Publicly traded Bird Construction Ltd. has reported a net loss of $5.6 million on construction revenue of $389.9 million for the third quarter of 2015
The contractor attributed the loss to a non-cash charge to earnings of $22.4 million ($20.3 million after deferred tax reversal) for the impairment of goodwill and intangible assets relating to the company’s investment in its wholly owned subsidiary H.J. O’Connell Limited, based in Quebec and Newfoundland.
“Unfavourable market and economic conditions surrounding O’Connell’s operating environment are expected to negatively affect future revenues and earnings resulting in a third quarter impairment charge for the goodwill and intangible assets relating to the O’Connell investment,” the company’s earnings news release reported.
For the nine months ended Sept. 30, 2015, the company reported net income of $9.9 million on construction revenue of $1,031.4 million, compared with net income of $23.4 million on construction revenue of $973.9 million in 2014.
Adjusting net income for the non-cash impairment charge, the Company would have recorded adjusted net income of $30.2 million (a non-GAAP measure) on construction revenue of $1,031.4 million in the nine months of 2015, exceeding the results for the same period in 2014. The increase in 2015 adjusted net income is a result of higher construction revenue, a slightly higher gross profit percentage and lower general and administrative expenses.
The company secured $1,716.7 million of new construction contracts, including change orders on existing contracts, to date in 2015. At Sept. 30, 2015, the Company has achieved a record level of backlog of $1,835.0 million compared with $1,149.7 million at Dec. 31, 2014 and $1,340.7 million at September 30, 2014.
Bird’s board of directors declares monthly dividends of $0.0633 per common share for November and December 2015 and January, February and March 2016.
“We are very pleased to report that in the third quarter the company secured a significant number of new PPP construction contracts which contributed to a record level of backlog of just over $1.8 billion at quarter end,” said president and CEO Ian Boyd. “These projects will make a positive contribution to earnings in the final quarter of 2015 and more importantly in 2016 and beyond.
“The loss reported in the third quarter is a result of a non-cash impairment charge for the goodwill and intangible assets relating to our investment in H.J. O’Connell Limited. Had it not been for this expense, earnings for the year and the third quarter would have exceeded 2014 results and our expectations for the year. Looking towards 2016, we remain confident in our ability to deliver solid results, albeit lower than 2015 adjusted net income, as we work through our record level of Backlog and in spite of ongoing challenging economic conditions in the resource sector.”