North American Construction Group Q4 2025 Earnings Call - Fargo adjustment dents Q4 but IMC acquisition and Australia momentum keep 2026 growth on track

Joanna, Conference Call Operator: Good morning, ladies and gentlemen. Welcome to the North American Construction Group conference call regarding the fourth quarter ended December 31, 2025. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, there will be an opportunity for analysts, shareholders, and bondholders to ask questions. The media may monitor this call in listen-only mode. They are free to quote any member of management, but they are asked not to quote remarks from any other participant without that participant’s permission. The company wishes to confirm that today’s comments contain forward-looking information and that actual results could differ materially from a conclusion, forecast, or projection contained in that forward-looking information. Certain material factors or assumptions were applied in drawing conclusions or in making forecasts or projections that are reflected in the forward-looking information.

Additional information about those material factors is contained in the company’s most recent management discussion and analysis, which is available on SEDAR and EDGAR, as well as the company’s website at nacg.ca. I will now turn the conference over to Jason Veenstra, CFO. Please go ahead.

Jason Veenstra, Chief Financial Officer, North American Construction Group: Thanks, Joanna, and good morning, everyone. We’ve shortened the deck this quarter, and I’ll start off with brief commentary on the financials and pass the call to Barry for his operational and forward-looking remarks. Starting on slide 4, the headline EBITDA number of CAD 78 million was significantly impacted by a $13 million retroactive life-to-date adjustment for the Fargo project, which we’ll discuss on the next slide. Australia revenue for the quarter of AUD 176 million was a Q4 record for the region, despite the wet weather. The oil sands region also posted solid top-line numbers for the quarter.

In looking at the CAD 344 million of combined revenue, and when factoring out the volatility of Fargo in the quarter, we are trending in a positive way and on our way to the CAD 1.6 billion midpoint for 2026, which will be another company record. When looking at the CAD 1.5 billion generated in 2025 of combined revenue, we can see that Australia and Canada are up on a combined net basis 10%, with Australia up an impressive 17% and Canada up a modest 4%. When looking at our employee exposure hours, we can see that the 6.3 million hours in 2024 was eclipsed in 2025 by a correlated 15% and reached 7.1 million hours, representing a steadily growing workforce of 3,300 employees.

These metrics showcase the base load momentum we’re currently experiencing and give us the historical context and confidence in the 2026 outlook, which Barry will close our prepared remarks with. Moving to slide 5. I’ve already touched on the revenue momentum, but will add that 2025 Q4 was impacted by the strategic divestiture we made of our ultra-class fleet, which was effective December 1, 2025. Regarding gross profit, we were impacted by two significant factors in the quarter, with the Fargo cost adjustment being the major factor. Based on an updated full project forecast, the Fargo team increased the estimated cost to complete of the structures, railroads, and aqueducts. On a gross basis, the increase to cost was approximately $50 million, and on a net basis to us was a $13 million life-to-date adjustment, given the late stage the project is at.

With approximately 85% of the project complete, management is confident in the updated cost estimate and is looking forward to completing the project year in 2026 at the forecasted level. The second impact in the quarter was the above-average rainfall in very late Q4 in Queensland and the financial effect it had on the results, primarily at the Carmichael Mine. Excluding these isolated items, gross profit of approximately 15% is a reasonable run rate metric of where our combined business is currently operating and consistent with the more routine third quarter of 2025. Moving to slide 6. Q4 EBITDA and EBIT were down from their 2024 comparables, as already discussed, with the 23% EBITDA margin being approximately 7% lower than the run rate metric of around 30% based on the two factors mentioned.

Included in EBITDA is direct general administrative expenses of CAD 15 million in the quarter and equivalent to 4.9% of reported revenue. Going from EBITDA to EBIT, we expensed depreciation equivalent to 18% of combined revenue, which is higher than the 14%-16% run rate of the business based on the unique conditions in the quarter. Adjusted earnings per share was a loss of CAD 0.14 for the quarter and reflects the EBIT generated by the business net of interest and taxes. The average cash interest rate for Q4 remained consistent at 6.4%. Moving to slide seven. I’ll briefly summarize our cash flow. Net cash provided by operations prior to working capital of CAD 56 million was generated by the business, reflecting EBITDA performance net of cash interest.

Free cash flow of CAD 57 million was a highlight for the quarter based on EBITDA generation and disciplined sustaining capital maintenance. The CAD 57 million in Q4 and CAD 46 million in Q3 combine to CAD 103 million of free cash flow generated in the second half of 2025. Moving to slide 8, net debt levels ended the quarter at CAD 878 million, a decrease of CAD 26 million in the quarter as free cash flow generation was used to pay down debt, but was also used on growth capital, share purchases, and dividends. Net debt and senior secured debt leverage ended at 2.4 times and 1.4 times, respectively.

As mentioned last quarter, senior unsecured debt or high-yield debt now accounts for approximately 40% of our overall net debt, and we’ve been pleased with the demand for that source of financing as it provides the ability to confidently grow our Australian and infrastructure businesses. As shown on the slide, the CAD 422 million of cash liquidity, up from CAD 334 million at the end of September, has positioned us for success. We expect to pay out the convertible debentures at the end of the month with this capacity, which will bring the credit facility net of cash up to around 15% of our overall debt. With those comments on the financials, I’ll pass the call to Barry.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Thanks, Jason, and good morning, everyone. This is my first earnings call as President and CEO, and after 44 years with North American Construction Group, my focus is on execution and operating discipline. I’ll start with some remarks on slide 10 regarding our previously announced acquisition of Iron Mine Contracting, or for short, IMC. We expect that transaction to close early in the second quarter of 2026, subject to customary closing conditions, including approval by the Australian Competition and Consumer Commission. Strategically, IMC is a strong fit. Their culture, core values, and maintenance capabilities align well with their existing platform in Australia and across the globe. IMC brings roughly 120 heavy assets, 100 and...

Yeah, 120 heavy assets and about CAD 1 billion of contractual backlog, which increases our overall backlog by roughly 30% and Australian backlog by roughly 35%. Most importantly, IMC and MacKellar together will create a national tier one contractor platform in Australia, capable of executing large comprehensive scopes in both Eastern and Western Australia. This also accelerates our objective to expand lower capital unit rate work across Australia, where in times of geopolitical restrictions, the Western world is increasingly looking for critical mineral supply. Having overseen our operations in Australia over the last 2 years, I’m incredibly excited about our opportunities on the continent and what it’ll mean to North American Construction Group overall. Before walking through the next couple slides, I wanna separate two things. First, our 2026 operational priorities, which are the actions we are focused on executing this year.

Second, the structural growth drivers that expand our earnings power over time. Moving to slide 11, my operational priorities as new CEO are straightforward, operational, and aimed at sustainable growth that compounds long-term shareholder value. First and always, safety. Everybody gets home safe everywhere we operate. Second, in Australia, we’re further optimizing our workforce mix based on the improvements we have already implemented in the second half of 2025, driving even stronger consistency, productivity, and execution. Third, after the major growth in Queensland over the last two years, we will review and optimize operating costs while fully maintaining customer requirements. Fourth, we’ll integrate and commission the expanded IMC fleet following the transaction close in Western Australia to support growth and scale. Fifth, we will deliver the successful completion of Fargo Moorhead Diversion project, reinforcing our civil execution credentials.

Lastly, we will continue improving mechanical availability and reliability in the oil sands through right-sizing the fleet, discipline, maintenance, and operating fundamentals. Moving to slide 12. With that operational focus in mind, the next slide, step back and look at the bigger picture, the structural growth drivers we have put in place over the past several years that’ll translate into visible traction in the back half of 2026 and beyond. At a high level, first, scaling into tier one contractor platform in Australia. Second, expanding mining services across Canada and the U.S. Third, securing infrastructure awards across North America. Diversified in scope, these are building blocks for an even stronger and more resilient operating profile and a deeper pipeline of opportunities across end markets. Let’s dive into the first one. On slide 13, Australia is our primary growth engine.

We are operating across 18 sites with favorable, consistent operating conditions that support year-round equipment utilization. Our platform is diversified across key commodities, including gold, coal, iron ore, lithium, copper, and mining-related infrastructure. With IMC, we will expand to a national tier 1 scale, and we become even better positioned in Western Australia, particularly in rare earth and critical minerals, whereas Australia is increasingly a strategic hub for the West critical mineral supply chains. Moving to slide 14. In North America, North American infrastructure, we’re seeing nation-building projects across Canada and the US now advancing from announcement to the bid stage and into execution. Fargo Moorhead is a key proof point that sets us up to win more work.

Our earthwork scopes, representing approximately CAD 600 million in total project volume for the company, have been completed as planned. The execution record strengthens our credibility and expands the set of opportunities we are able to pursue. We’re tracking a strong pipeline across northern Canadian infrastructure, defense-related scopes, and critical mineral infrastructure work with our partner, Nuna, and mass civil earthworks and opportunities in the U.S. as a subcontractor. We’re focused on winning work where we have a clear competitive advantage, such as mine site civil scopes and subcontracted earthwork roles on large programs. Moving to slide 15, mining services remain a core strength of North American, built on decades of operating experience and a large specialized fleet.

We operate across a broad geography from north of the Arctic Circle to the heart of Texas, and our track record, safety culture, and equipment base support expansion and mining activity grows across this continent. We see tailwinds from increased focus on critical minerals and energy infrastructure and a reduction in regulatory hurdles, and we intend to earn that work by executing our fundamentals of safe operations, high equipment availability, and disciplined maintenance. Moving on to slide 16, let me start with how I see execution priorities and strategic growth drivers translate to our financials. We enter the year with strong visibility supported by our contractual backlog and bidding activity. Currently, our backlog is approximately CAD 3.9 billion, with CAD 1.2 billion already secured for 2026.

Beyond that backlog, we are tracking a total bid pipeline of approximately CAD 12.6 billion, including roughly CAD 4.6 billion currently in active tender and procurement processes. Taken together, this provides strong visibility into the year ahead and supports our expectation for another year of growth for NACG. At the midpoint, we expect combined revenue of CAD 1.6 billion, adjusted EBITDA of CAD 400 million, and free cash flow of CAD 120 million. An important point on the cadence for our adjusted EBITDA, our outlook reflects a stable first half performance broadly in line with the current Q4 run rate, excluding the Fargo impacts, with meaningful improvements expected in the second half of 2026 as IMC synergies and opportunities are realized. New acquired equipment is commissioned and seasonal activity strengthens.

Historically, from 2022 to 2025, second half revenues consistently exceeded the first half, averaging approximately 20% higher contribution. This profile is consistent with how our business typically builds through the year. We also ended 2025 with strong momentum and free cash flow, included CAD 57 million in Q4 2025, which supports our confidence entering 2026. That ends the Q4 presentation, and we would be happy to take any questions you have. I’ll now turn it back over to the operator.

Joanna, Conference Call Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. The first question comes from Adam Thalhimer at Thompson Davis & Co. Please go ahead.

Adam Thalhimer, Analyst, Thompson Davis & Co.: Hey, good morning, guys, and welcome to the call, Barry.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Morning. Thanks, Adam.

Adam Thalhimer, Analyst, Thompson Davis & Co.: Can you provide a little bit more color? The total bid pipeline’s up CAD 12.6 billion, and I think this is a new metric, this CAD 4.6 billion in active tender value. What’s in that kinda geographically, and when could that come into backlog?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: It’s kinda spread all over the place. It involves some of the defense spending. It involves some of the water projects in the US. It’s some mining projects that are out there. It’s kinda scattered all over there. It’s roughly 40 projects within that number.

Adam Thalhimer, Analyst, Thompson Davis & Co.: As it relates to the Fargo job, is there any risk to additional costs, and are those embedded in the 2026 guidance at all? Well, a couple questions. Can you remind us, I think that there’s a tail of income from this project once the construction is complete. Just, can you comment on that?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yeah, I can take that one, Adam. Yeah, we don’t see a lot of risk in the remaining 15% of the project. This was a very detailed update done by the project team, and it’s a limited amount that’s left. We see limited risk. Of the $400 million of EBITDA for this year, only about $5 million is contemplated from Fargo at these reduced margins. You know, with the life-to-date adjustment that was made, that assumes that margin carries through to completion. That’s kind of the risk profile. What was the second part of the question?

Adam Thalhimer, Analyst, Thompson Davis & Co.: Oh, the second question was just, I think, that there’s a.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Oh, right. Yeah.

Adam Thalhimer, Analyst, Thompson Davis & Co.: I think there’s recurring revenue from that project.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Correct.

Adam Thalhimer, Analyst, Thompson Davis & Co.: going forward.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yeah. It’s not a meaningful number, Adam. We do own 15% of the special purpose vehicle that will do the operate and maintain portion of the contract, but it’s not a meaningful contributor moving forward, and so it’s not worth modeling out, I would say.

Adam Thalhimer, Analyst, Thompson Davis & Co.: Okay. Last one for me. Can you comment on the strategic review in the oil sands and what the outlook is for margins there this year?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yeah. Look, I mean, we see the oil sands as still a very strong market. You know, there’s lots of activity. I mean, I’ve been in conversation with senior management in the oil sands and they’re telling us they’re focused on throughput this year and there’s opportunity for us. We see a lot of good things there. I think you know, as far as the margin improvement goes, that’s on us. I think you know, we put more of our gear to work and the availability of our equipment increases and our projects will just improve on margin. I think there’s great opportunities not only for additional revenue, but margin improvements as well.

Adam Thalhimer, Analyst, Thompson Davis & Co.: All right. Thanks, guys.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Thanks, Adam.

Joanna, Conference Call Operator: Thank you. The next question comes from Joseph Lambert at Roth Capital. Please go ahead.

Joseph Lambert, Analyst, Roth Capital: Hey, Jason and Barry. Thanks for taking my questions. My main questions could be around IMC. I think the original timeline expectation was to close by late Q1, and now that’s pushed to Q2. I think the original guide hasn’t changed. Is there something that’s kind of come up to offset whatever was lost from IMC being delayed? Should we expect, you know, that once it closes, you’ll give updated guidance? Like, how should we think about that? Can you talk a little bit about why it shifted from Q1 to Q2?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yeah. Joe, I can take that one. It’s purely this ACCC process, regulatory review and is taking a little longer than we had thought. It’s, we’re being told there’s no risk there. It’s just getting through the administrative process. You know, with regards to the second question, probably two parts to that. One, Q1 is a lighter quarter for IMC, so it wasn’t a big part of our guide. and two, the shareholder agreement does allow for retroactive earnings back to January one, so it doesn’t require us to update you know. Should this close in the normal course in early Q2, which we expect, it’s of the same impact as what we issued in December when we announced it.

Joseph Lambert, Analyst, Roth Capital: Okay. On that, retroactive item, if you close in Q2, would there be like a catch-up in Q2, and Q1 would be a little lighter from a modeling standpoint? Or would

Barry Palmer, President and Chief Executive Officer, North American Construction Group: No.

Joseph Lambert, Analyst, Roth Capital: Okay.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: No. We expect to allocate that to Q1 because that’s when the economic activity would have happened. That’s our expectation.

Joseph Lambert, Analyst, Roth Capital: Okay. Thanks for the color on that. I’ll turn it over.

Jason Veenstra, Chief Financial Officer, North American Construction Group: Thanks.

Thanks, Joe.

Joanna, Conference Call Operator: Thank you. The next question comes from Sean Jack from Raymond James. Please go ahead.

Sean Jack, Analyst, Raymond James: Hey. Good morning, guys.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Morning.

Sean Jack, Analyst, Raymond James: First, just have a clarification question. I see that the EBITDA guidance for 2026 remains the same, but I’m not seeing kind of in this quarter’s materials like details on growth capital, EPS, et cetera. Just wondering, was this specifically left out? You know, have any expectations changed since the press release in late December, or was it just, you know, not addressed?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yeah, I can take that one, Sean. It’s intentional. We have, you know, with the changes that happened in the quarter here, you know, you’ll see, as was mentioned on even the bid pipeline, we’ve changed our approach on a few topics. One of those is just guidance metrics that we are issuing. We’re gonna stick to the three that we think are the most important to shareholders, which are top line, you know, operational margin, which is EBITDA margin. Then ultimately, what shareholders care most about is free cash flow. So, you know, we think that’s a more simplistic approach to really stick to those three. Just to answer the question, nothing has changed as far as the December metrics. It’s just for the kind of public-facing guidance.

We’re gonna stick with three just to kind of simplify the messaging and not get too caught up in, you know, trying to reconcile details. There still is a healthy amount of growth capital allocated for IMC so they can hit their growth targets for Q2, Q3, and Q4. About half of free cash flow, I would say, this year will be directed to growth, and then the rest is dividends and debt paydown.

Sean Jack, Analyst, Raymond James: Okay. Perfect. That’s the context. Just thinking about the operational focus on Australian workforce and cost reduction, do you mind kind of giving any sort of goalposts on how much you expect to save from these initiatives? Do you guys have a plan set out? Any color would be great.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yeah. Yeah, we do. I mean, it’s We’re looking for about a 3%-5% savings there. I mean, there’s on that workforce, I mean, it’s been talked about. It’s, you know, reducing subcontractors. Look, we engaged in that in Q3 of last year. It’s a process. It doesn’t happen overnight. A lot of the projects that had kicked off, you know, that they took larger numbers of people to get started. We’re slowly weaning that down and rightsizing the manpower number and insourcing more of that manpower requirement as opposed to subcontractors that, you know, hired mercenaries that helped us through a tough time, I guess, just to get started.

Sean Jack, Analyst, Raymond James: Okay, perfect. Last one, if I may. Just thinking about the bid pipeline, you know, across all these geographies. Wondering if you guys can comment on margins directionally. Should we be expecting improvements kinda embedded there?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yeah, I mean, it’s a tough question. You know, it comes down to it. The margins vary by geography, obviously. I mean, there’s a lot of great opportunities in Australia that seem to generate higher margins. You know, and as you get into the infrastructure jobs or. When I say infrastructure, I’m meaning just large earthworks operations. It’s a very competitive market. So I would say we’ll get. You know, we’ll bid these jobs and at a margin that we’re comfortable with and that we know we can execute on. And so it’s hard to say where that ends up. We do see improved margins just through operational efficiencies and improvement in our equipment.

Sean Jack, Analyst, Raymond James: Okay, perfect. That’s all from me, guys. Appreciate it.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Sean, thanks.

Joanna, Conference Call Operator: Thank you. The next question comes from Tim Monachello from ATB Cormark Capital Markets. Please go ahead. Tim, please unmute your line.

Tim Monachello, Analyst, ATB Cormark Capital Markets: Apologies, I was muted. Thanks for taking my questions. Just given the operational issues that have happened with Fargo and cost changes and whatnot throughout the year, and the fact that they were outside the scope of NOA’s operational breadth, I guess, on those projects. Then looking at how, you know, your strategic plan to move into more of these infrastructure projects, which will probably be consortiums, how do you think about the risk profile of that strategy? Do you think that you know, how do you manage these things that are outside of your operational scope and the impacts that they can have to your earnings as you go forward and have more exposure?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: It’s a great question, Tim, and I’m sure that a lot of people wanna know that. Look, you know, we learned some valuable lessons on the Fargo project. You know, our expertise is in the earthwork side of the business, and it certainly isn’t in structures and aqueducts and concrete. To that point, you know, I mean, you know, I guess for lack of a better term, we trusted our partners. You know, they know their business as well. You know, we didn’t have much line of sight into that.

Going forward, I can guarantee you this is, you know, with the lessons learned, unless we take on a project, unless we’re in total control of it, you know, where we know all of the risks, we own all the risks, we sign up for that, we likely wouldn’t go down that path. Other than to say that we will look more to on projects like that, where there’s other major players with scopes that do not match our skill set, we will look to simply sub the work. Sign up for a subcontract where we have terms and conditions in that subcontract that we’re fully aware of, that we’re fully on board with, and we go forward that way.

That’s our focus on the infrastructure side of it. If it’s not a project that fits us well and we’re suited for it, we will simply look to sub the earthworks that we’re suited for.

Tim Monachello, Analyst, ATB Cormark Capital Markets: Got it. Specific to Fargo, given these retroactive reforecasting that have happened throughout the year, is that project gonna be cash generative overall?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yes. Yeah, it still is. You know, that’s sort of the disappointing part of the narrative here, is that it still is a profitable project. It’s just, it started off at a higher margin and then these retroactive hits, three of them now that we’ve taken, have been really hard on current quarter earnings. It’s definitely free cash flow positive, and you know, still a success story overall. It just clearly had a massive impact, especially on this quarter.

Tim Monachello, Analyst, ATB Cormark Capital Markets: When that project wraps up here in 2026, I believe that the consortium is carrying some cash balances. What do you expect in terms of distributions to NOA when the project nears finalization? Is that included in your free cash flow guidance?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: It’s a good question. It’s not included in our free cash flow guide. I would say to your comment, Tim, that the cash injection at the end will be modest in 2027. We get paid out a kinda fixed margin monthly. What would be left is the final margin that exceeds that. That number has shrunk. It’s still. If I had to guess a number, it’d be in the kinda CAD 10 million range at the end of the project in 2027. Not the significant kind of cash injection that we originally planned for, but it’s still cash flow positive.

Tim Monachello, Analyst, ATB Cormark Capital Markets: Okay. Switching gears. When you look at the Canadian fleet and opportunities you’re looking at globally, can you just talk a little bit about where your utilization stands, the fleet that may be underutilized and the opportunities to redeploy that? I guess the strategy around optimizing that fleet, whether that be transfers to Australia or other infrastructure or, you know, mining projects in Canada or the U.S. or dispositions in 2026.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yeah, it’s a good question. I mean, look, we’re in the middle of rightsizing our fleet and identifying what we need to run successfully in the oil sands, where we still meet all of the client demands and opportunities that we see coming out there. With the remainder of that fleet, I mean, we’re looking at Australia. If there’s an opportunity to place it in Australia, particularly in the West, where they execute more unit rate style work. The problem with some of that stuff in Australia is when you get on these big sites with the blue-chip operators, you know, when you put equipment on their site, they demand it being fairly new or new or recently new.

It makes it a little tougher to put some of our fleet in there. There’s lots of opportunity on the unit rate side of the business where it doesn’t matter as long as the equipment runs well, it performs well. That’s in our wheelhouse, and we can do that. Again, in order to do that, it’s gotta make economic sense on both sides of the pond. You know, whether it’s IMC or MacKellar or in the East, it still has to make economic sense for them. We’re looking at that, you know, in detail and there’s certainly opportunities to do that.

Tim Monachello, Analyst, ATB Cormark Capital Markets: You haven’t made any definitive decisions on equipment transfers or dispositions out of Canada as yet?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: No. There’s been inquiries obviously from IMC because, you know, there’s a lot of growth opportunities and like I said, they’re more focused on unit rate style jobs. We’ve isolated a fleet right now. We’re just doing the costing on it and getting shipping prices and looking at the economic viability of doing that.

Tim Monachello, Analyst, ATB Cormark Capital Markets: Commodity prices have been really strong across the board in 2026, both on the energy side and on sort of the precious metal side. Are you seeing increased opportunity across your business as a result?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Oh, absolutely. There’s in different commodities. I mean, we’ve got some in the bid pipeline. I mean, some we’ve already bid, you know, and even in uranium, for instance, in Saskatchewan and like I said, you know, Australia is our oyster. I mean, there’s so much opportunity down there. It’s picking and choosing which we wanna chase after.

Tim Monachello, Analyst, ATB Cormark Capital Markets: When you think of the guidance.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: I mean, there is a limit to capital, right? There is a limit to capital, and so you can’t go after everything that’s out there. We’re being strategic when we chase after stuff.

Tim Monachello, Analyst, ATB Cormark Capital Markets: I’m glad you mentioned that because that was my next question, when you look at the guidance for the year, capital is not included in there, but assuming free cash flow has at least the maintenance portion in there. What’s the range on, I guess, the EBITDA range? What does that imply in terms of expectations for the year? And if you end up winning some of these awards, across the, you know, really sort of diversified opportunities that you’ve aligned, what could be the range on CapEx that’s required for growth?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: It’s a complex question, right, Tim? The guidance doesn’t include any material wins that would require significant growth CapEx. So that’s that. If we do win some of this, these active tenders that Barry’s talked about, it seems to me with the mine site civil work, generally, growth CapEx is one-for-one with the top line revenue that’s generated, and then the margins are kind of specific to the job. Yeah, as we come up with opportunities. I would say it’s annual revenue, it’s not full contract revenue. You know, we’re looking at 3- to 5-year type opportunities. So that’s kind of the growth CapEx that would be required.

With some of the unit rate work in Western Australia, that methodology doesn’t work either because it comes with a lot more revenue without the fleet, the direct fleet utilization required, and a lot more labor. Yeah, it really depends on the actual job.

Tim Monachello, Analyst, ATB Cormark Capital Markets: Got it. I guess the second part was just the guidance range for the year on the EBITDA. What does the bottom end contemplate relative to the top end?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yeah. Again, I know people hate hearing about it, but really the range in our business is weather dependent. You know, if you know, the midpoint is assuming a pretty conservative, worse than average kind of situation. If weather even is worse than that, then we’re talking about the lower end. If we get great operating conditions, we can exceed the top end. So, weather does impact utilization especially at certain sites. So that’s really why the range is there, for 2026.

Tim Monachello, Analyst, ATB Cormark Capital Markets: Got it. Last one for me. I guess you’re from a strategic standpoint, free cash flow generation and a true deleveraging is I think something that investors are really interested in seeing here. You’re also facing a really robust opportunity set. How are you thinking about, I guess the ranges on how much you’re willing to go out and spend and where? How do you manage the balance sheet in a growth environment, I guess, is sort of a more succinct way to think about it.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Well, I think a simple way to answer that question, Tim, is, you know, opportunities need to be on balance, net improvement to our deleverage. Right now we’re at 2.4x. We would only look at opportunities that with, you know, next 12 months EBITDA would bring that number down. That’s a key criteria for us. You are correct. It’s something we’re focused on. We’re still committed to our medium-term target of 2.0x. We expect to get there with the free cash flow we can generate over the next two years, probably by the end of 2027. The longer term goal that our board would like to see is 1.5x.

We, you know, we see it, we agree with it. We’ve funded all this growth 100% with debt. It’s been well-spent dollars, but it’s been all debt funded. I hope that answers the question. These opportunities are financiable. You know, we have very good banking relationships in both Australia and Canada. It’s not that we can’t do it’s just we need to make sure that our balance sheet stays in the low 2x multiple from a net debt leverage.

Tim Monachello, Analyst, ATB Cormark Capital Markets: Got it. That’s really helpful, and I appreciate your time.

Joanna, Conference Call Operator: Thank you. The next question comes from Yuri Lynk from Canaccord Genuity. Please go ahead.

Yuri Lynk, Analyst, Canaccord Genuity: Well, after that barrage of questions, I’m quite proud to say I still have one of my own.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Morning, Yuri.

Yuri Lynk, Analyst, Canaccord Genuity: Good morning, guys. Yeah, just maybe a little more detail on your plan to get into infrastructure projects. You know, a cynic could say, you know, you’ve got one of these projects and it hasn’t performed as you wanted it to. What can you say about the contract structure of that job in particular, vis-a-vis whether it’s a lump sum turnkey or some kind of reimbursable? More importantly, what are you seeing any shift in contract structure on some of the stuff that’s up for bid? Because there’s been, you know, a pretty broad shift in the industry towards more collaborative, more equitable type of contracts. I’m just wondering if the niche that you play in is kinda seeing the same thing.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Yeah. I mean, you know, looking at Fargo again, you know, were we somewhat naive? Maybe. Look, we fashion ourselves as the earthworks experts. Just on that note, I feel, you know, like I said in my shareholder letter, I’m very proud of the team, how they’ve executed that work. It’s gone as planned. It’s not without hiccups. I mean, understanding that if there’s a delay on structures that actually impacts earthworks and moves it around, you know, which costs money. So there’s some of that. You know, it’s our first endeavor into the P3 side of the industry. Like I said earlier, we learned some valuable lessons. You know, what we’re chasing after in the infrastructure space beyond that is stuff that’s more suited for us.

You know, there’s a lot of big players out there that are used to these types of contracts. I mean, we’ve made some calls already on two larger projects where we’re trying to team with them to the point where when I say team, where we’re being considered as a subcontractor option for them, and which would obviously come with a contract that’s got terms and conditions in there that we would have to agree to. I mean, that puts us in a lot in a better light as far as knowing the risk, understanding the risk, and executing towards that. You know, there’s other projects where it’s earthwork centric, where we can be the GC and we can sub out smaller portions of the work.

If the lion’s share of the work is earthworks, you know, we can take on them jobs and if the smaller portions are they involve concrete structures or whatever, we can sub that work out. I mean, we’re looking at a few of those right now. I think that’s pretty much what I would say on that side of it, Yuri.

Yuri Lynk, Analyst, Canaccord Genuity: You’re trying to more insulate yourself by positioning yourself in the consortium a little differently, and the overall contract structures are still, you know, all about pushing that risk down to the subcontractors, would you say? Or you’re. It’s not clear if you’re seeing any change there in overall structure.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: No, that’s a fair comment. That would sum it up very well.

Yuri Lynk, Analyst, Canaccord Genuity: Okay. Okay, that’s all I had, guys. Thanks very much.

Barry Palmer, President and Chief Executive Officer, North American Construction Group: Appreciate it, Yuri. Thanks.

Joanna, Conference Call Operator: Thank you. Ladies and gentlemen, as a reminder, if you have any questions, please press star one now. Next question comes from Maxim Sytchev from National Bank Capital Markets. Please go ahead.

Maxim Sytchev, Analyst, National Bank Capital Markets: Hi. Good morning, gentlemen. When we look at Canada and some of the nation-building stuff which is sort of floating around, I mean, I presume we shouldn’t assume any contribution, even if you are successful on some of the bid packages on these things in 2026. The contribution at the earliest would be 2027 and beyond. Is that a fair statement?

Barry Palmer, President and Chief Executive Officer, North American Construction Group: That’s a fair statement for sure, Max.

Maxim Sytchev, Analyst, National Bank Capital Markets: Okay. In terms of maybe can you provide a bit of a blueprint in terms of where you guys are on sort of inventory integration, ERP implementation, et cetera, et cetera, post the IMC closing and just to make sure that yeah, everything’s sort of like above board when it comes to inventory management on ongoing forward basis. Thank you.

Jason Veenstra, Chief Financial Officer, North American Construction Group: Yeah, we don’t see a lot of integration risk with the IMC acquisition. It’s, they’re a very well-run organization, and we’re ready. With this regulatory approval, it’s given us a little more time just to get really ready for day one. But as far as integration risk goes, Max, there’s not really much there. You know, they’ll manage their own inventories, their own fleet. You know, we have some ideas on integrating with our subsidiary. Their Western Plant Hire, they’re right, they’re neighbors, so there’ll be a little bit of integration there, but not a lot of headline risk there.

Maxim Sytchev, Analyst, National Bank Capital Markets: Okay. Especially, I guess over the last 24 months, labor has been a bit of an issue in Australia. Can you maybe comment around you know the trends on sort of inflation there and how that’s being managed? Thank you.

Jason Veenstra, Chief Financial Officer, North American Construction Group: Yeah. I think Barry touched on it. It’s, you know, it comes down to just effective recruiting and, I think we’ve seen, you know, a trend in the right direction. Yeah, it’s one thing that, you know, Barry highlighted as a top priority and is a key focus of us. We’ll be providing a further update at, you know, as part of the Q1 close.

Maxim Sytchev, Analyst, National Bank Capital Markets: Okay. Perfect. Just one quick one. In relation to Fargo, correct me if I’m wrong, but all the equipment that was bought for the project that was structured into an SPV. I presume there’s gonna be some sort of. I mean, I realize that you said the cash out is not gonna be sort of massive, but is there anything on the equipment side we should be keeping in mind? Thanks.

Jason Veenstra, Chief Financial Officer, North American Construction Group: Yeah. Again, similar to the equity injection at the end or outflow, it won’t be massive. I know it will be disposed. You’re exactly right. It was equipment was bought especially for that project and will be disposed of by that project. It’s not gonna be a big number. It would be all contained within that closeout at the end of the project. Even though the project will, you know, be complete this year, financial closeout requires a bunch of certification. That probably is 2027.

Maxim Sytchev, Analyst, National Bank Capital Markets: Okay. Okay, that’s it. Thank you so much, Jason Veenstra.

Jason Veenstra, Chief Financial Officer, North American Construction Group: Thanks, Max.

Joanna, Conference Call Operator: Thank you. We have no further questions. I will turn the call back over to Barry Palmer for closing comments.

Jason Veenstra, Chief Financial Officer, North American Construction Group: Thanks, Joanna. Thanks again, everyone, for joining us today. We look forward to providing the next update upon closing of the first quarter results.

Joanna, Conference Call Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.