Bird Construction Inc T.BDT

TD

[retiredcf]

Have a $12.00 target. GLTA

Bird Construction Inc.

(BDT-T) C$8.07

Q1/22 First Look Event

• Bird reported Q1/22 adjusted EBITDA that was broadly in line with expectations. Results were supported by higher-than-expected margins, while revenues underperformed.

• Meanwhile, Bird's backlog and pending backlog increased sequentially, and management provided what we would characterize as constructive outlook commentary (albeit little changed vs. last quarter).

• Conference call at 10:00 a.m. ET (1-855-328-1925).

  Impact: NEUTRAL

• Q1/22 adjusted EBITDA was $17.8mm vs. consensus and TD, both at $18.3mm.

• Adjusted EBITDA margin was 3.8% (+160bps vs. the Q1/21 ex-CEWS margin) vs. consensus and TD, both at 3.4%.

• Revenue was $475.5mm (+6.9% y/y), below consensus of $543.7mm and our $535.8mm estimate. Bird indicated that Q1/22 revenues were negatively impacted by pandemic-driven increased employee absenteeism and intermittent supply chain challenges, particularly during January and February. In contrast to Q1/21, when the pandemic led to Bird experiencing project shutdowns and postponements, in Q1/22, relatively smaller individual impacts were encountered, but across a wider range of projects.

• CFO (before w/c) was $19.3mm (vs. $25.8mm in Q4/21).

• Backlog was a record $3.03bln (vs. $3.00bln at Q4/21), +1% q/q. Meanwhile, at the end of Q1/22, Bird had pending backlog of $1.72bln (i.e., projects awarded, but not yet contracted), +5.7% q/q. Included within pending backlog is ~$850mm in MSA contracts that represent a recurring revenue stream over the next five years.

• Outlook Commentary

 Although Q1/22 results were affected by increased employee absenteeism and

intermittent supply chain challenges, revenue grew 6.9% y/y. Looking ahead,

Bird noted that it expects revenue growth to accelerate throughout the remainder of the year as the company executes its work program and secures new awards. Management remains optimistic for the full year, calling for "solid" organic growth for the remainder of 2022 and beyond, supported by Bird's backlog and a healthy project bidding pipeline (includes a positive outlook for infrastructure investment and a strong commodity price environment).