North American Construction Group Ltd

Good morning, ladies and gentlemen. Welcome to the North American Construction Group LTD four-quarter and year-ended results conference call and webcast on Thursday, February 16, 2023. 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 listen-only mode. Feel free to quote any member of management. but they're asked not to quote remarks from any other participant without that participant's permission. The company wishes to confirm that today's comments contain forward-looking information and that actual results could differ materially from a conclusion, forecast, or prediction contained in that forward-looking information. Certain material factors or assumptions were applied in drawing conclusions or in making forecasts or predictions that are reflected in the forward-looking information. Additional information about those material factors is contained in the company's most recent management discussion and analysis, which is available on CEDAR and EDGAR, as well as on the company's website at nacg.ca. I will now turn the conference over to Joe Lambert, President and CEO.

Thanks, Julie. Good morning, everyone, and thanks for joining our call today. Similar to previous calls, I'm going to start with our operational performance analysis before handing it over to Jason for the financial overview. And then I will conclude with the operational priorities, bid pipeline, outlook for 2023, and our capital allocation before taking your questions. On slide three, our trailing 12-month total recordable rate of 0.53 represents a significant improvement from the start of the year, and the Q4 rate of 0.30 was the best quarter of the year. The 0.53 achieved is slightly above our industry-leading target frequency of 0.5, and we will be focusing our efforts in 2023 on prevention of high potential injury events, implementing our acts of safety program, auditing critical tasks, and further advancing our use of developing technology in areas such as collision avoidance, fatigue management, and drone use for remote safety monitoring. On slide four, we highlight some of the major achievements of 2022. I'm not going to go through this list individually, but I would simply summarize that we resolved our first half issues, executed well on our Winter Works programs, safely and efficiently closed out the year, and are focused on carrying our momentum forward into 2023 and looking to take advantage of the opportunities presented in this continuing strong demand market. Slide five shows the cumulative financial results for the year, and I am proud to say all four of the noted metrics of revenue, EBITDA, EPS, and free cash flow are company records. As you can see on the following slide six, the trend for continuing improvements is consistent. More than doubling both EBITDA and EPS in just four years is an impressive pace that we are eager to maintain. The next two slides represent two areas of our business, that are key to continuing those positive trends. On slide seven, you will see we achieved our highest Q4 utilization on record after just having posted our highest Q3 on record, and the demand for our fleet remains high. The Q4 utilization of 75% was directly correlated to increased maintenance manpower and improved fleet mechanical availability. We expect the high demand to remain throughout 2023, and continuing into 2024 and beyond. We likewise expect our progress on increasing the maintenance labor workforce will directly correlate to continuing improvements in fleet utilization. Lastly on this slide, I would just like to point out that other than the obvious pandemic impacts in 2020, our diversification efforts over the last several years have delivered into expectation and demonstrated higher Q2 and Q3 fleet utilization as we have moved the smaller, underutilized portions of our heavy equipment fleet out of oil sands and into other geographies and commodities where they have achieved more operating hours. The diversification now built into the business has removed much of the seasonality and cyclicality seen in previous years. Slide 8 describes our advances in technology. and represents another area of our business that is key to continuing the positive financial trends. I spoke earlier about the technology being used to improve safety and would like to expand here on our telematic system. Our telematic system is now installed on about half of our fleet and it's on the biggest and heaviest half of our fleet. We will continue adding to the remaining portion of our fleet and might be subsequently looking into our support equipment as well. In 2022, The telematic system directly saved over $2 million of machine components through proactive interventions and saved an additional 1,200 hours of maintenance labor. We expect these costs and labor savings to about double in 2023 with full-year monitoring and additional assets brought online. The telematic system also contributes to improved operations through alerts and mapping that identify operator behaviors and provides locations complete with heat maps for alert events and frequency. The telematics program is really just hitting stride, and the more machines we get monitored and the more knowledge we build up from our analyses, the better we will get in improving maintenance and operations efficiency.

With that, I'll hand over Jason for the Q4 financials.