North American Construction Group Ltd. Files 6-K

TL;DR

NACG filed a 6-K for Q1 2024, confirming its status as a foreign private issuer.

AI Summary

North American Construction Group Ltd. filed a Form 6-K on May 1, 2024, reporting for the period ending March 31, 2024. The company, previously known as North American Energy Partners Inc., is incorporated in Alberta, Canada, and operates in the Oil, Gas Field Services sector. This filing is a report of a foreign private issuer.

Why It Matters

This filing provides an update on the company's reporting status as a foreign private issuer, which is relevant for investors tracking its financial disclosures.

Risk Assessment

Risk Level: low — This filing is a routine disclosure for a foreign private issuer and does not contain significant new financial or operational information that would immediately impact risk.

Key Players & Entities

• North American Construction Group Ltd. (company) — Filer
• North American Energy Partners Inc. (company) — Former company name
• NACG Holdings Inc. (company) — Former company name
• May 1, 2024 (date) — Filing date
• March 31, 2024 (date) — Reporting period end date

FAQ

Key Financial Figures

• $10 b — ete and our bid pipeline now being over $10 billion, our focus is on maximizing equip
• $297.0 million — ronouncements and Measures. Revenue of $297.0 million represented a $52.7 million (or 21.6%)
• $52.7 million — Revenue of $297.0 million represented a $52.7 million (or 21.6%) increase from Q1 2023 as a r
• $345.7 million — equipment fleets. Combined revenue of $345.7 million represented a $23.4 million (or 7.3%) i
• $23.4 million — revenue of $345.7 million represented a $23.4 million (or 7.3%) increase from Q1 2023. Our sh
• $48.7 m — er by joint ventures and affiliates was $48.7 million, compared to $78.0 million in Q1
• $78.0 million — filiates was $48.7 million, compared to $78.0 million in Q1 2023 (a decrease of 37.6%) as the
• $93.3 million — ruction Group Ltd. Adjusted EBITDA of $93.3 million was an increase of $8.6 million, or 10.
• $8.6 m — TDA of $93.3 million was an increase of $8.6 million, or 10.2%, from the Q1 2023 resul
• $84.6 m — n, or 10.2%, from the Q1 2023 result of $84.6 million, slightly better than the aforeme
• $11.1 m — xcluding stock-based compensation) were $11.1 million, or 3.8% of revenue, compared to
• $8.2 m — illion, or 3.8% of revenue, compared to $8.2 million, or 3.4% of revenue, in Q1 2023.
• $13.5 million — ncurred on our debt for the quarter was $13.5 million at an average cost of debt of 9.1%, com
• $0.78 — . Adjusted earnings per share (EPS) of $0.78 and adjusted net earnings of $20.9 mill
• $20.9 million — ) of $0.78 and adjusted net earnings of $20.9 million were down 18.8% and 17.4% from the prio

Filing Documents

• noa-20240331.htm (6-K) — 1307KB
• exhibit991-earningsrelease.htm (EX-99.1) — 221KB
• logoa01a.jpg (GRAPHIC) — 57KB
• nacg-2024xq1_covera.jpg (GRAPHIC) — 4855KB
• 0001368519-24-000008.txt ( ) — 8291KB

Management's Discussion and Analysis for the three months ended March 31, 2024

Management's Discussion and Analysis for the three months ended March 31, 2024. Interim consolidated financial statements of North American Construction Group Ltd. for the three months ended March 31, 2024. 99.1 North American Construction Group Ltd. Announces Results for the First Quarter Ending March 31, 2024.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NORTH AMERICAN CONSTRUCTION GROUP LTD. By s Jason Veenstra Name Jason Veenstra Title Chief Financial Officer Date May 1, 2024 Table of Contents Letter to Shareholders i

Management's Discussion and Analysis

Management's Discussion and Analysis Overall Performance M- 2 Financial Highlights M- 4 Liquidity and Capital Resources M- 10 Accounting Estimates, Pronouncements, and Measures M- 16 Internal System and Processes M- 19 Legal and Labour Matters M- 20 Outlook M- 16 Forward-Looking Information M- 20 Additional Information M- 22 Interim Consolidated Financial Statements Interim Consolidated Balance Sheets F- 1 Interim Consolidated Statements of Operations and Comprehensive Income F- 2 Interim Consolidated Statements of Changes in Shareholders' Equity F- 3 Interim Consolidated Statements of Cash Flows F- 4 Notes to Interim Consolidated Financial Statements F- 5 Letter to Shareholders Dear fellow shareholders In the first quarter of 2024, our safety performance, which now includes employee hours from Australia, achieved a total recordable injury rate ("TRIR") of 0.37 and a significant incident and failure potential rate ("SIFp") of 0.37, both of which are better than our industry-leading benchmark target of 0.50. Operationally, the quarter was a test of our ability to adapt to market changes and fleet utilization challenges. Our oil sands fleet has been repositioned and is now primarily deployed into time and material and rental-type contracts. These contracts inherently provide more consistency and stability than unit rate contracts and we see steady long-term demand for these types of contracts in the region at these levels. With repositioning complete and our bid pipeline now being over $10 billion, our focus is on maximizing equipment utilization in the remaining fleet. We intend to relocate or sell underutilized equipment before the end of this year. The majority of equipment being relocated will be transferred to Australian or North American resource markets and, although moving equipment halfway around the world takes approximately six months, we believe Australia provides the best overall return on our assets and, l

Management's Discussion and Analysis

Management's Discussion and Analysis For the three months ended March 31, 2024 May 1, 2024 The following Management's Discussion and Analysis (MDA) is as of May 1, 2024, and should be read in conjunction with the attached unaudited interim consolidated financial statements and notes that follow for the three months ended March 31, 2024, the audited consolidated financial statements and notes for the year ended December 31, 2023, and our annual MDA for the year ended December 31, 2023. All financial statements have been prepared in accordance with United States (US) generally accepted accounting principles (GAAP). Except where otherwise specifically indicated, all dollar amounts are expressed in Canadian dollars. The consolidated financial statements and additional information relating to our business, including our most recent Annual Information Form, are available on the Canadian Securities Administrators' SEDAR+ system at www.sedarplus.com , the US Securities and Exchange Commission's website at www.sec.gov and our Company website at www.nacg.ca . A non-GAAP financial measure is generally defined by securities regulatory authorities as one that purports to measure historical or future financial performance, financial position or cash flows, but excludes or includes amounts that would not be adjusted in the most comparable GAAP measures. Non-GAAP financial measures do not have standardized meanings under GAAP and therefore may not be comparable to similar measures presented by other issuers. In our MDA, we use non-GAAP financial measures such as adjusted EBIT, adjusted EBITDA, adjusted EBITDA margin, adjusted EPS, adjusted net earnings, backlog, capital additions, capital expenditures, net, capital inventory, capital work in progress, cash liquidity, cash provided by operating activities prior to change in working capital, cash related interest expense, combined backlog, combined gross profit, combined gross profit margin, equity investment EBIT, equity method

Management's Discussion and Analysis

Management's Discussion and Analysis March 31, 2024 M-1 North American Construction Group Ltd. OVERALL PERFORMANCE Interim MDA - Quarter 1 highlights (Expressed in thousands of Canadian Dollars, except per share amounts) Three months ended March 31, 2024 2023 (iv) Change Revenue $ 297,026 $ 244,329 $ 52,697 Total combined revenue (i) 345,713 322,341 23,372 Gross profit 53,290 41,100 12,190 Gross profit margin (i) 17.9 % 16.8 % 1.1 % Combined gross profit (i) 62,225 55,919 6,306 Combined gross profit margin (i)(ii) 18.0 % 17.3 % 0.7 % Operating income 38,276 25,708 12,568 Adjusted EBITDA (i) 93,251 84,622 8,629 Adjusted EBITDA margin (i)(iii) 27.0 % 26.3 % 0.7 % Net income 11,369 21,846 (10,477) Adjusted net earnings (i) 20,887 25,276 (4,389) Cash provided by operating activities 11,866 31,824 (19,958) Cash provided by operating activities prior to change in working capital (i) 73,892 65,835 8,057 Free cash flow (i) (36,391) (26,058) (10,333) Purchase of PPE 66,653 36,496 30,157 Sustaining capital additions (i) 59,876 47,191 12,685 Growth capital additions (i) 19,607 — 19,607 Basic net income per share $ 0.43 $ 0.83 $ (0.40) Adjusted EPS (i) $ 0.78 $ 0.96 $ (0.18) (i) See Non-GAAP Financial Measures. (ii) Combined gross profit margin is calculated using combined gross profit over total combined revenue. (iii) Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue. (iv) The prior year amounts are adjusted to reflect a change in accounting policy. See Accounting Estimates, Pronouncements and Measures. Revenue of $297.0 million represented a $52.7 million (or 21.6%) increase from Q1 2023 as a result of the acquisition of the MacKellar Group (MacKellar). Following the October 1, 2023, acquisition, MacKellar completed its second full quarter of revenue since the change in control and posted another strong quarter with top-line results in the first quarter of 2024 similar to that of the

Management's Discussion and Analysis

Management's Discussion and Analysis March 31, 2024 M-2 North American Construction Group Ltd. Adjusted EBITDA of $93.3 million was an increase of $8.6 million, or 10.2%, from the Q1 2023 result of $84.6 million, slightly better than the aforementioned combined revenue increase of 7.3% due to quarter-over-quarter margin improvements. Adjusted EBITDA margin of 27.0% was higher than Q1 2023 primarily due to margins posted by the MacKellar fleets which again exceeded 30% in the quarter. Continued rainfall in Queensland, Australia into January and February impacted margins in those months due to reduced operating hours but steady, effective operations in March provided for a strong overall quarter. Margins in the Heavy Equipment - Canada segment were notably impacted by fixed and indirect costs incurred during remobilization efforts but benefited from a strong March as equipment was commissioned and usage stabilized. For the installed and mobilized heavy equipment fleet, favourable operating and haul road conditions, typical for the winter season, allowed for effective operation at the Millennium, Kearl, and Fort Hills mines under primarily time and material and rental based contract structures. Restructuring efforts within the Nuna Group of Companies (Nuna) were fully completed during the quarter. Newly installed leadership has brought an operational focus and redirected resources as required. The projects in Northern BC and the Northwest Territories were finalized and debrief sessions held with operational personnel to consider and implement lessons learned. Adjusted EBITDA margin of less than 10% illustrates project execution challenges with one-time charges removed to reflect operational performance in the quarter. Restructuring expenses incurred in the quarter relate primarily to severance costs and one-time expenses required to complete legacy projects. Depreciation of our equipment fleet was 14.8% of revenue in the quarter, compared to 14.9% in Q1 2023. T

Management's Discussion and Analysis

Management's Discussion and Analysis March 31, 2024 M-3 North American Construction Group Ltd. FINANCIAL HIGHLIGHTS Three months ended March 31, 2024 results Three months ended March 31, (dollars in thousands, except per share amounts) 2024 2023 (iii) Change Revenue $ 297,026 $ 244,329 $ 52,697 Cost of sales 199,795 166,844 32,951 Depreciation 43,941 36,385 7,556 Gross profit $ 53,290 $ 41,100 $ 12,190 Gross profit margin (i) 17.9 % 16.8 % 1.1 % General and administrative expenses (excluding stock-based compensation) (i) 11,145 8,243 2,902 Stock-based compensation expense 3,608 5,936 (2,328) Operating income 38,276 25,708 12,568 Interest expense, net 15,597 7,311 8,286 Net income 11,369 21,846 (10,477) Adjusted EBITDA (i) 93,251 84,622 8,629 Adjusted EBITDA margin (i)(ii) 27.0 % 26.3 % 0.7 % Per share information Basic net income per share $ 0.43 $ 0.83 $ (0.40) Diluted net income per share $ 0.39 $ 0.71 $ (0.32) Adjusted EPS (i) $ 0.78 $ 0.96 $ (0.18) (i) See Non-GAAP Financial Measures. (ii) Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue. (iii) The prior year amounts are adjusted to reflect a change in accounting policy. See Accounting Estimates, Pronouncements and Measures. Reconciliation of total reported revenue to total combined revenue Three months ended March 31, (dollars in thousands) 2024 2023 (ii) Revenue from wholly-owned entities per financial statements $ 297,026 $ 244,329 Share of revenue from investments in affiliates and joint ventures 125,838 189,485 Elimination of joint venture subcontract revenue (77,151) (111,473) Total combined revenue (i) $ 345,713 $ 322,341 (i) See Non-GAAP Financial Measures. (ii) The prior year amounts are adjusted to reflect a change in accounting policy. See Accounting Estimates, Pronouncements and Measures. Reconciliation of reported gross profit to combined gross profit Three months ended March 31, (dollars in thousands) 2024

Management's Discussion and Analysis

Management's Discussion and Analysis March 31, 2024 M-4 North American Construction Group Ltd. Reconciliation of net income to adjusted net earnings, adjusted EBIT, and adjusted EBITDA Three months ended March 31, (dollars in thousands) 2024 2023 Net income $ 11,369 $ 21,846 Adjustments Loss on disposal of property, plant and equipment 261 1,213 Stock-based compensation expense 3,608 5,936 Change in fair value of contingent obligations 1,438 — Restructuring costs 4,517 — Gain on derivative financial instruments — (2,509) Net unrealized loss on derivative financial instruments included in equity earnings in affiliates and joint ventures 1,954 434 Tax effect of the above items (2,260) (1,644) Adjusted net earnings (i) 20,887 25,276 Adjustments Tax effect of the above items 2,260 1,644 Amortization of fair value of contingent obligations 3,955 — Interest expense, net 15,597 7,311 Income tax expense 4,405 8,402 Equity loss (earnings) in affiliates and joint ventures (i)(iii) 1,512 (9,342) Equity investment EBIT (i)(iii) (3,768) 9,783 Adjusted EBIT (i) 44,848 43,074 Adjustments Depreciation and amortization 44,241 36,691 Equity investment depreciation and amortization 4,162 4,857 Adjusted EBITDA (i) $ 93,251 $ 84,622 Adjusted EBITDA margin (ii) 27.0 % 26.3 % (i) See Non-GAAP Financial Measures. (ii) Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue. (iii) The prior year amounts are adjusted to reflect a change in accounting policy. See Accounting Estimates, Pronouncements and Measures. Reconciliation of equity earnings in affiliates and joint ventures to equity investment EBIT Three months ended March 31, (dollars in thousands) 2024 2023 (ii) Equity (loss) earnings in affiliates and joint ventures $ (1,512) $ 9,342 Adjustments Interest (income) expense, net (573) 357 Income tax (benefit) expense (1,508) 124 Gain on disposal of property, plant and equipment (175) (40) Equity investmen

Management's Discussion and Analysis

Management's Discussion and Analysis March 31, 2024 M-5 North American Construction Group Ltd. Analysis of three months ended March 31, 2024 results Revenue A breakdown of revenue by reportable segment is as follows Three months ended March 31, 2024 2023 Heavy Equipment - Canada $ 158,271 $ 230,647 Heavy Equipment - Australia 133,948 6,022 Other 4,862 11,096 Eliminations (55) (3,436) $ 297,026 $ 244,329 A breakdown of revenue by source is as follows Three months ended March 31, 2024 2023 Operations support services $ 284,724 $ 229,457 Equipment and component sales 11,022 11,083 Construction services 1,280 3,789 $ 297,026 $ 244,329 For the three months ended March 31, 2024, revenue was $297.0 million, up from $244.3 million in the same period last year. The majority of the quarter-over-quarter increase in revenue was driven by the October 2023 acquisition of MacKellar, represented in the Heavy Equipment - Australia segment of $133.9 million. Reductions in current year Heavy Equipment - Canada revenue relate to equipment utilization of 53%, compared to the Q1 2023 metric of 79%, as a result of reduced overburden and reclamation scopes at the Fort Hills and Syncrude mines. Gross profit A breakdown of gross profit by reportable segment is as follows Three months ended March 31, 2024 2023 Heavy Equipment - Canada $ 16,442 $ 36,744 Heavy Equipment - Australia 32,801 1,985 Other 3,012 3,078 Eliminations 1,035 (707) $ 53,290 $ 41,100 A breakdown of cost of sales is as follows Three months ended March 31, (dollars in thousands) 2024 2023 (i) Salaries, wages, and benefits $ 86,185 $ 68,145 Repair parts and consumable supplies 63,810 49,821 Subcontractor services 28,024 32,585 Equipment and component sales 6,857 7,836 Third-party equipment rentals 7,441 3,697 Fuel 3,928 2,649 Other 3,550 2,111 $ 199,795 $ 166,844 (i) The prior year amounts are adjusted to reflect a change in accounting policy. See Accounting Estimates, Pronou

Management's Discussion and Analysis

Management's Discussion and Analysis March 31, 2024 M-6 North American Construction Group Ltd. A breakdown of depreciation by reportable segment is as follows Three months ended March 31, 2024 2023 Heavy Equipment - Canada $ 30,883 $ 36,340 Heavy Equipment - Australia 13,136 45 Eliminations (78) — $ 43,941 $ 36,385 For the three months ended March 31, 2024, depreciation was $43.9 million, or 14.8% of revenue, up from $36.4 million, or 14.9% of revenue, in the same period last year. The increased depreciation in the current quarter relates to the October 2023 acquisition of MacKellar which is shown in the Heavy Equipment - Australia segment. The decrease in depreciation in Heavy Equipment - Canada, is driven by decreased operating hours compared to Q1 2023. Operating income For the three months ended March 31, 2024, we recorded operating income of $38.3 million, an increase of $12.6 million from $25.7 million for the same period last year, largely due to the contribution from MacKellar in the current period. General and administrative expenses, excluding stock-based compensation expense, was $11.1 million (or 3.8% of revenue) for the quarter, higher than the $8.2 million (or 3.4% of revenue) in the prior year. The increase can be primarily attributed to MacKellar, offset by current year expense reductions as we optimize support services. Stock-based compensation expense decreased by $2.3 million compared to the prior year as our share price increased at a slower rate compared to the prior year, impacting the carrying value of our liability classified award plans. Non-operating income and expense Three months ended March 31, (dollars in thousands) 2024 2023 Change Credit Facility $ 6,731 $ 2,658 $ 4,073 Convertible debentures 1,711 1,692 19 Interest on customer supply chain financing 988 1,230 (242) Equipment financing 4,784 806 3,978 Mortgage 240 330 (90) Other interest expense 384 306 78 Cash interest expense 14,838 7,022 7,816 Amortiza

Management's Discussion and Analysis

Management's Discussion and Analysis March 31, 2024 M-7 North American Construction Group Ltd. Equity earnings in affiliates and joint ventures Equity earnings in affiliates and joint ventures was generated by the joint ventures accounted for using the equity method. The loss of $1.5 million for the three months ended March 31, 2024, down from earnings of $9.3 million in the same period last year, was primarily driven by the $4.5 million one-time restructuring charge at Nuna and a reduction in overburden and reclamation scopes at MNALP. Three months ended March 31, 2024 Nuna MNALP Fargo Other entities Total Revenues $ 14,348 $ 84,196 $ 23,934 $ 3,360 $ 125,838 Gross (loss) profit (1,350) 3,028 6,898 359 8,935 (Loss) income before taxes (7,243) 2,207 916 1,433 (2,687) Net (loss) income (6,038) 2,207 916 1,403 (1,512) Three months ended March 31, 2023 (i) Nuna MNALP Fargo Other entities Total Revenues $ 56,577 $ 118,195 $ 13,300 $ 1,413 $ 189,485 Gross profit 7,047 3,950 3,809 13 14,819 Income before taxes 5,172 3,118 1,450 (239) 9,501 Net income (loss) 5,048 3,118 1,415 (239) 9,342 (i) The prior year amounts are adjusted to reflect a change in accounting policy. See Accounting Estimates, Pronouncements and Measures. Net income and comprehensive income For the three months ended March 31, 2024, we recorded $10.7 million of net income and comprehensive income (basic net income per share of $0.43 and diluted net income per share of $0.39), compared to $21.9 million net income and comprehensive income (basic net income per share of $0.83 and diluted net income per share of $0.71) recorded for the same period last year. Reconciliation of basic net income per share to adjusted EPS Three months ended March 31, (dollars in thousands) 2024 2023 Net income $ 11,369 $ 21,846 Interest from convertible debentures (after tax) 1,489 1,462 Diluted net income available to common shareholders $ 12,858 $ 23,308 Adjusted net earnings (i) $ 20,887 $ 25,2

Management's Discussion and Analysis

Management's Discussion and Analysis March 31, 2024 M-8 North American Construction Group Ltd. The table below summarizes our consolidated results for the preceding eight quarter

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