 300:24:48Okay. Okay. Thanks. Operator00:24:52The next question is from Chris Murray with ATB Capital Markets. Please go ahead. Speaker 400:24:58Yes, guys. Thanks. So maybe just to follow on a little bit on just margins and just expectations for margins. I think you had talked about the fact that you're about 40 basis points accretive with Jacobs. Is 40 basis points the right way to think about the impact on EBITDA? Speaker 400:25:20Or is it also sort of 40 basis points on the gross profit margin as well? Speaker 200:25:27Yes. I think for Jacob Brothers, their G and A percent of revenue is higher than, say, birds. So you might pick up a bit more on gross profit, but then you get a little bit back on G and A. But when you look at the impact on EBITDA, those 2 are netted out, so they have the 40 basis point difference. Speaker 400:25:49Okay. That's helpful. And then Wayne, just kind of a quick question, I guess, on cash and capital. There's been certainly a lot of moving parts, I guess, in the credit facility, the acquisition of Jacobs, a lot of stuff moving around. But just looking at the kind of the cash kind of the mix between kind of what's your cash and what's in restricted cash and joint operations, it really seemed to have dropped out over the last few quarters. Speaker 400:26:18Just wondering because I don't think you're in a lot of joint venture operations right now, but maybe I'm misunderstanding that. Just can you kind of walk us through how you think cash is going to kind of move around period to period with the joint ventures in the mix? And if Jacob kind of changes how those Speaker 200:26:42work through your balance sheet? Yes. Maybe I'll just talk a little bit about the mix of the cash. We kind of bifurcate our cash into 3 categories. We call it accessible cash, trust cash and then joint venture cash. Speaker 200:27:01The trust cash plus or minus $5,000,000 kind of stays in a fairly tight range quarter to quarter driven on volumes, of course, in parts of the country that have that type of legislation in place, but not much movement there. I'd say in one of our large capital investment project, we are in a joint venture. And certainly, on that project, we have cash balances that are held in those joint venture accounts. And that's why year over year, you see the spike in cash held in JVs. At some point, that cash comes back to become accessible cash, if you will, because things like profits and overheads will get distributed from the joint venture accounts back to the joint venture partners over time. Speaker 200:27:53And then obviously, some of that cash is used to deliver the project certainly as well. It's accessible cash. Like we invested $15,000,000 in our Liberbank account to acquire the Jacob Brothers acquisition in Q3. So we had negative $6,000,000 in accessible cash now. But if you look at some of the cash we put on Jacob Brothers, you'd be plus 10% type thing. Speaker 200:28:21And then with the growth in the business, it's pretty significant year over year growth. So even though in Q3, we delivered positive $6,000,000 in cash from changes in non cash working capital accounts. On a year to date basis, we still have $148,000,000 invested in that. So Q4 is always our strongest cash generating quarter and we expect that trend to continue. I think in Q4 last year, we released maybe $65,000,000 in non cash working capital. Speaker 200:28:55And I think all things being equal, we'd expect that to occur again this year. And then all of that cash becomes accessible for the business as well. So I just think with the growth of the business, you're seeing more investment in that non cash working capital, but you're still going to see the same seasonality trends that we have in over the past several years. Speaker 400:29:19Okay. That's helpful. Thank you. Thanks, Chris. Operator00:29:24The next question is from Atharva Zaveri with TD Cowen. Please go ahead. Speaker 500:29:31Good morning. Atharva Zaveri here on behalf of Michael Tuphol. So impressive margin performance in Q3 and now you're expecting full year 'twenty four EBITDA margin of at least 6%, which is good. So how much year over year margin improvement do you expect in 2025? Operator00:30:24Pardon me, this is the conference operator. We appear to have lost audio with the speakers' location. Please stand by as we try to regain them. This is the conference operator. We've been rejoined by the speaker connection. Operator00:32:28Please go ahead. Speaker 200:32:32Hi there. Can you hear me okay? Yes. I'm not sure what happened there, but I'll just restate my answer. I'm not sure what point we got dropped off there. Speaker 200:32:41We're just talking about how can we think about EBITDA margins going into 2025. So what I was trying to say is that we said for the full year of 2027, we're going to be at 8%. And each year, we are going to see an improvement organically through improvements in the business and diversification, those types of things. But 2025 will get an additional lift in our EBITDA margins from having a full year of Jacob Brothers included in there. So I think we said in our outlook section this year that we're going to finish 2024 greater than 6% in EBITDA margin. Speaker 200:33:22And I think you're going to see for 2025 approaching 7% for the year. And then 26%, 27%, you'll pick up another 50 basis point improvement in each of those years as just organic improvements. Operator00:33:41The next question is from Frederic Bastien with Raymond James. Please go ahead. Speaker 600:33:49Hi, guys. This is Sean on for Fred. I just had a quick question to ask on LTIPs. So these are expected to have a growing impact over the next few years embedded in the new strategic plan outlook. I want to see if anything changes around the outlook and around investments as a result of last night's election results? Speaker 100:34:12So we certainly see continuous strength in the large capital investments. We don't see any changes. We don't anticipate any changes as a result of the American election. Typically, the kinds of things that we're focused on are largely agnostic to election cycles. So we like I said, we continue to see strength of projects that we're focused on our long term with significant investments, with significant strength by the entities that are making those investments and they're well along. Speaker 100:34:50So the landscape that we're in is quite exciting. Speaker 600:34:57Perfect. Okay. That's all for me guys. Thanks. Speaker 100:35:00Thank you. Operator00:35:06The next question is from Ian Gillies with Stifel. Please go ahead. Speaker 700:35:11Good morning, everyone. Speaker 200:35:13Good morning, Ian. Speaker 700:35:17As it pertains to some of the permitting delays you alluded to, It doesn't seem to have impacted your view on 2025 whatsoever. Can you maybe just talk about how you worked in, call it, some of these, call it, slower processes as it relates to permitting into the guidance? And whether you're seeing any steps by governments to rectify some of these issues? Speaker 100:35:43Yes, certainly, it's something that we're spending a tremendous amount of time on. I think it's a couple of things. I think in the percentage of projects that are larger scale are entering our business in a larger way and those typically don't have the same challenges. They're well developed. They have long period of and especially in the Calabrio focus we have, we're working with our clients in the municipalities and in provincial districts that are in. Speaker 100:36:18So the permits are further along and developed and there's more predictability in a lot of those. So I think in that regard, because that higher percentage entering into 25, we don't feel it will be something that will impact us as it has. And I think there's also still an overhang post COVID with government agencies deal not fully recovered and able to deliver the permitting that we need in a timely manner and it's something we talk on a regular basis with provincial governments about how do we get more predictability and more improvements in these areas. Speaker 700:37:05That's helpful. And maybe a follow on question from some of that. Is there any advantage for call it a large company such as yourselves versus some of the smaller private construction companies in going and obtaining these permits? Is there any moat there competitive advantage you could point to? Speaker 100:37:25I'd say the larger projects tend to have a better priority and better engagement. Smaller projects sometimes don't get the all parties kind of pulling in the same direction where the larger ones, especially when you're working in alliance with the government. You've got some major decision makers at the table and the smaller projects we do for various clients sometimes aren't the priority they need to be. So I think it's just a difference in the approach and I think some of the large ones have a much longer planning cycle. So it's just you can work through a lot of that. Speaker 700:38:07And maybe just one last one, just put one final point in around this issue. Nothing's materially changed around the permitting front since the Investor Day, call it a month ago? No, no. Understood. Thank you. Speaker 700:38:21I'll turn the call back over. Operator00:38:26This concludes our question and answer session. I will hand the call back over to Mr. McKibbin for any closing remarks. Speaker 100:38:34So I'd just like to thank everybody for joining our call today and have a safe balance of your year. Thank you. Operator00:38:44This brings to a close today's conference call and webcast. You may disconnect your lines. Thank you for participating and have a pleasant day.Read morePowered by