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Bird Construction Inc. reported its first-quarter 2025 earnings, showcasing a notable increase in revenue and profitability. Despite these gains, the company’s stock experienced a downturn, reflecting investor concerns over revenue falling short of expectations. Bird Construction’s earnings per share (EPS) surpassed forecasts, but revenue did not meet projections, leading to a 5.27% decline in stock price in after-hours trading. According to InvestingPro analysis, the stock appears undervalued compared to its Fair Value, suggesting potential upside opportunity despite recent market reaction.
Key Takeaways
- Bird Construction’s Q1 2025 revenue increased by 4.3% year-over-year to $717.6 million.
- EPS of $0.23 exceeded the forecast of $0.2149.
- Stock price fell by 5.27% following the earnings release.
- Record combined backlog of $4.3 billion, providing strong visibility into future growth.
- Continued focus on margin expansion and strategic growth initiatives.
Company Performance
Bird Construction reported a solid first quarter, with revenue rising by 4.3% compared to the same period last year. The company’s gross profit percentage improved to 9.4%, up from 8% in the previous year, reflecting enhanced operational efficiency. Adjusted EBITDA saw a significant increase of 41% year-over-year, reaching $34.1 million, which represents 4.8% of revenues. InvestingPro data shows the company operates with a moderate debt-to-equity ratio of 0.84, providing financial flexibility while maintaining stable operations. Discover more insights and 8 additional ProTips with an InvestingPro subscription. This performance is underpinned by strong demand in infrastructure, buildings, and industrial sectors.
Financial Highlights
- Revenue: $717.6 million, a 4.3% increase year-over-year.
- Earnings per share: $0.23, surpassing the forecast of $0.2149.
- Gross profit percentage: 9.4%, up from 8% in the prior year.
- Adjusted EBITDA: $34.1 million, a 41% increase year-over-year.
- Net income: $9.4 million, translating to $0.17 per share.
Earnings vs. Forecast
Bird Construction’s EPS of $0.23 exceeded the forecasted $0.2149, representing a positive surprise. However, the company’s revenue of $717.6 million fell short of the expected $740.19 million, which may have contributed to the negative market reaction. The EPS beat was a bright spot, but the revenue miss was significant enough to impact investor sentiment.
Market Reaction
Following the earnings announcement, Bird Construction’s stock price declined by 5.27%, closing at $25.98. This movement comes despite the company’s strong earnings performance, likely due to the revenue shortfall. InvestingPro technical analysis indicates the stock’s RSI suggests overbought conditions, while the company maintains a strong track record of dividend payments for 26 consecutive years, demonstrating consistent shareholder returns despite market volatility. The stock’s decline also reflects broader market trends, as investors weigh the implications of the revenue miss against the company’s long-term growth prospects.
Outlook & Guidance
Bird Construction reaffirmed its strategic targets for 2025 and 2027, with expectations of back-end loaded revenue growth and continued margin expansion. Get exclusive access to Bird Construction’s comprehensive Pro Research Report, part of InvestingPro’s coverage of 1,400+ US equities, offering deep-dive analysis and actionable insights for informed investment decisions. The company is exploring mergers and acquisitions opportunities and remains confident in its organic growth potential. Bird Construction’s record backlog of $4.3 billion provides strong visibility into full-year revenue growth, supporting its positive outlook.
Executive Commentary
"Our record combined backlog at quarter’s end provides strong visibility into full-year revenue growth," said Terri McKibbon, CEO of Bird Construction. "We’re seeing the diversification into different end markets really paying off," McKibbon added, highlighting the company’s strategic focus on expanding its presence across various sectors.
Risks and Challenges
- Supply chain disruptions could impact project timelines and costs.
- Revenue shortfall poses a challenge to meeting investor expectations.
- Economic uncertainties may affect the infrastructure and industrial sectors.
- Increased competition in bidding for large-scale projects.
- Potential delays in project approvals could hinder growth.
Q&A
During the earnings call, analysts inquired about the impact of industrial maintenance deferrals, estimated to affect Q1 and Q2 by $20-25 million. The management highlighted strong opportunities in defense and infrastructure and expressed confidence in the permitting environment, with no concerns about project cancellations.
Full transcript - Bird Construction Inc. (BDT) Q1 2025:
Conference Operator: Good day, and thank you for standing by. Welcome to the Bird Construction First Quarter Results Conference Call and Webcast. We will begin with Terri McKibbon, President and Chief Executive Officer’s presentation, which will be followed by a question and answer session. Please be advised that today’s conference is being recorded, and at this time, participants are in a listen only mode. 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 therefore 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. Management’s formal comments and responses to any questions 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, the 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. I would now like to turn the call over to Terry McKibbon, President and CEO of Thank
Terri McKibbon, President and Chief Executive Officer, Bird Construction: you, Operator. Good morning, everyone. Thank you for joining our first quarter twenty twenty five conference call. With me today is Wayne Gingrich, BIRD’s Chief Financial Officer. Before we begin, I’d like to acknowledge our teams across the country who recognized Safety Week last week.
At BIRD, prioritizing safety is integral to our operations, ensuring our employees return home safely each day while also serving as a cornerstone of our operational excellence. This commitment not only enhances our performance, but also positions us for sustained growth and long term success. Thank you to our teams for their continued dedication to safety and excellence. Turning to our first quarter highlights, our team delivered a solid quarter with continued revenue growth and significant gross profit and EBITDA margin expansion compared to last year. Adjusted earnings growth continued to outpace revenue growth and Bird’s backlog reached a record level of $4,300,000,000 at the end of the quarter.
Bird’s balance sheet remains strong with sufficient liquidity to allow continued capital investment supporting our organic growth and returns to shareholders while retaining flexibility for Bird to explore attractive M and A opportunities in today’s active environment. Our overall foundation is strong and we remain well positioned to navigate macroeconomic uncertainty and evolving trade policies. Our diverse risk balance and highly collaborative combined backlog provides good visibility into full year revenues and continued margin accretion as we progress toward our strategic targets. An ongoing strategic priority for Bird is continuing to improve the margin profile of our business. We are achieving this through our focus on margin accretive sectors with long term demand drivers, disciplined project selection, increasing our self perform capabilities, and realizing structural cost efficiencies through scalable operational excellence, automation, and technology.
As shown on slide three, the company has made great progress over the past few years in this regard, having increased our first quarter adjusted EBITDA margin to 4.8%. On a trailing twelve month basis, our EBITDA margin now stands at 6.5%, putting us 150 basis points of our 2027 adjusted EBITDA margin target of 8%, which we remain confident in achieving, supported by our record combined backlog with favorable embedded margins. Looking ahead, pipeline of attractive opportunities in today’s active bidding environment is expected to drive further revenue growth and margin accretion that are in line with the company’s strategic targets. At Q1, Bird added $1,300,000,000 to its backlog in the first quarter between conversions of pending backlog and new awards, exceeding work executed in the quarter by 85%, and growing our backlog of contracted work to $4,300,000,000 the highest reported in the company’s history. Pending backlog of awarded but not yet contracted work increased modestly to $4,000,000,000 at quarter end with new awards more than replacing the significant conversion to backlog in the quarter and continues to include approximately $950,000,000 of master service agreements and other recurring revenue.
For its combined backlog continues to reflect a high proportion of collaborative contract types and higher embedded margins than in the prior year. We expect further significant conversions of pending backlog to backlog in the second quarter of twenty twenty five, adding to our record backlog and providing good visibility into revenue growth for the full year and into 2026. The bidding pipeline remains strong, and with the federal election now behind us, Bird is well positioned to benefit from government commitments to position Canada as a global energy superpower across both clean and conventional energy sectors, as well as substantial investment in nation building infrastructure. These investments present opportunities in technically complex projects across the energy mining and transportation sectors. Our significant and highly skilled electrical workforce continues to be a key differentiator, enabling Bird to pay to play a growing role in electrification and other related scopes of work aligned with Canada’s energy and infrastructure evolution.
For its strong presence in high demand, economically resilient sectors enhances long term visibility and allows us to pursue projects aligned with our risk balanced margin accretive strategy. Recent project awards highlight the sustained demand across our target sectors, reinforcing our ability to consistently win work in these strategic areas and our confidence in the long term outlook. In the transportation infrastructure market, Bird secured a highway improvement civil infrastructure project through our recently acquired subsidiary, Jacob Brothers, and finalized the significant project alliance agreement for the East Harbor Transit Hub, which marks a formal start for the execution phase. In buildings, Bird was awarded a multiphase expansion and renovation of the Cottonwoods long term care facility and the design and construction of 200 new residential housing units for the Canadian Armed Forces. In industrial, Bird was awarded new contracts as part of Dow’s Path to Zero project and a contract extension for early site development works at Woodfiber LNG, both of which are large capital investment projects, which we will discuss further on the next slide.
Additionally, we were awarded multiple work packages supporting Ontario Power Generation’s nuclear program with the design and construction of six projects contributing to ongoing operations and refurbishment efforts. Large capital investment projects remain an important part of our strategy, offering multiyear visibility and strong margin potential. While only a selection is highlighted here, Bird is actively engaged in a broader range of opportunities across the country. These large scale initiatives, primarily in complex high demand infrastructure in the industrial sectors, often begin with one or two work packages. Through strong execution, we expand our role over time through additional scopes and grow our presence on-site.
We continue to see significant activity on these projects and our involvement continues to expand. We recently announced an extension of our work at Wood Fiber LNG, new work packages at Dallas Path to Zero initiative and the signing of a project alliance agreement for the East Harbour Transit Hub where construction is now underway. Looking ahead, we see a strong pipeline of opportunities as Canada advances its clean and conventional energy ambitions and decarbonization goal. The potential for more streamlined approvals of major projects could further accelerate momentum and strengthen overall market confidence. I’ll now hand the call over to Wayne to cover our first quarter financial performance in more detail.
Wayne Gingrich, Chief Financial Officer, Bird Construction: Thank you, Terri. Construction revenue of $717,600,000 was earned in the first quarter compared to $688,200,000 earned in the first quarter of twenty twenty four, representing a 4.3% increase year over year. Infrastructure accounted for the majority of revenue growth, largely due to contributions from Jacob Brothers and increased work programs for mining clients. Growth was partially offset by minor declines in buildings and industrial work programs due to less favorable seasonal weather conditions compared to Q1 twenty twenty four and the deferral of certain industrial maintenance work until later in the year. The company’s margin profile in the first quarter of twenty twenty five continued to improve compared to the prior year, with gross profit percentage increasing to 9.4% compared to 8%.
All business units contributed to the increase in gross profit, with the overall margin increase driven primarily by higher growth in infrastructure through gross profit contributions from Jacob Brothers. The increase in gross profit continues to reflect the improved margin profiles on newer work resulting from disciplined project selection and cost control, growing self perform capabilities, and cross selling opportunities across the company. Adjusted EBITDA of $34,100,000 or 4.8% of revenues in the first quarter compared to $24,200,000 or 3.5% of revenues in Q1 twenty twenty four, representing an increase of 41%. Net income and earnings per share were $9,400,000 and $0.17 in the first quarter compared to $10,000,000 and $0.19 in the prior year. The marginal decline includes the impact of non cash amortization of acquisition intangibles related to Jacob Brothers, which was acquired in August of twenty twenty four.
Adjusted earnings and adjusted EPS, which exclude the impact of these non operating factors, better show the contribution from ongoing operations. Adjusted earnings increased 14.5% to $12,900,000 in the quarter. I would further highlight that both adjusted EBITDA and adjusted earnings growth are outpacing revenue growth, which is a trend that we expect to see throughout the year. Healthy balance sheet and strong operating and free cash flow generation remain a differentiator for the company, supporting our strategic growth initiatives and our balanced capital allocation approach. On a trailing twelve month basis, Bird’s operating cash flow and free cash flow generation remain healthy.
Operating cash flow generation for the year was up 14% compared to Q1 twenty twenty four, and free cash flow generation was up 24% from Q1 twenty twenty four. Free cash flow conversion of net income was 62.9%, and free cash flow per share was $1.13 The company’s current ratio was 1.27. Our adjusted net debt to trailing twelve month adjusted EBITDA ratio was 0.71 times, and our long term debt to equity ratio was 31% at the end
Terri McKibbon, President and Chief Executive Officer, Bird Construction: of the first quarter.
Wayne Gingrich, Chief Financial Officer, Bird Construction: Bird’s liquidity position remains strong with $137,800,000 of cash and cash equivalents and an additional $336,700,000 available under the company’s syndicated credit facility to support ongoing investments in growth related working capital, project driven capital expenditures, and potential acquisitions to further diversify service offerings and self perform capabilities. FERC’s capital allocation strategy remains balanced, supporting both near term growth and long term value creation. We continue to invest in the growth of the business and support our growing work programs while maintaining a relatively low capital intensity profile. Bird’s dividend reflects our commitment to delivering direct shareholder returns, aligned with our long term dividend payout ratio target of 33% over twenty twenty five to twenty twenty seven strategic plan period. We remain active in evaluating accretive M and A opportunities.
It’s a dynamic environment and we’ll continue to take a disciplined opportunistic approach to pursue acquisitions that enhance our platform and drive shareholder value. With that, I’ll turn
Terri McKibbon, President and Chief Executive Officer, Bird Construction: the call back to Terry for closing remarks. Thanks, Wayne. Burt’s strategic focus on geographic diversification and balancing exposure across infrastructure building and industrial markets combined with targeting key sectors with favorable long term demand drivers continues to reinforce the strength and resilience of our business foundation. This resilience has enabled continued growth in revenue and improved margin profiles in the first quarter of twenty twenty five despite the deferral of some industrial maintenance spending to the latter half of the year. While similar timing dynamics may affect second quarter revenue growth, our record combined backlog at quarter’s end provides strong visibility into full year revenue growth aligned with strategic targets and continued margin improvement towards our 2027 goal of an 8% adjusted EBITDA margin.
The bidding environment remains active, supported by recent awards across key sectors, and a healthy pipeline of active opportunities is expected to sustain or grow our backlog through the remainder of the year. We remain focused on the strong execution of our current projects, including our significant portfolio of work on large capital investment projects and driving revenue growth and margin expansion through our targeted strategy. Her strong presence in key infrastructure and industrial markets aligns well with the evolving commitments of the federal government. Federal government has a renewed focus on building Canada into a clean and conventional energy superpower, and we are well positioned to support this vision. I’ll now turn the call back to the operator for questions.
Conference Operator: We will now begin the question and answer session. Our first question comes from Chris Murray with ATB Capital Markets.
Chris Murray, Analyst, ATB Capital Markets: Good morning, folks.
Maxim Sytchev, Analyst, National Bank Financial: Morning, Chris.
Chris Murray, Analyst, ATB Capital Markets: Good morning. Just looking at the backlog growth in the quarter, pretty remarkable, almost two times. And so you’ve certainly talked about a few other contracts moving in Q2. And we’re even now starting to look at the pending backlog. When we start thinking about growth at these levels, you’ve talked about your long term plan, kind of call it 10% organic on a regular basis.
And I appreciate that just looking at some of your numbers, the duration of that backlog is probably going to extend a little bit. But is there the opportunity with the amount of work you have coming at you that we could start looking at higher levels of growth? Or is there something that just maybe constrains you for what seems to be a pretty aggressive demand profile coming at you?
Terri McKibbon, President and Chief Executive Officer, Bird Construction: Yeah, I think how we’re thinking of it today is our plan hitting our strategic plan and the guidance we’ve given you for that. I think a reasonable those are reasonable targets. We have a high degree of confidence. I don’t think we want to get ahead of that yet over time potentially, but I think our focus is on our plan right now and the dynamics we’re excited about. We’re really seeing the diversification into different end markets really paying off, and the markets we’ve been really focused on are the markets that have a lot of momentum.
So that’s always exciting. You don’t always see that. Sometimes you’ll be focused in an area that gets some pressure that you wouldn’t have anticipated, but it just feels right now that the markets that we’re targeting and focused on have got a lot of momentum and some of the older markets historically we might have been in do not. So we’ve obviously pivoted. Our team’s strategy has really paid off.
Chris Murray, Analyst, ATB Capital Markets: Okay. And then just thinking about sort of guidance for the year, Q1, I guess it’s more Q1 was pretty decent, in fact, better than we thought, especially on the margin side. Any thoughts on how Q2 is progressing so far to date? Anything we should be thinking about in terms of either growth on the revenue line or in the margin profile? It feels like even though the second half might be loaded, Q2, you’ve got decent weather, feels like there’s a lot of projects on the go.
So any thoughts around kind of the near term view on the quarter would be great.
Wayne Gingrich, Chief Financial Officer, Bird Construction: Yes, I can take that one, Chris. So a couple of thoughts. We tried to provide a little bit of guidance on where we expect revenues to come for Q2 in our outlook section there. And we said some of the factors that impacted Q1 were some of the maintenance revenues shifting to the right a little bit by some of our clients, we think that impact is still going to be there for Q2. But we’re confident they’re still going to proceed for the year at this point in time.
So it’s again kind of driving that growth to the second half, if you will. But the margin profile of the work that we have in place right now is really strong. And I think you see that with what we did in Q1, where year over year, I think our margins grew 120, one hundred and 30 basis points. And a portion of that certainly would relate to that the infrastructure work that Jacob Brothers is doing. But if you look at all of our business units, like the building business, industrial, the other parts of our infrastructure business outside of Jacob Brothers, all of those entities had higher margins in Q1.
So our margins embedded in our backlog and our pending backlog are at higher levels than they were for the work program kind of coming into place in 2024 and in Q1. So we expect strong margin growth as well in Q2 and certainly in the back half of the year as well. And we also try to say that our EBITDA growth and our adjusted earnings and adjusted EPS growth are going to outpace the revenue growth, and we expect that trend to continue in Q2, Q3, and Q4.
Chris Murray, Analyst, ATB Capital Markets: Okay. Thanks. That’s helpful. I’ll leave it there.
Terri McKibbon, President and Chief Executive Officer, Bird Construction: Thanks, Chris.
Conference Operator: Our next question comes from Krista Friesen with CIBC.
Krista Friesen, Analyst, CIBC: Hi, thanks for taking my question. Was wondering if maybe just to dig in on the comment about some the revenue to be pushed into the back half of the year. Think you also made this comment when you had reported Q4 results. I was just wondering if now versus a few months ago when you reported Q4, if you’re seeing more of that revenue being pushed into the back half because of deferrals that relate to economic uncertainty, or if your view is the same as it was a month or two ago.
Wayne Gingrich, Chief Financial Officer, Bird Construction: I think the big difference from what we said in March is just what we’re seeing on some of the maintenance that’s kind of shifting a little bit with some of our clients taking a pretty pragmatic approach to what they’re planning their spend on until they get a little bit more visibility and maybe some of the economic uncertainty subsides a bit. But at some point, you’re going to have to do the maintenance on those facilities, right? So you can certainly defer it in the short term, but at some point you’re going to have to do it. And then I think in Q1, we also saw very small impacts in buildings and a few small impacts industrial as well, but nothing significant. So when we were putting our forecast together for the first half at year end, we had said the growth was certainly going to be back end loaded, maybe twice as high in the back half as what the growth was going to be in the first half, probably a little bit higher than that now where the back half is going to be even more weighted on the growth side because we’re seeing some of those impacts that we had in Q1 also impact Q2.
But again, we kind of see the second half with the visibility we have with our backlog and expected pending backlog conversions to be in
Terri McKibbon, President and Chief Executive Officer, Bird Construction: a really good spot going into Q3 and Q4 for some good organic revenue growth. Chris, it’s Terry. I also think that the pace of new opportunities just feels like it’s accelerating, and that covers the whole spectrum, including maintenance. So there are new opportunities for us in maintenance that we haven’t seen before that are evolving. They take time, but we’re excited about the business, the various business we have and the positions they have because there’s the demand is not softening at all.
It’s just some of it’s timing.
Krista Friesen, Analyst, CIBC: Okay. Great. And then maybe just, one last one on the m and a front. Obviously, balance sheet’s in a great position. Just wondering what you’re seeing in the market, if there’s maybe hesitation from sellers or or if pipeline’s robust?
Terri McKibbon, President and Chief Executive Officer, Bird Construction: Yeah. So as we’ve spoke to in the past, have a pretty narrow focus on M and A that we look for companies that want to work with us exclusively, and we want to retain the leadership team. So we’re not out there participating in auctions to a certain extent. The pace has not really softened for us. We get approached on a pretty regular basis for new opportunities.
So in our queue, it’s fairly full of things we’re evaluating and things we’re working our way through. So I would say that as we look out towards what’s ahead, we’re continuing We like, our position on on finding those, you know, nuggets out there hasn’t changed at all. You know, we we’re excited about with the demands we have in the future, and it seems like we see a a, you know, a bit of a stabilizing macroeconomic activity with Canada seem to be settling. We’ve got a new government in place. It just feels like as we get through Q2, things are going to be more normalized.
Krista Friesen, Analyst, CIBC: Perfect. Thank you. I’ll jump back in the queue.
Michael Tupholme, Analyst, TD Cowen: Thank you.
Conference Operator: Our next question comes from Michael Tupholme with TD Cowen.
Michael Tupholme, Analyst, TD Cowen: Thank you. Good morning.
Terri McKibbon, President and Chief Executive Officer, Bird Construction: Hi, Mike.
Michael Tupholme, Analyst, TD Cowen: Maybe just to start on the industrial maintenance deferrals. Can you give us some sense for how much of an impact they had on the first quarter? And it sounds like you expect them to carry on into the second quarter. Is it a similar impact or is it actually greater just because they may not have been in place right from the beginning of the year? Just trying to get a sense for again, impacting Q1 and how that compares to you the way you’re thinking about it for Q2.
I
Wayne Gingrich, Chief Financial Officer, Bird Construction: can take that. I mean, certainly in Q1, we’re still doing maintenance for our clients without that all of our work program got deferred. You’re talking about tens of millions like plus or minus $20,000,000 20 5 million dollars impact kind of thing in Q1. I would expect a similar impact in Q2, but we’re still going to be doing the majority of our maintenance, but some things are kind of shifting to the right. So I’d say it’s probably in that order of magnitude for Q2.
Michael Tupholme, Analyst, TD Cowen: Okay. And the way you’re thinking about it in terms of suggesting it’s being deferred to the latter part of the year is they it’s clear you think they will resume, but do they make up for what was lost in the first half of the year in the second half? Or is it just sort of everything shifted to the right and you do what
Maxim Sytchev, Analyst, National Bank Financial: you would have done in the second half?
Terri McKibbon, President and Chief Executive Officer, Bird Construction: I’d say there are two points to that. Yes. But also there’s new business evolving that I think we’d be active in by Q3 if we’re successful. It’s early days, but there’s new things that I think will pick up if there’s any gaps. And that’s exciting because these are brand new fronts we’ve never had before.
Michael Tupholme, Analyst, TD Cowen: Okay. So just just I mean, seems like the one thing you’re kind of calling out that was, you know, maybe a little bit different than the way you thought about the outlook when last presented. So just to be clear, is the 2025 outlook as previously articulated and also the three year plan, is that all still being reaffirmed or is anything changing with any of that, the prior sort of looking guidance for 2025, ’20 ’20 ’7?
Wayne Gingrich, Chief Financial Officer, Bird Construction: We’re reaffirming all of the guidance for 2027, for 2025. We’re just seeing a bit of a shift into the second half for the year.
Michael Tupholme, Analyst, TD Cowen: Got it. Okay. And then you spoke earlier on the call about the strength of the margins and the level of improvement you saw 130 basis points of year over year improvement in adjusted EBITDA. So that’s quite a nice healthy level of improvement. You’re still targeting this 8% by 2027, but it feels like maybe you’re getting closer to that level more quickly.
Is that a possibility that in fact you maybe that’s still the end point that you get to in 2027, but are you getting there more quickly? Like is 2025 shaping up to be a year where actually the margin is outperforming your expectations could come in higher than you originally thought?
Wayne Gingrich, Chief Financial Officer, Bird Construction: Well, certainly Q1 margins came in stronger. So that’s one data point, I guess. With the margins we’re seeing in our backlog and pending backlog, they’re certainly higher than the work we brought in. So again, we kind of see this upward momentum in what our margins are. I think as Terry mentioned earlier, if you look at our EBITDA on a trailing twelve month basis, we’re 6.5 at the March 2025.
So if you forward ahead to ’27, we have eleven quarters to go, I guess, by year end ’27, and we’re calling 8%. So we have 150 basis points to improve over the next eleven quarters. The one thing I’d say about Constructed is it’s never perfectly linear. There’s always going to be a few ups and downs along the way. But in terms of the trajectory we’re on, we feel pretty confident on the path we’re on.
Michael Tupholme, Analyst, TD Cowen: Okay, perfect. And then, I mean, in some ways, kind of already asked a few things related to this, but you’re reaffirming your guidance for the year and the multi year. You’ve called out these industrial deferrals, which doesn’t sound like, you know, they’re likely to impact your view on guidance for the year. It sounds like it’s the one kind of area where there’s been a bit of a change, like everything else seems like it’s going quite well in terms of, you know, backlog growth and demand for your services. So I guess just in the context of thinking about, you know, macroeconomic uncertainty and trade related uncertainty, is there are you seeing anything that is suggesting this sort of could spread to other areas, or are you quite confident that this is somewhat of a unique situation with these industrial deferrals?
Terri McKibbon, President and Chief Executive Officer, Bird Construction: Well, I think, first of all, the pace the business overall in so many different areas, and some of these are new, is so high that I think that it gets offset by the pace of new opportunities. If we’re a little softer here, somebody defers something, it just opens up capacity for us to move that team to something else. So actually in the longer term it’s probably a bigger positive because it opens up new customers and new projects for us if we’ve got tighter capacity. So I think for us, I think the opportunities are really strong, and we’re excited about, you know, the next few years with the scale of these opportunities. It’s not something that anyone’s ever seen before.
Michael Tupholme, Analyst, TD Cowen: All right, I appreciate all the time. Thank you. Our
Conference Operator: next question comes from Maxim Sytchev with National Bank Financial.
Maxim Sytchev, Analyst, National Bank Financial: Hi, good morning, gentlemen.
Terri McKibbon, President and Chief Executive Officer, Bird Construction: Nick.
Maxim Sytchev, Analyst, National Bank Financial: Terry, maybe just the first question for you. As you guys are doing more integrated project delivery contracts, I mean, obviously, margins are moving in a very positive direction. One of your peers suggested that there’s some margin, I mean, not dilution, but again, because like there’s it’s like lower risk, therefore, kind of low return dynamic. Obviously, you’re not seeing this. Do you mind maybe explaining a little bit in terms of why that’s the case for you specifically?
Thanks.
Terri McKibbon, President and Chief Executive Officer, Bird Construction: Well, I think, you know, the you’ve got various forms of collaborative contracts such as IPD or alliance contracts. You’ve got, some progressive design bills now that governments are using with a target. First of all, most of these projects have got a lot of scale, they’re quite sophisticated. I think the demand is high overall across the country and we have such high demand, companies have a good lens of their capacity and the larger companies obviously have got a lot of work. Everyone in the sector has got considerable backlog growth.
So they’re pretty selective with their capacity and how they look at things. Think the real benefit at Bird that may be a bit different in who you’re talking about, and I’m sure who that is, but the real benefit is we self perform a lot of the scope. So we bring all our own companies in, electrical, mechanical, you know, civil, building guys. You know? So we have, you know, such a a a broad array of, you know, services, you know, infrastructure side with site developments, and you got all these services that changes the margin profile of the overall project.
It’s not like you’re just putting a margin on the revenue. We’re getting margins on these businesses as well. So that’s a bit of a different, you know, dynamic for us.
Maxim Sytchev, Analyst, National Bank Financial: Yeah. No. That’s that’s super helpful. Thank you so much. And then do you mind maybe discussing a little bit around the the early opportunities in the defense space and and maybe anything that’s happening in in in Northern Ontario if we get our act together and kind of room of fire opportunities?
Thanks.
Terri McKibbon, President and Chief Executive Officer, Bird Construction: So on the defense side the opportunities that we’re seeing are tenfold what we would normally see. And that’s certainly very exciting. It’s a high barrier. There’s only a few companies that do defense construction, so very sophisticated, complex. You know, you gotta have major investments in secure rooms and things like that.
So we have that, you know, Canada wide now. And so where these these assets are getting, major investments. And, again, it’s a tall order for Canada to get to 2% GDP and maintain it. And the maintain it part is is really is significant for the country to it’s one thing to do at once, but the the maintain aspect. So there’s a lot of major planning going into the facilities that will be required to house, you know, this new, array of, you know, defense armament, you know, in ships and submarines and jets.
And, you know, if you you put a an f 35, it’s not, you know, rolling into a Quonset hut. It’s rolling into a bunker that has massive structure to it to protect, you know, when it’s a hundred million dollar plane. So you you just you have this this the scale of this is is really quite impressive, and and we’re we’re lucky to be in a position to be able to service all of those bases and all of those, contemplated new bases in the remote North, which is, you know, a common place for us to be, you know, at any at any given time. We’re constantly in the North doing something. Ring of Fire, you know, certainly feels to us like the the government in Ontario are are really focused, you know, on this, and and there seems to be a lot of activity.
I think, you know, the government the federal government of Canada will be a very interested partner now moving forward. So it just feels like there’s they’ve broken through the, the logjam on Ring Of Fire, and things are starting to happen and move. Again, it’s really remote, that work complex. Only a few companies have the interest in getting involved in something like that. You have to have a track record of being able to put these temporary bases in for your workforce to be slight in, flat out likely.
So pretty complex, and obviously that’s what we do. At the same time, there’s a lot of this stuff underway already. There’s some really big projects that are underway that some of the competitors that we would typically have are pretty busy with that.
Maxim Sytchev, Analyst, National Bank Financial: Okay. No, that’s great color. Thank you so much.
Terri McKibbon, President and Chief Executive Officer, Bird Construction: Excellent.
Conference Operator: Our next question comes from Ian Gillies with Stifel.
Wayne Gingrich, Chief Financial Officer, Bird Construction: Morning everyone.
Michael Tupholme, Analyst, TD Cowen: Following
Ian Gillies, Analyst, Stifel: on Max’s question a little bit, can you talk a little bit about whether the permitting environment in Canada is causing some of the delays in getting projects going. And perhaps what you’d like to see changed or where you’d be hopeful to see improvements from the new liberal government so we can get things going in a bit more of an expedited manner?
Terri McKibbon, President and Chief Executive Officer, Bird Construction: It certainly seems like on a federal level, you know, things like Reagan Fire, you know, there’s been discussions now about this this national corridor across the country. I think that’s gonna gain some momentum. So I think there from our lens, appears to be some significant movement now in Ottawa with a new federal government, a new prime minister to start to expedite and get things done. We’re really noticing it on the energy side where you historically would be bottlenecked with permits and things like that. That seems to be much different today than it was.
If you want to do an LNG facility in Prince Rupert, I think you have a very willing and engaged partner in the provincial and federal government to make that happen. That seems to be obvious. Now, again, we’re not in the room with those permits, but it certainly feels like our clients are getting the kind of support in more of a partnership than they ever have historically. You know? So I think it’s a it’s a really encouraging sign for us that there’s a lot of things starting to to happen and move now, and it makes it pretty exciting to be in the in the various in the various sectors that we’re in.
Ian Gillies, Analyst, Stifel: Understood. As you think about new projects coming to market over the next, call it, twelve months, in light of recent project, large project cancellations in Canada, are you worried that a slackening bid environment with a few more competitors with available capacity could hamper some of your margin goals or revenue growth goals?
Terri McKibbon, President and Chief Executive Officer, Bird Construction: No. Because and and to be clear, we we’re not seeing projects cancel. We’ve had projects where, you know, the
Wayne Gingrich, Chief Financial Officer, Bird Construction: might have been
Terri McKibbon, President and Chief Executive Officer, Bird Construction: in a municipal level where the municipal team from the owner side got carried away with the wish list of what they wanted to build and didn’t have
Wayne Gingrich, Chief Financial Officer, Bird Construction: the budget for it. We go
Terri McKibbon, President and Chief Executive Officer, Bird Construction: back to the drawing board and delays the six months and then they have to come back out to tender. We had a project in Alberta that was like that, and now it’s coming back out to tender with a different format that makes it more reasonable, I would say. But we’re not seeing really anything that we’ve got that’s got scale to it with with that, you know, that framework of it being formally canceled. The scale of the new things that are coming through, you know,
Michael Tupholme, Analyst, TD Cowen: in
Terri McKibbon, President and Chief Executive Officer, Bird Construction: nuclear infrastructure. Pearson Airport is a mammoth investment that’s just starting into procurement now by the federal government. It’s it’s a it’s a massive scale of what they expect to do there. So that’s just something new that is daunting for the industry, to be honest with you. But there’s more of those that are feel like they’re imminent, LNG phase two, things like that.
So I just think Prince Rupert, LNG, things like that are just pretty exciting. We used to be pretty excited when we had one of those, and we’ve got you know, a dozen or more of them and another dozen in the planning stages. Yeah, no sign of anything that we’re worried about. We have a client that, you know, that we’ve identified in Dow Chemical that has delayed some of their spending until the uncertainty settles. Know, we’re we’re like, again, I said earlier, it just allows us some additional capacity for some of the things that we might not have even looked at.
So we’ll see. And again, it’s not canceled, just deferred. A lot of the work we’ve got there is not affected by it, but some of the new stuff likely will get pushed out a bit, but we’ll see.
Ian Gillies, Analyst, Stifel: Understood. That’s very helpful. Thank you.
Conference Operator: This concludes the question and answer session. I’ll hand the call back to Mr. McKibbin for closing remarks.
Terri McKibbon, President and Chief Executive Officer, Bird Construction: Before we close, I’d like to highlight that our 2024 sustainability overview has been released and reflects the progress we’ve made in embedding ESG priorities across our business, confirms our commitment to providing sustainable value and accretive contributions to our clients, employees, and shareholders, and communities in which we live and work. This report is available on our website. I’d like to thank everyone for joining us this morning on our earnings call, and a special thanks to the BIRD team for their ongoing commitment to safety and excellence. Thank you, everyone.
Conference Operator: This concludes today’s conference call and webcast. You may disconnect your lines. Thanks for participating, and have a pleasant day.
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