Welcome, ladies and gentlemen, to the Bird Construction First Quarter twenty twenty Financial Results Conference Call. We will begin with Terri McKibbon, President and Chief Executive Officer's presentation, which will be followed by a question and answer session. On your telephone to be placed into the question queue. You will hear a tone acknowledging your request. When you are ready for questions, you will 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 and 2. As a reminder, all participants are in listen only mode and the conference is being recorded. Before commencing with the conference call, the company would like to remind those participating that certain statements which are made express management's expectations or estimates of future performance and thereby constitute forward looking statements. Forward looking statements are 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. In particular, management's formal comments and responses to any questions may include forward looking statements.
Therefore, the company cautions today's participants that such forward looking statements involve 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 these forward looking statements. Forward looking statements are not guarantees of future performance. The company expressly disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, events or otherwise. At this time, I would like to turn the conference over to Mr. Terry McKiddon, President and CEO of Bird Construction.
Please go ahead.
Hello, and thank you for participating in Bird Construction's first quarter twenty twenty earnings call. Co presenting with me today is William Gingrich, Bird's CFO. We hope that all our employees and the investment community are staying safe and healthy during COVID-nineteen pandemic. On 03/11/2020, the World Health Organization declared a global pandemic due to the contagiousness of the null coronavirus and severe respiratory disease, COVID-nineteen, that could be developed after contracting the virus. The COVID-nineteen pandemic has added uncertainty to the industry, as each provincial government has responded with different measures to address the public health threat.
The duration of these measures is currently unknown, and the corresponding impacts to our workforce and to our project sites are key variables that have uncertainty as a result. The first quarter financial performance of the company is generally not impacted by the pandemic, but the company has seen impacts in early April late April and early May related to the temporary project shutdowns and reduced productivity on project sites as a result of physical distancing and additional health and safety measures added to our normal protocols. The situation remains very fluid, and the company is well positioned to respond to fluctuating scenarios in the near term. Our highest priority is always to protect the health and safety of our employees. The company acted quickly to implement a pandemic response plan combined with a rigorous COVID-nineteen health and safety program, which meets or exceeds guidance from applicable public health authorities.
The response plan includes best practices for managers, self assessment tools, enhanced cleaning protocols and hygiene measures, physical distancing practices, new COVID-nineteen measure audits and a complete proximity activity hazard management process, including additional personal protective equipment requirements. Strategies to reduce concentration of site workers such as staggered start times, breaks and lunch times have also been implemented on construction sites. The company has also created online COVID-nineteen information centers for employees and managers to ensure all team members are kept informed as the situation evolves. Remote work practices facilitated by information technology have been implemented across all offices. The company continues to communicate on a regular basis with all employees and has highlighted the additional support offered by the provider of the Employee and Family Assistance Program to support employees and their families during this time.
The company was proactive in managing its cost structure and balance sheet by implementing precautionary measures to position itself in the event of a prolonged impact to the business by instituting a temporary reduction in salary in mid April with the Board of Directors, executives and non project related employees. Where projects have been temporarily slowed down or suspended by client or by a provincial government, the company has implemented temporary layoffs. Additionally, the company has also reduced discretionary spending, deferred capital expenditures where possible out of an abundance of caution. All these efforts contribute to a strengthened financial position should the pandemic run longer than expected or if a second wave of COVID-nineteen occurs. The executives and directors want to acknowledge the efforts and sacrifices that our employees have made to ensure that the company is operating safely and effectively, delivering upon its project commitments through these unprecedented times.
In the first quarter of twenty twenty, the company continued to execute a more diverse work program and delivered significantly improved net income and adjusted EBITDA year over year. Adjusted EBITDA adjusted EBITDA margin in the 2020 were $7,600,000 and 2.35%, respectively. Adjusted EBITDA increased $10,700,000 from a negative $3,100,000 in the first quarter of twenty nineteen. Adjusted EBITDA margin increased three fifty five basis points from the negative 1.2% recorded in the first quarter of twenty nineteen. The year over year improvement was driven by an increase in gross profit due to the revenue mix and the impact of increased costs on certain contracts incurred 2019 that did not recur in 2020.
We are pleased with the continued progress completing our challenging legacy programs and in the impact of our efforts to diversify our revenue stream across the portfolio of both geographic and balanced risk profiles. We continue to be encouraged by the growth of our pending backlog, of which many are in a delivery model that supports a more traditional portfolio risk balance of BERD in our overall work program, and our earnings base has begun to reflect this. The COVID-nineteen pandemic did impact the timing of conversion of some of our pending backlog, pushing some expected awards after the first quarter of twenty twenty. In 2020, the company secured 220,800,000.0 of new contract awards and change orders and executed $321,600,000 of construction revenues. The backlog of $1,430,000,000 for the company at 03/31/2020, increased 11.2% from the $1,280,000,000 in backlog a year ago.
However, backlog decreased $121,000,000 or 7.8% from the $1,550,000,000 of backlog recorded at December 3139, as several awards expected in the 2020 were delayed, including the Eric Amber secondary school replacement project. The company experienced two minor project cancellations in the quarter as a result of the COVID-nineteen pandemic, one from backlog and one from pending backlog. The Board has declared an eligible dividend of $0.03 $25 per common share for May 2020, and it is meeting monthly through the COVID-nineteen crisis. We'll communicate dividend declaration monthly on a go forward basis. Subject to the quarter end, the company announced the award of the Eric Hamber secondary school replacement project in Vancouver, British Columbia for approximately $92,000,000 under a design build contract.
Wayne will now walk us through the financial results for the quarter compared with the prior year.
Thank you, Terry. Before I discuss the financial results, I'd like to take a moment to thank all employees, including those who are working remotely and help with our financial reporting process. The COVID-nineteen pandemic has changed the way we work, and I appreciate the flexibility and continued dedication of our team to support and maintain the business through this crisis. During the first quarter of twenty twenty, the company recorded net income of $1,100,000 on construction revenue of $321,600,000 compared with a net loss of $6,500,000 on $261,800,000 of construction revenue in 2019. The year over year increase of revenue in the first quarter of twenty two point nine percent was driven by growth in the industrial work program, while the Commercial and Institutional Work program was effectively flat.
The year over year increase in first quarter net income is reflective of the improvement in revenue and earnings attributable to the mix of higher margin Industrial Work program. The company's twenty twenty first quarter gross profit of $16,900,000 was $10,600,000 or 167.8% higher than the $6,300,000 recorded a year ago. The increase in the amount of gross profit is driven by the higher quarterly construction revenues year over year. In addition, the increase in gross profit is due to a higher margin work program as revenue contribution shifted from predominantly institutional and commercial projects to a more balanced work program, including industrial. The 2019 was also negatively impacted by a PPP project that incurred additional costs due to design related scope growth and acceleration expenses.
There were substantial changes to
the scope of that project requested by
the client that are still in commercial negotiation. This PPP project achieved substantial performance in the first quarter of twenty twenty. Gross profit percentage in the 2020 was 5.32.9% higher than the gross profit percentage of 2.4% recorded a year ago for the same reasons as gross profit. Income from equity accounted investments in the 2020 was $1,700,000 compared with $700,000 in the same period of 2019. Included in the 2020 was a net gain on sale of one of the company's investments in equity accounted entities held for sale of $400,000 The remainder of the increase in income was primarily driven by the margin earned from equity accounted investment based in Eastern Canada.
In the first quarter of twenty twenty, general and administrative expenses of $14,800,000 or 4.6% of revenue was slightly lower than the $15,000,000 or 5.7% of revenue in the corresponding period a year ago. During the first quarter, the company had lower compensation expense of $400,000 Third party pursuit costs were $300,000 lower and $100,000 higher foreign exchange gains than the amount recorded a year ago. Partially offsetting these reductions in expenses was $600,000 higher professional fees relating to information technology and consulting fees than the amount recorded in 2019. Finance income of $800,000 in the 2020 is comparable to the $600,000 recorded in the same period of 2019 due to higher cash balances being carried during the quarter compared to the prior year. Finance and other costs of $3,100,000 were $1,600,000 higher than the $1,500,000 reported in the first quarter of twenty nineteen.
The increase was due to $800,000 higher interest expense on nonrecourse project financing and $500,000 higher losses on interest rate swaps. There was also a $400,000 increase in interest expense on loans and borrowings. In the first quarter of twenty twenty, income tax expense was $400,000 compared to the income tax recovery of $2,400,000 recorded in the first quarter of twenty nineteen. The effective tax rate of 27.1% in 2020 is comparable to the 27% in 2019. I will now turn the call back over to Terry to comment on the future operating performance for the company.
Thank you, Wayne. The trend for the company over the past several years towards a growing proportion of industrial project revenues is expected to continue throughout 2020. Diversification into LNG, nuclear, public transit, modular, environmental sectors will balance the risk profile and help stabilize earnings. In the third quarter of twenty twenty, the company expects to sell two equity investments in PPP projects. This is consistent with the company's strategy not to hold these investments for the entire duration of the concession agreement.
At 03/31/2020, the company was carrying a backlog of $1,426,000 which is 11.2% higher than that recorded a year ago. The company expects to recognize 66% of the remaining performance obligations over the next twelve months. This estimate reflects any short term impact on financial results from projects that have been put on hold by clients as a result of the pandemic. This expectation is based on management's best estimate that contains uncertainty as it is subject to factors outside of management's control. Embedded margin in backlog improved throughout 2019 and improved year over year in the first quarter of twenty twenty.
Backlog is more diversified than in prior years across a broad range of markets and contracting methods with a more balanced risk profile. This can be seen in the disaggregation of the revenue in the company's twenty twenty first quarter financial statements, whereby revenue earned in higher risk contract categories such as PPP, alternative finance and complex design build projects comprised 16.1% of total revenue in the 2020 compared to 26.1% in the same time period in 2019. Proportion of revenue earned from higher risk contract types is expected to remain lower throughout 2020 when compared year over year. The company has minimal direct exposure to projects in the oil sector in its backlog. In addition, the company has $625,000,000 of pending backlog as of the end of the first quarter of twenty twenty.
The projects are geographically diverse and span multiple sectors. This includes the addition of the Eric Hamber secondary school replacement project in Vancouver, B. C. For approximately $92,000,000 under a design build contract. Subsequent to the end of the first quarter, the project was contracted and recorded in the backlog.
Projecting the timing of converting the rest of these projects into contracts has become more difficult in the current market conditions as a result of the pandemic and several have shifted beyond the second quarter into the second half of twenty twenty, which will impact the revenue this year. The project pursuit pipeline remains healthy and falls within our targeted risk of risk tolerance. The company continues to be selective on prospective pursuits, ensuring our clients' expectations are an appropriate match for our capacity within our overall work program. Project cancellations in the Pursuit pipeline have been minimal to date. However, the company is seeing projects in the Pursuit phase shift further out, which will have a modest impact in the second half of twenty twenty.
At this point, the company does not expect this shift of timing of pursuits to impact 2021. In the near term, opportunities will primarily consist of smaller environmental projects, midsized social infrastructure projects and a range of projects in the LNG sector and mining sectors. The award of any of these projects will benefit the 2020 and beyond. Recognizing that the longer the COVID-nineteen pandemic circumstances persist, the higher the risk of company's underlying assumptions, the company maintains an optimistic outlook considering the impacts to date and the positive indications for gradual reopening of the provincial economies in the near term. The company has experienced impacts of the pandemic in April related to temporary project shutdowns and reduced productivity on project sites as a result of physical distancing and additional health and safety measures added to our normal protocols.
As May evolves, our operational workforce have become accustomed to the new operational landscape and productivity levels are returning to normal. The company expects to benefit in 2020 from having a healthy backlog with higher margins than a year ago and more balanced in terms of contractual risk profile of the work program, notwithstanding expectations that revenues will be lower year over year as a result of the pandemic. When the company's work program fully mobilizes, there will be a period of time in which the company will experience growth in noncash working capital as the business ramps back up until a steady state of operations is achieved. So this concludes the prepared remarks section of the conference call. I'll now turn the call over to the conference call operator, who will take your questions in turn.
Thank you. We will now begin the question and answer session. Analysts and institutional investors who wish to ask a question may press and 1 on their touch tone telephone to join the question queue. You will hear a tone acknowledging your request. If you are using a speakerphone, please ensure you lift the handset before pressing any keys.
If you wish to remove yourself from the question queue, you may press and 2. Our first question comes from Yuri Lynk of Canaccord. Please go ahead.
Just wondering how the quarter turned out vis a vis your initial expectations Because it looks like a pretty good quarter from our management.
Yes. I think, generally, year end, as expected. Certainly, we put a lot of focus into our business, our forecast, our budgets and generally as expected for the business. I'm trying to get obviously, trying to
get a handle on the degree to which revenues might be down this
year. The MD and
A implies about an 8% reduction in the revenue that you expect to burn from backlog over the next twelve months compared to what you had in Q4. Is that kind of ballpark the revenue decline you're expecting? Or can can you give us any additional color on how to think about that?
We haven't disclosed, obviously, what
we expect the revenue to be for the year. But suffice to say, we expect Q2 will be significantly down from a year ago. We are seeing some of our project sites return to work. We're seeing some ramp up on other sites where they had kind of previously ramped down through April. But Q2 is certainly going to be impacted.
Some of the new project awards that were in our pending backlog that coming into the year, we thought were going
to convert to awards in kind
of Q1 or Q2 are starting to push to the right, and that is going to have a negative impact on Q3 and Q4. But if you think back to our Q4 disclosure, we had said that 66%
of our backlog would come into revenue in
the next twelve months. So 66% of that would come into 2020. At the end of Q1, here, the number is still 66%, but it's on a in the next twelve months, but it's on a $1,400,000,000 backlog. So that's coming down as well. So we haven't pegged a revenue number, but I don't think a 8% reduction that you're putting out there is far off from a total year perspective.
Okay. Last one for me, I'll turn it over. Terry, do have any concerns about being on the hook in any way for the additional costs that you're experiencing on probably almost all your job sites associated with dealing with COVID-nineteen?
Generally, Yuri, our obviously, our contracts do a varying degree of types of contracts with varying degrees of contractual coverage. Obviously, our subcontractors are back to back on those you always have the risk of challenges of trades weathering this type of environment. You never you do your best to have security on the larger ones, but there's always a bit of that risk. But generally speaking, it's not something that we're worried about based on what we're seeing today. And I think that generally relates to the fact that the industry really kept going.
And it's obviously humbling to see how the construction industry has performed through a very uncertain time. We had some certainly some contracts that were paused and legislated to pause. But overall, it's it is really is impressive to see our industry, not just within Bert's business, but generally across the industry continue the way it has. And we have not had a worker on a site at Bert diagnosed with COVID-nineteen. We've had certainly symptoms that we ran through extensive testing on.
But across our whole suite of business across the country, we've not had a positive test. So I think that's a testament to the efforts that we're making on hygiene and protocols, safe distance and things like that. So it really is impressive to see. And obviously, a second wave can occur, but we feel that we've gone through this first wave and can certainly handle another wave as well.
Okay. I appreciate the color.
Our next question comes from Frederic Bastien of Raymond James. Please go ahead.
I was hoping to get your thoughts on how the second quarter is shaping up right now relative to perhaps thoughts how you felt it might be maybe six weeks from that six weeks ago?
It seemed early to we're seeing signs of certainly clients restarting projects that were paused. It's still early days effort. But we've seen we had certainly some absenteeism in the April. Productivity, everyone getting used to the new normal. But we're seeing, I would say, in most markets, some strength.
And I would say we're more optimistic about the back half of the second quarter than we would have been six weeks ago. But again, it's well, it is a higher level of confidence just because we're getting adjusted to this framework that we've worked in, and our clients are starting to get mobilized. We're feeling better than we did six weeks ago, for
sure. Okay.
Can you also provide an update on LNG Canada? I understand you have three projects, three contracts on this particular site. Give us an update, please.
Yes. So same sort of thoughts there. Early days, early April, certainly, significant reduction in scale. But that is returning to anticipated levels sort of as we speak. And the team there and our clients have done a phenomenal job with protocols and the parameters of managing the workforce.
Just they've done some really impressive things. And to this point, no positive tests within an employee from certainly within our landscape. And I don't think there's been a lot on the site. But within our landscape, we have find sight to. It's been really impressive.
So returning to our anticipated levels sort of as we speak.
Okay. Awesome. Last one for me, probably for Wayne. In respect to the two investments that you plan to sell shortly, are you expecting similar types of gains to the one that you enjoyed in Q1?
I think the gain on the projects that we're selling for is larger
than that gain. It's kind of
an opportunistic item that came up in Q1, so we did monetize that asset. The two that will occur in Q3, I think the gains will be slightly larger than what we saw in the first one.
Our next question comes from Michael Tupholme of TD Securities.
Terry, you provided a bit of an update there on LNG Canada. So clearly, it sounds like that was one of the projects where you did experience some impact from COVID-nineteen. I'm just wondering, were the impacts that you did see from COVID-nineteen across other parts of the business? Was it pretty general and fairly widespread? Or was it fairly concentrated to a handful of other projects?
It's fairly concentrated to a handful of other projects in provinces where the governments put really put restrictions in place, such as Ontario. We had some impacts in Atlantic Canada on some of our educational work. But it was purely government legislation that affected that. We have activity in Northern Quebec with our mining business with our cement tiles. So that was also affected with Quebec's legislation we put in place.
And I'd say that the economic demand, inventory levels, things like that on the iron ore side will certainly delay further demand in that business in the second quarter and expect that will be third quarter, fourth quarter. But it's seasonal anyway. And we've anticipated that, and it certainly doesn't have a major impact on our business per se. It's much smaller.
Okay. So it sounds like things are generally starting to normalize in terms of activity levels and ramping back up. So the second half of the year, to the extent that revenues are softer than you had originally expected, is that primarily a function of the some of the awards that you thought had would come through in the first half may not be at the level Yes.
Coupled with the softer second quarter revenue from some of the delays or some of the restrictions.
Right. Okay. And then just in terms of your earnings outlook commentary, reads consistent with the way it read in Q4 in that you do talk about continuing to expect earnings to be higher than in recent years. Not to try to pin you down to an exact number because I'm sure you won't provide that. But when you talk about higher than the last than recent years, there's quite a divergence depending on how far you go back.
So if you look at 2018, there was actually a small loss. And then in 2019, you were in $0.22 So just trying to get some sense. When you talk about recent years, I mean, we be focused more on 2019? Or kind of how far back are we looking here?
Yes. Obviously, our commentary relates to 2019. But although we anticipate that it will be lower than expected, our commentary is holds that we expect accretive performance from 2019, and we have a level of confidence of that based on the backlog and the embedded margin in that backlog and the performance that we've had to date.
Okay. That's helpful. And then just in terms of some of the projects being pushed to the right that were in the pursuit phase, is that in any particular end markets or sectors? Or is it more broad? Just any color around where you're seeing what areas those projects are in would be helpful.
Yes. So we it's somewhat broad, but I would say more focused on private commercial institutional work and the mining side, where things are getting pushed through. Generally, our industrial program hasn't seen that to an extent other than active work that's been underway. We're not seeing that as much on anything that's in the industrial program. It's more our commercial institutional side in the private sector, private investment side of that is where it's got pushed a bit.
Okay. And then just lastly, in terms of your you made some commentary around 2021 and at this point, not expecting a shift in the timing of Pursuit to impact your 2021. Just wondering what is the what gives you the confidence to say that? Is that a function of the fact that you're now seeing activity ramp back up on some of your existing projects? And maybe Pursuit's even though they've been pushed, they are still do expect awards in
the second half? Just trying to get
a sense for sort of at this point, So full uncertainty, how you can say
first and foremost, it's the anchor projects that we have in our backlog, projects that are evolving such as Canadian Nuclear Labs up in Shock River, as an example. Confederation Line extension in Ottawa is another example. LNG, we're still in the very largely in the early phase of procurement of LNG. So that's significant growth opportunities in all of those projects. So really, the confidence comes from the position we have, the strength of that backlog.
And just, I'd say, that we've had with some of you know, our, commercial institutional clients that are starting to reengage now and reset, you know, whether that's, some of the larger pension funds that we work for, you know, and hit the pause button for, you know, the month of April. We're starting to engage with those and move those towards fully contracted. So, you know, so we're and we have I think the more important piece is we have a very clear line of sight to the risk of our backlog and, you know, and the predictability of that. And so, know, we're we're in a good spot, you know. And if we can continue to evolve like we have through this getting through this month of April and starting to see more normal evolution of the business, I think we've got some exciting things ahead of us in the balance of the year and well into 2021 and beyond.
Our next question comes from Maxim Sytchev of National Bank Financial.
Just Hi, wanted to circle back quickly on Q2. I mean given the fact that revenue is obviously being impacted by some of these dislocations. What you are doing on the cost side, I mean, should we still expect positive EBITDA for Q2? Or this is still kind of to answer the call or make a commentary on that?
At this point, we expect positive EBITDA in Q2.
Okay. And guess so Terry, that really comes from the cost side or like, I mean, what are the levers there? Is that the right I
think combinations maybe a combination of both, Max. But but I think, you know, obviously, the q two has has had been impacted. But I I think it's a combination of the margin profile of the projects that are underway, and we've been really aggressive on the cost side.
Okay. That's very helpful. And then I was wondering, if you don't mind maybe revisiting kind of the addressable market opportunity on LNG Canada. As you said, you were sort of very early in terms of that site development. Speaking with sort of the main EPCs and the proponents, Is there any change in terms of your ability to drive incremental revenue from that site?
No. It's it's you know, we're we're continuing to evolve on that site. We performed extremely well, very proud of the performance of team, you know, from a from a safety perspective. Obviously, dealing with the pandemic, from a schedule perspective, we performed extremely well. And, you know, anytime you're underneath these large global EPCs and you perform well, you you certainly get a lot of opportunities that evolve.
As you know, we've been very focused on the workforce accommodation. We've secured non process facilities for the project. We have secured some of the larger earth grading. So you can, you know, sort of follow along as you see the project evolve and all the different components on something of this scale. And, you know, we we we've had good success securing each phase.
Obviously, you know, the trains have, you know, fabrication in in in Asia, components of that. There'll be a lot of interconnect work, things like that that will provide opportunities. Lots of ancillary facilities are still evolving. Obviously, all of the foundational work concrete, all those, you know, things are are in procurement as we speak. So, yeah, we're excited and just couldn't be happier with the the performance of the team there.
There's, you know, there's there's obviously potential for phase two of the project. You know, we don't have any color on that today, but, you know, that's that's future opportunity potentially as as they consider that at some point in the future. But, yeah, it's it's been a a nice replacement for our historical oil sands opportunities. And the team that we've got there, obviously, have extensive experience in Oilsends in a major way with a major scale, and we've been able to obviously take that entire team and build upon that team. And, yeah, really pleased to see this group deliver something at this scale, this complexity in what I would call a pretty remote location in doing that.
Yeah. No. For sure. Thanks for the color. Do you mind maybe commenting, if it's possible, on the kind of the payment terms, maybe on LNG Canada specifically?
I don't know if you want to address this. Or just in general, if you have seen any slippage from any clients on accounts receivables and things like that? It's still kind of business as usual on this list?
No, clearly, you know, we've been at LG Canada now for some time. They've been they've been excellent. Everything is on time. So no no no issues there whatsoever. Balance of clients.
Obviously, in an economic landscape like this. You do have to put considerably more attention to receivables and whatnot. To date, we haven't been impacted by anyone out of
the
ordinary. We have certain clients that are just generally slow and they continue to be, but no change, I guess, Max, this point. And we put appropriate measures in place to protect our performance, whether that's maturity from larger performers. So we've got the protection on the subcontract side. But our clients have been good.
So that is worrisome for sure.
Yeah. And actually, as you touched on a good point around the subs, do you feel comfortable in terms of kind of that other side of the supply chain being relatively intact and and available in terms of to to to be able to to to do the work that these companies I mean, obviously, of smaller scale that are not being impacted too much where you have to start worrying about them being able to carry out the contracts?
A couple of things. We put higher standards of performance expectations in place in terms of surety on anything new on existing. I think if we would have had a lot longer impact, know, two, three months, maybe end of that third month, I think it would have been more worrisome than it is today. But and the fact that they've been largely able to continue, however, subcontractors have been able to continue. So I think, at this point, we're not anticipating that there will be challenges.
But there's always going to be a subcontractor out there that was in trouble in the first place and can't handle that month that they've been impacted. There's always going to be that dynamic. But we are typically well covered with performance free.
Okay. That's helpful. And then I'm just wondering in terms of your concessions monetization. I'm not sure if if in the past you have publicly stated in terms of kind of the potential expectation. I mean, is this tens of millions and millions just so that we can anchor kind of the expectations around the cash injection into the balance sheet in Q3?
For the sale of the two assets. So
in Q1, I think our inflow is 5,400,000
So in Q2, the inflow would be higher than that, but less than 10,000,000 Okay.
Okay. No, that's helpful. And then just maybe last sort of bigger picture question, if it's possible for, say, I mean, we're thinking, obviously, there's a lot of discussion around infrastructure spending and things like that in general to stimulate the economy. I'm just wondering if you have any kind of early indications from conversations with the government, what you guys are hearing on the ground in terms of the potential spending in late twenty twenty and maybe in 2021?
So I think a little early in terms of the quantum, but, we're certainly seeing activity getting organized in various governments, municipally and provincially, for similar programs. The interest levels for Bird are probably highest in the social infrastructure side, educational facilities. We saw that in 02/2008. We've experienced that more recently with the SIFT program in Canada from the federal government. The other area that we've grown considerably in is on the environmental side.
And we expect to see environmental projects stimulus investment. A lot of municipalities and provinces in Canada have got to do considerable upgrades to existing, and that's work you can get underway, you know, fairly quickly. You know, you may have caught history a pretty large bill in The U. S. Designed around stimulus on water, wastewater investment, pretty significant federal U.
S. We're not in The U. S. In that sector, but you can see that some of the early stuff The U. S.
Is getting to market. I'm quite confident that Canada will do the same.
Right. And is there anything on the health care side where you know, you see a potential opportunity or right now it's just really kind of on the OpEx, on the CapEx side?
Yeah. And I I would bundle that underneath the social infrastructure side. You know, some of the larger health care stuff is is longer in duration because it's it's p three typically or depending on, you know, the the province and agencies, the larger programs. But, yeah, the smaller midsize, you know, opportunities that are there. We have one that's in procurement right now in Atlanta, Canada in the second quarter.
So it's continuing forward, a nice fit for us, but we'll see. So there's still and those were those are not COVID related, but they haven't interrupted the procurement. They've continued forward with it. So, it's a government driven initiative. So we'll see where where the dust settles on that.
But, yeah. It's still a space. You know, I'd say the educational, you know, mix with, you know, university university investment, high school, elementary, you know, across the country, which is certainly those projects I would I would expect are closer to being shovel ready. And and then the environmental side, we'll be closer to being shovel ready ready for funding. So those are I I those are the two areas that I'm most interested in.
We're not, to any extent, in the horizontal landscape, you know, in terms of road building, that kind of thing. You know, in a minor way we are, but not not to take advantage of that. And, the larger LRT type work, I think, is just a longer duration typically p three delivery takes longer.
Okay. That's great. Thank you so much. Thanks, Ben.
Our next question is a follow-up from Michael Tigham of TD Securities. Please go ahead.
Yes, thanks. Just two follow ups. Firstly, Terry, just with respect to the two minor project cancellations you mentioned, how do you see or how would you assess your level of concern around the potential for any future cancellations?
It's pretty low, Michael. These these occurred early on. So anything that we certainly don't have any line of sight to anything else defaulting. If anything, it's things that have had some delay that you'd expect might get canceled or restarting. So I'd say lower it's not a worry right now.
Okay. And then a question for Wayne. Just there's a comment in the MD and A regarding working capital investment as the business ramps back up. So just wondering how your expectations for work not the changes in noncash working capital for the year have changed, I guess, both on a full year basis and then just the cadence through the year. If you could comment on that, that would be helpful.
Yes. Really, what the comment is
intended to say is that total working capital necessarily won't be impacted by this. But as we start to see the work program ramp up, again, hopefully in June and July timeframe, that's going to require investment in cash into non cash working capital. And then that will start to release again in late September, early October. So it's kind of a timing issue that we just wanted to highlight there.
Okay. Thanks for that.
There are no further questions at this time. I would now like to hand the call back over to Mr. McKibbin for closing remarks.
I want to thank all of our employees for their resilience and for the sacrifices they've made to ensure the company remains healthy in our one hundredth year of operation. Our field staff deserve a special recognition for having continued to work on our projects with utmost professionalism and dedication while quickly embracing new safety practices and procedures. Our primary concern is always the health and safety of our employees. We hope our strong safety culture also permeates into the daily lives of our employees and serves to help protect their families and communities in which we live and work. The 2020 represents the sixth sequential quarter where our twelve month trailing adjusted EBITDA margin has improved.
While it's difficult to estimate the impacts of the pandemic on our company at this time, discipline and focus of the team over the past several years on reducing the risk profile and increasing the diversification of the work program will help the company emerge from this crisis with a healthy backlog and maintain a strong balance sheet. We have sufficient cash and liquidity to support our anticipated work program while maintaining the current dividend based on our current expectations of the impact of COVID-nineteen. Despite those impacts, we will still expect 2020 to be more profitable than recent years. We look forward to properly celebrating the century mark for our company with our clients, shareholders and employers later this year. Thank you for participating in Bird Construction's first quarter twenty twenty conference call.
As always, Ming and I are available if additional information is required, so please do not hesitate to get in touch with us. Have a nice day and stay safe.
This concludes today's conference call. You may disconnect your lines. Thank you for participate.