Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bird Construction Inc (BIRDF, Financial) achieved a 15% revenue growth in the third quarter compared to the previous year, driven by organic growth and contributions from the Jacob Bros acquisition.
- The company reported a 42% increase in adjusted EBITDA and a 27% growth in adjusted EPS, reflecting strong financial performance.
- Bird Construction Inc (BIRDF) was recognized as a 2024 TSX30 winner, ranking seventh among the top-performing companies on the Toronto Stock Exchange.
- The company's backlog reached a record $7.9 billion, indicating a robust pipeline of future projects and opportunities.
- Bird Construction Inc (BIRDF) announced a 50% dividend increase, demonstrating confidence in its financial stability and commitment to returning value to shareholders.
Negative Points
- The company experienced delays in the start of some new projects due to permitting issues, which pushed some work into early 2025.
- General and administrative expenses increased significantly, partly due to acquisition costs and higher compensation expenses.
- Despite strong performance, the company's revenue was lower than anticipated due to project delays.
- Bird Construction Inc (BIRDF) faces challenges with municipal permit delays, which can impact project timelines and revenue recognition.
- The company's G&A expenses as a percentage of revenue increased, indicating higher operational costs.
Q & A Highlights
Q: Can you tell us if there's any common reason behind the delayed projects you noted and maybe give us a flavor in terms of region and end market?
A: The common issue we see in Canada is typically permit delays, which are difficult to push through the system. This is not specific to any region and is more frequent on the building side, where we had some delays in the third quarter.
Q: I would have thought a delay might get resolved by the next quarter, but you're pointing to 2025. Is that just to be conservative?
A: Yes, it's about catching up. You're not able to catch up on the delay, and that's really what it is.
Q: There was a nice gross margin step-up. Anything to call out on gross margin in the quarter? And the G&A expense was higher than expected. Is this the rate we're at pro forma?
A: For the summer months, we generally have our highest margins in the third and fourth quarters. Jacob Bros contributed, but even without them, the strength in the industrial business was a factor. On the G&A side, year-over-year, we were $17 million higher, with more than half related to compensation costs and investments in business development.
Q: Should we expect LTIP or stock-based comp expense in G&A to be elevated due to the stock price increase?
A: Yes, we run that through our G&A. The run-up after Investor Day is after September 30, so there could be an impact in Q4. It's a one-time adjustment, and we'll calculate it based on the year-end share price.
Q: How should we think about EBITDA margins going into 2025?
A: We expect to finish 2024 with an EBITDA margin greater than 6%. For 2025, Bird is approaching 7%, with further improvements in 2026 and 2027, reaching 8% by 2027.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
