EX-99.1 2 exhibit991-earningsrelease.htm EX-99.1 Document
EXHIBIT 99.1

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News Release

North American Construction Group Ltd. Announces
Results for the Second Quarter Ended June 30, 2025
ACHESON, Alberta, August 13, 2025 - North American Construction Group Ltd. (“NACG”) (TSX:NOA/NYSE:NOA) today announced results for the second quarter ended June 30, 2025. Unless otherwise indicated, financial figures are expressed in Canadian dollars, and comparisons are to the prior second quarter ended June 30, 2024.
Second Quarter 2025 Financial Highlights:
•Combined revenue was $370.6 million and increased 12% (reported revenue of $320.6 million, increased 16%)
•Combined gross profit was $39.8 million (11%) and decreased 37% (reported gross profit of $35.8 million (11%), decreased 29%)
•Adjusted EPS was $0.02 and decreased 98% (basic earnings per share of $0.35, decreased 35%)
•Adjusted EBITDA was $80.1 million and decreased 12% (net income of $10.3 million, decreased 29%)
•Free cash flow was a use of cash of $0.4 million and increased $10.2 million
•Net debt was $896.9 million and increased $29.5 million
Second Quarter 2025 Operational Highlights:
Revenue and combined revenue for the second quarter increased, driven by global equipment utilization of 74%, consistent with 74% in the prior year, as well as strong performance in the both the Heavy Equipment - Australia and Heavy Equipment - Canada segments.
•Heavy Equipment - Australia revenue increased 14% to $168.1 million from $147.2 million due to their expanded heavy equipment fleet and ongoing production at a new copper mine project.
•Heavy Equipment - Canada revenue increased 20% to $147.4 million from $122.8 million due to increased reclamation activities and the ramp-up of the stream diversion project.
•Revenue generated by joint ventures and affiliates decreased 6% to $50.0 million from $53.4 million primarily due to lower revenue contributions by the Nuna joint venture.
•Our portion of revenue generated by the civil-infrastructure Fargo project remained strong this year, comparable to the prior year, as the project continued strong production momentum through the quarter.
Gross profit for the quarter was negatively impacted by one-time or infrequent disruptions. We have taken targeted actions to mitigate certain issues, and we do not expect them to affect future performance.
•A temporary over-reliance on subcontractor labour in Australia increased costs and impacted margins. We are now focused on hiring and training internal labour to minimize this going forward.
•An abrupt, customer-requested shut-down of work, followed by a ramp back up later in the quarter, impacted margin efficiency for the Heavy Equipment - Canada segment.
Adjusted EPS for the second quarter fell short of expectations largely due to the same issues impacting gross profit, along with a $7.7 million cumulative catch-up reduction in equity earnings. This adjustment is a one-time item arising from the settlement of a claim and a subsequent forecast revision for the Fargo project, resulting in a true-up to the forecast margin percentage.
The Q2 adjusted EBITDA was lower year-over-year due to the same factors that impacted gross profit.
Free cash flow for the quarter was a use of cash of $0.4 million. This use of cash was primarily based on adjusted EBITDA generation of $80.1 million offset by sustaining capital additions ($68.2 million), cash interest expense ($13.4 million), and current income tax expense ($0.8 million).
Our net debt increase in the current quarter was primarily driven by growth capital of $24.5 million.

EXHIBIT 99.1

Joe Lambert, President and CEO stated "Our outlook for the second half remains positive. We remain confident in delivering second half year results consistent with our original expectations aside from our oil sands business. While we expect revenue in the remainder of 2025 in the oil sands consistent with original expectations, we now expect increased costs due to demand volatility and near-term costs on our largest truck fleets. Beyond 2025, our long-term growth targets remain intact, with anticipated organic revenue growth of 5% to 10% annually, underpinned by ongoing Australian growth and new infrastructure projects that will further enhance operational diversification."
Declaration of Quarterly Dividend
On August 12th, 2025, the NACG Board of Directors declared a regular quarterly dividend (the “Dividend”) of twelve Canadian cents ($0.12) per common share, payable to common shareholders of record at the close of business on August 29, 2025. The Dividend will be paid on October 3, 2025, and is an eligible dividend for Canadian income tax purposes.
NACG’s outlook for 2025
The following table provides projected key measures for 2025. While our revenue guidance remains unchanged, supported by our backlog, our EBITDA and EPS guidance for the second half of 2025 have been adjusted to reflect increased near-term costs related to demand volatility and higher maintenance requirements. Guidance on sustaining and growth capital spending and free cash flow remain unchanged. Our updated debt leverage target reflects the debenture conversions in the first quarter of 2025.
Actual results for the six months endedOutlook for the six months ended
June 30, 2024December 31, 2024June 30,
2025		December 31, 2025
CurrentPrevious
Key measures
Combined revenue(i)
$675M$740M$762M$700 - $750MNo Change
Adjusted EBITDA(i)
$188M$202M$180M$190 - $210M$205 - $225M
Adjusted EPS(i)
$1.58$2.15$0.54$1.40 - $1.60$1.95 - $2.15
Sustaining capital(i)
$138M$69M$158M$60 - $70MNo Change
Free cash flow(i)
($50M)$68M($42M)$95 - $105MNo Change
Capital allocation
Growth spending(i)
$40M$45M$53MApprox. $25MNo Change
Net debt leverage(i)
2.2x2.2x2.2xTargeting 2.1x1.7x
(i)See “Non-GAAP Financial Measures”.

EXHIBIT 99.1

Results for the three and six months ended June 30, 2025
Consolidated Financial Highlights
Three months endedSix months ended
June 30,June 30,
(dollars in thousands, except per share amounts)2025202420252024
Revenue $320,634 $276,314 $661,467 $573,340 
Cost of sales(i)
230,293 182,804 472,521 378,474 
Depreciation(i)
54,511 43,151 115,225 91,013 
Gross profit(i)
$35,830 $50,359 $73,721 $103,853 
Gross profit margin(i)(ii)
11.2 %18.2 %11.1 %18.1 %
General and administrative expenses (excluding stock-based compensation)(ii)
11,698 12,483 22,788 23,318 
Stock-based compensation expense (benefit)964 (1,859)(2,444)1,749 
Operating income(i)
22,789 39,395 53,371 77,875 
Interest expense, net14,123 14,339 27,639 29,936 
Net income(i)
10,250 14,503 16,413 26,014 
Comprehensive income(i)
9,691 15,834 16,332 26,652 
Adjusted EBITDA(i)(ii)
80,113 91,089 180,045 188,475 
Adjusted EBITDA margin(i)(ii)(iii)
21.6 %27.6 %23.6 %27.9 %
Per share information
Basic net income per share$0.35 $0.54 $0.57 $0.97 
Diluted net income per share$0.33 $0.48 $0.55 $0.88 
Adjusted EPS(ii)
$0.02 $0.80 $0.54 $1.58 
(i)The prior year amounts are adjusted to reflect a change in policy. See "Change in significant accounting policy".
(ii)See "Non-GAAP Financial Measures".
(iii)Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue.
Free cash flow
Three months endedSix months ended
June 30,June 30,
(dollars in thousands)2025202420252024
Consolidated Statements of Cash Flows
Cash provided by operating activities(i)
$64,674 $66,431 $116,092 $85,390 
Cash used in investing activities(i)
(71,823)(87,017)(165,604)(153,112)
Effect of exchange rate on changes in cash915 (875)(160)(974)
Add back of growth and non-cash items included in the above figures:
Growth capital additions(ii)
24,463 19,943 52,529 39,550 
Capital additions financed by leases(ii)
(18,605)(9,031)(44,808)(21,069)
Free cash flow(i)
$(376)$(10,549)$(41,951)$(50,215)
(i)The prior year amounts are adjusted to reflect a change in policy. See "Change in significant accounting policy".
(ii)See "Non-GAAP Financial Measures".
Net debt
(dollars in thousands)June 30,
2025		March 31, 2025December 31,
2024
Credit Facility(i)
$257,536 $421,702 $395,844 
Equipment financing(i)
314,414 310,361 253,639 
Contingent obligations(i)
96,837 131,246 127,866 
Senior debt(ii)
668,787 863,309 777,349 
Senior unsecured notes225,000 — — 
Mortgage(i)
27,175 27,388 27,600 
Total debt(ii)
920,962 890,697 804,949 
Convertible debentures(i)
55,000 55,000 129,106 
Cash(79,025)(78,241)(77,875)
Net debt(ii)
$896,937 $867,456 $856,180 

(i)Includes current portion.
(ii)See "Non-GAAP Financial Measures".

EXHIBIT 99.1

Conference Call and Webcast
Management will hold a conference call and webcast to discuss our financial results for the quarter ended June 30, 2025, tomorrow, Thursday, August 14, 2025, at 7:00 am Mountain Time (9:00 am Eastern Time).
The call can be accessed by dialing:
Toll Free: 1-800-717-1738
Conference ID: 53211
A replay will be available through September 15, 2025, by dialing:
Toll Free: 1-888-660-6264
Conference ID: 53211
Playback Passcode: 53211
The 2025 Q2 earnings presentation for the webcast will be available for download on the company’s website at www.nacg.ca/presentations/
The live presentation and webcast can be accessed at:
https://onlinexperiences.com/scripts/Server.nxp?LASCmd=AI:4;F:QS!10100&ShowUUID=87347F42-2D6F-4E06-867A-B96665B437F5
A replay will be available until September 15, 2025, using the link provided.
About the Company
North American Construction Group Ltd. is a premier provider of heavy civil construction and mining services in Australia, Canada, and the U.S. For over 70 years, NACG has provided services to the mining, resource and infrastructure construction markets.
For further information contact:
Jason Veenstra, CPA, CA
Chief Financial Officer
North American Construction Group Ltd.
(780) 960-7171
IR@nacg.ca
www.nacg.ca
Basis of Presentation
We have prepared our consolidated financial statements in conformity with accounting principles generally accepted in the United States ("US GAAP"). Unless otherwise specified, all dollar amounts discussed are in Canadian dollars. Please see the Management’s Discussion and Analysis (“MD&A”) for the quarter ended June 30, 2025, for further detail on the matters discussed in this release. In addition to the MD&A, please reference the dedicated 2025 Q2 Results Presentation for more information on our results and projections which can be found on our website under Investors - Presentations.
Change in significant accounting policy - Classification of heavy equipment tires
Effective in the first quarter of 2025, we have changed our accounting policy for the classification of heavy equipment tires. These tires are now recognized as property, plant, and equipment on the Consolidated Balance Sheets and are amortized through depreciation on the Consolidated Statements of Operations and Comprehensive Income. Previously, all tires were classified as inventories and expensed through cost of sales when placed into service. This change in accounting policy provides a more accurate reflection of the role of tires as components of the heavy equipment in which they are utilized, aligning the accounting treatment with the economic substance of their use.
We have applied this change retrospectively in accordance with Accounting Standards Codification ("ASC") 250, Accounting Changes and Error Corrections, by restating the comparative period. For further details regarding the retrospective adjustments, refer to Note 16 in the consolidated financial statements for the period ended June 30, 2025.

EXHIBIT 99.1

Forward-Looking Information
The information provided in this release contains forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “anticipate”, “believe”, “expect”, “should” or similar expressions.
The material factors or assumptions used to develop the above forward-looking statements include, and the risks and uncertainties to which such forward-looking statements are subject, are highlighted in the MD&A for the three and six months ended June 30, 2025. Actual results could differ materially from those contemplated by such forward-looking statements because of any number of factors and uncertainties, many of which are beyond NACG’s control. Undue reliance should not be placed upon forward-looking statements and NACG undertakes no obligation, other than those required by applicable law, to update or revise those statements. For more complete information about NACG, please read our disclosure documents filed with the SEC and the CSA. These free documents can be obtained by visiting EDGAR on the SEC website at www.sec.gov or on the CSA website at www.sedarplus.com.
Non-GAAP Financial Measures
This press release presents certain non-GAAP financial measures because management believes that they may be useful to investors in analyzing our business performance, leverage and liquidity. The non-GAAP financial measures we present include "adjusted EBIT", "adjusted EBITDA", "adjusted EBITDA margin", "adjusted EPS", "adjusted net earnings", "capital additions", "capital work in progress", "cash liquidity", "cash provided by operating activities prior to change in working capital", "cash related interest expense", "combined gross profit", "combined gross profit margin", "equity investment depreciation and amortization", "equity investment EBIT", "free cash flow", "general and administrative expenses (excluding stock-based compensation)", "gross profit margin", "growth capital", "margin", "net debt", "net debt leverage", "senior debt", "sustaining capital", "total capital liquidity", "total combined revenue", and "total debt". A non-GAAP financial measure is defined by relevant regulatory authorities as a numerical measure of an issuer's historical or future financial performance, financial position or cash flow that is not specified, defined or determined under the issuer’s GAAP and that is not presented in an issuer’s financial statements. These non-GAAP measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other companies. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Each non-GAAP financial measure used in this press release is defined and reconciled to its most directly comparable GAAP measure in the "Non-GAAP Financial Measures" section of our Management’s Discussion and Analysis filed concurrently with this press release.

EXHIBIT 99.1

Reconciliation of net income to adjusted net earnings, adjusted EBIT and adjusted EBITDA
Three months endedSix months ended
June 30,June 30,
(dollars in thousands)2025202420252024
Net income(i)
$10,250 $14,503 $16,413 $26,014 
Adjustments:
Stock-based compensation expense (benefit)964 (1,859)(2,444)1,749 
(Gain) loss on disposal of property, plant and equipment(110)32 (1,084)293 
Change in fair value of contingent obligations from adjustments to estimates(17,485)7,420 (18,802)8,858 
Loss on derivative financial instruments750 273 7,662 273 
Equity investment loss (gain) on derivative financial instruments892 (984)1,911 970 
Equity investment restructuring costs— — — 4,517 
Depreciation expense relating to early component failures— — 4,274 — 
Post-acquisition asset relocation and integration costs— — 1,640 — 
Write-down on assets held for sale— 4,181 — 4,181 
Tax effect of the above items5,426 (2,248)5,726 (4,507)
Adjusted net earnings(i)(ii)
687 21,318 15,296 42,348 
Adjustments:
Tax effect of the above items(5,426)2,248 (5,726)4,507 
Interest expense, net14,123 14,339 27,639 29,936 
Equity investment EBIT(ii)
(5,057)6,555 (1,747)2,787 
Equity loss (earnings) in affiliates and joint ventures5,133 (6,629)1,850 (5,117)
Change in fair value of contingent obligations4,247 4,143 8,594 8,098 
Income tax expense5,771 5,346 10,015 9,813 
Adjusted EBIT(i)(ii)
19,478 47,320 55,921 92,372 
Adjustments:
Depreciation(i)
54,511 43,151 115,225 91,013 
Amortization of intangible assets489 308 1,090 618 
Depreciation expense relating to early component failures— — (4,274)— 
Write-down on assets held for sale— (4,181)— (4,181)
Equity investment depreciation and amortization(ii)
5,635 4,491 12,083 8,653 
Adjusted EBITDA(i)(ii)
$80,113 $91,089 $180,045 $188,475 
Adjusted EBITDA margin(i)(ii)(iii)
21.6 %27.6 %23.6 %27.9 %
(i)The prior year amounts are adjusted to reflect a change in policy. See "Change in significant accounting policy".
(ii)See "Non-GAAP Financial Measures".
(iii)Adjusted EBITDA margin is calculated using adjusted EBITDA over total combined revenue.

Reconciliation of equity earnings in affiliates and joint ventures to equity investment EBIT
Three months endedSix months ended
June 30,June 30,
(dollars in thousands)2025202420252024
Equity (loss) earnings in affiliates and joint ventures$(5,133)$6,629 $(1,850)$5,117 
Adjustments:
Loss (gain) on disposal of property, plant and equipment155 — 157 (175)
Interest (income) expense183 (146)154 (719)
Income tax expense (benefit)(262)72 (208)(1,436)
Equity investment EBIT(i)
$(5,057)$6,555 $(1,747)$2,787 
(i)See "Non-GAAP Financial Measures".
Reconciliation of total reported revenue to total combined revenue
Three months endedSix months ended
June 30,June 30,
(dollars in thousands)2025202420252024
Revenue from wholly-owned entities per financial statements$320,634 $276,314 $661,467 $573,340 
Share of revenue from investments in affiliates and joint ventures121,843 112,377 257,740 238,215 
Elimination of joint venture subcontract revenue(71,849)(58,968)(157,415)(136,119)
Total combined revenue(i)
$370,628 $329,723 $761,792 $675,436 
(i)See "Non-GAAP Financial Measures".

EXHIBIT 99.1


Reconciliation of reported gross profit to combined gross profit
Three months endedSix months ended
June 30,June 30,
(dollars in thousands)2025202420252024
Gross profit from wholly-owned entities per financial statements$35,830 $50,359 $73,721 $103,853 
Share of gross (loss) profit from investments in affiliates and joint ventures3,947 12,920 17,284 21,855 
Combined gross profit(i)(ii)
$39,777 $63,279 $91,005 $125,708 

(i)See "Non-GAAP Financial Measures".
(ii)The prior year amounts are adjusted to reflect a change in policy. See "Change in significant accounting policy".
Reconciliation of basic net income per share to adjusted EPS
Three months endedSix months ended
June 30,June 30,
(dollars in thousands)2025202420252024
Net income(i)
$10,250 $14,503 $16,413 $26,014 
Interest from convertible debentures (after tax)616 1,489 1,728 2,981 
Diluted net income available to common shareholders(i)
$10,866 $15,992 $18,141 $28,995 
Adjusted net earnings(i)(ii)
$687 $21,318 $15,296 $42,348 
Weighted-average number of common shares29,354,387 26,730,049 28,611,557 26,731,762 
Weighted-average number of diluted common shares32,562,639 33,026,740 32,743,696 33,026,740 
Basic net income per share$0.35 $0.54 $0.57 $0.97 
Diluted net income per share$0.33 $0.48 $0.55 $0.88 
Adjusted EPS(ii)
$0.02 $0.80 $0.54 $1.58 

(i)The prior year amounts are adjusted to reflect a change in policy. See "Change in significant accounting policy".
(ii)See "Non-GAAP Financial Measures".

EXHIBIT 99.1

Interim Consolidated Balance Sheets
(Expressed in thousands of Canadian Dollars)
(Unaudited)
June 30,
2025
December 31, 2024(i)
Assets
Current assets
Cash$79,025 $77,875 
Accounts receivable195,313 166,070 
Contract assets15,670 4,135 
Inventories74,217 69,027 
Prepaid expenses and deposits5,540 7,676 
Assets held for sale683 683 
370,448 325,466 
Property, plant and equipment, net of accumulated depreciation of $539,496 (December 31, 2024 – $500,303)1,350,451 1,251,874 
Operating lease right-of-use assets11,181 12,722 
Investments in affiliates and joint ventures79,181 84,692 
Intangible assets10,159 9,901 
Other assets5,795 9,845 
Total assets$1,827,215 $1,694,500 
Liabilities and shareholders’ equity
Current liabilities
Accounts payable$143,044 $110,750 
Accrued liabilities60,966 78,010 
Contract liabilities6,444 1,944 
Current portion of long-term debt149,539 84,194 
Current portion of contingent obligations33,021 39,290 
Current portion of operating lease liabilities1,488 1,771 
394,502 315,959 
Long-term debt723,061 719,399 
Contingent obligations63,816 88,576 
Operating lease liabilities10,279 11,441 
Other long-term obligations42,910 44,711 
Deferred tax liabilities132,431 125,378 
1,366,999 1,305,464 
Shareholders' equity
Common shares (authorized – unlimited number of voting common shares; issued and outstanding – June 30, 2025 - 30,176,981 (December 31, 2024 – 27,704,450)) 295,074 228,961 
Treasury shares (June 30, 2025 - 1,010,022 (December 31, 2024 - 1,000,328)) (16,156)(15,913)
Additional paid-in capital16,783 20,819 
Retained earnings165,698 156,271 
Accumulated other comprehensive loss(1,183)(1,102)
Shareholders' equity460,216 389,036 
Total liabilities and shareholders’ equity$1,827,215 $1,694,500 
(i)The prior year amounts are adjusted to reflect a change in policy. See "Change in significant accounting policy".


EXHIBIT 99.1

Interim Consolidated Statements of Operations and
Comprehensive Income
(Expressed in thousands of Canadian Dollars, except per share amounts)
(Unaudited) 
Three months endedSix months ended
June 30,June 30,
2025
2024(i)
2025
2024(i)
Revenue$320,634 $276,314 $661,467 $573,340 
Cost of sales230,293 182,804 472,521 378,474 
Depreciation54,511 43,151 115,225 91,013 
Gross profit35,830 50,359 73,721 103,853 
General and administrative expenses12,662 10,624 20,344 25,067 
Amortization of intangible assets489 308 1,090 618 
(Gain) loss on disposal of property, plant and equipment(110)32 (1,084)293 
Operating income22,789 39,395 53,371 77,875 
Interest expense, net14,123 14,339 27,639 29,936 
Equity loss (earnings) in affiliates and joint ventures5,133 (6,629)1,850 (5,117)
Loss on derivative financial instruments750 273 7,662 273 
Change in fair value of contingent obligations(13,238)11,563 (10,208)16,956 
Income before income taxes16,021 19,849 26,428 35,827 
Current income tax expense (benefit)798 (1,275)2,575 3,021 
Deferred income tax expense4,973 6,621 7,440 6,792 
Net income$10,250 $14,503 $16,413 $26,014 
Other comprehensive income
Unrealized foreign currency translation loss (gain)559 (1,331)81 (638)
Comprehensive income$9,691 $15,834 $16,332 $26,652 
Per share information
Basic net income per share$0.35 $0.54 $0.57 $0.97 
Diluted net income per share$0.33 $0.48 $0.55 $0.88 
(i)The prior year amounts are adjusted to reflect a change in policy. See "Change in significant accounting policy".