Bird Construction Inc.

Good day, and thank you for standing by. Welcome to the Bird Construction fourth quarter and full year 2025 results conference call and webcast. We will begin with Terry McKibben, President and Chief Executive 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 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 McKibbin, President and CEO of Burr Construction.

Good morning, everyone. Thank you for joining our fourth quarter 2025 conference call. With me today is Wayne Gingrich, Byrd's Chief Financial Officer. Before we begin today's call, I want to recognize the many teams across Byrd who took part in Women in Construction Week and International Women's Day. These moments are reminders of the meaningful contributions women make across our organization and our responsibility to create space for every voice to be heard This year's International Women's Day theme, Give to Gain, reflects our belief that when we support each other through mentorship, opportunity, and visibility, we strengthen our business. Our commitment to equity and inclusion continues to shape how we collaborate, innovate, and deliver for our clients. 2025, Bird strengthened the underlying fundamentals of the business, exiting the year with record backlog, improved margin, quality, and increased visibility into a multi-year growth runway. While revenue timing shifted in certain markets, demand did not. Demand across our key strategic sectors remained strong, resulting in more than $11 billion in combined backlog with accretive embedded margins. This reflects growth of 45% over 2024 and provides multi-year visibility, underpinning our confidence in our revenue margin trajectory. As we enter 2026, we believe long-cycle infrastructure investments across our core markets. Four-year revenue was $3.4 billion, comparable to 2024. Growth in infrastructure was supported by the ramp-up of the East Harbor Transit Hub, a full year of Jacob Brothers, and the addition of FRPD. Growth was offset by timing shifts and project starts across several end markets, which we have discussed in prior quarters. Importantly, momentum in our infrastructure business remains a core driver of our strategy, and we expect that momentum to continue. Margins progress year-over-year despite the lower proportional revenue in our industrial construction and industrial maintenance businesses. Adjusted earnings and adjusted earnings per share remain strong, though slightly lower year-over-year. Our operating model continues to perform, and structural margin levers remain firmly in place. During the year, we secured $4.7 billion worth of work, underscoring the strength of our client relationships and the robustness of the bidding environment. Our backlog is diversified, risk-balanced, and heavily weighted towards collaborative delivery models. With stronger embedded margins than a year ago, our backlog provides a level of visibility and confidence into future revenues and margins. Depths of our backlog continue to build across priority sectors. Defense backlog increased to over $1.5 billion. We entered a development phase agreement for the Peel Memorial Hospital, secured successive awards on large capital projects, mobilized new work at the Pickering Nuclear Facility, and significantly expanded our industrial maintenance portfolio. Importantly, the factors that muted near-term revenue in 2045 did not reduce demand. That demand is firmly embedded in our backlog. pending backlog, and recurring revenue programs that extend well beyond 2026. Looking ahead, approximately 54% of our backlog is expected to be recognized over the next 12 months. This is further supported by a record $1.5 billion of recurring revenue contracts with industrial maintenance and other recurring revenue expected to contribute over $500 million per year, along with a continued conversion of pending backlog. Bird's record combined backlog with stronger embedded margins than a year ago demonstrates the underlying momentum of the business and supports our confidence in Bird's long-term trajectory. We did not see the opportunity set slowing down, and as major projects advance, we expect the volume of opportunities to continue to increase, allowing us to be selective in pursuing the projects best suited to our capabilities. Turning to margins, quarterly margins were down modestly year over year, industrial maintenance. On a full-year basis, our adjusted even margin was 6.5%, an improvement of 20 basis points over 2024. Given that from 2022 to 2024, BERT expanded adjusted even margins by 200 basis points, we remain confident in achieving the remaining 150 basis points within two years to go in terms of our current strategic plan time horizon. The next few slides outline the deliberate and incremental drivers already at work across the business to support the continued progress of our strategy. Large capital investment projects remain a core pillar of BIRD's long-term strategy. These programs are inherently multi-year, providing scale duration and opportunities for margin expansion driven by complexity and higher self-performed content. 2025, BIRD moved into the execution phase of the East Harbor Transit Hub, expanded scope on Dallas Path to Zero project, secured additional awards at BHP's Janssen Potash project, mobilized new work at the Pickering Nuclear Facility, progressed operations at Wood Fiber LNG, and entered the development phase of Peel Memorial Hospital. Successive awards demonstrate Byrd's ability to engage early, execute effectively, and expand participation over the project lifestyle. This track record continues to strengthen our reputation and positions the company well for sustaining demand across Canada's evolving nation-building energy and infrastructure investment programs. There is significant depth across birds and markets with near-term tailwinds supporting demand across energy, defense, healthcare, data centers, transportation, and trade infrastructure. We are increasingly being pulled into new opportunities early and across more geographies as clients prioritize safety delivery certainty, self-performed depth, and proven execution. Demand remains resilient across nuclear, LNG, petrochemicals, and potash. We were pleased to hear how Dow recommitted to the Path to Zero project, where its work remains weighted to the second half of 2026 and 2027. Our industrial maintenance portfolio remains a key differentiator, providing a strong base of recurring revenue. New MRO awards and MSAs secured in 2025 increase pending back The largest of these awards resulted directly from the NORCAN acquisition, demonstrating the value of cross-selling and the effectiveness of integrating acquisitions into the bird operating model. The nuclear sector remains active, representing approximately 10% of our revenue today, and we expect that exposure to grow. Additionally, we've recently achieved new credentials that enable broader participation in the sector. This is timely as we prepare for new-built activity to ramp up in the coming years. Our backlog remains robust across healthcare, defense, education, and long-term care. Peel Memorial Hospital is a significant milestone award and a strong validation of our healthcare expertise and collaborative approach. As referenced, our defense portfolio continues to accelerate We're actively tracking over 200 defense-related projects, including substantial investment in the Arctic infrastructure where Byrne has a deep experience and a proven track record. Many of these projects are part of the Department of Defense's plan, $100 billion in construction over 10 years, which includes $40 billion in the north over 20 years. We continue to see strong, sustained activity in the data center market as the sector schedule certainty and the ability to self-perform critical path scope. BERT is well differentiated here with integrated civil, electrical, mechanical, and project delivery capabilities. BERT offers end-to-end capabilities in this fast-growing sector from land selection and power coordination and sourcing through site development, full electrical, mechanical, and structural delivery. Critical path in data center construction is electrical scope and Byrd's position as the country's largest electrical employer enables us to support clients coast to coast with scale and schedule certainty. We're currently tracking more than 20 billion in data center opportunities and see momentum continuing to build through 2026. In infrastructure, the acquisition of FRPD has meaningfully expanded our self-reform capabilities in marine construction, dredging, and land foundations. FRPD's strong reputation and 115-year track record spanning coast to coast to coast brings deep expertise and a differentiated platform for delivery. This has unlocked new cross-selling opportunities with Jacob Brothers, our industrial group, and across the broader organization. Timing of this acquisition couldn't have been better given the breadth of opportunities developing across all geographic regions in Canada. Momentum is building rapidly and we expect FRPD to be a significant catalyst for growth. Taken together, strong sector demand, long-duration nation-building investments, BRRRD's execution capabilities, record backlog, positioned the company well for sustained discipline growth and value creation through 2026 and beyond. In 2025, infrastructure continued to expand, creating a more balanced revenue mix between industrial buildings and infrastructure. by a full-year contribution from Jacob Brothers, an initial contribution from FRPD, and strong execution across transit, hydroelectric, utilities, and mining programs, including continued momentum from recent acquisitions and our commercial systems and utilities group. Infrastructure, with its high proportion of self-performed work, will continue to support margin progression as it increases its share of our revenue mix. As our record backlog converts, we expect to benefit from operating leverage across our platform, supported by scale and disciplined cost management. At the same time, we continue to make smart investments to further improve execution and efficiency. In 2025, Bird reached a major milestone with the rollout of our ERP platform, establishing a scalable digital foundation and unified project delivery system. Building on that, we are advancing predictive analytics, digital tools to enhance planning, productivity, and safety. Early progress is improving visibility into potential project risks and enabling more proactive data-informed decision-making across the project lifestyle. Together, these capabilities support earlier risk identification, more effective resource allocation, and more consistent execution across complex projects, reinforcing margin resilience as the business continues to scale. Across the business, multiple deliberate levers are already at work. Mixed improvement as infrastructure scales, higher self-reform and equipment-related revenue, operating leverage, and discipline project selection within collaborative, lower-risk delivery models. These are not new initiatives. They reflect execution already underway, tangible progress supporting our path to the 2027 adjusted EBITDA margin target of 8% and further revenue growth. We are confident in this trajectory and the backlog and demand environment provide the runway to execute. With that, I'll now turn it over to Wayne to walk through our financial performance in more detail.

Thank you, Terry. Urge for a quarter and full year 2025 results demonstrate continued execution of our strategy and the resilience of our operating model. Despite uncertainty impacting near-term revenue timing, we delivered solid margins, adjusted earnings, and cash flow. As anticipated, construction revenue in the fourth quarter was $877 million, lower year over year, reflecting the timing related to project delays that we highlighted earlier in 2025. Gross profit margin in the quarter was 11.1%, a full percent higher than in 2024. Margins benefited from a higher proportion of infrastructure work, which typically carries greater self-performed content, and from disciplined project execution. These positives were partially offset by delays in project starts, where we continued to carry personnel and equipment costs in anticipation of future mobilization. Adjusted EBITDA in the fourth quarter was $66.2 million compared to $71.9 million last year, with an adjusted EBITDA margin of 7.5% compared to 7.7%. Given the softer industrial work program and mixed impacts in the quarter, this remains a solid margin outcome. Turning to earnings, net loss in the quarter was $14 million or $0.25 per share compared to net income of $32.5 million or $0.59 per share in the fourth quarter of 2024. This decline reflects the $62.2 million impairment on accounts receivable and contract assets related to creditworthiness concerns for a single customer that was previously disclosed. The sole project for this customer is substantially complete no further costs are expected this impact was partially offset by the 7.6 million bargain purchase gain on the acquisition of frpd adjusted earnings in the quarter was 31.8 million or 57 cents per share compared to 37.3 million or 67 cents per share last year adjusted earnings excludes both the bargain purchase gain and the credit impairment which are non-recurring items Operating cash flow in the fourth quarter was $192.6 million, up $55 million year over year. This reflects resilient underlying cash generation that would have been materially higher, absent the one-time customer credit impairment. For the full year, revenue totaled $3.4 billion, essentially flat compared to 2024. Growth from the full year contribution of Jacob Brothers, the addition of FRPD, and organic growth in infrastructure, including mining work program This reflected less favorable weather early in the year, maintenance work deferred into 2026, and client decisions that slowed certain work programs and delayed the start of new projects. Revenue of all the company's businesses in 2025 was impacted by delays in the start of contracted projects resulting from economic uncertainty. Despite flat revenue, profitability continued to improve. Full year growth profit increased to $356.9 million, representing percent in 2024. Margin improvement was driven primarily by higher relative growth in infrastructure and the continued shift toward higher margin collaborative work. These results reflect disciplined project selection, strong execution, expanding self-performed capabilities, and effective cross-selling across the organization. Adjusted EBITDA for the full year was $222.1 million, This places BERT within 150 basis points of our 2027 margin target, even in a year where higher margin self-perform industrial work was temporarily deferred into 2026. Net income for the year was $47.4 million, or $0.86 per share, with the year-over-year decline primarily attributable to the fourth quarter impairment. Adjusted earnings for the year was $107.7 million, or $1.94 per share, compared to $111.3 million, or $2.04 per share, in 2024. Cash flow generation remained a core strength in 2025. Full-year operating cash flow was $113.1 million, which is a strong result despite the one-time customer credit issue and demonstrates the underlying strength of Bert's cash-generating business model. Free cash flow totaled $71.8 million, or $1.30 per share. Our balance sheet remains strong, providing both resilience and flexibility. Adjusted return on equity was 25%. Adjusted net debt to adjusted EBITDA was 0.82 times, and the current ratio was 1.26. With $167 million of cash and cash equivalents and an additional $399 million available under the company's syndicated credit facility, Byrd has ample liquidity to support working capital, project-driven capital expenditures, and accretive acquisitions to further expand our service offerings and self-perform capabilities. Overall, while revenue in 2025 was impacted by uncertainty, Byrd delivered strong margins, solid earnings, and robust cash flow supported by a rugged backlog with higher embedded margins. Bird remains committed to a balanced and disciplined approach to capital allocation, supporting both profitable growth and consistent shareholder returns. Our priorities are clear and unchanged. We continue to invest in our business through capital expenditures and equipment and technology to support execution. We remain active and disciplined in M&A, pursuing tuck-in acquisitions that enhance our capabilities, expand our footprint in key markets, and are accretive to margins and cash flow. We also continue to return capital to shareholders through our monthly dividend with a long-term pay ratio target of 33% of net income, recognizing that the ratio may fluctuate year to year. BERT operates with low capital intensity and our strong balance sheet and consistent cash generation while pursuing opportunistic growth. We remain focused on opportunities that deliver outsized value through our cross-selling and our one-bird operating model. Taken together, this disciplined approach continues to support long-term value creation through clear priorities, smart investment, and a conservative financial profile. With that, I'll turn the call back to Terry.

Thank you, Wayne. With 2025 behind us, we enter 2026 with momentum and greater multi-year visibility. Work programs are expected to materialize as anticipated, with revenue growth accelerating in the second quarter. Recent industrial maintenance awards that added more than $1 billion to the backlog further support multi-year visibility. Our teams continue to win new work at a pace that drives future revenue growth, as the book-to-bill ratio has been consistently greater than one, reaching 1.4 times in 2025. The bidding environment remains highly active across defense, trade, and transportation. With risk balance record backlog of more than $11 billion, with average margins higher than a year ago, BERT has strong visibility through 2027 and clear momentum towards strategic plan growth and profitability targets. Supported by a strong balance sheet, this one capital allocation and ample liquidity, BERT is well positioned to execute its record backlog, invest in growth, and continue delivering shareholder value.

I'll now turn the call back to the operator to open the line for questions.

As a reminder, to ask a question, analysts, please press star 11 on your telephone. If you wish to remove yourself from the queue, you may press star 11 again. We will now begin the Q&A session. Our first question comes from Chris Murray with ATB Cormark Capital Markets. Your line is open.

Yeah, thanks, guys. Good morning. Maybe just starting with the outlook in 2026. Certainly 2025, as you know, it had some challenges in it. And so I guess what I'm trying to understand is how should we be thinking about year-over-year revenue growth? You did mention, you know, kind of starting to ramp back up Q2. The backlog is, you know, Pretty pretty sizable to have to work through. So just trying to get an idea of how we think of this. I know at one point we started thinking about a 10% year over year growth, but it just feels like next year just coming off the lower base. We're going to be a lot higher than that, but just how this how this kind of pattern you think happens and any commentary about you know where you thought you were going to be for 27 based on what the original strategic plan would would be helpful. Thank you.

Yeah, I think for 26, the way the year is shaping up, I think, is consistent with how we tried to frame it in Q3. And again, here, At year end, so I think Q1 is still going to be a little bit muted. We're going to have some of the project deferrals that we talked about last year that's still going to impact Q1, particularly in the industrial program. I think we're going to see Q2 ramp up pretty significantly towards the end of Q2. And then in the second half of 2026, I think we're going to see very robust growth. So I think 26 overall is certainly going to be double-digit growth and could be, depending on how certain of our market sectors play out, could be stronger into the low teens even. We have record backlog, 54% of it's going to be put in place in 2026, but we also win and execute work throughout the year and we expect that to continue. Looking ahead to 2027, we've got more visibility into the two years out than we've ever had with our $11 billion combined backlog. What gives us confidence in the margins is that the margins embedded in our combined backlog are higher today than they were a year ago or at any point in the last 10 years. That's why we're confident that we can continue to see margins still improve through 26 and 27. And then from a volume perspective on 27, the range we came out with in our strategic plan back when we did the investor day in October 24 was $4.6 million to $5.1 million. I think the midpoint 4.85, so we still expect to be in that range of revenue for 27. The pipeline that we have, and Terry can go into this more in a bit here too, but the pipeline of projects that we're pursuing right now line up very well to support this growth on top of the record backlog.

Okay, that's helpful. then just maybe a housekeeping question on the um on the impairment um you did note it was one client uh project complete um but it was tied to a specific asset so just um in terms of recoveries is does this mean that uh you know you you either have a claim on the asset or there's some other mechanism that'll be in place for recoveries and um You know, any idea of timing on recoveries and whether or not this is fully impaired or there's an expectation that you'll only come out whole at the end?

Well, so we took a full impairment in Q4 for the $62.2 million, you know, made up of receivable and contract assets. So we're not carrying a recovery on the books at this time. We are going to pursue recovery, but we decided to take a pretty conservative view of it. Certainly, nothing is going to be imminent on any potential future recovery, and we're just going to follow the normal course there. But just with how the facts are playing out in this particular instance, it's not something that we can really go into a ton of detail on at this point in time. But I guess the key point here is, Just know that we're going to pursue recovery, but it would take time before you ever see anything from that, we think.

Okay. I'll leave it there. Thanks, folks. Thanks, Chris.

Thank you. Our next question comes from Frederick Bastion with Raymond James. Your line is open.

Good morning, guys. Around this time last year, you were preparing for some turnaround activity that ended up getting pushed out. What indications are you receiving from OSS clients today that may indicate things will go back to normal this year?

We're certainly feeling highly confident in the programs. The programs will be in all cases, with all our major clients, will be fall turnarounds. That has moved around a bit in prior years. There's been spring turnarounds, but In our case this year, they're all fall, and that's sort of the end of the window for their flexibility in terms of when they do these turnarounds. There's regulatory compliance they have to meet, but we expect them to be of considerable scale, and we have some new opportunities that we're potentially positioned for, and we'll see how they materialize. as well, so we're expecting a very strong back half of 26 with the large fall turnaround program.

Okay, great. And Terry, you sound pretty pumped about FRPD. Can you speak to some of the cross-selling opportunities that you expect to deliver from that acquisition? I know you kind of hinted at some, but any specifics that you can point to?

Yeah, so I don't think in my entire career I've ever been involved in an acquisition with our team that was more timely than this one. This one is just you couldn't script it any better the way it's playing out. So we've got Western ports all getting increased spending levels, increased throughput. And that's, you know, a lot of the ports on the West Coast, you know, are very visible. We're on one of the three teams that are qualified for the Roberts Bank Terminal, which is a large opportunity. As you know, in the West Coast, there's large scopes of work being done with, for example, the Massey Tunnel, you know, which is a tunnel under the Fraser, so we're well-positioned to support those kinds of projects. You've got North... and where they're in um you know the arctic bases things that are developing you know lots of discussion around churchill um and these are all places that effort has worked in the past uh and you've got you know the lng side with both the second phase of lng canada you got uh prince rupert lng these are all and there's not a lot of marine capacity in canada a lot of international capacity is very expensive you know, to use that. So we're just really well positioned for that business and they've been running at breakneck speed in the last few months with the opportunities as they're coming in. So we're really feeling good about that and I think as Canada looks at its east-west trade corridors, any of that work involves, you know, significant enhancements of ports and we're well positioned to support that, you know, as we go forward. And we're also starting to see mining opportunities where, you know, mining companies are talking to us about going in and, you know, coming in and dredging tailing ponds to reactivate mining in those reserves that, you know, at the time they were shut down, they were not cost effective, but they are in today's market. So we're seeing those opportunities evolve. And it's kind of unique. It's not something you see or have historically seen, but Those are also, you know, certainly happening. So, yeah, it's a very busy time for FRPD, and obviously we're starting now in July on our new dredging contract as well. The dredging contract we have with the regional report authorities. Yeah, so exciting.

Awesome. That's Greg Tuller. Thanks, Terry. I'll turn it over.

Thank you. Our next question comes from Ian Gillies with Stiefel. Your line is open.

Morning, everyone. Morning. Terry, I think you specifically mentioned the defense backlog in the commentary, but I was wondering if you could maybe talk a little bit about where the nuclear backlog is today, whether it be in absolute or percentage terms, and where you might hope that hope to see that in 12 months or 24 months time, just so we can get a better understanding of how impactful you think that that space may be your business.

You know, a good portion of the nuclear background is flowing through our, you know, our MSA framework. Um, so there, you know, you've got all that remediation work that we do for, um, for CNL and other, other clients. Um, and you have the, um, the nuclear lab up in Chalk River that is advancing construction, which is certainly a large-scale opportunity. I'm not in a position where we can disclose those values of that type of work because it's something that with our clients is confidential. We still have a large program underway with Bruce. We've got a large program underway with OPG. We're building five facilities for OPG right now at the Pickering Nuclear Facility. We've got some more work that's evolving in some of the other nuclear facilities in the country. Decommissioning is still at a very high pace. So new opportunities that we're in procurement on for that. So I'd say like it's certainly a robust area. I can speak to it more, you know, in terms of overall percentage of revenue because of the MSA aspect of it. So, you know, we'll run probably around 10% of our revenue, even with our anticipated growth in 2026, nuclear-related activity. And then I think longer term, we have the new builds, you know, which are going to be – significant scale, you know, both at Bruce and Wesleyville. So the scale of those will take considerable capacity from the market that have nuclear credentials, nuclear capabilities. You know, we're building, you know, essentially a weapons-grade uranium testing facility that was, you know, the same nuclear-grade concrete and things like that as you'd have on a an SMR or a large scale nuclear program. So the resume we're developing is quite strong and now we have the required certifications and licenses to essentially do an end-to-end in nuclear. We just have to build out our resume a bit stronger and we have the contracts in place to do that when we're working on a reactor phase.

That's very helpful. And then maybe switching gears to the margin side, you look at Q4, which was very strong, and you think about adding scale to that through 26 and 27 and getting leverage on G&A. Is the 8% EBITDA margin target, is there potential you think you could exceed that or even beat that based on what you see right now?

Yeah, it's tough to get ahead of that right now and get over our skis a bit on that. I think it's an achievable target. I think as we see the momentum build, you know, in Q2, you know, into Q3, we'll have a little more clarity as to how that's evolving. And, you know, the world we live in today has got certainly some volatility. But we're pretty confident on the backlog and the kinds of projects we have. These are going ahead. We've tried to position ourselves with blue chip clients. And the exciting part of our business, to be honest with you, is when you have such a large scale of new work that's evolving, both in defense and in data centers. The scale of these opportunities in those two areas, which has not really been, in historical times, a very strong position or percentage or, you know, a very small percentage of our historical revenue. So you start to see those things layer in. Yeah, it's pretty exciting, especially when you have your core markets that we've been working on are very strong. So, you know, puts us in a really nice position for the next five years and beyond.

That's helpful. Thanks very much. I'll turn the call back over. Thank you.

As a reminder, to ask a question, please press star 1-1 on your telephone. Again, that is star 1-1 to ask a question. Our next question comes from Krista Friesen with CIBC. Your line is open.

Hi. Thanks for taking my question. Maybe just to follow up on the last question on the nuclear portion, are there markets that you would be evaluating for M&A to help boost your resume within nuclear or your product offering, or is that not something you really see much of in the market right now?

I think it's, you don't see much of it in the market in Canada, and we're focused, as you know, in Canada, so you don't see much of it. You'd have to almost be moving towards, you know, a manufacturing kind of frame framework. And it's not really, um, what our core business is. So, um, no, I think, I think it's, we have a very strong resume in large scale projects with, you know, things like LNG, you're building these massive foundations and large concrete type, uh, mobilizing workforces. So we have a really strong resume and we're, we're continuing to develop our, our resumes so that their clients are you know are confident to award those those programs you know a small acquisition and that's been and have to be small because there's nobody that's got any real scale and it wouldn't really do much for us and like I said we're focused on on the on the resume development we're also doing some large scale we have a large scale hydroelectric project underway with OPG and that's going well and those all you know enhance the

scale question about you know our capability to handle large-scale projects okay great and then maybe just on the data center opportunity you've uh i identified a tam of um 15 billion uh here in canada are you seeing much uh work right now and and maybe specifically what are you seeing in alberta in terms of um projects actually starting to move forward on the data center front?

So, you know, we've historically had experience here in smaller data centers in the province, like small, predominantly on the electrical side. Currently, and I can't talk about, you know, who the clients are. It's a very secretive industry. But currently, it feels like we're just at the tipping point here. On large scale, there's some large scale ones that are in procurement right now that have, you know, and it's at the scale of these things is just, it's really significant and it'll take out a lot of capacity, to be honest. The secret weapon for us is a large electrical army that we have and a number of those resources here in Alberta. So, but Alberta has got something like 40 individual companies that are in discussions with the government to develop data centers so there's you know potentially 40 projects you know they all get built um they all need power you know the government's sort of mantra here has been we've got the gas bring your own power and uh they'll you know work closely with you to develop these and uh you know if um If that continues, I think you'll see Alberta as a major hub in North America for data centers, and the scale of these that are evolving are massive. Some of them are further along in procurement than others. We typically aren't in the early stage of a project, so when a client is going out to get approval from a municipality to do something, we may or may not be involved at that point. Some companies will go ahead and do that on their own and then engage us after. And in other cases, we're working really early on and working with potential clients to identify opportunities, land opportunities, and identify power opportunities and working with them collaboratively on the power applications and that. So we're We have a pretty good sense of where everyone is and where they're all evolving. The major markets for us would be Alberta and Ontario. But we've got data centers underway right now in Manitoba. There's emerging opportunities in Saskatchewan. We've got emerging opportunities in Atlanta, Canada. It feels like we're just getting towards the tipping point after a few years of of a lot of planning and as you can well imagine, the impact these have had in the U.S. on companies like us has been a tremendous impact in terms of performance and scale. But it feels like we're three or four years behind the U.S. development. But these companies have a track record They know what they're doing and they know the critical path is certain aspects of those projects like electrical is critical.

Thanks, I appreciate the color on that. It sounds like a very big opportunity. If I could just sneak in one more. I appreciate early days since we've seen so much volatility in the price of oil, but are you hearing anything about potential delays in the maintenance work, just given where the price of oil is and maybe customers looking to push out as much as they can right now?

It would be our opinion, despite the press yesterday on this, it would be our opinion that there isn't any ability to defer any of these large turnarounds another year. It wouldn't meet the regulatory obligations and it would be it wouldn't be a good decision given that we've already extended some of them a year. That's just our opinion. We have reached out based on that article that came out yesterday and have confirmed that there is no anticipation of a delay of these turnarounds. There's a lot of planning that goes into these. They're big. I guess anybody's guess when things settle down, whether the things are settled down by the fall, but that's the timing of those. They're not spring turnarounds as they sometimes were historically. They're all fall turnarounds as time arounds.

Thank you. Appreciate it. I'll jump back in the queue. Thank you. As a reminder,

Analysts who wish to ask a question may press star 11 on your telephone. Again, that is star 11 to ask a question. Our next question comes from Maxim Sychov with NBCM. Your line is open.

Terry Wayne, good morning. I just wanted to circle back, if I may, to the data center space. I mean, I presume obviously right now your electrical capacity is sort of fully utilized, and assuming some of these big opportunities do come to fruition in terms of I mean, are you thinking about any pinch points in relation to accessing labor? Or, Terry, I guess, how do you envision those things evolving less cold over the next 24 months?

One of the benefits we have, Max, is we have an accordion-like capability that is massive in scale when we ramp up and ramp down for the turnaround side. So we have teams of people that that's all they do. So as we enter into the planning stages of some of these projects, it's a really nice feature that we have. And we carry a regular base. So what we will be doing as these things materialize is diverting attention to these away from some of the other traditional markets that we have. But we have the ability to ramp up, you know, considerably to handle one of these. And, you know, we've improved the track record of building these for clients. Just, you know, the scale of these and the speed of these is really increasing.

Okay. Is there some sort of tangible capacity to – I mean, I realize that you were not doing, like, a ton of resi work, but is there some spare left in that bucket or not – or you were just sort of talking about overall –

Yeah, I'd say that if you start to develop significant backlog in the data center space, you start to steer away from other opportunities that you have in other markets that we service. As you know, we have a very large commercial electrical capability, and we have a very large industrial electrical capability. And both of those have accordion-like features. We have bases all over Canada. So we can draw from those bases. And the thing with the data centers is largely about speed. So those types of projects can carry the travel costs and the premiums that are associated with attracting that type of capability. I was told by one of my close friends in the US that runs a very large construction company that if we had These this army of electricians available in the US, we would have you know opportunities that would just be daunting to to simply. enter into because there's so much demand so we're dealing with clients that are very aware of the complexity of up to deliver these projects with speed you've got to have the resources and it's typically the first thing they look at. is where's the electrical capacity and uh that's how they get evaluated so it feels feels like we're we've had a lot of inbound requests from different companies and um it feels like we're heading into a a nice phase of um um strong demand and uh and we we've got a track record of delivering these things in the end so um we'll do the site developments we'll do the you know we'll do uh electrical, mechanical to the structures. We'll do, you know, underground utilities. We'll do all of that, you know, with our own companies. And that's what clients are kind of looking for.

And so can you remind us in terms of the margin generation there, is there any differential versus kind of the core construction activities on the electrical side of things?

I think it's the turnkey capabilities If you look at companies in the U.S. that trade publicly that just do site development, the speed of that site development will give you a higher margin opportunity for companies that are more electrical to trade publicly in the U.S. You can see the margin profile that they're generating. It's definitely higher across the space because of the speed and because of the quality and because of the expectations and the confidence level of these clients to get these things done on time.

Okay, that's super helpful. And then you had a slide kind of, you know, highlighting some of the digital tools deployment that you're doing across the company. I realize it's probably, you know, very early days, but Terry or Wayne, if you want to opine on these developments and how that could be perceived, whether in terms of, you know, margin uplift or just vertical path, you know, staying closer to that, any comments would be helpful. Thank you.

Well, it's really, you know, I think,

Again, sometimes you're lucky with your timing. For us to put a new advanced ERP in place that has the latest technology and the latest capabilities, and it can be enhanced and expanded upon in many new areas. Predictive analytics is something that we've been working on now for 18 months, and now we're able to evaluate projects You know, it's a very powerful tool in the sense that, you know, I've been in construction my whole career and you do develop an eye for, you know, productivity or an eye for progress on a project. But despite all that, despite you've been in the business for a long time and you're a seasoned, you know, project developer. superintendent project manager when you can give those those individuals leading indicators of issues that you know you wouldn't normally be able to detect and it's not just you know you're dealing with an individual project manager and you're thinking about his particular career you know he will only know what he knows through his particular career if you're dealing with thousands of projects and thousands of leading indicators and you have all that in your database, which we have, we're able to generate predictive flags at a very early level, sometimes 10 or 15%, which you normally would be catching up to until you're sort of midway through a project, maybe 50%. And as you know, we work a lot with clients, so we're able to share that predictive ability with a client you know, to, you know, if you're working collaboratively, clients, the types of contracts we have today, clients are, you know, they want to be fully aware of anything that's giving, you know, giving them any concern around schedule and anything they can do to, you know, enable, you know, whether it's moving utility or, you know, if a utility relocation gets delayed, what is the impact on the project? So with this kind of power that we have now in our new system Arming all our leaders in the field with these tools is very powerful. And then you add to that a digital twin where you've got a model now that eventually will be controlling all of the projects in terms of progress and design and constructability and work-based planning and safety and all these aspects. It's really going to make a difference, you know, in so many areas that project predictability will be considerably higher. And in particular, I'm excited about what it's going to do for safety. Because if we can, you know, ensure with the monitoring that we'll have capabilities to do that every individual worker is first and foremost, you know, in a position where they're qualified to be in, you know, but also working efficiently with the right tools and the tools are in the right place and you know, that's going to make a huge difference as the company moves forward.

Okay. Well, that sounds very exciting.

Thank you so much for the incremental call. Thank you.

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

So, in closing, our foundation is stronger, visibility is greater, and the opportunity a year. We remain focused on safety, our people, and discipline project execution, and we are increasingly confident in the trajectory of the business and energized by what lies ahead. Thank you all for joining us this morning.

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