Q4 2023 Mullen Group Ltd Earnings Call

Operator: Thank you for standing by. This is the conference operator. Welcome to the Mullen Group Ltd. year-end and fourth quarter earnings conference call and webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad.

Thank you for standing by this is the conference operator.

I'll come to the Mullen Group limited yearend and fourth quarter earnings conference call and webcast.

As a reminder, all participants are in listen only mode and the conference is being recorded.

During the presentation there'll be an opportunity to ask questions.

And the question you May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing Star then zero.

Operator: Should you need assistance during the conference call, you may signal an operator by pressing star, then 0. I would now like to turn the conference over to Murray K. Mullen, Chair, Senior Executive Officer, and President. Please go ahead.

I would now like to turn the conference over to Murray K Mullen Chair Senior Executive Officer and President. Please go ahead.

Murray Kenneth Mullen: Good morning everyone, thank you and welcome to Mullen Group's quarterly conference call. We'll provide shareholders and interested investors with an overview of the Q4 2023 financial results. And, in addition, we will discuss the main drivers impacting these results, and our expectations for 24. And we'll close with a Q&A session. So we'll leave most of the time for Q&A. I see there's already people getting in the queue.

Good morning, everyone. Thank you and welcome to Mullen group's quarterly conference call.

We will provide shareholders and interested investors with an overview of the Q4 2023 financial results.

And in addition, we will discuss the main drivers impacting these results our expectations for 'twenty four.

And we'll close with a Q&A session. So we'll leave most of the time for Q&A, let's see there's already.

People getting in the queue.

Murray Kenneth Mullen: Before I commence today's review, I'll remind everyone that our presentation contains forward-looking statements, and they are based upon current expectations and are subject to a number of risks and uncertainties, and as such, actual results may differ materially. Further information on identifying these risks, uncertainties, and assumptions can be found in the disclosure documents which are filed on CDAR Plus and at www.mullen-group.com. So with me this morning in Okotoks, I have the entire senior executive team, Richard Maloney who's our senior operating officer, Joanna Scott who's our senior corporate officer, and Carson Urlacher who's our senior accounting officer and who's the primary architect and So today, Carson will be providing analysis and discussion on our Q4 performance. But before I turn the call over to Carson, I'm going to make a few opening comments.

Before I commence today's review I remind everyone that our presentation contains forward looking statements.

And they are based upon current expectations and are subject to a number of risks and uncertainties and as such actual results may differ materially further information and Dana buying these risks uncertainties and assumptions can be found in the disclosure documents, which are filed on SEDAR.

And at Www Dot Mullen Hyphen group Dot com. So with me this morning in OCA talks.

I have the entire senior executive team, Richard Maloney, Who's our senior operating officer, Joanna Scott Who's our senior corporate officer at.

Carson Urlacher Who's our senior accounting officer, and who is the primary architect and author of the very informative of detailed annual financial review that we've already posted.

So today carcinoma, providing analysis and discussion on our Q4 performance, but before I turn the call over to Carsten and I am going to provide a few opening comments, let's talk just in terms of Q4 2023 financial and operating performance.

Murray Kenneth Mullen: Let's talk just in terms of Q4 2023 financial and operating performance. It was just a few weeks ago, December 11th, to be precise, that we provided investors with a Q4 2023 update as well as we outlined our business plan for 2024, meaning that really today's call is basically redundant because the actual results for Q4 2023 were very consistent with that update. Revenues came in at nearly $500 million for the quarter.

It was just a few weeks ago December 11th to be precise that we provided investors with a Q4 2023 update as well as we outlined our business plan for 2024, meaning that really today's call is basically redundant because the actual results for Q4 'twenty three we're very consistent with that update.

Our revenues came in at nearly $500 million for the quarter, that's virtually the same as Q4 2022.

Murray Kenneth Mullen: That's virtually the same as Q4 2022. And that's despite all of the disruption taking place in the logistics and transportation sectors. And you've all heard, or you know by now, what those issues are.

And that's despite all of the disruption taking place in the logistics and transportation sectors and you've all heard or you know by now what those issues are.

Murray Kenneth Mullen: The general economy just has not been growing at the same robust pace as 2022, and shippers, well, you know what? They needed to adjust inventory levels in 23. These two factors reduced overall freight demand significantly in 2023.

The general economy, just has not been growing at the same robust pace as 2022.

And shippers well you know what they needed to adjust inventory levels and twenty-three. These.

These two factors reduced overall freight demand significantly in 2023. In addition, all the supply that flooded into the market. When freight demand was elevated is today's achilles' heel to that very same freight market and we all know that when supply exceeds demand.

Murray Kenneth Mullen: In addition, all the supply that flooded into the market when freight demand was elevated is today's Achilles heel to that very same freight market? And we all know that when supply exceeds demand... Prices fall. The joys and the sorrows of the market. But what about at Mullen Group? But you know what? Why did we generate results in 2023 virtually the same as 2022? Reason number one.

Prices fall, the joys and the source of the market.

But what about a smaller group.

Well you know what why did we generate results in 2023 virtually the same as 2022.

Reason number one.

Murray Kenneth Mullen: We have a strong, diversified network of business humans. We also operate in verticals of the economy where the marketplace disruptions were not as acute. S.A.

We have a strong diversified network of business units.

We also operate in verticals of the economy, where the <unk>.

Marketplace disruptions were not as acute.

Carson P. Urlacher: The, Long haul trucking. And reason number three, we completed a couple of timely acquisitions in 2020. [inaudible] Thank you, Murray, and welcome everyone. Today I'll focus on the highlights from our fourth quarter.

As say the.

Long haul trucking market.

And reason number three we completed a couple of timely acquisitions in 2023. So in summary, our business performed extremely well we matched the highs that were obtained in 2022 and I couldnt be happier, especially knowing all of the challenges that many of our peers are facing today. So.

I'll now turn the call over to Carson and he's going to give you a detailed analysis of the fourth quarter for us in Europe.

Carson P. Urlacher: The details of both the fourth quarter and our 2023 results are fully explained in our annual financial review, which is available on CDAR and on our website. So consolidated revenue in the fourth quarter was $498.6 million, our seventh straight quarter of generating approximately $500 million of revenue. Revenue for the quarter was essentially flat compared to the prior year, declining by less than 1% or $4.1 million, which was due to the following fact: First, fuel surcharge revenue declined by $11.1 million as diesel fuel prices decreased by 25% year-over-year.

Well, Thank you Mary and welcome everyone today I'll focus on the highlights from our fourth quarter. The details of both the fourth quarter and our 2023 results are fully explained in our annual financial review, which is available on SEDAR and on our website.

Consolidated revenue in the fourth quarter was $498.

$6 million, our seventh straight quarter of generating approximately $500 million of revenue.

Revenue for the quarter was essentially flat compared to the prior year declining by less than 1% or $4 1 million, which was due to the following factors.

First fuel surcharge revenue declined by $11 1 million as diesel fuel prices decreased by 25% year over year.

Carson P. Urlacher: Second, revenue declined by $13.2 million due to lower freight volumes and a more normalized pricing environment, particularly in the L&W and U.S. 3PL segments, which was somewhat offset by greater demand for services in the S&I segment, while our LTL segment remains stable and consistent year over year. Third, we disposed of our Hydrobac business in 2022, which led to a $1.4 million reduction in revenue. These revenue declines were virtually offset by $21.7 million of incremental revenue from acquisitions. We generated OIBDA of $79.2 million, an increase of 2.1% or $1.6 million compared to the prior year, despite one-time integration costs related to BNR and a more competitive operating environment. Operating margin increased by half a point to 15.9%, reflecting the variable cost structure of our business model and our business unit's ability to adapt to changing market conditions. Now, let's take a closer look at how we perform by segmenting.

Second revenue declined by $13 2 million due to lower freight volumes and a more normalized pricing environment, particularly in the <unk> and U S. Three PL segments.

Which was somewhat offset by greater demand for services in the F&I segment, while our <unk> segment remained stable and consistent year over year.

Third we disposed of our hydro Vac business in 2022, which led to a $1 $4 million reduction in revenue.

These revenue declines were virtually offset by $21 7 million of incremental revenue from acquisitions.

We generated <unk> $79 2 million, an increase of two 1% or $1 6 million compared to the prior year. Despite one time integration costs related to <unk> and a more competitive operating environment.

Operating margin increased by half a point to 15, 9%, reflecting the variable cost structure of our business model and our business units ability to adapt to changing market conditions now, let's take a closer look at how we performed by segments.

Carson P. Urlacher: Starting with our largest segment, revenues in the LTL segment were $190 million, which was virtually flat to last year as lower fuel surcharge revenue was offset by incremental revenue from acquisition. The lower fuel surcharge revenue was essentially offset by steady, predictable freight volumes in Western Canada. OIVDA was down $1.9 million to $29.9 million, and operating margin decreased by 1% to 15.7%, primarily due to those one-time integration costs experienced at B&R.

Starting with our largest segment.

Our revenues in the <unk> segment were $190 million.

Which was virtually flat to last year as lower fuel surcharge revenue was offset by incremental revenue from acquisitions.

The slight decline in freight volumes that we experienced in eastern Canada was essentially.

We offset by steady predictable freight volumes in Western Canada.

<unk> was down $1 9 million to $29 9 million and operating margin decreased by 1% to 15, 7% primarily due to those one time integration costs experienced at PNR.

Carson P. Urlacher: Excluding the financial results of BNR, our LTL segment would have generated operating margins of 18% in the fourth quarter of 2020. Our second largest segment is our L&W segment, and revenues in the L&W segment were $140.8 million.

Excluding the financial results of <unk>, our <unk> segment would have generated operating margins of 18% in the fourth quarter of 2023.

Our second largest segment is our <unk> segment revenues in the <unk> segment were $140 8 million.

Carson P. Urlacher: Although down 8.5% due to lower freight volumes and competitive pricing, lower fuel surcharge revenue, and from the sale of our HydroVac business in 2020, OIBDA was a respectable $29.1 million, or 20.7% of segment revenue, which was almost a full percentage point higher than last year. Operating margins improved as our business units adapted to current market conditions, resulting in lower direct operating expenses as a percentage of revenue. Moving now over to our S&I segment, revenues were up by $14.5 million to $122.5 million on $14.4 million of incremental revenue from acquisition. We did experience some revenue declines associated with lower fuel surcharges, from the sale of our Hydravac business, and from lower demand for pipeline hauling and stringing services.

Down eight 5% due to the lower freight volumes and competitive pricing lower fuel surcharge revenue and from the sale of our hydro Vac business in 2022.

<unk> was a respectable $29 1 million or 27% of segment revenue, which was almost a full percentage point higher than last year operating margins improved as our business units adapted to current market conditions, resulting in lower direct operating expenses as a percentage of revenue.

Moving now over to our <unk> segment revenues were up by $14 5 million to $122 5 million and $14 $4 million of incremental revenue from acquisitions. We did experienced some revenue declines associated with lower fuel surcharge from the sale of our hydro vac business and from lower demand for pipeline hauling and streaming.

Services. However, these decline declines were more than offset by greater activity levels for drilling activity surface drilling related services, while smoke and Canadian dewatering also experienced greater demand.

Carson P. Urlacher: However, these declines were more than offset by greater activity levels for drilling-related services, while smoke and Canadian dewatering also experienced greater demand. OIBDA increased by $5.5 million to $24.6 million, with acquisitions adding $3.4 million of incremental OIBDA, while improved pricing for drilling-related services and the transportation of fluids and servicing of wells also contributed to the increase. Operating margins improved to 20.1% on lower direct operating expenses as rate increases and greater activity levels resulted in more efficient operations. In our non-asset-based U.S. 3PL segment, revenues declined by 9.3% to $47.7 million due to both lower freight demand and pricing in the U.S. for full truckload shipping. OIBDA declined to $400,000, and margins came in at just under 1% due to higher S&A expenses as a percentage segment.

Hawaii BDA increased by $5 5 million to $24 6 million with acquisitions, adding $3 4 million of incremental or IBD, while improved pricing for the drilling related services in the transportation of fluids and servicing of wells also contributed to the increase.

Operating margins improved to 21% on lower direct operating expenses as rate increases and greater activity levels resulted in more efficient operations.

In our non asset based <unk> segment revenues declined by nine 3% to $47 7 million due to both lower freight demand and pricing in the U S for full truckload shipments or <unk> declined to 400000 and margins came in at just under 1% due to higher SG&A expenses as a percentage of <unk>.

Segment revenue.

Carson P. Urlacher: Operating margin on a net revenue basis was 9.8% compared to 19.6% in 2020. However, from a net income perspective, it decreased by $32.1 million. decreased by $32.1 million to $29.4 million, or $0.33 per common share. This decrease was almost entirely due to a $29.3 million negative variance in the gain on sale of property, plant, and equipment, which mainly resulted from a significant gain on sale of non-core real estate in the fourth quarter of last year. The weighted average number of common shares outstanding decreased by 4.8% to 88.4 million shares in the quarter as we continued to repurchase and cancel shares under our NCIB program.

Operating margin on a net revenue basis was nine 8% compared to 19, 6% in 2022.

From a net income perspective, it decreased by $32 1 million.

Decreased by $32 1 million to $29 4 million or <unk> 33 per common share.

This decrease was almost entirely due to a $29 3 million negative variance in the gain on sale of property plant and equipment, which mainly resulted from a significant gain.

On sale of noncore real estate in the fourth quarter of last year.

The weighted average number of common shares outstanding decreased by four 8% to $88 4 million shares in the quarter as we continued to repurchase and cancel shares under our <unk> program.

Carson P. Urlacher: We continue to maintain a well-structured balance sheet, with a book value of over $2 billion in total assets, and our largest asset class being real estate, which helps us avoid some of those inflationary pressures associated with lease renewal. Our debt-to-operating cash flow covenant under our private debt agreement is down to 1.83 to 1, meaning we could theoretically add $200 million of debt to our balance sheet and still be a full turn away from our covenant threshold. We consistently generate free cash, so adding new debt to our balance sheet would be to grow our business and Verticals of the Economy with strong underlying fundamentals via acquisitions that meet our precision-based strategy of being the right fit, the right price, and creating synergies for our existing business units. We now have a total of $375 million of bank credit facilities, of which $73 million was drawn at year-end, providing us with over $300 million of borrowing, availability, or liquidity.

We continue to maintain a well structured balance sheet with a book value of over $2 billion in total assets with our largest asset class being real estate, which helps us avoid some of those inflationary pressures associated with lease renewals.

Our debt to operating cash flow covenant under our private debt agreement is down to $1 83 to one meaning we can theoretically add $200 million of debt to our balance sheet and still be a full turn away from our covenant threshold.

We consistently generate free cash so, adding new debt to our balance sheet would be to grow our business and verticals of the economy with strong underlying fundamentals via acquisitions that meet our precision based strategy of being the right fit the right price and creating synergies for our existing business units.

We now have a total of $375 million of bank credit facilities of which $73 million was drawn at year end, providing us with over $300 million.

Our borrowing availability or liquidity.

Murray Kenneth Mullen: In October of 2024, we have $217 million of private debt notes coming due that we fully expect to be able to replace with new private debt notes this year. So with that, Murray, I will pass the conference call back to you. Thanks, Cars.

In October of 2024, we have $217 million of private debt notes coming due that we fully expect to be able to replace with new private debt notes this year.

So with that Murray I will pass the conference call back to you. Thanks cars.

Murray Kenneth Mullen: So, once again, just as I kind of turn to the outlook of what we think is going to happen and 24. You know, we provided previous guidance on December 11th, 2023 as part of our laying out our business plan for 24, and really this has not changed. But let's very quickly just review the highlights of what we articulated in December. The first is our analysis of the macroenvironment.

So once again just as we are.

As I kind of turn to the outlook of what we think is going to happen.

And 24.

We provided previous guidance in December 11th 2023 is part of our laying out our.

Business plan for 'twenty, four and really this has not changed.

But let's very quickly just review the highlights of what we what we articulated in December.

The first is our analysis of the macro environment.

And from our perspective, it appears that the North American economy continues to be okay.

Murray Kenneth Mullen: From our perspective, it appears that the North American economy continues to be okay. It is definitely range-bound, the job market is still strong, and consumers are still spending. But they were buying fewer items, and that in itself is not good for freight demand. So basically, the average consumer... (inaudible) They have the same income, but their earned dollar just doesn't go as far today. And this is why inflation hurts the freight industry so much. And the only way I can see to get more money into the individual's hands is either the government sends money from the government money tree, or inflationary pressures and interest rates must come down, giving them more disposable income to buy the things they need and want. Furthermore,

It is definitely range bound.

Drop market is still strong.

<unk>, they're still spending.

But they are buying fewer and fewer items and that in itself is not good for freight demand. So basically the average consumer.

Is really hurt hard by inflation rising interest rates and taxes.

We have the same income, but the earned dollar just doesn't go as far today.

And this is why inflation hurts the freight industry so much.

And the only way to get more money into the individuals' hands is either the government sends the money from the government money tree.

More inflationary pressures in interest rates must come down giving them more disposable income to buy the things they need and want.

Now Furthermore.

Murray Kenneth Mullen: We believe that the high interest rates are not, what they're doing is disencouraging significant capital investment. These high interest rates are biting hard. So, given what we know today, I conclude that the overall consumption of freight demand will probably remain at our current levels for a while. Now, let me turn to the supply side. There is too much capacity, the competition is fierce, and margins are suffering. We hear this every day.

We believe that the high interest rates.

Are not.

What theyre doing is the disengaging significant capital investment. These high interest rates are biting hard so given what we know today.

To conclude that the overall consumption in freight demand will probably remain at our current levels for a while.

Now, let me turn to the supply side, there is too much capacity the competition spheres and margins are suffering we hear this every day, we see it in all of our inbox us with acquisition opportunities.

Murray Kenneth Mullen: We see it in all of our inboxes with acquisition opportunities. Many carriers are suffering with low to no profits and very high debt levels. This all suggests to me that something must give, and I expect more business failures in 2024. But, and this is where having a well-structured balance sheet plays an important role.

Many carriers are suffering with low to no profits and very high debt levels. This also suggests to me that something must give and I expect more business failures in 2024.

And here is where having a well structured balance sheet plays an important role to these failures along with industry consolidation will lead to tomorrow's price discipline, not only can our business out last the competition, we're going to use this opportunity to grow. So we will most likely acquire more companies in 2020 for like.

Murray Kenneth Mullen: Today's failures, along with industry consolidation, will lead to tomorrow's price discipline. Not only can our business outlast the competition, but we're going to use this opportunity to grow. So we will most likely acquire more companies in 2024, like the acquisition we announced at Container World. We love tuck-in acquisitions because they bring lots of synergies into play, and to us that's the true way to create shareholder value. And LTL remains our preferred choice because of the nature of the business, and only those with critical mass and lane density will be successful. So, in summary... We still expect to meet our 2024 business plan. The less-than-truckload segment is one of the most stable and predictable parts of our business model, so 2024 should be pretty close to last year's performance.

The acquisition, we announced on container World, We love tuck in acquisitions, because they bring lots of synergies into play.

And to US that's the true way to create shareholder value.

<unk> remains our preferred coast choice because of the nature of the business or more only those with critical mass in lane density will be successful.

So in summary.

We still expect to meet our 2024 business plan the less than truckload segment is one of the most stable and predictable parts of our business model.

This means a 24 should be pretty close to last year's performance.

Murray Kenneth Mullen: And we can beat the 2023 results with token acquisition. In the logistics and warehousing segment, it's where we see the continuation of soft volumes in competitive markets. We just don't see any real growth except, say, from acquisitions like Container World. In other words, we know we're going to be able to grow our revenue base in 2024, and we are going to position ourselves to improve margins once the market stabilizes. So we'll use this market to streamline operations and focus on gaining market share for tomorrow. Now, in the specialized and industrial services segment, we should exceed 2023 because we will have a full year of results from the B&R Equals acquisition. That's the only business unit where we really see some drag is from our pre-made pipeline group.

And we can beat the 2023 results with tuck in acquisitions.

In the logistics and warehousing is maintenance is where we see the continuation of soft volumes in competitive markets. We just don't see any real growth, except say from acquisitions like container world. So in other words, we know we're going to be able to grow our revenue base in 2024, and we are going to position ourselves to improve margins once the market stabilizes. So we will use this market to.

To streamline operations and focus on gaining market share for tomorrow now in the specialized <unk> industrial services segment, we should exceed 2023, because we will have a full year of results from the <unk> acquisition.

That's the only business unit, we really see some drag is from our <unk> pipeline group.

And as Carsten mentioned, that's because the major pipeline projects are have either wound down or will be completed very very shortly so until new pipeline projects are sanctioned.

And if there are if they are sanctioned I'm pretty sure it will only be for LNG exports.

Murray Kenneth Mullen: And as Carson mentioned, that's because the major pipeline projects have either wound down or will be completed very, very shortly. So until new pipeline projects are sanctioned... And if they are sanctioned, I'm pretty sure they'll only be for LNG exports, we will simply reduce expenses and wait patiently. Now, offsetting lower pipeline activity in 2024 will be increased natural gas drilling in northeast B.C., we believe. Once again, the benefits of having a diversified business model. In the U.S., 3PL. [inaudible] We believe they can grow in 24 as compared to 23.

We will simply reduce expenses and wait patiently.

Now offsetting lower pipeline activity in 24 will be increased natural gas drilling in northeast BC. We believe once again the benefits of having a diversified business model.

In the U S <unk>.

And let's call that high E <unk> holistic because it's the only business unit at the moment.

We believe they can grow in 24 as compared to 23.

Holistic is a great technology platform Silver express, which we provide to independent station owners and owners.

Who happen to have good customer relationships and we prefer this to the employee corporate sales model because it is both very scalable and it does not increase our fixed costs and besides as I say to the senior team and holistic.

Murray Kenneth Mullen: Holistic has a great technology platform, Silver Express, which we provide to independent station owners who happen to have good customer relationships. And we prefer this to the employee corporate sales model because it is both very scalable and it does not increase our fixed costs. And besides, as I said to the senior team at Holistic, with all of those layoffs occurring in the 3PL space, there's going to be a lot of free agents available in the market, each that brings a customer Rolodex with them. There is an opportunity out there, but one must be creative.

With all of those layoffs occurring in the <unk> space Theres going to be a lot of free agents available in the market each that brings a customer rolodex with them.

There is opportunity out there, but one must be creative our holistic team will be this concludes our presentation today and I will turn the call over to the conference operator, and we will go right to the Q&A session. Thank you.

We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear its own acknowledging your request.

If youre using a speakerphone please pick up your handset before pressing any quiche.

Operator: Our holistic team will be. This concludes our presentation today, and I'll turn the call over to the conference operator, and we'll go right to the Q&A session. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad.

Can withdraw your question. Please press Star then two.

We'll pause for a moment as colleagues John Mchugh.

Yeah.

The first question comes from Kamran Dotson of National Bank Financial. Please go ahead.

Okay. Thanks, very much good morning.

Just a question I guess around some of the comments in the press release, just around the inventory restock I mean, it does sound like Youre more optimistic for 2024 that the destocking of inventories in the industry has done and we could get a bit of a rebound in 2024 I'm just wondering if youre seeing anything specifically that gives you that confidence.

Cameron Doerksen: You will hear a tone that Maloney Jr. requests. [inaudible] To withdraw your question, please press star then two. We'll pause for a moment as scholars join the queue. The first question comes from Cameron Doerksen of National Bank Financial. Please go ahead. Yeah, thanks very much. Good morning.

Murray Kenneth Mullen: Just a question, I guess, around some of the comments in the press release just around the inventory restock. I mean, it does sound like you're more optimistic for 2024 that the destocking of inventories in the industry is done, and we could get a bit of a rebound in 2024. Just wondering if you're seeing anything specifically that gives you that confidence. I mean, obviously, you operate some warehouses, so I'm just wondering what you're seeing there and maybe what your customers are telling you as far as what they're seeing as far as potential restocking of inventories. I think Cameron, that's a really good question; it's one that everybody struggles with.

I mean, obviously you operate some warehouses I'm just wondering what you're seeing there and maybe what your customers are telling you as far as what theyre seeing as far as potential restocking of inventory.

I think Cameron.

Sure.

Thats really good.

Question is one that everybody struggles with.

And I would say to you we are not seeing any further declines in the inventory.

Rebalancing cycle I think.

Our customers are the shippers that manufacturers are basically got inventory levels to where they are at now.

They've got the right size they went through.

Now.

You've got to have inventory that the customer wants for tomorrow, so they're going to have to re theyre going to have to bring in new inventory. So that is available when the customer wants to buy.

Murray Kenneth Mullen: And I would say to you, we are not seeing any further declines in the inventory rebalancing cycle. I think, you know, our customers, the shippers, the manufacturers have basically got inventory levels to where they're at now. They got them right-sized, and they went through. You've got to have inventory that the customer wants for tomorrow, so they're going to have to bring in new inventory so that it's available when the customer wants to buy. [inaudible] off the shelves or have been disposed of or something like that.

I would think most of the stuff they bought in 'twenty two that's already.

Off the shelves or have been disposed of or something like that.

<unk>.

I think we're basically over that cycle that doesn't necessarily mean.

That they're going to be a re inventory rebuilding I just said, they're going to have to bring in inventory.

Just in time to meet what the customers want so we're back into an inventory cycle its more traditional in my view.

Murray Kenneth Mullen: I think basically, over that cycle, that doesn't necessarily mean... That they're going to be a re-inventory rebuilding. I just said they're going to have to bring in inventory just in time to meet what the customers want. So we're back into an inventory cycle that's more traditional in my view. Inventories will go up if our customers start thinking that the... that their customers or their customers are going to be buying more product. But until then, I think it's more just time in and out. So it's it's it's in balance. That's what I think now. Okay, no, that's helpful.

Inventories will go up if our customers start thinking that the.

That our customers or their customers are going to be buying more product, but until then I think it's more just in time in and out. So it's imbalanced, that's what I think now.

Okay. No that's helpful and maybe just a quick I guess sort of modeling question you obviously have this debt.

For refinancing in October.

It sounds <unk> got good opportunities there to refinance so I'm just wondering any early thoughts on rates.

Obviously interest rates may come down later this year, but any initial thoughts on what kind of rate you might expect there.

Murray Kenneth Mullen: And maybe just a quick, I guess, sort of modeling question. You obviously have this debt that's up for refinancing in October. Sounds like you've got good opportunities there to refinance that. Just wondering, any early thoughts on rates? You know, obviously, interest rates may come down later this year, but any initial thoughts on what kind of rate you might expect there? Well, we debate that all the time, Cameron, and our... Our number one strategy is, and has been for... Rich, when did we get our first private debt? In 2006,

Well we debate.

We debate that all the time.

Cameron and R.

Our number one strategy is and has been for.

Rich when do we get our first private debt late.

In 2006, so our strategy always has been to replace the long term bonds that we have as they mature and we're doing what we had.

Taking all the necessary steps to replace that because really that long term money is really the mortgage on our on a really good asset which is our buildings.

Murray Kenneth Mullen: So, our strategy always has been to replace the long-term bonds that we have as they mature. And, you know, we're taking all the necessary steps to replace them. Because really, that long-term money is really the mortgage on our really good asset, which is our building. So, uh... we we think uh... will be able to replace those. What's the interest rate? I don't know for sure that ten-year keeps bouncing around. You know, it's, you know. In a 6-week period, it bounced by 1%. So we'll pick our timing. Can't listen to them when we think it's.

No.

We think.

We'll be able to replace those what's the interest rate I don't know for sure the 10 year keeps bouncing around.

Yeah.

In a.

The six week period bounce by 1%, So we will pick our timing camera. So when we think it's.

We can get the best rate for for the next number of years and then we'll place some long term bonds again.

And then we will use all of our bank lines cornerstone for growth and we've got lots of bank lines do we know we have lots of bank loan we got lots of bank lines that we can grow the business. So.

Yes, I think.

Murray Kenneth Mullen: You know, we can get the best rate for the next number of years, and then we'll place some long-term bonds again. And then we use all of our bank lines, Carson, for growth. And we've got lots of bank lines, do we not? We have lots of bank lines.

We're on a good path there and we will pick our timing. We obviously, we don't have to pay them off till October. So, we're just waiting to see where.

Where the interest rates were going to get the interest rate that we think is favorable for our investors for the next 10 years.

Murray Kenneth Mullen: We've got lots of bank lines to grow the business. I think we're on a good path there, and we'll pick our timing. We obviously don't have to pay him off until October.

Okay, Great makes a lot of sense alright, thanks very much. Thank.

Thank you Catherine particular.

Okay.

Once again, if you have a question. Please press Star then one.

The next question comes from Kevin Chiang CIBC. Please go ahead.

Murray Kenneth Mullen: So we're just waiting to see where the interest rates are, where we can get the interest rate that we think is favorable for our investors for the next 10 years. Okay, great. That makes a lot of sense. All right. Thanks very much.

Hey, good morning, everybody. Thanks for thanks for taking my question.

Maybe just on on on.

Youre holistic segment.

Obviously, it's a small contributor to earnings.

I guess strategically.

Kevin Chiang: Thank you. Once again, if you have a question, please press star then 1. The next question comes from Kevin Chiang of CIBC. Please go ahead. Hey, good morning, everybody.

How do you think you how are you thinking of this business over the next.

Because in 2024, and maybe even longer it seems like there's a little bit of.

Of transition happened in the U S <unk> market.

Sure.

UBS is contemplating what to do with Coyote, just just wondering if those are opportunities for you to grow market share organically does that create any opportunities for you guys as others look to exit.

Murray Kenneth Mullen: Thanks for taking my question. Maybe just on your holistics segment, you know, obviously, a small contributor to earnings. I guess strategically, how are you thinking of this business over the next David Ocampo, Trevor Reynolds, Mullen Group Ltd. I'm sure you heard, you know, UPS is contemplating what to do with Coyote.

This business.

So just wondering your thoughts overall.

Yes.

I think Kevin once again Thats, a really good insightful question when Youre hearing about what what's going on with all the <unk> now.

Murray Kenneth Mullen: Just wondering if those are opportunities for you to grow markets, show organically, and do you see M&A opportunities for you as others like to exit this business? Just wondering your thoughts overall. Yeah, you know, I think, Kev, that, you know, once again, that's a really good insightful question when you're hearing about, well, what's going on with all the 3PLs now.

Well.

In my view.

Okay, I think that.

<unk> are under a lot of pressure traditional that.

Traditional <unk> broker models under pressure, particularly with.

Okay.

New technology tools coming in like AI.

I think thats really going to displace the <unk> and I think thats going to put the put it.

Put it back on to the customer end.

Murray Kenneth Mullen: In my view, I think that 3PLs are under a lot of pressure, and the traditional 3PL broker model is under pressure, particularly with new technology tools coming in like AI. I think that's really going to displace the 3PL, and I think that's going to put it in the customer's hands and the content hand, which is the carrier. So I think the traditional 3PLs have got themselves in a bit of a box here right now. Because I think technology is going to be able to connect the content. You don't need to have a broker that does that anymore. with our holistic team is that it's all about the technology and the people that are out there.

In the customers' hands and the and the content and which is the carrier.

So I think the traditional three pls have got themselves in a pressure.

And a bit of a box here right now.

Because I think technology is going to be able to connect the content.

With the shipper.

You don't need to have a broker that does that any more of that will be the technology of which we were building out very very quickly with our with our holistic team is that it's all about the technology.

Murray Kenneth Mullen: The other thing that I would say is... You know, if customers still want to do business with people, I think they're going to want to do business with. There's going to be a lot of free agents out there, entrepreneurs, as they get laid off. Those people are making money for those big logistics companies. And our value proposition to them is, well, why don't you make the money rather than make it for the company? So why don't you become a station agent owner? You make the money. Be your own independent contractor, and we'll provide you with the platform.

The people that are out there the other thing that I would say is.

If customers still want to do business with people I think they're going to want to do business with.

There's going to be a lot of free agents out there are entrepreneurs as they get laid off or.

Those people are making money for.

Big logistics companies and our value proposition to them as well why don't you make.

The money rather than make it for the company. So why don't you become a station agent on and you make the money via our own independent contractor and we will provide you with the platform. We will provide you with the technology of the platform and the infrastructure. So we think thats the business model that we're going to go after.

Murray Kenneth Mullen: We'll provide you with the technology, the platform, and the infrastructure. So we think that's the business model that we're going to go after. You know, I'm delighted we've got Holistic because I think that's going to be our entry into that business to get a much, much bigger footprint. And I'm not interested in another 3PL. You just got people up.

And you know.

I'm delighted we've got holistic because I think that's going to be.

That's going to be our entry into that business to get a bigger much much bigger footprint in.

I am not interested in another three PL you just got people, we're going to get station owners.

Murray Kenneth Mullen: We're going to get station owners. I'm a huge believer in the entrepreneurial spirit in this country, in North America, particularly in the U.S. And we're going to use an Uber-style business model, and they're going to have the customer, and we're going to have the technology. Yeah, that's our vision. Yeah, that makes that that makes that makes a ton of sense.

I'm a huge believer in the entrepreneurial spirit in this country.

In North America, particularly in the U S.

And.

We're going to use an Uber style business model and theyre going to have the customer and we're going to have the technology.

Yep.

That's our vision.

Yes that makes.

And that makes that makes a ton of sense.

So the only if I look at our only capex. The only thing we're going to be investing in is really technology.

Kevin Chiang: So our only CapEx, the only thing we're going to be investing in is really technology. Because if we go to the U.S., if Mullen goes to the U.S., you're going to have to, you know, the content is already there; there's already lots of content. I think the middleware, the technology, is where you're going to bring value today, and we're just going to connect. [inaudible] Right, that makes a ton of sense and obviously sounds like that's a pretty good return on invested capital strategy there. Maybe just turning to the LTL segment, you know, despite, despite, you know, a pretty, pretty challenging freight recession, your overall revenue held up pretty well. If my math is correct, you know, organically, you're down a couple of points here. I'm just wondering, I guess, when you look at that organic growth slippage, is there a way to think of how much of that was, you know, price, which feels like it held in pretty well versus volume, and within volume, maybe how much of that was just shipments versus weight.

Alright.

Because even if we go to the U S. If monolinguals C.

Okay.

Youre going to have to the content is already there is already lots of content.

I think the I think the middleware technology is where youre going to bring the value add today and we're just going to connect.

Entrepreneur with entrepreneur, that's what we're going to do.

Right that makes a ton of sense and obviously it sounds like that that's a pretty good.

Return on invested capital strategy there.

Maybe just turning to the <unk> segment.

Despite despite.

Pretty pretty challenging freight recession.

Mobile revenue held up pretty well, but if my math is correct organically youre down.

Couple of points here.

I'm just wondering.

I guess when you look at that organic organic growth slippage as a way to think of how much of that was.

Was price, which feels like it held in pretty well versus versus volume and within volume maybe how much of that was just shipments versus <unk>.

Murray Kenneth Mullen: And then when you think of 2024, I guess what are the opportunities? I know you're conservative in your outlook for LTL, but as you look to grow this business through the next part of this upcycle, I guess what's the lowest hanging fruit? Is it capturing more price? Is it improving density through more shipments? Is it grabbing more weight, so you're pricing better on a 100-weight basis?

Wait and then when you think of 2020 for I guess, what are the opportunities I know you're conservative in your outlook for <unk>, but.

As you look to <unk> as you look to grow this business through the next part of this up cycle.

I guess, what's the lowest hanging fruit is capturing more price as it is it improving density through more shipments as it is a grabbing more wait and see a pricing better than 100 weight basis.

Murray Kenneth Mullen: Just wondering how that will play out in 2023. I'm trying to understand it, yes. So you follow the industry, Kevin, and we're all— You know, all of us that are in this business and quote the LPL, less than truckload space, we all know that you're going to have to make it up with density, lane density, and productivity improvements and those kind of things. It's tough to get pricing leverage today. I'll be honest with you, I really think the biggest opportunity is that we're going to gain market share through tuck-in acquisitions. Now, you know, tuck-in acquisitions can get you back.

Just wondering how that played out in 2013 as I'm trying to understand it yes.

I mean.

You follow the industry, Kevin and we're all.

All of US that are in this business and the <unk> <unk> less than truckload space, we all know.

Is that youre going to have to make it up with with density Lane density and productivity improvements.

Those kind of things, it's tough to get pricing leverage today.

But.

I'll be honest with you.

I really think the biggest opportunity.

As we're going to gain market share through tuck in acquisitions now.

Tuck in acquisitions can set you back let's look at the <unk> group as an example costs last year in Carson has got some some data that will help you on.

Murray Kenneth Mullen: Let's look at the B&R Group as an example, of course, last year. And Carson's got some, some data that will help you on, on the altail sector, what, what we were down on shipment count, what we were down on, on fuel surcharge, blah, blah, blah. But, When we bought the B&R Group, we knew that they were not operating their LTL part of their business efficiently. We knew that when we ordered due diligence, but that was where we said, okay, we'll fix it.

On the <unk> sector, what we were down on shipment count what were down on on fuel surcharge blah blah blah, but.

When we bought the B in our group we knew that they were they were <unk>.

Not operating their LDL part of their business efficiently, we knew that when we would order due diligence, but that was where we said, okay. We will fix it.

Now you can fix that by either taking that and putting in technology and building the infrastructure or we took that business and we've restructured it we took all the cost in the fourth quarter basically.

Murray Kenneth Mullen: Now you can fix that by either taking that and putting in technology and building the infrastructure, or we took that business and restructured it. We took all the costs in the fourth quarter, basically, and we put that business in with our two other business units that have technology and have the infrastructure. So we'll get the margin improvement this year, and keep the one that we lost in the fourth quarter. What did we do, like 2% down? Like it cost us at least 1% last year, right? We were almost $3 million in integration costs in the fourth quarter.

And we well, we put that business and with our two other business units that have technology have the infrastructure. So we will get the margin improvement. This year kept that we lost in the fourth quarter. When we do like 2% down like a cost us at least 1% last year right, Yes, we're almost.

Most.

$3 million in integration costs, so all of.

Those costs go away this year and I think we'll get some some efficiency gains. So when you go and take these smaller carriers that do not invest in the technology. They are just hard working people that make it work, but you got to have the technology today.

And our best in class business units, so, but it takes you a year to integrate demand it.

Murray Kenneth Mullen: Those costs will go away this year, and I think we'll get some efficiency gains. So when you go and take these smaller carriers that do not invest in the technology, they're just hard-working people that make it work, but you've got to have the technology today. We have it in our best-in-class business units, but it takes you a year to integrate them. It doesn't take three years, but it does take a year. And, you know, you can't go in like a bull in a china shop, and you'll scare off too many people and customers.

It doesn't take three years, but it does take a year.

You can't go in like a bull in a China shop, and just Youll scare with too many people and customers. So it'll take a year, but we will get it resolved this year and we see more and more of those opportunities coming in where they just did.

The pressure in the market.

From competitiveness and not having the right technology is immense.

No.

We're going to be well situated to continue to add lane density.

And that's where you make your money up in <unk>.

Don't care if it's.

Murray Kenneth Mullen: So it'll take a year, but we'll get it resolved this year. And we see more and more of those opportunities coming in where just the pressure in the market from competitiveness and not having the right technology is immense.

Amazon.

<unk> Fedex or all of our competitors. They have you look at them. They match lane density and Thats, how they get most of that drive most of their productivity improvement and we will be doing the same thing in terms of us. So maybe that will help you with what we see how that goes I think I think the market's okay.

Murray Kenneth Mullen: We're going to be well-situated to continue to add lane density, and that's where you make your money on LTO. I don't care if it's Amazon.

Like I don't see the economy growing I don't see <unk> shipments going up.

Murray Kenneth Mullen: UPS, FedEx, or all of our competitors, they have, you look at them, they match lane density, and that's how they get most of, drive most of their productivity improvement, and we'll be doing the same thing in terms of us. So maybe that'll help you with what we see. I think the market's okay, Kev, like I don't see the economy growing, I don't see LTL shipments going up, I don't see a lot of pricing leverage, but I still see opportunity, which is basically picking up market shares either through people not making it because it's just too tough out there or through tough acquisitions. Carson, just in terms of 2023, the same store sales of our businesses, let's just get some highlights on that for Kevin, what we did on the LTL side.

I don't see a lot of pricing leverage, but I'd still see opportunity, which is basically picking up market share is either through.

People not making it because it's just too tough out there or through tuck in acquisitions, but.

Carson and just in terms of 'twenty three our same store sales of our businesses, let's just give some highlights on that for Kevin Kevin on the <unk>, yes.

Kevin I would say the big thing that.

Ah phenomenon, particularly for the <unk> segment is as fuel surcharge. So if you look at fuel surcharge in 2023, just in the <unk> segment alone we were down.

$22 5 million Bucks in fuel surcharge, which.

Murray Kenneth Mullen: Yeah Kevin, I'd say the big thing that's a phenomenon, particularly for the LTL segment, is the fuel surcharge. So if you look at fuel surcharge in 2023, just in the LTL segment alone, we were down $22.5 million in fuel surcharge, which, you know, was quite a headwind in 2023 versus 2022. I don't know if that continues on into 2024, but it doesn't appear that we would see that same headwind going forward into 2024.

It was quite a headwind.

23 versus 22, so I don't know if that continues on into 'twenty four but it doesn't appear that we would see that same headwind going going forward.

Into into 2024.

So.

Fuel surcharge plays a big component into that segment just because of the.

The nature of it.

So I would say that that had a lot to do with.

With the results in the fourth quarter and in 2023.

I don't see as big of a headwind going into 2024.

That's super helpful of course, then and I appreciate the color. Thanks, Hello, everybody I think if we backed out count.

Carson P. Urlacher: So, you know, fuel surcharge plays a big component in that segment, just because of the nature of it. So I would say that had a lot to do with the results in the fourth quarter and in 2020, which I don't see as a big of a headwind going into 2020. That's super helpful, Carson, and I appreciate the comment. Thanks a lot, everybody.

All in all I think we backed out.

And our increased business acquisition that revenue.

And you take a look at the overall market I think we actually improved margin on a same store sales on the business that we had of course by a little bit yes, we would've instead of coming in at.

15, 7%, we would've been at 18% and that in the <unk> segment in the fourth quarter.

Murray Kenneth Mullen: I think if we backed out, Kev... All in all, I think if we backed out, B&R would have increased business, acquisition that revenue. And you take a look at the overall market, I think we actually improved margin on same store sales on the businesses that we had, of course, by a little bit. Yeah, we would have.

If you back out those integration costs. So what you saw in 'twenty three on that deterioration in <unk> that was a onetime event and we knew what we were doing because I wanted to get it and it'll either buffered some of the headwinds that we got <unk> or we're going to improve our numbers in 2024.

But we'll be back up I think we'll be back to where we were in 2022 in terms of margin.

Carson P. Urlacher: Instead of coming in at, you know, 15.7%, we would have been at 18% in the LTL segment in the fourth quarter. You back out those migration costs. Yeah, so what you saw in 23 on that deterioration in LTL, that was a one-time event.

Yes.

Got it.

That's very helpful color. Thank you very much and best of luck as you get to 2004, it here and close on the container will deal. Thank you. Thank you. Thank you.

The next question comes from David Ocampo of Cormack Securities. Please go ahead.

Murray Kenneth Mullen: And we knew what we were doing because I wanted to get it. It'll either buffet some of the headwinds we got in LTL, or we're going to improve our numbers in 2024. But we'll be back. I think we will be back to where we were in 2022 in terms of margin. That's very helpful, Colin. Thank you very much and best of luck as you get through 24. If you hear any calls on the container, we'll arrange it.

Thanks.

One of your competitors in Canada, just talked about a tougher competitive environment just given.

Driver Inc.

And if I take a look at your businesses and you called it out with LTE Albert <unk> W. Just backing out those one time costs you did see some margin improvement so just curious.

Kevin Chiang: Thank you. Thank you. Thank you. The next question comes from David Ocampo of Konark Securities. Please go ahead.

If you can comment on driver, Inc, and how that is negatively impacting your business.

Yes so.

Sure.

Driver Inc.

David Ocampo: Thanks. Murray, one of your competitors in Canada just talked about a tougher competitive environment, just given Driver, Inc. And if I take a look at your businesses, and you called it out with LTL, but even L&W, just backing up those one-time costs, you did see some margin improvement. So just curious if you can comment on Driver, Inc. and how that's negatively impacting your business. Uh, yeah, so, uh... The Driver, Inc. model has been around for quite some time.

The driver Inc. Model has been around for quite some time.

And some carriers have been.

Some of our competition and that business has been.

Kind of a bit Lucy with some of the rules.

And they have a they have a distinct competitive advantage. When you use the driver Inc. Model, because you don't pay the people.

That are doing the work benefits for example, and you don't pay them.

<unk>.

What we'd call a fair going right that larger carriers and.

Murray Kenneth Mullen: And some carriers have been. Some of our competition in that business has been. [inaudible] And they have a distinct competitive advantage when you use the Driver, Inc. model because you don't pay the people. You know, the rest of us have to comply with. But in saying that, I think it's a CRA issue. You know, if a Driver, Inc. model is.

The rest of us have to comply with.

But in saying that I think it's the CRA issue.

Is that.

<unk>.

Driver Inc model is.

Similar to an Uber style model.

<unk> kind of a model or an independent.

Driver.

I don't like it but it is what it is but that may explain.

Murray Kenneth Mullen: [inaudible] I don't like it, but it is what it is. David, why did we not have a big footprint in the full truckload business? Because if our competition, a lot of which is in the full truckload business... Boy, I'll tell you what, they're tough competitors because they have a lower cost structure. They don't have better technology, they don't buy equipment cheaper, they don't buy fuel cheaper. But they have one competitive advantage. They do not pay their people the same as larger carriers. That's why we didn't get into and do a lot of acquisitions in the full truckload business, so we're not really hurt as much as some other carriers on that side. Got it; that's perfect.

David why we did not do not have a big footprint in the full truckload business.

<unk>.

Barco competition of which a lot of it is in the full truckload business.

Boy I'll tell you what they're tough competitors because they have a lower cost structure. They don't have better technology. They don't buy equipment cheaper they don't buy fuel cheaper they have one competitive advantage they do not pay their people the same.

Larger carriers.

And.

That's why we didn't get into and do a lot of acquisitions in the full truckload business. So we're not really hurt as much as some other carriers on that side.

Got it.

Murray Kenneth Mullen: It's a real issue for anybody that's in the full truckload business. I can tell you that if you employ that business model. That gives you a very, very, very big cost advantage, for sure. So, I guess carriers are going to either have to either CRA let everybody do it, or they're going to have to address that situation to make the playing field even. Right now, the playing field is not even, but it doesn't really impact Mullen Group that much because we're not big in the full truckload business, and I've stayed away from it for that very reason. That may explain it.

It's really it's a real issue for anybody that's in the full truckload business I can tell you.

That if you employ that business model.

Yes.

And that gives you a very very.

Very big cost advantage for sure.

So.

I guess carriers youre going to either have to either CRA lets everybody do it or you got or theyre going to have to.

Address that situation.

To make the Plainfield, even right now the playing field is not even.

But it doesn't really impact Mullen group that much because we're not big in and a full truckload business and Ive stayed away from it for that very reason.

Murray Kenneth Mullen: Gotcha, that makes perfect sense there. And then, just shifting gears here, you guys called out, you know, potentially making more acquisitions in the S&I segment, just given in your market outlook section in the MD&A. Curious where you guys are seeing the most opportunity there, and how the multiples in that space compare to your preferred acquisition area, which is LTL? Well, there's opportunity everywhere, right? Yeah, yeah, I think, you know, it's across the board, David, they're like, when I say to you, I think there are companies that are stretched because of high interest rates. I think that's right across the board. Anybody that anybody that did acquisitions in 2022, David, you paid too much. Anybody that took on debt. When interest rates were very low, you may have bought a home when the mortgage rates were very low, but your mortgage rates are coming due, and the mortgage rates are a lot higher today than they were back then.

That may explain it.

Got you that makes perfect sense, there and then just shifting gears here you guys called out potentially making more acquisitions in the C&I segment, just given your market outlook section in the MD&A curious where you guys are seeing the most opportunity there and how did the multiples in that space.

Sure to your preferred acquisition area, which as Akhil.

Uh huh.

While this opportunity everywhere right.

I think it's across the board, Dave but like when.

When I say to you I think there is companies that are stretched because of high interest rate I think thats right across the board anybody that anybody that did acquisitions in 2022, David you paid too much fact.

Anybody that took on debt.

When interest rates were very low your mortgages coming due in the mortgage rates are a lot higher today than they were back then that is really squeezing people in this market.

Murray Kenneth Mullen: That is really squeezing people in this market, and it's across the board. We did not do any deals in 22.

And it's across the board.

We did not do deals in 'twenty two.

Murray Kenneth Mullen: Because we just. Truthfully, I just didn't think that it was sustainable. Number two is, David, we did not add any debt.

Because we just.

Truthfully I just didn't think that it was sustainable number two is David we did not add any any debt.

Murray Kenneth Mullen: In our company, since we did our last bond deal in 2014, all we did during that time was we did one convertible debenture. That's all we did. So we've kind of stayed away from taking on a whole bunch of debt, but our peers didn't. And it's across the board.

In our company since we did our last bond deal in 2014, all we did during that time as we did one convertible debenture. That's all we did so we've kind of stayed away from taking on a whole bunch of debt.

But our peers didn't.

And it's across the board, we're getting opportunities come in virtually our inbox is on and data with them. What we have to do is filtered through that and say well where do we want to strategically I think we can get the best synergies and the best opportunities for the future <unk> is clearly one of them David.

Murray Kenneth Mullen: We're getting opportunities come in virtually. Our inbox is inundated with them. What we have to do is filter through that and say, well, where do we think we can get the best synergies and the best opportunities for the future? LTL is clearly one of them, David.

Got it.

Murray Kenneth Mullen: And then we did Container World. I think booze, liquor, and wine will be hauled for quite a while, way past Murray's career. I think it'll still be there, and all we'll do is, once we get that, we've got a really good footprint once the Competition Bureau gives its blessing on it. We don't think that'll be an issue. You know, you've got to get their blessing, but once we get it, then we'll go in and we'll work with, for example, Container, where we know the business is there. We'll just work on improving processes and reducing costs and driving efficiencies and... I really see new technology and AI really helping that business drive efficiency over the long term. So we'll look for unique opportunities where we get a really nice footprint, like container world, that's a good strategic move. And then lots of tuck ins that help our existing 40 business units. That'll help all of them because we already have great management teams in place. We already have facilities. We just want more throughput, and the market's not giving that throughput right now. The acquisition market is giving that opportunity, but not the economy itself.

And then we.

Did container World I think booz liquor wine will be all for quite a while <unk> quarter.

I think it will still be there and all we will do is once we get that we got a really good footprint.

Once the competition Bureau Gibson.

It gives their blessing on it we don't think that'll be an issue, but you know.

You've got to get their blessing, but once we get it then we'll go in and we'll work with for example, container where we know the businesses there.

We will just work on improving processes, and reducing cost and driving efficiencies and IRA.

I really see.

New technology, and AI really helping that business drive efficiency over the long term.

So.

Our unique opportunities, where we get a really nice footprint like container world.

As a good strategic move and then lots of tuck ins that help our existing 40 business units.

That will help all of them because we already got great management teams in place we already got facilities. We just want more we just want more throughput and the market's not giving that throughput right now the acquisition market is giving the.

That opportunity, but not be economy itself.

Murray Kenneth Mullen: And Murray, I'm curious just how you're balancing the acquisitions against buying back more stocks since you guys are trading under six times EBITDA. I'm not sure if the acquisition markets are favorable and if we can acquire stuff in the four or five times range. You know, I think, from a board perspective, we talk about that, and the board will give the senior executives the wink wink of what to do on the share buyback. But, you know, we're still going to be buying back shares.

And Marion just how youre balancing that the acquisitions against buying back more stock. Since you guys are trading under six times EBITDA I'm not sure if the the acquisition markets are.

Favorable and we can acquire something that four to five times range.

I think from a from a board.

Perspective, we talk about that in.

And the board will give the senior executives.

Wink Wink of what to do on share buyback, but.

We're going to be still buying back shares.

Murray Kenneth Mullen: Joanna, I think we're going to renew our NCIB here again. And we just know what the long-term opportunities are for this company. We're situated as well or better than everybody. There are only a couple of us in Canada that can really do acquisitions right now, David. One is in Montreal, and one is out in Alberta.

Joanna I think we're going to renew our <unk> and CIB here.

Again.

And we just know what the long term opportunities are for this company.

We're situated as well or better than.

Everybody. This is only a couple of us and Canada can really do acquisitions right now David.

One is in Montreal, and one is open alber.

Murray Kenneth Mullen: There are not many others that can really do them. So, we get to look at a lot of things and make the right choices that will help each of our respective business units and get critical mass. I feel pretty good about it. So, if investors don't want to own our stock, we'll buy it back because we like the long-term fundamentals of our company.

Not many others that can really do.

So.

We get to look at a lot of things and make the right choices.

Help each of our respective business units and get critical mass.

I feel pretty good about it so.

If investors don't want to own our stock level buyback because we like the long term fundamentals of our company.

David Ocampo: Got it. That's it for me. I'll hop back in the queue. This concludes the question and answer session. I would like to turn the conference back over to Mr. Mullen for any closing remarks.

Got it that's it for me I'll hop back in the queue.

Okay.

This concludes the question and answer session I would like to turn the conference back over to Mr. Mullen for any closing remarks.

Murray Kenneth Mullen: Thanks, folks, for joining us. It's already mid-February. We're already mid-way through the quarter already, so we'll be looking forward to giving you a further update in April, which isn't that far away. Spring is around the corner. We've got lots of work to do. We're delighted to have 23. That's it for 23.

Thanks folks for joining us it's already mid February we're already through the quarter already so we'll be looking forward to giving you a further update.

In April.

Which is only not that long.

It's around the corner, we got lots of work to do we are delighted to have 23 thats. It for 23, I'm not going to talk about it again.

Enjoyed folks and we'll talk to everybody in.

In April thank you very much.

This concludes the call.

Today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

Operator: I'm not going to talk about it again. Enjoy, folks, and we'll talk to everybody in April. Thank you very much. This concludes today's conference call, though you may disconnect your lines. Thank you for participating and have a pleasant day.

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