Bird Construction Inc.

officer's presentation, which will be followed by a question and answer session. To ask a question during the session, analysts will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded, and at this time, all 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 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. 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 risk, 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 like to turn the call over to Terry McKibbin. President and CEO of Byrd Construction.

Thank you, operator. Good morning, everyone. Thank you for joining our second quarter 2025 conference call. With me today is Wayne Gingrich, Byrd's Chief Financial Officer. Before we dive into our results for the quarter, I'd like to take a moment to share a milestone that we feel reflects the strength of our people and culture here at Byrd. We're proud to be recognized as a Certified Best Employer in Canada a distinction awarded to organizations scoring in the top quartile for employee engagement through the Best Employers in Canada program powered by Mercer. With a 95% employee survey response rate, our employees have made their voices heard and we are thankful for their feedback. We're proud of our dedicated teams for fostering meaningful employee experiences. Turning to our second quarter highlights, BERT continued to deliver margin improvement with gross profit percentage increasing to 10.6% from 8.6% a year ago and adjusted even a margin increasing to 6.5% compared to 5.3% last year. The margin accretion reflects the company's strategic focus on higher margin sectors, disciplined project selection, and strong operational execution. While revenue is slightly lower year-over-year as a result of client-driven project deferrals and delays amid a backdrop of economic uncertainty, underlying demand in our key sectors remains strong. Burd's secured nearly $1.2 billion in new awards in the quarter, growing our record backlog to over $4.6 billion, over 36% higher than a year ago. Burd's backlog remains diversified, risk-balanced, and heavily weighted collaborative delivery models providing a pathway to growth and continued margin accretion once some of the market uncertainty is behind us. With a solid balance sheet, BERT remains well-positioned to invest in future work programs that pursue attractive M&A opportunities in a healthy market environment. BERT continues to progress through its 2027 strategic target of 8% EBITDA margin, margin improvements of 120 basis points in the quarter and 150 basis points on a trailing 12-month basis compared to last year are a direct result of our focus on margin-accreted sectors, discipline project selection, increasing self-reformed capabilities, and contributions from Jacob Brothers acquired in August of 2024. While the company has made great progress over the past year, it's important to remember that margin-accretion-like revenue in the construction industry is rarely linear, and recent client decisions to delay certain projects and a slower-to-develop industrial maintenance program may moderate the pace of margin improvements until there's greater clarity in the market for our clients. That being said, with only a 120 basis point gap between our current trailing 12-month margin and our 2027 target of 8%, we remain committed to achieving this target with two and a half years remaining in our plan. Demand in Bernski sectors remains strong and the bidding environment is robust. In the second quarter, Burt added $1.2 billion in securements to his backlog of contracted work, bringing year-to-date securements to just shy of $2.5 billion. For context, that's almost a billion more in securements in the current year compared to the same time last year. At the end of the second quarter, Burt's backlog of contracted work was $4.6 billion, and our pending backlog of awarded but not yet contracted work was $3.8 billion. Pending backlog continues to include over $800 million of master service agreement and other recurring revenue to be earned over the next five years. Bidding backlog continues to reflect a high proportion of collaborative contract types and favorable embedded margins compared to a year ago. The bidding pipeline remains strong, and we believe Burr is well-positioned to support nation-building initiatives and the development of export markets, increased defense spending, demand for health care, long-term care the need for additional power generation capability through lng nuclear wind and hydro refurbishments in particular we continue to see strong demand in our key strategic sectors this was reflected in our second quarter project awards including projects awards in defense energy long-term care mining sectors all sectors that remain central to canada's evolving economic priorities a significant development this year is the passing of Bill C-5, the One Canadian Economy Act, which seeks to streamline approvals for nationally significant infrastructure projects while protecting the environment and respecting indigenous rights through meaningful consultation. This legislation is expected to unlock billions in investment across sectors that align closely with BIRD's core strengths, including transportation, energy, and civil infrastructure. With our proven track record delivering large, complex projects, and our strong partnerships with indigenous communities exemplified by our Parasilver status, we are well positioned to capitalize on this shift and expand our pipeline of major infrastructure opportunities. Looking ahead, we see compelling opportunities emerging from several key trends. Global investment in nuclear energy is accelerating. The BRRRD has a strong footing to support the resurgence through our infrastructure and industrial capabilities. A recently awarded contract to design and construct facilities supporting Ontario Power Generation's nuclear operations and refurbishment activities demonstrates our active participation in this growth market, and we are well positioned to play a meaningful role in Canada's nuclear resurgence and the broader energy transition. Canada's renewed focus on economic independence, including increased defense spending, and a more streamlined regulatory environment is creating a favorable landscape for infrastructure and resource development. In the second quarter, BIRD was awarded a new project with Defense Construction Canada, building on our expertise in delivering secure, specialized infrastructure. BIRD remains focused on key sectors that are aligned with national priorities. As these trends continue to unfold, we expect them to have a positive impact on our backlog, margin expansion, and long-term value creation for our shareholders. Large capital investment projects, or LCIPs, continue to be a key pillar of BERT's strategy, offering long-term visibility and scalable growth. These complex multi-phase initiatives often begin with targeted scopes, allowing us to demonstrate value early and expand our role over time. In the second quarter, BERT continued to be awarded additional scopes across several LCIPs, including on sites where project delays have been announced due to current economic uncertainty. The award of new scopes reinforces our confidence that projects will proceed through to completion and BIRD will be there to support them along their journey. While timelines have shifted, the strategic importance of these projects remains unchanged, and they continue to represent meaningful opportunities for margin accretion and sustained shareholder value. I'll now turn the call over to Wayne to cover our second quarter financial performance in more detail.

Thank you, Terry. Construction revenue for the second quarter of $850.8 million represented a 2.6% decrease compared to the same period in 2024. Organic growth and infrastructure resulting from increased work programs for mining clients, as well as the commencement of the East Harbor Transit Home Project, was complemented by additional contributions from Jacob Brothers acquired in August of last year. The infrastructure revenue growth was more than offset by modest revenue decline in buildings and industrial driven by client decisions to slow down certain work programs and delay commencement of new projects as a result of economic uncertainty across North America and globally. On a year-to-date basis, revenues of $1.57 billion for the first half of 2025 compared to $1.56 billion in the first half of 2024. The company's gross profit margin improved in the quarter compared to 2024, increasing to 10.6% from 8.6%. The increase in gross profit continues to reflect the improved margin profiles on newer work resulting from disciplined project selection and cross-control, growing self-performed capabilities, and cross-selling opportunities across the company. On a year-to-date basis, gross profit margin of 10% compared to 8.3% last year. Adjusted EBITDA in the second quarter is $54.9 million, a 17.9% increase over the $46.6 million recorded a year ago. Adjusted EBITDA margins continue to increase on a year-over-year basis, reaching 6.5% for the quarter compared to 5.3% last year. On a year-to-date basis, adjusted EBITDA was $89 million, or 26% higher than in 2024, and adjusted EBITDA margin was 5.7% compared to 4.5% in the prior year. Turning to earnings, net income and earnings per share were 20.3 million and 37 cents, respectively, compared to 21.4 million and 40 cents in 2024. This marginal decline includes the impact of non-cash amortization of acquisition intangibles related to the Jacob Brothers, which was acquired in August of 2024. Adjusted earnings and adjusted earnings per share were 27.6 million and 50 cents. million and 42 cents in 2024. The weighted average shares outstanding for the second quarter of 2025 was approximately 1.5 million shares higher than 2024 due to the acquisition of Jacob Brothers. BERT continues to generate strong operating and free cash flow, which in combination with the company's healthy balance sheet supports our strategic growth initiatives in our balanced capital allocation. On a trailing 12 month basis, BERT's operating cash flow and free The company's current ratio was 1.28 times. Our adjusted net debt to trailing 12-month adjusted EBITDA ratio was 1.15 times. And our long-term debt-to-equity ratio was 30% at the end of the second quarter. Burr's liquidity position remains strong with $142.6 million of cash and cash equivalents and an additional $231.7 million available under the company's syndicated credit facility to support ongoing investments in growth-related working capital, project-driven capital expenditures, and accretive acquisitions to further diversify service offerings and self-performing capabilities. The firm remains committed to a balanced capital allocation approach, supporting the growth of the company's current and future work programs through capital expenditures in equipment and technology, returning capital to shareholders through our monthly dividends, and actively pursuing attractive opportunities in today's healthy and lean market. The company maintains low capital intensity continues to target a long-term dividend-payer ratio of GAAP net income of 33% and remains disciplined and opportunistic in our approach to pursue acquisitions that will enhance our capabilities and drive further shareholder value.

With that, I'll turn the call back to Terry.

Thank you, Wayne.

We remain focused on resilient, high-demand sectors such as infrastructure, healthcare, defense, and energy, including LNG, nuclear, wind, and hydro. These sectors with long-term drivers align with national priorities and will support our growth and margin expansion strategy through 2027. While the second quarter was marked by elevated economic uncertainty, this primarily influenced the timing of project execution rather than the strength of demand. Although some clients opted to delay project starts due to the economic uncertainty, these projects are secured and our scopes of work remain intact. We anticipate positive revenue growth in the second half of 2025 compared to 2024, though the pace may be more measured until macroeconomic conditions stabilize. BERT is a healthy balance sheet, strong operating cash flow to support our strategic growth initiatives, including the flexibility to pursue attractive M&A opportunities, which will further diversify our service offerings and self-performed capabilities. With that, I'll turn the call back to the operator for questions.

Thank you. We will now begin the question and answer session. As a reminder, analysts who wish to ask a question may press star 1-1 on your telephone. If you wish to remove yourself from the queue, you may press star 1-1 again. One moment for questions. Our first question comes from Chris Murray with ATV Capital Markets. You may proceed.

Yeah, thanks, guys. Good morning. I guess we'll start with the revenue and expectations for the second half. So And correct me if I'm wrong. I mean, if I think about the fact that Q2 should have had a pretty big impact from Jacobs, probably underlying bird organic growth was probably low double-digit type decline. You've talked about some modest increases organically. There'll be less of an impact from Jacobs as we go into the second half. So just trying to get a sense of magnitude. Previously, you've talked about kind of a 10% CAGR increase. plus 5% from Jacobs, you know, this year, and then, you know, probably 10% to get you to your longer range target. So, you know, I guess I'm trying to understand, you know, how we should frame or think about, you know, the pace of revenue over the next couple of years and if that long-term target is still kind of valid or not.

Chris, I can take that one. Maybe I'll start with his point there. I think the long-term target is still valid. Like, we're very much committed to our 2027. you know, targets, and especially the 8% EBITDA. You know, we think we're on a good path for that. You know, looking at 2025, you know, certainly the growth is more muted than we had originally thought in our strategic plan. You know, certainly the economic uncertainty that's out there is impacting our ability to put work in place. I think on a positive note, you know, our backlog is at a record level. The margins embedded in it are good. Just trying to put the work program in place you know, has been the challenge. Yeah, I think you're right. You know, the range you provided, you know, approximately 10% negative organic growth year over year, you know, probably in the range. So when you look at the second half, you know, I think the growth is going to be more muted than we had originally expected. I think we'll see still positive growth overall, but it is going to be outside of that range. But, you know, the margins we're putting in place are still pretty good. But, you know, it's hard to get the leverage we had anticipated, you know, on our cost structure when our volumes are kind of pushing to the right like that in the short term. I think if a trade deal could be struck with the U.S. and maybe there becomes some certainty about what happens with KUSMA, then I think the momentum that we have going into 2026 would be very positive.

Okay. And I guess the other piece of this, just to think about, you know, you did make the comment that you thought your payout ratio um on the dividend would probably you know be above the kind of the target uh 33 percent you know uh in the in the release you know i guess the q3 dividends have already been declared um kind of in line and and look i mean there's certainly i think adequate dividend coverage um where we're at right now but but the one thing that we kind of have been seeing over the last few quarters um with the earnings and it's been an increase in q4 is is I guess what's the tolerance or whatever way you want to frame this for the board to continue to be able to grow the dividend even in face of this blip? Or is this something that we should just think that any sort of increase in the dividend is off the table at this point until we start seeing a recovery later in 26 or 27?

You know, in our strategic plan, and, you know, the 33% of GAV to income, you know, payoff ratio, we had that in the 22 to 24 strategic plan. It served us well, and we're continuing that in 2025 through our 2027 strategic plan. There's no changes to that thinking. I mean, part of the reason, you know, why we have 33% is whether it's economic uncertainty or that type of thing, we're easily able to absorb that. So, you know, the payout ratio in 2025 is going to be higher than 33%, but we're still absolutely committed to our dividend. You know, and once we get, you know, clarity on 2026 coming up and, you know, we'll evaluate our dividend again in the fourth quarter of this year going into next year. Okay.

I'll leave it there and pass the line. Thank you.

Thank you. Our next question comes from Michael Topham with TD Cowen. You may proceed.

Thank you. Good morning. So just with respect to the revenue outlook here in the back half, obviously understandable the suggestion that some of the headwinds you've seen here in the first part of the year will persist into the third quarter. I guess, do you have any thoughts on the fourth quarter? I mean, is there... Is it likely at this point that that's also going to experience the same sorts of pressures? Or is there any scenario here where if your customers got some comfort around certain items, you could actually see the fourth quarter begin to show some improvement? Or is this more of a 2026 improvement situation if and when the customers get comfort on the issues they need to see?

I think you could see it in Q4, but again, it centers on And it's just clarity that our customers are seeking. They're thinking of these, you know, especially the larger projects, you know, a long-term view. But, you know, it's to get clarity on cost pressures and how tariffs are going to impact, you know, their sales and their inbound cost materials. And that's really, you know, that's really what's giving them clarity. some uncertainty and as such, you know, they've slowed down or delayed, you know, additional phases, things like that. What's interesting for us is we continue to get work awarded on future phases, which gives us great confidence that this is just a temporary pause until there's clarity. And that's all they're really looking for. So, you know, as we move forward, you know, it's really just, we just need that catalyst of what the clarity is going to be because obviously it's easy to understand that they just want clarity.

That makes sense. With respect to the clarity that customers are seeking and when you have your conversations with them, I think Wayne mentioned if we've got a trade deal and if there was clarity around renegotiation of Kuzma, like clearly those would be big items that would provide clarity. But are those the things we need to have settled and essentially get complete clarity on in order for customers to move forward? Or are there other things, other signals that they may be looking for that even in the absence of those kinds of large developments, they could still get some comfort and begin to move forward with?

I think it's primarily a trade deal and settlement of trade deals around the world because many of our customers have global markets and they need that economic clarity so they understand the impacts of global markets or some other products. We are in a situation where a high percentage of the work that we're targeting has very high demand drivers. And so we're obviously somewhat insulated, but you can see when you get a few projects that, and obviously we, and these are projects that everyone would be very aware of because there's been public announcements from our clients delaying a billion dollars in capital expenditure in 2025 due to the uncertainty. So although we didn't anticipate what the impact would be at the end of Q1, we started to see it certainly in Q2 that we were going to be delayed. So that's one of the challenges. It's a quarter to quarter sort of adjustment, and it's difficult to predict. because we're kind of quarter to quarter right now with some of these customers as to whether we're going forward or not. So not ideal, but it's just the uncertainty that we're living with.

Okay, that makes sense. Just last one for me. On the margins or margin expectations and margin outlook, so you've reaffirmed your 2027 targets, which call for the company to get to about an 8%. You put down margin by that point. you obviously have strong margin performance in the second quarter, but are talking about, you know, the prospect of the pace of margin improvement maybe not being as robust in the second half. So when we look at 2025, like with the strength you saw in the second quarter, but this more tempered outlook for the back half, like do you still expect to be able to get to the level that the street was looking for for the year, which was about 7% for 2025, like with those two offsetting dynamics, or is this pressure in the back half of the year that you're talking about, does that put you in a situation where we should be thinking about something less than that 7% level for 2025?

I think the 7% would be difficult to achieve, given some of the revenues that are pushing out, just because you're not getting leverage on the cost structure in place that we would have expected previously. But the margins that we have embedded in our backlog, and we call this out in our e-book, you know, they're higher in there than they were a year ago. They're favorable. Same thing with pending backlog. So all the strategies we're putting in place, you know, TSO well to improve margins on a go-forward basis, but it's just not probably going to be on the same pace that it was. And I think, you know, we expect them to be higher in 2025 than they were for 2024, but probably just not at that 7%.

I think the scale of the opportunities continues to accelerate as well. And, you know, obviously, the scale and the pace, the frequency of these opportunities, the models are the models that we were very comfortable with. So, you know, despite this temporary uncertainty, it's exciting. to see the demand, and a lot of it's in the larger scale projects, the nation building type, defense, healthcare, you know, the scale of these opportunities is somewhat daunting at times. And, you know, there's only a few companies that have the capacity for this type of thing or the capabilities for these types of projects. So it's very exciting for us. So the 27 targets, you know, we're very comfortable with, as comfortable or more comfortable than we were, you know, before this uncertainty. It's just we've got to get through this uncertainty, get it clarified, and that's why we're in this, you know, this malaise that kind of sits on some of our clients, and we've just got to work our way through it. But we're very confident that as we get through it, that acceleration – we always try to be clear about, you know, the staging construction, you know, on a year-over-year basis is never linear. The idea that we would improve on a linear basis was difficult. So I think by the 26 and 27 evolution, you'll see us at this point very confident. You'll see us in a strong performance level through 26 and 27. Okay.

Thank you for all the detail. I'll turn it over.

Thank you. Our next question comes from Christopher Eason with CIBC. You may proceed.

Hi, thanks for taking my question. Maybe just further on the delays that you're seeing from some of your customers. In the event we do reach some sort of trade deal, would you expect there to be a significant catch-up in 2026? And if so, would you have the capacity to accommodate that?

Yes. Yes, and that's what's putting a bit of a burden on our cost structure currently because we've built, you know, it's the horse before the cart sort of scenario, so we've got a horse and some of these projects are delaying us, so it's putting pressure on our cost structure.

And at this point, Is it kind of on a rolling basis, like each week you might have new customers delaying projects, or for the most part, are you aware of the delays to the best of your knowledge at this time?

Yeah, some of them, Krista, have been where you've delayed a big turnaround that we weren't expecting to be delayed. So to a certain extent, that could be a calendar delay, and it feels like it is. because that's just how the big maintenance turnarounds occur. So, you know, we've had those. We've had others that were more, you know, more clarifications of cost and then returning in the government sense to Treasury Board to get approvals of the project and have achieved those, but we had a delay. So those are moving, you know, now. So it's a mix, but the industrial side feels like it's going to, those customers are going to, you know, sort of be through this year until they'll, and some of these are public, so it's pretty obvious, you know, to us and others that it's a 25 delay. So, yeah, but it's a bit of a mix, depending on whether it's a government client or a, you know, and it's primarily industrial on the private side.

Okay, great. And then switching gears a bit to M&A, are there any specific areas that you're really looking to build out your capabilities in that maybe are top of your list at the moment?

Well, I think, you know, obviously in keeping with what's happening in Canada currently, and we've been, I think, very strategic in positioning ourselves in the markets that have a lot of runway and a lot of demand and a lot of resiliency um companies that can can support us and increase our diversification and self-perform capabilities are the companies that we're really we're really focused on and um and and you know it's we're in a good spot because there's some we've got a good track record of of um integrating you know these types of companies and uh And then, you know, obviously what's really exciting is that the catalyst that each of our previous acquisitions has been for us, that makes it really exciting that we can leverage off an acquisition to take us into something much larger in the scale of the larger opportunities. You know, you sort of need that, you know, that base and to leverage off of and with that experience. And so that's been exciting. Yeah, that market is quite, so we're seeing some very interesting opportunities. But, you know, we're very methodical in how we approach them. We're very disciplined. We're very, you know, careful. It's not a burning platform for us, so we're growing accordingly in a very measured way, not the similar to how we select projects that we pursue.

Thank you for the color. I'll pass the line.

Thank you. Our next question comes from Maxim Sitra with NBF. You may proceed.

Hi, good morning, gentlemen.

Yeah, lots of good questions have been already asked. But just to come back to some of the delays that you're witnessing. So if you were to delineate maybe the quantum of delays between private versus public clients, Is it possible to get a bit more color there where there is more pressure or there is kind of equivalent pressure but for different reasons?

Yeah, I'd say 70-30 private to public. Okay. And primarily industrial. Primarily industrial and on the public side, it's government primarily in B.C. and Ontario. Okay, that's super helpful.

And I guess, I mean, in terms of when you say that you're adding to backlog on scope and delay projects, so in terms of sort of, you know, backlog additions, I guess there's no concern that if the client sort of pushes things further out or is it just going to become sort of more of a TAM on certain things? I'm just, you know, trying to see sort of visibility.

Yeah, so these... These additions are on, you know, so let me put it in two sort of folders. On the large industrial projects that we're doing, you know, that constitute a higher percentage of the delay, we're being awarded additional scopes on those projects, and the scopes have considerable scale. On the government side, it's more of a, you know, value engineering, reengineering, dealing with, you know, cost escalation and then delay as they return to Treasury Board and we get, you know, moving again. It's, you know, if you recall in fourth quarter, we talked about a large long-term care package that we've been awarded. And these projects were over a billion dollars. They had to be reengineered. and they had to be, you know, redesigned and go back, you know, to the Treasury Board and get approvals for, and now they're back out, you know, into a new format, and we're in the middle of those as we speak. So that's the kind of thing that, you know, when you have uncertainty around escalation and uncertainty around, and one of the things that, you know, has impacted us probably more than you would anticipate is the fact that we've got these collaborative models, the cost impacts are being borne by our clients to the tune of 80% to 90%. So we're in a good place that we're not impacted by them. That's why you're seeing the margin escalation. If we were, we could be moving a lot faster if we were owning the risk of that. So I'd rather be in the place that we are in and have this little bit of softness than be in a situation where we're locked in with fixed price and have to absorb those costs because that can be really, really difficult to work your way through and try to deal with that. So I'm happy where we are. It's just unfortunate that because where we are, sometimes you have projects that get delayed due to clients rethinking and redesigning and re-value engineering, which we spend a lot of time on.

Yeah, that makes sense 100% from a risk management perspective. And then just circling back to sort of one of the emerging opportunities, do you mind providing a bit of a refresh around some of the stuff that you do on the defense side of things, kind of your exposure and where we might see sort of incremental effects flowing through? Because correct me if I'm wrong, but kind of the first bucket of, you know, government commitments is like around salaries that are not necessarily kind of hard infrastructure. So Where do you see that space evolving over time? Thank you.

Yeah, that space is really unique compared to any other market we're in because it's unfettered. It's flowing at a really rapid pace. Projects have got a scale of some of this stuff. It's just daunting, and it's just moving fast. There's no, you know, there's no permitting issues. There's no delay issues. It's just moving at a really impressive clip. And, you know, we're so grateful that we have such a strong team that has been strengthened the depth and experience to deliver these. And it's a very small group of companies in Canada that can do this because of the secrecy and all the security clearances and the infrastructure that you have to have set up in your in your organization and your facilities to handle the secrecy of all this is quite significant. Millions of dollars that we've invested to have this capability in different centers. But the pace is probably the most exciting market we have.

That's great, Paul. Thank you so much.

Thank you. And as a reminder, to ask a question, please press star 1-1 on your telephone. Our next question comes from Sean Jack with Raymond James. You may proceed.

Hey, morning, guys. Just a broader question around LCIP going forward. Any major concerns around any other LCIP projects that are in the pipeline similar to kind of what you're seeing right now?

No, I don't think so. There doesn't seem to be any concerns Any pause in like LNG, for example, there's some LNG projects that are getting developed. We're hearing a lot about pipelines. We're hearing a lot about ports. Some of that is defense. Some of that is just export ports to be developed. Very exciting. Obviously, we have that capability. Both on the West Coast, East Coast, we have large centers that allow us to... know to mobilize from um yeah so we don't you know again in the projects that have been delayed um we we don't see that once there's clarity we think those will those are long-term you know 50-year horizon type things so they just want to get clarity and they just want to the commitments that they make today they want to ensure they clearly understand those and and that's what comes from the types of blue chip clients we have they're very very disciplined about how they approach their expenditures.

Perfect. And then on the flip side of that, thinking about Bill C-5 and improving sentiment around nation building, et cetera, can you give us a sense of how you're seeing the market, where the market's at with some of these new large opportunities? Any sort of sense of when you could see some of these projects coming to tender?

Some of our opportunities that are evolving, you know, have already got consensus. So, you know, we're seeing some pretty exciting markets evolving in the remote north where, you know, the local communities have already been well engaged with the government and those are just moving ahead now. And Bill C-5 doesn't really, you know, they've already dealt with it. So, you know, it doesn't have that big of an impact. I think there's been tremendous progress on bringing fire, for example. Some of those projects, you know, LNG is another example, you know, where you've got to build, you know, new pipelines, new facilities. Those are, you know, those have major investments from indigenous communities. So, yeah, it's, I think, big government stuff i think is you know with the current program uh build canada program i think is i think they're they're well down the road on some of those you're going to get you know groups that um try to disrupt it but i i tend to think that a lot of that from what we're seeing a lot of work is done and they're they're rolling these out and they're happening so all right perfect that's great color guys thanks

Thank you. Our next question comes from Ian Gillies with Stifel. You may proceed.

Morning, everyone. As it pertains to M&A pursuits, just given some of the uncertainty going on in the broader environment, can you talk a little bit about how you can de-risk some of these issues when assessing potential targets and so you know you're paying the right price. And I know Bird's always disciplined in that pursuit, but there's certainly some more external risks now when trying to assess backlog and future financial performance.

Yeah, I think the key is the long-term demand drivers. And in a sense, we're looking for companies that can benefit the broad organization as opposed to just a specific geographic or in market. And those are the kinds of opportunities that, you know, you have a bit more insulation, you know, in terms of, but, you know, the key is, as you said, you know, we're very disciplined about how we approach an opportunity and it's a good time to be fishing for new opportunities because, you know, there is, you know, there is the ability to get a better you know, a better deal in this environment right now than there might be when, you know, so it's a good time to be hunting.

Understood. That's helpful. Everything else I wanted to ask has been asked, so thank you very much.

Thanks. Thank you. Our next question comes from Chris Murray with ATB Capital Markets. You may proceed.

Yes, thanks, guys. Just one follow-up I was going to ask about. It looks like, according to the MD&A, you guys have sold your investment in Stack Modular. I'm wondering if you can give us just a little bit of color on that. I think you talked a little bit about the fact that, you know, given where the units were built and they were metal and some of the tariff issues, there were some, I guess, some challenges go forward. But I guess the other piece of this is, in terms of construction technology, know does this you know give you an incentive to come up with some sort of modular or large timber type um technology and kind of make some investments in that area uh especially like when i think about some of these northern investments modular was was a probably a good technology to think about for building those but so anything any color you can add on on the stack sale and and where to from here um would be helpful thanks yeah i think um you know you know obviously the global

macroeconomic environment with China. Obviously, we were patient with it, but it just didn't seem like it was going to be settled anytime soon. So it just became increasingly difficult to remain on the sidelines. And the opportunities for STAC were more global in isolated areas, and that's really not where we're focused. We were really Our initial investment was to, you know, to be able to build in Canada. I think, you know, there's some really robust wood frame builders that can build, you know, product, you know, that can handle different jurisdictions of various height restrictions. So we, you know, our competitive advantage was really where we went, you know, vertical into, you know, greater than five or six storeys. And those opportunities just weren't materializing to the extent that we would have expected. But our partnership with STAC is really unaffected. We'll continue to work with them if there's an opportunity. So it's just we're not in the investment of the manufacturing. We don't have the investment of the manufacturing side now. Obviously, we've worked with that team know eight years so we know the team so when there's opportunities that you know we'll continue to partner with them but um it just felt like especially in this this environment right now with with government that it just you know it's just increasingly getting difficult to bring in that product in that form okay

And I guess, any thoughts about modular in the future for bird or the environment or what this does to maybe the mass timber approach or anything like that?

Yeah, the mass supersize, you know, certainly is continuing to grow and it's exciting and you can do some really unique things. You know, it's still somewhat limited in terms of the height, but we do a lot of mass timber work currently predominantly in education, in educational facilities on both coasts. It's where we've seen it, you know, in our case, where we're seeing it, but we've built a long-term care facility in Winnipeg with mass timber. So it's, yeah, no, it's out there. It's a good product. We've got good skill set. It's not complicated to build. So yeah, there's no question, but The wood frame module guys are very robust. They can support us, which, as you know, we built a 5,000-room lodge at LG Canada. You know, 80% of it was wood frame. We used some of our own modules for a portion of it. But, yeah, so we have those relationships. We have that capability, and we're continuing to seek and be awarded work that's got a modular component to it, so...

I'll leave it there. Thank you. Thank you.

Thank you. This concludes the question and answer session. I will hand the call back over to Mr. McKibbin for any closing remarks.

For delivered solid margin performance in the second quarter supported by a record backlog and continued diversification across strategic sectors. Importantly, we remain focused on long-term value creation while revenue growth and margin accretion We're not always linear. We're firmly committed to achieving our 8% EBITDA target, adjusted EBITDA target by 2027. So thank you all for joining us this morning on our earnings call.

Thank you. This concludes today's conference call and webcast. You may disconnect your lines. Thank you for participating and have a pleasant day.