North American Construction Group Ltd. Announces Results for the Second Quarter Ended June 30, 2025

ACHESON, Alberta, Aug. 13, 2025 (GLOBE NEWSWIRE) — 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.

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.

⁽ⁱ⁾See “Non-GAAP Financial Measures”.

Results for the three and six months ended June 30, 2025

Consolidated Financial Highlights

⁽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

⁽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

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

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.

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.

Reconciliation of net income to adjusted net earnings, adjusted EBIT and adjusted EBITDA

⁽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

⁽ⁱ⁾See “Non-GAAP Financial Measures”.

Reconciliation of total reported revenue to total combined revenue

⁽ⁱ⁾See “Non-GAAP Financial Measures”.

Reconciliation of reported gross profit to combined gross profit

⁽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

⁽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”.

Interim Consolidated Balance Sheets

(Expressed in thousands of Canadian Dollars)
(Unaudited)

⁽ⁱ⁾The prior year amounts are adjusted to reflect a change in policy. See “Change in significant accounting policy”.

Interim Consolidated Statements of Operations and
Comprehensive Income

(Expressed in thousands of Canadian Dollars, except per share amounts)
(Unaudited) 

⁽ⁱ⁾The prior year amounts are adjusted to reflect a change in policy. See “Change in significant accounting policy”.