Welcome, ladies and gentlemen, to the Bird Construction first quarter financial results conference call and webcast. We will begin with Teri McKibbon, President and Chief Executive Officer's presentation, which will be followed by a question and answer session. Analysts and institutional investors who wish to ask a question should have their webcast muted when dialing into the conference number provided. At any time during the presentation today, you may press the star and one on your telephone to be placed into the question queue. You will hear a tone acknowledging your request. When we are ready for questions, you'll be introduced into the conference in the order that you were received. If you wish to remove yourself from the question queue, you may press star and two. As a reminder, all participants are in listen-only mode, and the webcast is being recorded.
Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. Before commencing with the conference call, the company reminds those present that certain statements which are made express management's expectations or estimates of future performance and thereby constitute forward-looking information. Forward-looking information is necessarily based on a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic, and competitive uncertainties and contingencies. Management's formal comments and responses to any questions you may ask might include forward-looking information. Therefore, the company cautions today's participants that such forward-looking information involves known and unknown risks, uncertainties, and other factors that may cause the actual financial results, performance, or achievements of the company to be materially different from the company's estimated future results, performance, or achievements expressed or implied by the forward-looking information.
Forward-looking information does not guarantee future performance. The company expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events, or otherwise. At this time, I would like to turn the conference over to Mr. Teri McKibbon, President and CEO of Bird Construction. Please go ahead, Mr. Teri McKibbon.
Thank you, operator, and good morning, everyone. Thanks for joining us on today's first quarter 2021 earnings conference call. Joining me on today's call is Wayne Gingrich, Chief Financial Officer. I am pleased to report solid first quarter 2021 financial results, despite the negative impacts the global pandemic had on our operations this quarter. While public health pandemic-related restrictions impacted our productivity at various times during the first quarter, the majority of our project teams were able to return to job sites by March and continue executing on our projects. Once again, the Bird team went above and beyond, and I want to thank them for their dedication in putting clients and projects first during these incredibly challenging times. Turning to slide four, we reported another profitable quarter.
Revenues increased 38%, while adjusted EBITDA was up 178% and adjusted earnings improved 714% compared to the comparable quarter in 2020. Additionally, we secured CAD 389 million in new contract awards in the first quarter, a 94% increase compared to Q1 last year. Looking at our backlog and pending backlog on a consolidated basis, we ended the first quarter at a similar level compared with year-end 2020. While we continued to see delays in project tenders and awards due to the pandemic, we secured a number of strategic awards, which I will highlight shortly. Once again, we ended the quarter on very strong financial footing, which positions us to grow not just organically, but also be more acquisitive in the future. Turning to slide five, one of our key priorities, improve our overall margin profile.
I'm happy to report that our adjusted EBITDA margin profile continues to improve sequentially. With our first quarter results, we have now posted 10 sequential quarters of trailing 12-month adjusted EBITDA margin improvement. Our adjusted EBITDA margin in the first quarter of 2021 was 4.7%, reflecting a 230 basis point improvement year-over-year. On a trailing 12-month basis, our adjusted EBITDA margin was 5.9%, which is a significant improvement compared to a year ago. As we have discussed previously, the inclusion of Stuart Olson will weigh on our near-term margin profile. However, we are confident we've assembled a business that can support higher margin profile over the medium to long term. In fact, Bird-Stuart Olson business combination is yielding results as opportunities continue to present themselves.
As you can see on slide six, we secured a new five-year maintenance contract from a long-standing industrial customer in Alberta to provide MRO services. This contract is estimated to be in excess of CAD 550 million, the majority of which has been recorded in pending backlog. Additionally, we secured a contract with Infrastructure Ontario for the design build expansion at Kenora Jail and Thunder Bay Correctional Center. While this is a smaller project, it is very much a strategic win for Bird as it leverages both Bird and Stuart Olson capabilities, spanning our innovative Stack Modular capabilities and commercial systems offerings to our national and geographic presence. Subsequent to quarter end, we were awarded a CAD 172 million fixed price construction services contract by Concert Properties for the Sherbourne Project or The Burke in Toronto, Ontario.
The Burke is a residential tower consisting of 53 floors and 501 residential suites. This announcement builds on our longstanding relationship with Concert Properties, as we have had ongoing success in this market for years. Additionally, in May of 2021, we announced we secured two separate civil works contracts valued at approximately CAD 135 million. The first contract is at an existing project site in northwestern British Columbia and includes the construction of two concrete storm and effluent ponds. This project award reflects our extensive industrial experience, growing self-performing capabilities, and our demonstrated operational excellence throughout the years working on this site. The second project is located in northern Alberta. The lump sum contract includes the construction of an overpass that will facilitate access to an ore preparation plant from a mine. Installation of the cast-in-place concrete structure will be supported by substantial earthworks and a high-voltage electrical relocation.
This project award demonstrates the strength of Bird's self-perform capabilities that have been further enhanced through the acquisition of Stuart Olson. Overall, I am pleased with the results and the operational progress we have made to date, notwithstanding the impacts of COVID-19 that has had on our business. The combination of Bird-Stuart Olson is yielding revenue synergies, evidenced by the benefits from cross-selling the combined capabilities of Stuart Olson and Bird to deliver a higher value proposition to our clients. Additionally, our outlook is becoming brighter as we emerge from the pandemic and projects return to pre-pandemic levels, noting we are witnessing a strong bid pipeline to date.
Furthermore, we are seeing opportunities surface with the improvement in natural resource prices, which is noticeably improving the business prospects in Alberta, as well as the significant planned infrastructure spending announced by the federal and individual provincial governments with their most recent budget announcements. As you can see on slide seven, we have identified numerous opportunities that arise from stimulus program coast to coast. The aggregate federal and provincial expenditures outlined in recent budgets on infrastructure and related spending is over CAD 350 billion. As a top-tier nationwide construction company, we expect to fully participate in these planned work programs over time, which we expect will be additive to our top-line growth in 2022 and beyond. Now I would like to turn it over to Wayne to go over our financial results.
Thanks, Teri, and good morning, everyone. Please turn to slide eight. I'm very pleased with our first quarter 2021 financial results as they reflect more resiliency and less seasonality in our business compared to recent years. For the first quarter of 2021, we reported construction revenues of CAD 445 million, reflecting a 38% increase compared to the first quarter of 2020. The year-over-year increase can be attributed to the inclusion of Stuart Olson, as the pandemic delayed the securement of some new projects and temporary shutdowns or delays on existing projects resulted in lower revenues on some work programs, with the estimated impact of the pandemic totaling approximately CAD 90 million on Q1 2021 revenues. Gross profit was CAD 39.9 million, or 9% of revenues, in Q1 2021. This compares to gross profit of CAD 16.9 million, or 5.3% of revenues, in the prior year period.
The year-over-year increase in gross profit is due to a combination of additional gross profit from the inclusion of Stuart Olson and diversification of the company's work program, as well as improving year-over-year margins and operations. The pandemic had a negative impact on gross profit due to lower productivity and project delays and was partially offset by the recovery of CAD 11 million of compensation expense in cost of construction under the Canada Emergency Wage Subsidy, or CEWS program. General and administrative expenses increased by CAD 14.6 million year-over-year to CAD 29.4 million in the first quarter. The main driver of the increase is higher compensation costs of CAD 7.4 million due to the addition of Stuart Olson, as well as higher variable compensation expenses. General and administrative expenses also included CAD 2.7 million of integration costs in the first quarter of 2021.
Overall, we expect discretionary general and administrative expenses to be at similar levels in Q2 as they were this quarter and resume to a more normalized level as economic activity picks up to pre-pandemic levels. Q1 2021 adjusted EBITDA was CAD 21 million, representing 4.7% of revenues. This compares to adjusted EBITDA of CAD 7.6 million and an associated margin of 2.4% in Q1 2020. This represents a CAD 13.5 million increase and a 230 basis point improvement year-over-year. Adjusted net earnings was CAD 9.1 million, or CAD 0.17 per share in the first quarter of 2021, compared to CAD 1.1 million, or CAD 0.03 per share in the first quarter of 2020. The year-over-year increase in adjusted net earnings reflects a combination of additional margin from the acquisition of Stuart Olson, inclusive of synergies, as well as progress with diversifying the work program and improving year-over-year margins and operations.
Adjusted net earnings in the first quarter of 2021 was negatively impacted by reduced productivity and project delays resulting from the pandemic, which had a significant unfavorable impact on earnings and were partially mitigated by a pre-tax compensation expense recovery of CAD 11.2 million recognized in the quarter from the CEWS program and the adjustment of CAD 2 million of tax-affected integration expenses incurred in the first quarter of 2021. I'd like to turn to slide nine to briefly provide everyone with an update on the integration of Stuart Olson. We're very pleased with the integration to date and are on track with realizing the previously stated 25 million in cost synergies. To date, we have set in motion 8 million of the stated 10 million in EBITDA synergies and have fully realized the remaining 15 million in depreciation and amortization and interest cost savings.
As Teri had mentioned previously, we expect to see revenue synergies materialize over time. We're off to a good start given recent contract wins that either company could not have necessarily been able to secure individually. We expect to see more wins in the future as we continue to leverage our enhanced value proposition with our clients. Turning to slide 10, our backlog was largely flat compared to the end of 2020. As at March 31st, 2021, backlog stood at approximately CAD 2.6 billion, compared with CAD 2.7 billion as at year-end 2020, representing a slight decrease of approximately 2%. We expect 64% of backlog to convert to revenue over the next 12 months. Our pending backlog as at the end of the quarter was CAD 1.7 billion, up 3% from CAD 1.6 billion as at December 31st, 2020.
I would like to remind everyone that pending backlog includes a greater proportion of MSA contracts of approximately CAD 1 billion of the CAD 1.7 billion pending backlog. These contracts are typically with industrial clients that span multiple years for MRO services and represent a recurring revenue stream over the next 1 to 6 years. The company expects to convert these MSAs to backlog on a quarterly basis as purchase orders are received and provide excellent visibility to forward revenues. Projecting the timing of converting the non-MSA projects to pending backlog into contracts has been challenging with the effects of the pandemic, shifting some project conversions later into 2021. Overall, I'm very pleased with the composition of our future work program. We remain focused on appropriately balancing the risk profile of our backlog through end market diversification and contracting methods.
Moving to slide 11, the company continues to have a solid balance sheet with a lot of financial flexibility. I would like to remind everyone that from a seasonal perspective, the first quarter is typically the lowest point in our cash cycle as our accounts payable decreases. This quarter was no different, with accessible cash declining CAD 65.6 million in the first quarter of 2021 from CAD 96.7 million to CAD 31.1 million. Additionally, during the quarter, we reduced our indebtedness by CAD 7.6 million, of which CAD 5 million was non-scheduled, as we repaid a portion of the revolving credit facility. As such, we ended the first quarter of 2021 with cash and cash equivalents of CAD 125 million, while cash and cash equivalents available for operations was CAD 31.1 million.
Adjusted net debt stood at CAD 34.2 million, or 0.36 times trailing 12-month adjusted EBITDA, which is well within our comfort level.
As we have talked about previously, we remain committed to a balanced approach to capital allocation. As shown on slide 12, during the first quarter of 2021, we generated cash flow from operations before non-cash working capital of approximately CAD 21 million with a small portion of these proceeds being deployed towards capital expenditures of CAD 1 million. In the near term, we will continue to strengthen our balance sheet by reducing our net indebtedness with the ultimate goal of capitalizing on organic growth opportunities, as well as margin-accretive M&A that further diversifies our service offerings and balances our geographic presence. Bird remains committed to returning capital to shareholders through our monthly dividend, which amounted to CAD 5.2 million in dividend payments during the first quarter of 2021.
Overall, we are pleased with our financial strength and are ideally situated to benefit from government stimulus spending and stronger resource prices given our expanded capabilities. I will now turn it back to Teri.
Thanks, Wayne. I would like to spend a minute on our sustainability strategy on slide 13. Since our last quarterly earnings call, we published our inaugural sustainability overview report. Our values outlined in this report reflect our commitment to entrenching sustainability best practices within all areas of the business, transforming the way we work, build, and live. Bird already has a strong track record in utilizing sustainable construction methods such as mass timber and modular construction, and we are actively seeking ways to reduce our carbon footprint, including through tracking our greenhouse gas emissions. Overall, our core values are rooted in building green, working green, and living green, anchored by strong corporate governance practices. These values will guide our sustainability goals as we create value for all stakeholders involved for the next 100 years. I would encourage everyone to visit our webpage and explore our new sustainability page.
Turning to slide 14, overall, we have built a strong foundation. I continue to believe that Bird has built a stronger team and a more resilient business model over the past year and is well positioned to play a major role in the Canadian construction industry. We are ideally situated to capitalize on the significant growth opportunities ahead of us as the economy recovers and the strong infrastructure stimulus spending takes hold over the near to medium term. We're also ideally situated from a balance sheet perspective to capitalize on acquisition opportunities, which we expect will materialize over time. Lastly, I would like to once again thank our employees for their dedication, especially during these challenging and uncertain times. With that, I'd like to turn it back to the operator for questions.
Thank you. We will now begin the question and answer session. The first question is from Jacob Bout of CIBC. Please go ahead.
Good morning.
Hey, Jacob.
Morning, Jacob.
On the fourth quarter call, you talked about CAD 175 million of sales that had been delayed. Is that the current run rate? Has any of that delayed work been canceled from backlog?
None of that work has been canceled from backlog. That is a shift to the right. I don't know that I'd characterize the CAD 175 million as a run rate. That was a total year 2020 impact that moved towards this year. Then again, from our expectations as a result of some of the provincial measures put in place, we had CAD 90 million of revenue from Q1 kind of push out further into the year, but none of it has been canceled.
Okay. What would that total amount be that's been delayed as it stands right now for the run rate?
You mean in terms of normalizing a quarter?
Yeah. I mean, just work that has been pushed out.
I think at a point in time, it's that CAD 90 million that we talked about in Q1. As well, Q1 is a seasonally lower quarter for us. As our work program continues to ramp up, you can think of it as if we didn't have the pandemic, our revenue would be CAD 90 million higher, you'd have the appropriate amount of ramp-up coming up in Q2, Q3, and Q4.
How are you managing through the rapid rise in raw material costs? Lumber and steel has been quite dramatic. How is that impacting quoting activity, logistics, that type of thing?
It's a mix of solutions, Jacob. In some cases, we're indexing our proposals with our clients so the clients realize that we can't take that risk on. In other cases, it's a pure pass-through. In other cases, you've got subcontractors that are taking that risk, depending on the type of project we work with, certainly tier 1 subcontractors. They're taking it on. In the last case, there are situations where we will build in, obviously, contingencies or build in a hedge position against a supply channel. There's a multitude of solutions, but our teams are working very hard to cover that. It is certainly out there, and it's something we deal with every day.
Okay. Just lastly, just a question on embedded margins on your recent project wins. Obviously, there's been quite a few versus the rest of your historic backlog.
Are you asking how we feel about the margin profile on those wins?
Yeah. The embedded margins higher or lower than, so Burke, Nanaimo, Kenora, Thunder Bay, are the embedded margins, how does that compare to the rest of your backlog?
Yeah. I think if you take the prisons, for example. With our ability to leverage the STACK Modular solution in that, certainly that has a higher embedded margin with that program, but just due to the nature of it. Then we also earn equity earnings from our 50% share of STACK Modular as well in terms of manufacturing of those modules. It's certainly healthy. When you think about the MRO win that we announced, the CAD 550 million, certainly the margins are consistent with prior years on that. I'd say it's consistent. If you think about the project with Concert on Sherbourne, that's an institutional project for us. Again, I think we're happy with the margin profile on it. There'll be a large subcontracted component of that program. Then if you think about the two civil jobs, those are self-performed jobs.
Typically, in our industrial work program, when we self-perform, we have a higher margin profile. Again, I think those are stronger margins than maybe the overall work program we have, which gets impacted by the mix of institutional work. I'd say generally, Jacob, we're being very disciplined with the projects we're pursuing, the projects we select to pursue that we've got the opportunity to have accretive margin on those projects. In general, and we're seeing a fairly robust pipeline on types of projects that we're very interested in. We're very pleased with and excited about what's ahead right now.
I'll leave it there. Thank you.
Thanks, Jacob.
Thanks, Jacob.
The next question comes from Chris Murray of ATB Capital Markets. Please go ahead.
Thanks. Good morning, gentlemen. Just turning back to the margins in Q1, and I think you talked a little bit about the CAD 90 million that was pushed out, but I guess there's also the CEWS payment. A couple of questions around the CEWS. First of all, kind of normalizing for, call it the CAD 11 million that impacted EBITDA and the gross margin, but again, the revenue coming out. How should we be thinking about what margins would have been if you could have executed that CAD 90 million in a quarter? Then just second, as we go forward, how should we think about CEWS impacting Q2 and Q3?
Certainly. I think if you're trying to just normalize that, what we said in our MD&A is that, revenue was impacted by CAD 90 million. If you want to make an adjustment, you could add CAD 90 million back onto the top line. What we said is that the CAD 11.2 million of CEWS payments almost covered up the impacts of COVID. For simplicity, you can say it covered it off. The amount of margins that we earned, I think on a normalized basis, probably are reflective of the work program we have in place now, just revenue is a little bit lower. If you're looking at gross profit margin or EBITDA margins, they're probably higher than they would be if you added that CAD 90 million back. It would lower the overall percentage, but I think in dollar terms, they're reflective.
Okay, just the impact for CEWS on Q2 and Q3?
Yeah. I think the company will still qualify to some extent, although probably to a lesser degree for CEWS leading up to the June 5th timeline, which was kind of the end of that program prior to the recent government announcement on it. I think beyond June 6th, the company probably will not qualify. I think, at this point in time, from what we see happening in the business, June 5th is when it will end. I think from a dollar value, it's hard to actually put a dollar on it, but I think it'll certainly be less than the amount we recorded in Q1 here.
Okay. Fair enough. Just thinking about the modular business, the Nyomo and Thunder Bay, some of the other projects you've done. The majority of your projects seem to be, call it institutional. I know there was a hotel project you've done, some stuff in Quebec you've done. I guess a question, there seems to be a lot of demand from the government around housing and social housing. It seems to be an area that you guys haven't had a lot of success in so far. Just sort of curious about your thoughts around being able to use STACK in that kind of environment, and whether or not building additional modular capability, either internally or through acquisition, is something you're thinking about.
I think, Chris, that again, the modular side of our business is evolving, and it's such a significant change for the industry where you're building things in a remote location in a plant and then shipping. It certainly takes time for all stakeholders to acclimatize or accustom to that type of a build. We are seeing, though, opportunities arise. Some of the smaller builds in Canada have been, at times, if it's smaller demand, smaller scale projects, the efficiency isn't there to access with our Stack business. We are seeing the business gaining momentum and seeing opportunities evolve, and expect to see some opportunities in the near to medium term on some of the social housing type initiatives with various governments.
Stack's predominantly a metal fabricator, but I know a lot of the other companies and the competitors are into wood. Is that something you might be thinking of?
Exclusively steel.
Yeah.
It's a different space for us to go into the wood side. There's some very significant players, the ATCO of the world, guys like that are in the wood business. I think it's just a different delivery. We haven't looked at it seriously because we think that there's a lot of capacity there. For us, the benefits of a steel modular build are significant heights that you can achieve and in that regard, and I think the long-term capability of that design, durability of that design being steel, is something that is important for the types of things we're focused on. The wood side certainly hasn't really been on our radar.
All right. That's helpful. Thanks, folks.
Sure.
Sure.
The next question is from Yuri Lynk with Canaccord Genuity. Please go ahead.
Good morning, guys.
Hey, Yuri.
Hey, Yuri.
I'm just going to go back to the CAD 90 million. What are you seeing in terms of delays in Q2? Does that CAD 90 million, does half of that kind of come back in the second quarter, or is it more back-end weighted?
I think all things being equal, I think we'll be able to recover on the CAD 90 million through the course of the year. I think it's going to be probably more spread over the three quarters than a higher proportion in Q2, say. I think for the year, we may be able to recover on that. In Q2, the largest project site that was impacted in Q1 was the LNGC project site, and that was shut down primarily for all of January and February, and then we slowly ramped up in March. We're at full capacity now. I think with just some of the restrictions announced a few weeks ago in Ontario, we really only have one project that's currently on hold, and it's not that material in terms of the overall impact.
Right now, we don't see as significant impact in Q2 as what we have in Q1.
Okay. Could you provide us with the revenues from the Stuart Olson business in the first quarter?
We did not disclose the mix of legacy Stuart Olson or legacy Bird revenues in the quarter.
Okay. Were they seeing, when you talked about the CAD 90 million in delays, is that across some of Stuart Olson projects as well?
I think, the short answer is yes, but I think the majority of it relates to what I would say are legacy Bird projects. I think the Stuart Olson business had some impacts, but not nearly to the extent that the legacy Bird business had.
Okay. I'll leave it there, guys. Thanks.
Thanks, Yuri.
Thanks, Yuri.
The next question is from Michael Tupholme with TD Securities. Please go ahead.
Thank you. In the press release, it was mentioned that you're nearing the completion of the initial Stuart Olson integration plan. I'm just wondering if you can provide a bit of an update. I know you did indicate that the synergies are running to plan in terms of realization. Is the integration now essentially complete or is there a subsequent phase to the integration plan?
Generally speaking, it's complete. Obviously we're seeing some really exciting cross-selling opportunities and the integration's gone really well. We're really excited about the combination of the two businesses. The chemistry of the teams has worked out quite well, considering we're in a pandemic and we're largely isolated to a certain extent, and not able to have that sort of team building sessions you would in a normal environment you would have, but it's gone incredibly well. We still have a longer term technology integration. It's not specific to the integration. It's really in the absence of the integration, we would be doing this anyway. The construction industry right now is in a, what I would call a revolutionary phase of technology focus.
We're busy with that, and then we're lucky that we have two entities with considerable experience and considerable exposure to different types of technology that we can pick the best of both. We're making good progress on that as well. The bulk of the day-to-day integrational and team structure, organizational structure, and we've harmonized compensation and benefits and that's all gone extremely well.
Okay. That's helpful. Thank you. Just in terms of the cross-selling opportunities, it sounds like you're starting to see some realization. Just to be clear, it doesn't sound like they're necessarily hitting revenues yet in terms of benefiting revenues, but am I correct that you've actually secured some work that's now sitting in backlog that you sort of deemed to have been achieved through the benefit of the?
Yes
combination of the two firms?
Yes. Some of the new projects we've announced are the combination of the two firms. I think the scale of the business, as we are able to service clients with a company with 5,000 employees is a different offering than what we would've had seven months ago.
Okay. How are these materializing? Are these opportunities where you were in pursuit of some work and then the opportunity set has expanded because of the combined entity and its capabilities? Or is this clients coming to you and saying, "Looks like you can offer us additional opportunities or services.
Yeah.
Can you just talk a little bit about that, please?
Yeah, it's a bit of both. In certain situations we can bring If you look at it from the Bird lens, we can bring some of the Stuart Olson entities into existing opportunities that we are in pursuit of. Oftentimes, we're seeing an evolution of new commercial models, an extensive use of integrated project delivery, for example, which requires a different front end in terms of the amount of time you spend with a client. Stuart Olson is accustomed to that type of thing. They do a lot of that today working on development of projects so the combination of Bird and Stuart Olson obviously creates a very dynamic delivery, certainly a solution for clients and we're making really good traction and I think that's a model that will be used quite extensively in the future.
We're seeing that accelerate with various clients and significant scale where projects have got considerable complexity and the risk, for us, is capped. Certainly, and I'd say that back to the scale, when you've got clients looking at the new entity, it just gives you a much broader offering and a broader solution and a more resilient labor solution. I think it's a mix of different things that are evolving. The opportunity with the modular and the jail work in Ontario for IO, we're bringing in different entities within the Bird Group to deliver that. That's an example where we're adding considerable value and enhancing our margin profile by using different subsets of the business.
Okay. You were asked earlier about rising materials costs, and I think you spoke to how you're managing through that. I just have a follow-on, though, related to what sort of an impact is this having on client decisions to move forward with projects to the extent that projects are going to be costing more than they would have previously, given the rising price environment. Is this having any impact on client decision-making?
Certainly from our lens, a lot of the work that we do, it's a mix of different types of clients and obviously, we tend to work with tier 1 sort of entities so that they understand these fluctuations. Obviously if we're indexing the impacts by the time you're in the ground on some of the longer-term things we're working on, that index could be back to current conditions. I'd say we're not seeing any sort of pause with the types of projects that we pursue from the types of clients, at least at this point. You might see it in smaller private development type work if it's obvious as we're putting our budgets forward that the budgets aren't meeting their financial model. We haven't seen it to any extent at this point.
Okay, great. Just last quick housekeeping item. Wayne, you talked about Q1 in terms of seasonality from a cash perspective. There was a close to a CAD 70 million investment in changes in non-cash working capital in the first quarter. How should we think about that over the full year?
I think the pattern that we've seen in recent years will continue this year. I think you're going to see our work program in Q2 increase. I think that's going to put pressure on cash as our non-cash working capital grows. I think in Q3, you're still going to see a little bit more normalcy in the business, if you will, and it should be a very strong revenue quarter. Q4 is typically where we generate most of our free cash flow in the year, where the investment in working capital through Q2 and Q3 starts to release in Q4. Again, I think we're expecting Q4 to be a pretty strong cash flow quarter again.
Just in terms of where that leaves you at the end of the year, do you expect to be in a position where on a full year basis you've invested, or does that Q4 recovery bring back most of what you've invested through the first part?
I think it'll bring back what we invested in the first part.
Okay. Thank you.
The next question comes from Frederic Bastien with Raymond James. Please go ahead.
Hi. Good morning, everybody.
Good morning, Frederic.
was wondering if you could comment on how the competitors are behaving these days? You obviously benefit from a healthy and diversified backlog, but some smaller and more concentrated players may not have the luxury of waiting around for the markets to pick up. Just wondering what kind of opportunities may present themselves from that, but also there might be some potential challenges that come out of it as well.
I think generally, Frederic, we've been very selective on the projects that we've been pursuing. We're not typically in the space where we're competing with some of the smaller guys that might be under more pressure than we are. I think, as you referenced, our diversified service offering allows us to be into a different profile. I think we're seeing a lot of opportunities on the industrial side where we've got projects that will require significant experience and ability to deliver. You don't see the smaller guys in those very often. That's exciting for us. I think just generally overall, we're focusing on a different horizon than some of the smaller guys.
Okay. If we flip that around, does that create opportunities for you potentially on the M&A side?
Yes
Are you still kind of dedicated and solely focused on integrating Stuart Olson right now?
We're very pleased with the progress we've made with Stuart Olson. We are actively looking at opportunities. Obviously, we're being very selective and ensuring that they're in a space that we want to grow and feel that that market has got legs and resiliency. Obviously, as we mentioned in the notes on the call, we're focusing on a geographical balance. We're focusing on accretive businesses that can complement what we're currently doing, but also creating some more diversity.
Great. Whatever you're doing is working right now. Keep doing it. Congrats.
Thank you.
Thank you.
Once again, anyone who has a question may press star and one at this time. The next question comes from Maxim Sytchev with National Bank Financial. Please go ahead.
Hi. Good morning.
Hi, Maxim.
Wayne, if you don't mind, because just trying to get the sense of the cadence on LNG Canada. I mean, obviously you were impacted January, February in terms of revenue generation, but is this kind of the revenue which is lost just given kind of the seasonality component, or can you put more boots on the ground to be able to sort of fully recapture that? Just trying to make sure that we properly reflect this because, I mean, it is a sizable program like this.
No. When BC Health announced the shutdown of those five projects, of which one of them was the LNG Canada project, the number of boots on the ground we had to reduce in January and February. Had that not been in place, we would have had a lot more activity on site in January and February, and even in March, we were ramping up on that project. We didn't really get to a full capacity till towards the end of the quarter. It did have an impact from what we otherwise would have had.
Right. Again, will you be generating on a like-for-like basis, I guess, more EBITDA in Q3, Q4 because of that catch-up dynamic, or that's not how you guys are thinking about it?
Yeah. No, I think that's a fair comment. For the work that was delayed in Q1, we think we'll be able to make that up through the course of the year.
Okay. That's super helpful. Thank you. Teri, if you don't mind, obviously with WTI where it is, can you maybe talk about the oil and gas opportunities maybe for Legacy, Stuart Olson, and then given the pricing in iron ore gold, and there seems to be much more movement there in copper as well, anything on the mining side of things that makes you guys excited looking forward from a bidding perspective? Thanks.
Certainly on the oil and gas side, we're certainly seeing an uptick in the demand for our services and the pace of activities has certainly increased. You're always active with projects that are sort of evolving. Even the one we announced had been evolving for a period of time. With the strength of oil pricing, we've seen these things accelerate now and move along, and we're seeing more new announcements and whatnot that are exciting for the market in that regard. Sort of the rising tide scenario. On the mining side, it's still a little bit slower in terms of new capital pouring into new projects and whatnot. I think there's still a lag there. At least we're seeing a bit of a lag in the kinds of things that we pursue, but we anticipate that will strengthen.
I think part of it is still in the pandemic as well. We'll see over time. We're not currently seeing that side of our business pick up, but anticipate that it will by third quarter.
By third. Okay. That's super helpful. I guess, obviously you have a slide showcasing the infra spend by province. Any pinch points on the potential horizon in terms of workforce to be able to undertake all these contracts? Maybe any mitigation strategies that you guys are thinking about right now? Thanks.
We certainly haven't experienced the pinch points at this point. Obviously we're always very careful that the projects we pursue are within our capacity and capabilities, and we're comfortable with the teams. It's just a function of being very disciplined. Ultimately, programs that announce like these that have been recently announced with the government take a bit of time. We do anticipate that there'll be some time that'll allow us to properly structure our positions on these things and take it from there. At this point, Canada has got pretty significant capacity. I don't anticipate in the short term to medium term, Max, that there'll be any kind of pinch point.
Okay. That's super helpful. That's it for me. Thank you so much.
Thanks, Max.
Thank you.
The next question comes once again from Michael Tupholme with TD Securities. Please go ahead.
Thanks. Just to follow up on one of the last couple questions there, Teri, regarding improving oil prices. It's clear there's obviously been a material improvement. I'm just wondering, though, the opportunities that you're seeing, can you be a little bit more specific? Are these sort of more debottlenecking type opportunities, or are you actually seeing some opportunities related to sort of growth, expansionary type spending?
Typically with the existing plants, they're always focused on increasing their capacity. There is such significant scale to these producers that it sort of quietly evolves where you've got expansion on these sites. For us, that's what we're seeing. Certainly some significant evolution there. When oil prices are stronger, the spending is higher, and that's just the way it evolves. You're starting to see new announcements with new opportunities evolving generally in the energy landscape. We're certainly excited about it. We're also seeing companies that are in oil and gas that are obviously expanding their renewable footprint, and those are exciting. We positioned ourselves really well to take advantage of a diversified platform of projects, and we're seeing that really start to bear fruit.
Okay. That's helpful. Thank you.
There are no further questions at this time. I will now hand the call back over to Mr. McKibbon for closing remarks.
Thank you everyone for taking the time to join our first quarter earnings conference call. We have a very bright future ahead of us as a premier construction and infrastructure company with the potential to create long-term value for all stakeholders. Have a good day, stay safe, and we look forward to updating you with our second quarter results.
This concludes today's conference call and webcast. You may disconnect your line. Thank you for participating, and have a pleasant day.