Stuart Olson Inc. reported consolidated financial results for the first quarter ended March 31, 2018. For the period, the company reported contract revenue increased by 20.8% to $265.9 million from $220.1 million in first quarter of 2017. Adjusted EBITDA increased 42.1% to $8.1 million from $5.7 million in first quarter of 2017. The improvement in adjusted EBITDA reflects higher revenue, partially offset by increased costs related to investments in organic growth initiatives and an increase in share-based compensation expense as a result of the increase in the company's share price in 2018. Net earnings increased to $1.6 million or diluted earnings per share of $0.06, from a net loss of $0.2 million or diluted loss per share of $0.01 in the first quarter of 2017. This gain was largely driven by the improvement in adjusted EBITDA, partially offset by increased tax expense associated with stronger financial results. Adjusted free cash flow grew to $5.6 million or $0.20 per share from $3.7 million or $0.14 per share in the same quarter last year. Higher year-over-year adjusted EBITDA, reduced capital expenditures and lower tax payments were the key factors in this $1.9 million or $0.06 per share improvement. The positive impact of these factors was partially offset by a prior-year benefit, which did not repeat at the same scale in the first quarter of 2018.

As compared to fiscal 2017, the company expects 2018 consolidated contract revenue to be modestly higher, and adjusted EBITDA to be meaningfully higher, based on the outlook for each of its business groups outlined below. The company expects 2018 adjusted EBITDA margin to remain stable year-over-year. Revenue and adjusted EBITDA from the Industrial Group are expected to be meaningfully higher in 2018 than in 2017, supported by increased activity in the oil sands as project owners complete increased scopes of maintenance and turnaround work. The group's financial results are also expected to be supported by the completion of two large projects outside Alberta in the power and mining sectors. Industrial Group EBITDA margin is expected to remain stable year-over-year. With a greater proportion of projects nearing completion in 2018 as compared to 2017, the Buildings Group anticipates modestly lower revenue year-over-year, paired with stable adjusted EBITDA and slightly higher adjusted EBITDA margin. The Buildings Group results as a whole will continue to be supported by predominantly public projects in multiple provinces, including the group's growing activity in Ontario. Commercial Systems Group revenue and adjusted EBITDA are expected to be significantly higher in 2018 as the group begins to see material benefits from the substantial number of project awards secured in 2017. The group's adjusted EBITDA margin is expected to be slightly lower year-over-year, reflecting the group being in earlier stages of completion on a number of larger projects and a greater proportion of projects contracted on a lower risk cost-plus basis.