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Dexterra Group Announces Results for Q1 2021 and Declares Dividend

Press Release

Highlights

  • Revenue of $155.4 million and EBITDA of $17.8 million for the three months ended March 31, 2021;
  • Net earnings of $4.5 million and basic EPS of $0.07 for the three months ended March 31, 2021;
  • Generated Free Cash Flow of $12.4 million in Q1 2021;
  • Capital improvements to the new Modular Solutions plant in Cambridge are underway with the plant expected to be operational by the end of Q2 2021;
  • Debt reduced to $78.9 million at March 31, 2021 from $85.4 million at year end. Management has a strong financial position as it looks to execute on its growth strategy; and
  • Dexterra Group declared a dividend for the second quarter of 2021 of $0.075 per share, for shareholders of record at June 30, 2021, to be paid July 15, 2021.

Toronto, Ontario, Canada, May 11, 2021 – TSX Symbol: DXT

First Quarter Financial Summary

First Quarter Operations Analysis

Facilities Management

For Q1 2021, Facilities Management revenues were $38.0 million and decreased by $5.4 million or 12% from the $43.4 million in Q1 2020. Revenue decreased primarily due to the temporary closure or reduction in operations at certain facilities as a result of COVID-19. In particular, the aviation and retail sectors decreased by $8.7 million compared to 2020. This was partially offset by new business.

EBITDA margin increased to 9% for Q1 2021 (Q4 2020 – 7%), mainly due to stronger project management and management delivering on operational improvements. See “Non-GAAP measures” above for the definition of “EBITDA as a percentage of revenue”.

Workforce Accommodations, Forestry and Energy Services (“WAFES”)

WAFES revenue performance was strong in a COVID-19 environment despite Q1 2021 being negatively impacted by temporary camp closures, especially in British Columbia. Revenue from the WAFES segment for the three months ended March 31, 2021 was $75.7 million.

EBITDA as a percentage of revenue was 20% which is an increase of 8% compared to Q1 2020, due to strong utilization of support services and the addition of new contracts and business in Eastern Canada with the growth of infrastructure and mining projects. This  margin is similar to Q4 2020.

Modular Solutions

Modular Solutions segment revenues for Q1 2021 were $41.9 million. These revenues are primarily focused on social and affordable housing and portable classrooms.

EBITDA for Q1 2021 was $2.9 million. The results reflect the focus on social and affordable housing projects where performance and execution have been strong in western Canada. This was partially offset by lower than expected margins in Eastern Canada due to project delays. The lower margins and lower revenue compared to Q4 2020 is not expected to continue and the new Cambridge plant will be better suited for construction of affordable housing projects.

A key metric for the Modular Solutions segment is the backlog[1] of projects and timing of backlog execution. The focus for this business unit will be to secure and increase backlog, which was $63.5 million for social housing at the end of Q1 2021. Additionally, Modular Solutions has recurring modular business beyond social housing worth approximately $40 million per annum, which mainly consists of portable classrooms and is finalizing contracts exceeding $45 million with the City of Toronto that will be manufactured in 2021 and are not included in the backlog numbers above.

Liquidity and Capital Resources

For the three months ended March 31, 2021, cash generated by operating activities was $17.9 million, compared to $5.1 million in the same period of 2020. The variance was business volume driven primarily by an increase in earnings before depreciation of $12 million in Q1 2021 compared to the prior period and reduced working capital needs by $3.1 million in Q1 2021. This was used to fund the $1.3 million in capital expenditures for the Cambridge NRB plant as well as to repay debt and pay dividends.

Debt was $78.9 million and available borrowing capacity was $83.7 million at March 31, 2021.

Additional Information

A copy of Dexterra Group’s Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2021 and 2020 and related Management’s Discussion and Analysis (“MD&A”) have been filed with the Canadian securities regulatory authorities and are available on SEDAR at sedar.com and Dexterra Group’s website at dexterra.com. The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards and the reporting currency is in Canadian dollars.

Conference Call

Dexterra Group will host a conference call and webcast to begin promptly at 8:30 Eastern time on May 12, 2021 to discuss Dexterra Group’s first quarter results.

To access the conference call by telephone the conference call dial in number is 1-800-319-4610.

A live webcast of the conference call will be accessible on Dexterra Group’s website at dexterra.com/investor-presentations-events/ by selecting the webcast link. A PowerPoint presentation will be posted on Dexterra Group’s website at dexterra.com on May 11, 2021 to be reviewed on the conference call.

An archived recording of the conference call will be available approximately one hour after the completion of the call until June 2, 2021 by dialing 1-855-669-9658, passcode 6678.

About Dexterra Group

Dexterra Group employs more than 6,000 people across Canada and delivers a range of support services for the creation, management, and operation of infrastructure across Canada.

Powered by people, Dexterra Group brings best-in-class regional expertise to every challenge and delivers innovative solutions, giving clients confidence in their day-to-day operations. Activities include a comprehensive range of facilities management services, industry leading workforce accommodation solutions, innovative modular building capabilities, and other support services for diverse clients in the public and private sectors.

For further information contact:

Drew Knight, CFO
Head office: Airway Centre, 5915 Airport Rd., 4th Floor Mississauga, Ontario L4V 1T1
Telephone: (416) 767-1148

You can also visit our website at dexterra.com

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