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.