LISTING: TORONTO
STOCK EXCHANGE
SYMBOL: BDT
TORONTO, Nov. 9, 2016 /CNW/ -
HIGHLIGHTS:
- During the third quarter of 2016, the Company generated net
income of $6.0 million on
construction revenue of $407.7
million compared with a net loss of $5.6 million on construction revenue of
$389.9 million in 2015. The net loss
in 2015 is primarily attributable to a non-cash charge to earnings
of $22.4 million ($20.3 million after deferred tax reversals) for
the impairment of goodwill and intangible assets relating to the
Company's investment in its wholly owned subsidiary H.J. O'Connell
Limited. The reduction in 2016 net income from the adjusted 2015
net income of $14.7 million (a
non-GAAP measure) is primarily a result of the shift in the
composition of the 2016 work program from higher margin industrial
projects to lower margin commercial and institutional projects. The
effect on earnings was, to some extent, offset by the additional
profit realized on higher revenues resulting from organic
growth.
- Construction revenue of $407.7
million was $17.8 million or
4.6% higher than $389.9 million
recorded in the third quarter of 2015. The increase in construction
revenues is largely due to the execution of the Company's
significant commercial and institutional work program, including
many Public Private Partnerships ("PPP") and alternative finance
projects. As expected, the Company's industrial revenues declined
relative to those recorded in 2015, primarily due to the reduction
in the capital spending programs of many of our industrial clients
in response to low commodity prices.
- In the third quarter, bidding activity on PPP and alternative
finance projects increased as there are now three active projects
under pursuit, all of which are scheduled to be submitted in the
next two quarters. The Company was also part of a team that was
shortlisted on the Regional Express Rail – Stouffville Corridor
project.
Financial
Results
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('000s except per
share amounts)
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Three months
ended
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Nine months
ended
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September
30
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September
30
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2016
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2015
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2016
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2015
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Construction
Revenue
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$407,663
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$389,878
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$1,159,152
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$1,031,363
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Net income and
comprehensive income
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$5,975
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$(5,616)
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$19,204
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$9,926
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Basic and diluted
earnings per share
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$0.14
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$(0.13)
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$0.45
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$0.23
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Adjusted Net
Income(1)
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$5,975
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$14,704
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$19,204
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$30,246
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Adjusted Net Income
per share
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$0.14
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$0.35
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$0.45
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$0.71
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(1)
Adjusted Net Income is a non-GAAP measure and does not have
standardized meaning. Refer to the Company's Management
Discussion and Analysis for a
description of adjusted net income and reconciliation with net
income.
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- During the first nine months of 2016, the Company generated net
income of $19.2 million on
construction revenue of $1,159.2
million compared with $9.9
million and $1,031.4 million,
respectively in 2015. In 2015, the Company recorded a non-cash
charge of $22.4 million ($20.3 million after deferred tax reversals) for
the impairment of goodwill and intangible assets relating to the
Company's investment in its wholly owned subsidiary H.J. O'Connell
Limited. Adjusting for the after-tax non-cash impairment charge of
$20.3 million, the Company would have
recorded Adjusted Net Income of $30.2
million (a non-GAAP measure) on construction revenue of
$1,031.4 million in 2015. The
reduction in 2016 net income is primarily a result of the shift in
the composition of the 2016 work program from higher margin
industrial projects to lower margin commercial and institutional
projects. The effect on earnings was, to some extent, offset by the
additional profit realized on higher 2016 revenues (12.4% organic
growth) and a reduction in general and administrative expenses.
- In the first nine months of 2016, the Company secured
$824.6 million of new contract awards
and executed $1,159.2 million of
construction revenues. The success in securing new work through the
first nine months of the year contributed to a Backlog of
$1,328.2 million at September 30, 2016, compared with $1,662.8 million at December 31, 2015. The decline in backlog from
the end of 2015 is representative of the fact that the Company has
not secured a major project in 2016 as opportunities have been
limited. The Company has been successful in securing many smaller
but strategic projects with opportunities for expansion in scope as
the Company looks to diversify its revenue streams into new markets
and with new clients.
- Bird Construction Inc. announced today that its Board of
Directors (the "Board") has approved a reduction to its monthly
dividend by 48.7% to $0.0325 per
share from $0.0633 per share. On an
annualized basis, the new dividend rate is $0.39 per share down from $0.76 per share. Management estimates that this
change will preserve approximately $15.7
million in cash annually and help to maintain the strength
of the Company's balance sheet. The new dividend will be effective
in January 2017 and will be paid on
February 17, 2017 to shareholders of
record as of January 31, 2017.
The Board and management are committed to providing shareholders
with a meaningful dividend that both returns cash to shareholders
and protects the long term health of the organization. Sustainable
dividends remain a key component of our shareholder return
strategy.
Mr. Ian Boyd, President and CEO
of Bird Construction Inc. commented on the dividend reduction and
future outlook, "In recent years our earnings and dividends
benefited greatly from a resource boom in both the oil sands of
western Canada, and mining
operations in eastern Canada, and
we focused heavily on capturing the higher margin opportunities
associated with this more remote and technically challenging work.
Although we have been feeling the effects of the simultaneous
reduction in activity in both of these markets for nearly two
years, we have continued to benefit to some degree from completion
of the higher margin work until now, due to the usual lagging
effect common in our industry.
The Company has been adapting to these changes occurring in the
marketplace with a renewed focus on the commercial and
institutional sectors. We were highly successful in capturing PPP
projects last year and, despite a lull in these opportunities this
year, we believe that we are well positioned for the robust
pipeline of PPP and other federal and provincial infrastructure
opportunities anticipated to come forward in 2017. We are also
diversifying our work program to include transportation projects,
the maintenance, repair and operation (MRO) segment of the
industrial market, water and waste water facilities and other
environmental projects.
I believe that we have sufficient opportunities and the
capabilities to secure and execute them profitably. We are
focused on rebuilding our earnings base and executing our
diversification strategy. However, with the higher margin
industrial work now behind us, and the time required to complete
our diversification strategy, we anticipate that 2017 will see a
significant reduction in earnings. In view of this, and in order to
sustain the equity and working capital which will be required to
support the rebuilding of our earnings base, we have concluded that
it is prudent to reduce the Company's monthly dividend rate
beginning next year."
Bird Construction Inc. also announced that its Board of
Directors has approved regular cash dividends for the months of
November and December 2016 in the
amount of $0.0633 per common share
for each month and January, February, March
2017 in the amount of $0.0325
per common share for each month to be paid as follows;
i)
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The November dividend
of $0.0633 per share will be paid on December 20, 2016 to the
Shareholders of record as of the close of business on November 30,
2016.
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ii)
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The December dividend
of $0.0633 per share will be paid on January 20, 2017 to the
Shareholders of record as of the close of business on December 30,
2016.
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iii)
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The January dividend
of $0.0325 per share will be paid on February 17, 2017 to the
Shareholders of record as of the close of business on January 31,
2017.
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iv)
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The February dividend
of $0.0325 per share will be paid on March 20, 2017 to the
Shareholders of record as of the close of business on February 28,
2017.
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v)
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The March dividend of
$0.0325 per share will be paid on April 20, 2017 to the
Shareholders of record as of the close of business on March 31,
2017.
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A conference call for analysts and investors will be held at
10:00AM EDT on Thursday, November 10, 2016, to discuss the
quarterly results. The dial in number is 1-855-328-1925. Attendees
are asked to be on the line 10 minutes prior to the start of the
call.
This press release contains forward-looking statements that
involve a number of risks and uncertainties because they relate to
events and depend on circumstances that will occur in the future.
Many factors could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements.
The Toronto Stock Exchange does not accept responsibility for
the adequacy or accuracy of this release.
SOURCE Bird Construction Inc.