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Stuart Olson Reports First Quarter 2020 Results

Revenue growth while realizing administrative cost savings
Added approximately $385 million to consolidated backlog

CALGARY, May 13, 2020 /CNW/ - Stuart Olson Inc. (TSX: SOX) ("Stuart Olson" or the "Company") today announced first quarter 2020 financial results.

"As we continue to navigate the challenges of operating under risks related to the COVID-19 pandemic, our safety-focused culture remains extremely committed to ensuring the health and welfare of people and the communities in which we operate. We are taking all necessary precautions to meet and exceed enhanced protection protocols to remain operational, but most importantly safe. We'd especially like to thank our front-line workers who continue to put their boots on every day and get the job done," said David LeMay, President and CEO of Stuart Olson.

"Notwithstanding the combination of the unprecedented impacts of the pandemic and historic decline in oil prices, in the first quarter of 2020 we grew consolidated backlog to $1.6 billion by securing an early renewal of a significant contract for our Industrial Group's MRO business, delivered rewarding revenue growth under challenging circumstances, and reduced administrative costs through the effective management of our business."

"We have and continue to take decisive actions to strengthen the foundation of our business. We remain well-positioned to grow our backlog in 2020, leveraging our experience and reputation to access the expected stimulus spending on infrastructure by all levels of government in the coming quarters to revive regional and national economies. In addition, we continue to grow our footprint with new customers, as well as increased scope with existing customers with our top tier Industrial Group MRO service offerings. We have already seen tremendous success on this in 2020 with the award of additional bundled services as part of the $400 million seven-year MRO contract renewal with an existing oil sands customer, as well as, subsequent to quarter end, a three and a half year contract award valued at an estimated $120 million to provide turnaround and maintenance services to a new power customer," added Mr. LeMay.


Three months ended March 31

$ millions, except percentages and per share amounts



Contract revenue



Contract income



Contract income margin



Administrative costs



Impairment loss



Adjusted EBITDA



Adjusted EBITDA margin



Net loss



Loss per share

Basic loss per share



Diluted loss per share



Adjusted free cash flow



Adjusted free cash flow per share



$ millions

Mar. 31, 2020

Dec. 31, 2019




Working capital



Long-term debt, excluding current portion



Convertible debentures, excluding equity portion



These financial results are presented in conformance with International Financial Reporting Standards ("IFRS"). All figures are in Canadian dollars unless otherwise noted. Certain financial and operational measures referred to in this press release, including "contract income margin", "adjusted EBITDA", "adjusted EBITDA margin", "backlog", "adjusted free cash flow", "adjusted free cash flow per share" and "net long-term indebtedness to adjusted EBITDA", are not prescribed measures under IFRS. For a description of these measures, please see the "Non-IFRS Measures" section in Stuart Olson's March 31, 2020 Management's Discussion & Analysis ("MD&A").


  • Stuart Olson grew backlog by $159.0 million to $1.6 billion as at March 31, 2020, which includes a mix of public, private and industrial projects from Ontario to British Columbia and is predominantly made up of low-risk contract arrangements. During the quarter, the Company secured the early renewal of a seven-year contract for its Industrial Group valued at an estimated $400.0 million to provide an increased scope of MRO services to an existing oil sands customer in Alberta, underscoring the strategic value of its acquisition of Tartan in 2018.
    • Subsequent to the end of the quarter, the Industrial Group signed a three and a half year contract valued at an estimated $120.0 million to provide turnaround and maintenance services to a new customer operating in the power industry. The estimated contract award amount will be added to second quarter 2020 backlog.
  • During the first quarter, Stuart Olson was recognized as one of Alberta's Top Employers in 2020 for the fourth consecutive year.
  • The Company generated consolidated revenue of $224.9 million in the first quarter of 2020, compared to $220.9 million in the same quarter last year. The 1.8% year-over-year increase primarily reflects an increase in general contracting projects secured by its Industrial Group entering 2020.
  • Recognized a net loss of $5.4 million (diluted loss per share of $0.19) in the first quarter of 2020, compared to a net loss of $2.5 million (diluted loss per share of $0.09) in the same period of 2019. The change is due primarily to the decrease in adjusted EBITDA outlined below and a $2.4 million non-cash impairment loss recognized in the 2020 period.
  • First quarter 2020 adjusted EBITDA was $5.6 million (adjusted EBITDA margin of 2.5%), which is lower than the $8.1 million (adjusted EBITDA margin of 3.7%) generated last year, primarily as a result of a shift in Buildings Group stage of completion, with a number of projects in later higher-margin phases in the 2019 period.
  • Adjusted free cash flow was an outflow of $1.7 million (outflow of $0.06 per share) in Q1 2020, as compared to an adjusted free cash outflow of $2.6 million (outflow of $0.09 per share) in the period last year. The $0.9 million improvement reflects a year-over-year reduction in final prior year cash tax payments, combined with a project stage of completion-driven change in provisions in 2019.
  • As at March 31, 2020, the Company had cash and cash equivalents, excluding non-operationally restricted cash, of $26.0 million and additional borrowing capacity on its revolving credit facility ("Revolver") of $11.1 million, for combined available liquidity of $37.1 million. This is slightly lower than a combined balance of $44.2 million ($5.6 million of non-operationally restricted cash and $38.6 million additional borrowing capacity) as at December 31, 2019, primarily due to required investments in non-cash working capital in the first quarter of 2020.
  • In March 2020, the Company collaboratively secured an amendment to its Revolver agreement with its banking partners. The amended agreement has been filed under Stuart Olson's profile on SEDAR, with material changes including:
    • A required interest coverage ratio for the period ending March 31, 2020 that shall be not less than 1.50:1.00, returning to shall be not less than 2.00:1.00 beginning June 30, 2020, increasing to shall be not less than 2.25:1.00 as at March 31, 2021, and increasing to shall be not less than 2.50:1.00 as at June 30, 2021.
    • Improved access to liquidity via a change to the required debt to EBITDA covenant to be not greater than 5.10:1.00 as at March 31, 2020, decreasing to be not greater than 4.25:1.00 until December 31, 2020, and decreasing to not greater than 3.25:1.00 for each quarter thereafter. All lease liabilities are excluded from the definition of debt for covenant calculation purposes for the quarters ending June 30, 2020 through to December 31, 2020.
    • The addition of a financial covenant in respect of cash flow variance tests.


Stuart Olson remains focused on managing through the unprecedented global challenges of the COVID-19 pandemic and historic decline in oil prices. Stuart Olson has worked closely and collaboratively with the broader construction industry on safety protocols specifically addressing risks related to the pandemic. These important social distancing and safety measures required to keep employees, subcontractors, trades and the general public safe through the ongoing pandemic has affected the Company's ability to deliver its slate of projects for 2020 at their normal work pace. As the duration and magnitude of the financial impact of these two events on the Company continue to evolve, Stuart Olson has implemented plans and mitigation strategies that prioritize the safety of its people and stakeholders first, and ensures it maintains a resilient business. While certain projects have experienced delays or decelerated as a result, the Company expects a gradual return to normal activity under enhanced safety protocols, vetted by a cross section of industry representatives, to guard against the ongoing COVID-19 risk. Stuart Olson is also well-positioned to benefit from any additional infrastructure investment that may result from larger government spend to stimulate economic growth. Given the speed at which developments are occurring in the Company's markets and communities, Stuart Olson will continue to defer more specific commentary on its 2020 outlook until greater certainty is available.


Stuart Olson will hold a conference call and webcast to discuss its 2020 first quarter financial results on Thursday, May 14, 2020 at 7:30 a.m. Mountain Time (9:30 a.m. Eastern Time). The webcast will be broadcast live and will also be available for replay in the Presentations & Events subsection under Investor Relations on the Company's website at For those unable to listen during the live webcast, a replay will be available on the website shortly after the conclusion of the conference call for a period of 90 days. Financial analysts and institutional investors who wish to ask questions during the conference call are invited to call 1-888-390-0546 (Canada and USA) or 1-587-880-2171 (outside Canada and USA). For those unable to participate on the live call, a replay will be made available until Thursday, May 28, 2020 by dialing 1-888-390-0541 (Canada and USA) or 1-416-764-8677 (outside Canada and USA), pin 491447. The public is invited to listen to the live conference call, webcast or the replay.


Stuart Olson Inc. provides general contracting and electrical building systems contracting in the public and private construction markets as well as general contracting, electrical, mechanical and specialty trades, such as insulation, cladding and asbestos abatement, in the industrial construction and services market. The Company operates office locations and projects throughout Western Canada, Ontario and the territories. Stuart Olson was recognized as one of Alberta's Top Employers in 2020 for the fourth consecutive year. Stuart Olson's common shares are listed on the Toronto Stock Exchange under the symbol "SOX".


This press release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws.

Often, but not always, forward-looking information can be identified by the use of such words as "may", "will", "expect", "believe", "plan", "intend", "estimate", "outlook", "forecast", "should", "anticipate", "seek", "continue", "see", "project", "predict", "propose", "targeting", "potential", "could", "might", "grow", "momentum" and other similar terminology, including statements concerning possible or assumed future results. Forward-looking information is based on management's reasonable assumptions, analysis and estimates in respect of its experience and perception of trends, current economic conditions, government policies and expected developments, as well as other material factors that it considers to be relevant at the time of making such statements.

The forward looking information in this press release should not be interpreted as providing a full assessment or reflection of the unprecedented impacts of the recent COVID-19 pandemic and the resulting indirect global and regional economic impacts. The forward-looking information in this press release is included solely for the purpose of assisting investors in understanding the Company's financial position and the results of its operations as at the date hereof. By its nature, forward-looking information involves known and unknown risks and uncertainties, which give rise to the possibility that management's assumptions, analysis and estimates will be incorrect and that the Company's anticipated results will not be achieved. Although the Company believes that the statements with respect to forward-looking information are reasonable and current, such statements should not be interpreted as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Forward-looking information is necessarily subject to a number of factors that may cause actual results to differ materially from those results implied by the expectations suggested by such information. Those factors include, without limitation, the risks and uncertainties described in the Company's Annual Information Form filed with the securities regulatory authorities in Canada under the Company's profile at Readers are encouraged to consider the foregoing risks and other factors carefully when evaluating the forward-looking information and are cautioned not to place undue reliance upon such information when making investment decisions.

The forward-looking information in this press release is current to the date hereof, and is subject to change following such date. While the Company may elect to do so, unless required by applicable law, it undertakes no obligation to update this information to reflect new information or circumstances at any particular time.

SOURCE Stuart Olson Inc.

For further information: David LeMay, President and Chief Executive Officer, Stuart Olson Inc., (403) 685-7777, Email:; Dean Beacon, Executive Vice President and Chief Financial Officer, Stuart Olson Inc., (403) 685-7777, Email: