North American Construction Group Ltd. Files 6-K

TL;DR

NACG filed its 6-K for June 30, 2024, confirming its foreign private issuer status.

AI Summary

North American Construction Group Ltd. filed a Form 6-K on July 31, 2024, for the period ending June 30, 2024. The company, previously known as North American Energy Partners Inc., is incorporated in Alberta and operates in the Oil, Gas Field Services sector. The filing indicates it is submitting its report as a foreign private issuer.

Why It Matters

This filing provides an update on the company's reporting status and historical information, which is relevant for investors tracking its regulatory compliance and corporate structure.

Risk Assessment

Risk Level: low — This filing is a routine regulatory report and does not contain new financial or operational information that would typically indicate significant 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
• 20240630 (date) — Reporting period end date
• 20240731 (date) — Filing date

FAQ

Key Financial Figures

• $5 million — over the second quarter. Approximately $5 million of that uptick we expect will be the se
• $10 million — e forecasted to contribute an increased $10 million based on equal impacts from i) higher u
• $276.3 million — s and Measures. Revenue for Q2 2024 of $276.3 million represented an increase of $81.1 millio
• $81.1 million — 76.3 million represented an increase of $81.1 million (or 42%) from Q2 2023. The increase is
• $20 million — ected top-line results by approximately $20 million. Quarter over quarter, the decrease in
• $329.7 million — late August 2023. Combined revenue of $329.7 million represented a $51.2 million (or 18%) in
• $51.2 million — revenue of $329.7 million represented a $51.2 million (or 18%) increase from Q2 2023. Our sha
• $53.4 m — 24 by joint ventures and affiliates was $53.4 million, compared to $83.4 million in Q2
• $83.4 million — filiates was $53.4 million, compared to $83.4 million in Q2 Management's Discussion and Ana
• $86.9 million — ted EBITDA and the associated margin of $86.9 million and 26.3% exceeded our Q2 2023 results
• $51.8 million — d 26.3% exceeded our Q2 2023 results of $51.8 million and 18.6%, respectively. Despite lower
• $12.8 m — xcluding stock-based compensation) were $12.8 million, or 4.6% of revenue, compared to
• $7.2 m — illion, or 4.6% of revenue, compared to $7.2 million, or 3.7% of revenue in Q2 2023. T
• $13.6 million — ed interest expense for the quarter was $13.6 million at an average cost of debt of 7.0%, com
• $7.2 million — erage cost of debt of 7.0%, compared to $7.2 million at an average cost of debt of 6.9% in Q

Filing Documents

• noa-20240630.htm (6-K) — 1772KB
• exhibit991-earningsrelease.htm (EX-99.1) — 299KB
• logoa01.jpg (GRAPHIC) — 57KB
• nacg-2024xq2_covera.jpg (GRAPHIC) — 4392KB
• 0001368519-24-000011.txt ( ) — 8200KB

Management's Discussion and Analysis for the three and six months ended June 30, 2024

Management's Discussion and Analysis for the three and six months ended June 30, 2024 Interim consolidated financial statements of North American Construction Group Ltd. for the three and six months ended June 30, 2024 99.1 North American Construction Group Ltd. Announces Results for the Second Quarter Ending June 30, 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 July 31, 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- 11 Accounting Estimates, Pronouncements, and Measures M- 18 Internal System and Processes M- 21 Legal and Labour Matters M- 21 Outlook M- 17 Forward-Looking Information M- 21 Additional Information M- 23 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 We expected that 2024 would be an eventful year, and so far, it is proving to be one. As you know, in the first quarter of this year, we dealt with our first rainy season in Australia while also repositioning our oil sands fleet, with the combined effect being a negative impact on fleet utilization. The second quarter brought more favorable weather in Australia but the oil sands region experienced both forest fires and heavy rains. Site access was initially restricted in May as forest fire protocols were put in place. Those eased as the rains came, but with rainfall at more than double the expected amount for May and June, site conditions deteriorated. Operating sites were inaccessible for fourteen days of May. These first half challenges, combined with the lengthy time involved in transporting and commissioning haul trucks from Canada to Australia, have unfortunately reduced our full year expectations. While clearly disappointing, I am encouraged by our underlying run-rate as the operations teams have been able to confirm that our second half projections remain exactly in line with original expectations. With a challenging first half behind us, we are building towards what I expect will be a very strong 2025. 1 We are

Management's Discussion and Analysis

Management's Discussion and Analysis For the three and six months ended June 30, 2024 July 31, 2024 The following Management's Discussion and Analysis (MDA) is as of July 31, 2024, and should be read in conjunction with the attached unaudited interim consolidated financial statements and notes that follow for the three and six months ended June 30, 2024, the audited consolidated financial statements and notes that follow 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

Management's Discussion and Analysis

Management's Discussion and Analysis June 30, 2024 M-1 North American Construction Group Ltd. OVERALL PERFORMANCE Interim MDA - Quarter 2 Highlights (Expressed in thousands of Canadian Dollars, except per share amounts) Three months ended June 30, 2024 2023 (iv) Change Revenue $ 276,314 $ 195,188 $ 81,126 Total combined revenue (i) 329,723 278,568 51,155 Gross profit 49,669 21,595 28,074 Gross profit margin (i) 18.0 % 11.1 % 7.0 % Combined gross profit (i) 60,350 36,258 24,092 Combined gross profit margin (i)(ii) 18.3 % 13.0 % 5.2 % Operating income 38,705 10,334 28,371 Adjusted EBITDA (i)(iii) 86,881 51,833 35,048 Adjusted EBITDA margin (i)(iii) 26.3 % 18.6 % 7.7 % Net income 14,007 12,262 1,745 Adjusted net earnings (i) 20,822 12,489 8,333 Cash provided by operating activities 59,013 40,185 18,828 Cash provided by operating activities prior to change in working capital (i) 68,911 27,145 41,766 Free cash flow (i) (1,518) (4,699) 3,181 Purchase of PPE 75,307 38,419 36,888 Sustaining capital additions (i) 37,313 38,311 (998) Growth capital additions (i) 19,943 2,748 17,195 Basic net income per share $ 0.52 $ 0.46 $ 0.06 Adjusted EPS (i) $ 0.78 $ 0.47 $ 0.31 (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 for Q2 2024 of $276.3 million represented an increase of $81.1 million (or 42%) from Q2 2023. The increase is primarily due to the inclusion of results from the MacKellar Group (MacKellar) following its acquisition on October 1, 2023. The Heavy Equipment - Australia segment showed strong performance, driven by MacKellar's Q2 results, which exceeded Q1 2024 by 9.9%, largely due to st

Management's Discussion and Analysis

Management's Discussion and Analysis June 30, 2024 M-2 North American Construction Group Ltd. 2023. The completion of the gold mine project in northern Ontario at the end of August 2023 was the primary driver of this quarter over quarter variance. Offsetting this variance was the Fargo-Moorhead flood diversion project which completed another strong operational quarter, posted a 98% increase from scopes completed in the prior quarter and surpassed the 40% completion mark in June. Adjusted EBITDA and the associated margin of $86.9 million and 26.3% exceeded our Q2 2023 results of $51.8 million and 18.6%, respectively. Despite lower revenue in the oil sands region, effective and efficient operation of the heavy equipment fleets in Australia and Canada and the implemented reductions of variable and fixed costs where necessary generated a strong EBITDA margin for Q2 2024. EBITDA margin for this quarter was relatively consistent with Q1 2024 and is reflective of the underlying consistent business of our heavy equipment fleets. Depreciation of our equipment fleet was 14.3% of revenue in the quarter but when factoring out the one-time loss on disposal, averaged 12.8% for the quarter. Depreciation as a percentage of revenue was 17.7% for the Heavy Equipment - Canada fleet which was higher than our historical average as increased customer demand for heavy equipment rentals has changed the revenue profile. The Heavy Equipment - Australia fleet, which averaged approximately 9.4% of revenue, was driven by MacKellar and reflected both productive operations in the quarter as well as the depreciation of fair market values allocated upon purchase. On a combined basis, depreciation averaged 13.4% of combined revenue in the quarter as the lower capital intensity in Fargo and Nuna joint ventures modestly reduced the ratio. General and administrative expenses (excluding stock-based compensation) were $12.8 million, or 4.6% of revenue, compared to $7.2 million, or 3.7% of revenue

Management's Discussion and Analysis

Management's Discussion and Analysis June 30, 2024 M-3 North American Construction Group Ltd. FINANCIAL HIGHLIGHTS Three and six months ended June 30, 2024, results Three months ended Six months ended June 30, June 30, (dollars in thousands, except per share amounts) 2024 2023 (iii) 2024 2023 (iii) Revenue $ 276,314 $ 195,188 $ 573,340 $ 439,517 Cost of sales 187,022 149,241 386,817 316,085 Depreciation 39,623 24,352 83,564 60,737 Gross profit $ 49,669 $ 21,595 $ 102,959 $ 62,695 Gross profit margin (i) 18.0 % 11.1 % 18.0 % 14.3 % General and administrative expenses (excluding stock-based compensation) 12,791 7,170 23,936 15,412 Stock-based compensation (benefit) expense (1,859) 4,804 1,749 10,741 Operating income 38,705 10,334 76,981 36,042 Interest expense, net 14,339 7,511 29,936 14,822 Net income 14,007 12,262 25,376 34,108 Comprehensive income 15,338 11,845 26,014 33,746 Adjusted EBITDA (i) 86,881 51,833 180,132 136,456 Adjusted EBITDA margin (i)(ii) 26.3 % 18.6 % 26.7 % 22.7 % Per share information Basic net income per share $ 0.52 $ 0.46 $ 0.95 $ 1.29 Diluted net income per share $ 0.47 $ 0.42 $ 0.86 $ 1.12 Adjusted EPS (i) $ 0.78 $ 0.47 $ 1.56 $ 1.43 (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 presentation. See Accounting Estimates, Pronouncements and Measures. Reconciliation of total reported revenue to total combined revenue Three months ended Six months ended June 30, June 30, (dollars in thousands) 2024 2023 (ii) 2024 2023 (ii) Revenue from wholly-owned entities per financial statements $ 276,314 $ 195,188 $ 573,340 $ 439,517 Share of revenue from investments in affiliates and joint ventures 112,377 158,485 238,215 347,970 Elimination of joint venture subcontract revenue (58,968) (75,105) (136,119) (186,578) Total combined revenue (i) $ 329,723 $ 278,568 $

Management's Discussion and Analysis

Management's Discussion and Analysis June 30, 2024 M-4 North American Construction Group Ltd. Reconciliation of net income to adjusted net earnings, adjusted EBIT, and adjusted EBITDA Three months ended Six months ended June 30, June 30, (dollars in thousands) 2024 2023 2024 2023 Net income $ 14,007 $ 12,262 $ 25,376 $ 34,108 Adjustments Loss (gain) on disposal of property, plant and equipment 32 (713) 293 500 Write-down on assets held for sale 4,181 — 4,181 — Stock-based compensation (benefit) expense (1,859) 4,804 1,749 10,741 Change in fair value of contingent obligation from adjustments to estimates 7,420 — 8,858 — Restructuring costs — — 4,517 — Loss on equity investment customer bankruptcy claim settlement — 759 — 759 Loss (gain) on derivative financial instruments 273 (1,852) 273 (4,361) Net unrealized (gain) loss on derivative financial instruments included in equity earnings in affiliates and joint ventures (984) (1,655) 970 (1,221) Tax effect of the above items (2,248) (1,116) (4,507) (2,760) Adjusted net earnings (i) 0 20,822 12,489 41,710 37,766 Adjustments Tax effect of the above items 2,248 1,116 4,507 2,760 Increase in fair value of contingent obligation from interest accretion expense 4,143 — 8,098 — Interest expense, net 14,339 7,511 29,936 14,822 Income tax expense 5,152 1,757 9,557 10,159 Equity earnings in affiliates and joint ventures (iii) (6,629) (9,344) (5,117) (18,686) Equity investment EBIT (i)(iii) 6,555 9,541 2,787 19,324 Adjusted EBIT (i) 46,630 23,070 91,478 66,145 Adjustments Depreciation and amortization 39,941 24,664 84,182 61,355 Write-down on assets held for sale (4,181) — (4,181) — Equity investment depreciation and amortization (i) 4,491 4,099 8,653 8,956 Adjusted EBITDA (i) $ 86,881 $ 51,833 $ 180,132 $ 136,456 Adjusted EBITDA margin (i)(ii) 26.3 % 18.6 % 26.7 % 22.7 % (i) See Non-GAAP Financial Measures. (ii) Adjusted EBITDA margin is calculated using adjusted EBITDA over total combin

Management's Discussion and Analysis

Management's Discussion and Analysis June 30, 2024 M-5 North American Construction Group Ltd. Analysis of three and six months ended June 30, 2024, results Revenue A breakdown of revenue by reportable segment is as follows Three months ended Six months ended June 30, June 30, 2024 2023 2024 2023 Heavy Equipment - Canada $ 122,817 $ 176,855 $ 281,088 $ 407,502 Heavy Equipment - Australia 147,172 8,931 281,120 14,953 Other 6,325 11,640 11,187 22,736 Eliminations — (2,238) (55) (5,674) $ 276,314 $ 195,188 $ 573,340 $ 439,517 A breakdown of revenue by source is as follows Three months ended Six months ended June 30, June 30, 2024 2023 2024 2023 Operations support services $ 262,624 $ 174,507 $ 547,348 $ 403,964 Equipment and component sales 13,448 15,921 24,470 27,004 Construction services 242 4,760 1,522 8,549 $ 276,314 $ 195,188 $ 573,340 $ 439,517 For the three months ended June 30, 2024, revenue was $276.3 million, up from $195.2 million in the same period last year. This quarter-over-quarter revenue growth was primarily driven by the October 2023 acquisition of MacKellar, contributing $147.1 million to the Heavy Equipment - Australia segment. Conversely, the Heavy Equipment - Canada segment experienced a decline in revenue due to a reduction in equipment utilization to 39%, compared to 61% in Q2 2023. This decline was largely attributed to heavy rainfall and wildfires affecting oil sands sites, as well as a contractual reduction in the overburden scope at the Fort Hills and Syncrude mines. For the six months ended June 30, 2024, revenue totaled $573.3 million, up from $439.5 million in the same period last year, reflecting a 30% increase. This growth was driven by the same factors that influenced Q2, including the significant contribution from MacKellar and the challenges faced by the Heavy Equipment - Canada segment. Gross profit A breakdown of gross profit by reportable segment is as follows Three months ended Six months ended Ju

Management's Discussion and Analysis

Management's Discussion and Analysis June 30, 2024 M-6 North American Construction Group Ltd. A breakdown of cost of sales is as follows Three months ended Six months ended June 30, June 30, (dollars in thousands) 2024 2023 2024 2023 Salaries, wages, benefits $ 81,001 $ 69,561 $ 167,186 $ 137,706 Repair parts consumable supplies 58,111 42,847 121,921 92,668 Subcontractor services 22,475 17,787 50,499 50,372 Equipment component sales 10,279 12,901 17,136 20,737 Third-party rentals 8,015 3,170 15,456 6,867 Fuel 3,989 1,136 7,917 3,785 Other 3,152 1,839 6,702 3,950 $ 187,022 $ 149,241 $ 386,817 $ 316,085 For the three months ended June 30, 2024, gross profit was $49.7 million with a 18.0% gross profit margin, up from a gross profit of $21.6 million and gross profit margin of 11.1% in the same period last year. The significant increase in gross margin is largely attributable to MacKellar, included within the Heavy Equipment - Australia segment, which recorded strong gross profit margins in the current quarter. MacKellar was acquired in October 2023 and has been a key driver of improved profitability. The Heavy Equipment - Canada segment maintained comparable gross profit margins despite lower revenue levels this year compared to last year. This stability was achieved through improved cost management. However, higher depreciation costs impacted the segment, primarily due to the impairment of 12 underutilized haul trucks, which were subsequently sold in July. For the six months ended June 30, 2024, gross profit was $103.0 million with a 18.0% gross profit margin, up from $62.7 million with a 14.3% gross profit margin in the same period last year. The year-over-year improvement in gross profit and margin was driven by the factors mentioned above, including the strong performance of the MacKellar acquisition and effective cost management in the Heavy Equipment - Canada segment, despite the higher depreciation costs. A breakdown of depreciation by repor

Management's Discussion and Analysis

Management's Discussion and Analysis June 30, 2024 M-7

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