North American Construction Group Ltd

Good morning, ladies and gentlemen. Welcome to the North American Construction Group earnings call for the second quarter ended June 30, 2020. At this time, all participants are in a listen-only mode. Following management's prepared remarks, there will be an opportunity for analysts, shareholders, and bondholders to ask questions. The media may monitor this call in a listen-only mode. They are free to quote any member of management, but they are asked not to quote remarks from any other participant without that participant's permission. Company's wishes to confirm that today's comments contain forward-looking information and that actual results could differ materially from a conclusion, forecast, or projection contained in that forward-looking information. Certain material factors or assumptions were applied in drawing conclusions or in making forecasts or projections that are reflected in the forward-looking information. Additional information about these material factors is contained in the company's most recent management discussion and analysis which is available on SADAR and EDGAR as well as the company's website at nacg.ca. I will now turn the conference over to Martin Farron, Chairman and CEO, please go ahead.

Thanks and a very good morning to everyone. As one of the very few companies that provided any sort of outlook for the second quarter, We were determined to both minimize the impact of the COVID-19 pandemic on the health and safety of our employees and mitigate its effect on our business performance. Therefore, I am pleased that good headway was made on both objectives as we also helped our customers manage the virus risk on their work sites. I am especially proud that in typical NACG fashion, we applied a fast and firm restraint to our costs. Eliminating all discretionary spending and very closely managing all third-party support expenses. This close stewardship of costs rather than the government federal wage subsidies rewarded us with a nicely profitable quarter despite a greater than 60% sequential fall in our revenues and the toughest operating environment we have ever experienced. We also hit our free cash flow target, which along with the call of a convertible debenture, allowed us to reduce net debt by over 10%. With that introduction, I will now hand over the call to Joe Lambert, our President and Chief Operating Officer, to take us through the safety and other operational highlights shown on slides two to four. Jason Veenstra, our CFO, will then cover financial highlights from slides five to nine. before I talk about our outlook using slide 10. So over to you, Joe.

Thanks, Martin. Looking at slide two, I am pleased to report that our team promptly responded to pandemic and put in place safeguards to ensure workplace hygiene, physical distancing, and isolation and contact protocols while maintaining our industry-leading safety results. When you consider our operating environment and the use of camps, Bussing and Transportation Needs, Sanitizing of Equipment and Offices, and Adjusting to Communicate with Over 900 Employees While Maintaining Social Distance, the speed, efficiency, and effectiveness of how our team responded was simply stated excellent. We will continue our diligence in both workplace hygiene and safety to ensure everyone gets home safe. Moving on to the business update on slide three, Faced with a previously unimaginable scenario of production cutbacks, negative oil prices, and a worldwide pandemic, our operations, maintenance, and support teams demonstrated the resilience of our company by rolling up their sleeves and getting to work. Ensuring the health of our workers was critical to us, and then we immediately turned to addressing our rapidly changing customer needs. Our strong oil sands customer alliances combined with our safe and low-cost operations allowed us to identify opportunities to increase fleet usage and efficiency on one site while demobilizing completely off another, allowing for the mutual benefit of improved fleet utilization and reduced customer costs. Similarly, in our startup of a coal management contract in Texas, we were not only able to achieve a smooth and orderly transition, we were able to complete on time and add significant cost savings. On time and under budget are always good ways to start a project, but achievement during pandemic and across borders is a true testament to the strength of this team. While we rapidly adjusted to our changing environment, our corporate strategy remains intact. Our focus on strong long-term relationships in oil sands showed that the mutual benefits we expect from improved customer alliances. We continue to have tender opportunities and are optimistic on potential awards before the end of the year, that will provide increased geographic and commodity diversity. We continue to increase vertical integration and external sales potential of our equipment maintenance business. Lastly, we react promptly with our capital spend and cost restraints to ensure we live within our means. Moving on from the bottom of slide three and into slide four, you'll see the operational plan for 2020 remains unchanged from what was presented at the end of last quarter. We expect our customer first mentality, safe low cost provider reputation, and client alliance relationships will put us at the front of the client callback as we begin to ramp up out of the Q2 business trough. The need for lower cost and improved efficiency only further enforces the value of both our internal and external maintenance services. Our new component rebuild facility got up and running in Q1, improved cost and efficiency during Q2, and we'll continue ramping up through year end to provide low cost, high quality components, initially supporting our internal needs and growing into next year with capacity for additional external revenue. Along with the lower cost component rebuilds, we continue to perform Second Life whole machine rebuilds and have completed our second ultra class truck, which is being commissioned this week. These whole machine component rebuilds have an immediate impact on reduced sustaining capital spend, but the income statement benefits will show more as they depreciate over the whole of the asset life and those further benefits increase the more units we build. To date, we have completed whole machine rebuild on a couple dozen or so of our larger machines and have current capacity to meet about 10% of our internal component demand. So we're just getting started. To close out my brief comments, I'd like to take this opportunity to personally thank all of our employees, clients, shareholders, partners, and other stakeholders that continue to support and show confidence in our business. I believe our results continue to prove the naysayers wrong and demonstrate the resilience and adaptability of our business. In response to those doomsday theorists we heard from in March and April, Mark Twain said it best when he said, the report of my death was an exaggeration. With that, I'll turn the call over to Jason for details on our financial health.