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.