Q2 2024 Badger Infrastructure Solutions Ltd Earnings Call

Operator: Good day, and thank you for standing by. Welcome to the Badger Infrastructure Solutions 2024 second quarter results conference call.

Good day, and thank you for standing by welcome to the Badger infrastructure solar since 2024.

Operator: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Lisa Ararte, Director of Investor Relations and Financial Planning. Madam, please go ahead.

Speaker Change: Quarter results conference call at this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need a press star one on your telephone you will then hear an automated message advising you. Your hand, just raised to withdraw your question. Please press star one again, please be advised that.

Speaker Change: Today's conference is being recorded I would now like to turn the conference over to your speaker today, Lisa Our RT director of Investor Relations and financial planning Ma'am. Please go ahead.

Lisa Olarte: Good morning everyone, and welcome to our second quarter 2024 earnings call. My name is Lisa Olarte, Badger's Director of Investor Relations and Financial Planning. Joining me on the call this morning are Badger President and CEO Rob Blackadar and our CFO Rob Dawson.

Good morning, everyone and welcome to our second quarter 2024 earnings call. My name is Lisa <unk>, <unk> director of Investor Relations and financial planning.

Lisa Olarte: Badger's 2024 second quarter earnings release, MD&A, and financial statements were released after markets closed yesterday and are available on the investor section on Badger's website and on CDAR. We are required to note that some of the statements made today may contain forward-looking information. In fact, all statements made today which are not statements of historical fact are considered to be forward-looking statements. We make these forward-looking statements based on certain assumptions that we consider to be reasonable.

Lisa Olarte: However, forward-looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them, as actual results may differ materially from those expressed or implied. For more information about material assumptions, risks, and uncertainties that may be relevant to such forward-looking statements, please visit our website at www.salesforce.com. Please refer to Badger's 2023 MD&A along with the 2023 AIF. I will now turn the call over to Rob Lockadar.

Speaker Change: Joining me on the call. This morning are badger's, President and CEO, Rob block at our and our CFO, Rob Dawson Badger's 2024 second quarter earnings release, MD&A and financial statements were released after markets closed yesterday and are available on the Investor section on Badger's website and on SEDAR.

Speaker Change: We're required to note some of the statements made today may contain forward looking information in fact, all statements made today, which are not statements of historical fact are considered to be forward looking statements.

Speaker Change: We make these forward looking statements based on certain assumptions that we consider to be reasonable. However forward looking statements are always subject to certain risks and uncertainties and undue reliance should not be placed on them as actual results may differ materially from those expressed or implied for more information.

Speaker Change: <unk> about material assumptions risks and uncertainties that may be relevant to such forward looking statements.

Rob blocker: These refer to Badger's 2023, MD&A, along with the 2023 Aif I will now turn the call over to Rob blocker.

Rob Blackadar: Thanks Lisa and good morning everyone, and thank you for joining our 2024 second quarter earnings call. Before we get into the results, I'd like to take a moment to talk about safety, which is how we start all of our team meetings here at Badger. We're in the middle of our busy summer construction season, and much of North America has been experiencing hot weather conditions in the field. Badger is mitigating this heat stress by having our operators focus on hydration.

Rob blocker: Thanks, Lisa and good morning, everyone and thank you for joining our 2024 second quarter earnings call before we get into the results I'd like to take a moment to talk about safety, which is how we start all of our team meetings here at Badger, where.

Rob blocker: We're in the middle of our busy summer construction season in much of North America has been experiencing hot weather conditions in the field.

Rob blocker: Badger is mitigating this heat stress by having our operators focus on hydration.

Rob Blackadar: Cooling Period, routine breaks, and aligning our work hours with the coolest parts of the day. By doing so, we've been able to avoid heat injuries across our employee base, and we appreciate our team's efforts to keep everyone safe.

Rob blocker: <unk> periods routine brakes, and aligning our work hours with the coolest parts of the day by doing so we've been able to avoid injuries across our employee base and we appreciate our teams efforts to keep everyone safe.

Rob Blackadar: Now on to the quarter results. We had another quarter of solid growth in revenues, gross profit, and adjusted EBITDA. Our top-line revenue of $186.8 million grew by 9%, driven by the strength of our U.S. operations, which saw a revenue increase of 14% year-over-year. In the U.S., our eastern and southern regions experienced strong growth, which was offset slightly by slower levels of growth in California and the Upper

Speaker Change: Now onto the quarter results, we had another quarter of solid growth in revenues gross profit.

Rob blocker: And adjusted EBITDA.

Rob blocker: Our topline revenue of $186 8 million grew by 9% driven by the strength of our U S operations, which saw a revenue increase of 14% year over year.

Rob blocker: In the U S. Our eastern and southern regions experienced strong growth, which was offset slightly by slower levels.

Rob blocker: Of growth in California, and the upper Midwest.

Rob Blackadar: We continue to experience softness in our Canadian markets, with revenue down 19% compared to 2023, due to the delayed starts of some significant projects in central Canada and lower market activity at our operating partner operations, as we discussed last quarter. We continue to expect these delayed projects, which we have been awarded, to begin later in 2024 and into early 2025, as we discussed on our previous call. Canadian revenues are likely to remain in line with this trend we experienced in the first half of the year.

Rob blocker: We continued to experience softness in our Canadian markets with revenue down 19% compared to 2023 due to the delayed starts of some significant projects in central Canada, and lower market activity at our operating partner operations as we discussed last quarter.

Rob blocker: We continue to expect these delayed projects, which we have been awarded to begin later in 2024 and into early 'twenty five as we discussed on our previous call.

Rob blocker: Canadian revenues are likely to remain in line with this trend we experienced in the first half of the year.

Rob Blackadar: In my closing remarks, I will cover some of the key projects and industry sectors that Badger has been having success with across North America. We achieved RPT, or revenue per truck per month, of $43,161 in Q2, down slightly from the previous year due to the slowdown in the Canadian market. RBT in the U.S. for the quarter was flat compared with last year.

Speaker Change: In my closing remarks, I will cover some of the key projects in the industry sectors that Badger has been having success with across North America.

Rob blocker: We achieved RPT or revenue per truck per month of $43161 in Q2.

Rob blocker: Down slightly from the previous year due to the slowdown in the Canadian market RPT in the U S for the quarter was flat compared with last year.

Rob Blackadar: We also added a net 114 trucks to our fleet year over year, while holding RPT relatively stable and continued to make good progress on our commercial and pricing initiatives. We continue to see growth in adjusted EBITDA track higher than our revenue growth, up 14% year-over-year, driven by improved operating leverage in our G&A support fund. Our adjusted EBITDA margin was 23.9%, up from 22.8 percent in 2023.

Rob blocker: We also added a net 114 trucks to our fleet year over year, while holding RPT relatively stable and continued to make good progress on our commercial and pricing initiatives.

Rob blocker: We continue to see growth in adjusted EBITDA track higher than our revenue growth up 14% year over year, driven by improved operating leverage in our G&A support functions.

Rob blocker: Our adjusted EBITDA margin was 23, 9%.

Up from 22, 8% in 2023.

Rob Blackadar: The Red Deer plant manufactured 59 hydrovacs this quarter and 111 year to date. Beginning in Q3, we are moderating our rate of truck builds and expect to be at the lower end of our full year guidance, which we previously announced to come in at 7% to 10% growth over the prior year. We retired 5 units in the quarter and 71 units year to date, within our range of 70 to 90 units for the full year.

Speaker Change: The Red Deer plant manufactured 59 hydro backs this quarter and 111 year to date.

Speaker Change: Beginning in Q3, we are moderating our rate of truck builds and expect to be at the lower end of our full year guidance, which we previously announced to come in at 7% to 10% growth over the prior year.

Speaker Change: We retired five units in the quarter and 71 units year to date within our range of 70% to 90 units for the full year.

Rob Blackadar: We refurbish 10 units in the quarter and 18 units year to date. We ended the quarter with 1,584 Hydrax in our fleet, growing our fleet by 8% since Q2 of last year. Also of note, we announce our intention to pursue a normal course issuer bid with the Toronto Stock Exchange, to which Badger may acquire common shares for cancellation subject to approval. I'll now turn the call over to Rob Dawson to discuss our Q2 financial results in more detail.

Speaker Change: We refurbished 10 units in the quarter and 18 units year to date.

Speaker Change: We ended the quarter with $1 584 hydro racks in our fleet.

Speaker Change: Growing our fleet by 8% since Q2 of last year.

Speaker Change: Also of note, we announced our intention to pursue a normal course issuer bid with the Toronto stock exchange to which Badger may acquire common shares for cancellation subject to approvals.

Rob Dolphin: I'll now turn the call over to Rob Dolphin to discuss our Q2 financial results in more detail.

Rob Dolphin: Thanks, Rob.

Rob Dawson: As you saw in our second quarter release, the team delivered another quarter of solid results. Revenue grew 9%, driven by our U.S. operations, which were up almost 14%. Our Canadian operations continued in line with the first quarter trend, down 19% from last year, due to the reasons Rob mentioned earlier. As Rob discussed, Canadian revenues are likely to remain in line with the first half of the year, and we remain encouraged by the overall strength of our U.S. business.

Rob Dolphin: As you saw in our second quarter release, the team delivered another quarter of solid results revenue grew 9% driven by our U S operations, which was up almost 14%.

Speaker Change: Our Canadian operations continued in line with the first quarter trend down 19% from last year due to the same reasons due to the reasons, Rob mentioned earlier as Rob discussed Canadian revenues are likely to remain in line with the first half of the year and we remain encouraged with the overall strength in our U S business.

Rob Dawson: Gross profit margins were largely unchanged from last year at 29.2% compared to 29.1% last year. However, the trend in our adjusted EBITDA margins continued to improve at 23.9%, up 110 basis points from last year. Our four-quarter trailing adjusted EBITDA margins continue to grow in line with our long-term objectives. Our trailing four-quarter adjusted EBITDA and adjusted EBITDA margins have now grown for 10 consecutive quarters. G&A expenses were $10 million, or 5.3% of revenue, down from $10.9 million, or 6.4% of revenue, in the prior year. As indicated last quarter, overall 2024 G&A spending is expected to be largely in line with last quarter. Adjusted earnings per share were $0.45, up 18% compared to last year.

Rob Dolphin: Our gross profit margins were largely unchanged from last year at 29 spot, 2% compared with 29, 1% last year.

Speaker Change: The trend in our adjusted EBITDA margins continued to improve at 'twenty threes by 9% up 110 basis points from last year.

Speaker Change: Our four quarter trailing adjusted EBITDA margins continue to grow in line with our long term objectives.

Speaker Change: Our trailing four quarter adjusted EBITDA and adjusted EBITDA margins have now grown for 10 consecutive quarters.

Speaker Change: G&A expenses were $10 million or five 3% of revenue down from $10 9 million or six 4% of revenue in the prior year as indicated last quarter. Overall 2020 for G&A spending is expected to be largely in line with last year's.

Speaker Change: Adjusted earnings per share was <unk> 45.

Speaker Change: Up 18% compared to last year with.

Rob Dawson: With revenues up 9%, adjusted EBITDA up 14%, and adjusted earnings per share up 18%, we are encouraged by the continued scalability and growth in margins. Now on to the balance sheet. Our capital allocation priorities are unchanged to utilize our cash flows from operations to fund growth in our fleet and our hydro-backed services operations. We continue to maintain a strong, flexible balance sheet to support this organic growth and commercial strategy. In that regard, our compliance leverage ended the quarter at 1.5 times debt-to-EBITDA, down from 1.6 times a year ago.

Speaker Change: With revenues up 9% adjusted EBITDA up 14% and adjusted earnings per share up 18%. We are encouraged by the continued scalability and growth and margins.

Rob Dawson: During the second quarter, we also completed some minor amendments to our syndicated credit facility, principally to convert it into a U.S. dollar. With ample liquidity and over four years of remaining term, we have plenty of flexibility to execute our plan. And, finally, and as Rob has already mentioned, we intend to initiate a normal course issue or bid in the near term.

Speaker Change: Now onto the balance sheet, our capital allocation priorities are unchanged to utilize our cash flows from operations to fund growth in our fleet and our hydro back services operations.

Speaker Change: We continue to maintain a strong flexible balance sheet to support this organic growth in commercial strategy.

Speaker Change: In that regard our compliance leverage ended the quarter at one five times debt to EBITDA down from one six times a year ago during.

Speaker Change: During the second quarter. We also completed some minor amendments to our syndicated credit facility principally to convert it into a U S dollar facility.

Speaker Change: With ample liquidity and over four years of remaining term, we have plenty of flexibility to execute our plans and finally and as Rob has already mentioned, we intend to initiate a normal course issuer bid in the near term.

Speaker Change: I will now turn things back over to Rob for some final comments.

Rob Blackadar: Thanks, Rob. So, before we open up for questions, I want to make a few last comments. We are pleased with our continued performance to scale and grow across key markets in North America. Our commercial strategy execution continues to help Badger capitalize on various projects, including data center construction. Microchip Manufacturing Plant, Energy and Power Grid Hardening Projects, and several other infrastructure projects. We continue to bid on and win light rail transit, wastewater treatment plant facilities, and stadium projects all across North America.

Rob: Thanks, Rob.

Rob: Before we open it up for questions I want to add a few last comments.

Rob: We are pleased with our continued performance to scale and grow across key markets in North America.

Speaker Change: Our commercial strategy execution continues to health Badger capitalize on various projects, including data center construction builds micro chip manufacturing plants.

Rob: Energy and power grid hardening projects and several other infrastructure projects, we continue to bid and win.

Speaker Change: Rail transit.

Speaker Change: Wastewater treatment plant facilities and stadium projects all across North America.

Rob Blackadar: Badger is the only vertically integrated HydroVac services company that can simultaneously support all of these diverse projects while also supporting our local market customers. I am very proud of our local sales, our national accounts, and operations teams who are helping to grow and make Badger and take Badger to new heights by pursuing these projects. We are also very excited to announce Badger's new data analytics platform, which will be launching this quarter.

Badger: Badger is the only vertically integrated hydro Vac services company that can simultaneously support all of these diverse projects, while also supporting our local market customers.

Speaker Change: I am very proud of our local sales our national accounts and operations teams are helping to grow and make badger and take badger to new heights by chasing these projects.

Speaker Change: We're also very excited to announce badger's, new data analytics platform, which we'll be launching this quarter.

Rob Blackadar: This new platform will act as a catalyst for revenue growth and margin improvement, driving the business towards our long-term targets which we set out at our recent Investor Day. So with those comments, let's turn it back to the operator for questions. Operator? Thank you. As a reminder, to ask a question...

Speaker Change: This new platform will act as a catalyst for revenue growth and margin improvement driving the business towards our long term targets, which we set out at our recent Investor day.

Speaker Change: So with those comments, let's turn it back to the operator for questions operator.

Operator: Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. One moment while we compile our Q&A roster. And our first question is going to come from the line of Yuri Link from Canaccord Genuity. Your line is open, please go ahead.

Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment, while we compile our Q&A roster.

Speaker Change: And our first question is going to come from the line of Yuri Lynk with Canaccord Genuity. Your line is open. Please go ahead.

Yuri Lynk: Good morning, gentlemen.

Gary: Hey, good morning, Gary.

Yuri Link: So pretty good quarter, all things considered. Just wanted to dig in a little bit on gross margin, the progress you've been making there, driving year-on-year improvements, kind of stalled out in Q2 despite you taking some price. So what were some of the offsets in the gross margin line and how do we think about your ability to continue to improve that number going forward?

Yuri Lynk: So pretty good quarter, all things considered.

Yuri Lynk: Just wanted to dig in a little bit on the gross margin.

Yuri Lynk: The progress you've been making there driving year on year improvements kind of stalled out in Q2. Despite you are taking some price. So what were some of the offsets.

Speaker Change: In the gross margin line and how do we think about your ability to continue to improve that number going forward.

Rob Dawson: Hi Yuri, it's Rob Dawson here. I can add a little color to that one.

Gary: Hi, Harry it's Rob to us and here I can I can add a little color to that one.

Rob Dawson: I think when you see that we're cutting our, not cutting, but we're moderating our or Truck Build. Our utilization was a little lighter in Q2, and as a result of that, we did have slightly elevated labor and some M&R maintenance and repairs as a percentage of revenue in the quarter. We think we can get back to growth and gross margins going forward with a little higher utilization going forward. I think utilization is the main driver there. And, as well, there are some other initiatives that we have underway that we think will return that to growth as expected.

Speaker Change: I think when you see that we're cutting are not cutting but we're moderating our.

Speaker Change: Our truck builds our utilization was a little lighter in Q2.

Speaker Change: And as a result of that we did have slightly elevated labor and some M&A or maintenance and repairs as a percentage of revenue in the quarter.

Gary: That we think we can get back to growth in gross margins going forward with a little little little higher utilization going forward I think utilization is the main driver there.

Gary: As well.

Gary: There are some other initiatives that we have underway that we think we'll return that to growth as expected.

Gary: Okay.

Rob Blackadar: And then last one for me, should we anticipate any disaster recovery work in the third quarter? I know there was a pretty large hurricane that went through the US.

Gary: And then last one for me.

Speaker Change: Should we anticipate any disaster recovery work in the third quarter I know there was a pretty large hurricane that went through the U S.

Rob Blackadar: I'll take that one, Rob. So, Yuri, we had some response to Hurricane Beryl, which had gone through Texas and hit Houston pretty hard. And it was kind of a normal course storm response for the company, nothing kind of extraordinary or outsized. You know, certainly the forecasters talk about how warm the Gulf of Mexico is and how this should be an active season, as well as some other emergency response work that we're all the time doing in a somewhat normal course across the business.

Gary: I'll take that one Rob so Yuri.

Rob: We had some response to hurricane barrel, which had gone up through Texas and Houston pretty hard.

Rob: And it was kind of a normal course storm response for the company nothing kind of.

Speaker Change: Extraordinary or outsized.

Speaker Change: Certainly the forecasters talk about how warm the Gulf of Mexico is and how this should be an active season.

Gary: As well as some other.

Gary: Emergency response work that we're all the time doing somewhat normal course across the business.

Rob Blackadar: In many different markets, we respond to forest fires and other natural disasters, and the team is always ready to step up on that. We're thinking it's probably going to be a pretty active season, but, you know, that storm we just had, even though there was a lot of noise regarding the storm and the storm response for about the first 7 to 10 days, it wasn't a very long-lasting storm response. The customer that we had down there was able to get the power back on, you know, in that 7 to 10-day period.

Gary: And many various markets, we respond to forest fires.

Gary: And other natural disasters and the team is always ready to amp up on that.

Gary: We're thinking it's probably going to be a pretty active season.

Gary: But.

Gary: That storm, we just had.

Gary: Even though there was a lot of noise regarding the storm and the storm response for about the first seven to 10 days it wasn't a very long lasting storm response.

Gary: The customer that we had down there was able to get the power back on.

Rob Blackadar: But, you know, we anticipate this year should be active, but we don't really forecast that into our numbers. Anything that happens along those lines is actually looked at as kind of an upside. The last couple of years of emergency response have been somewhat muted, and so it allows us to not try to live off of nonrecurring work like that.

Gary: And that seven to eight seven to 10 day period.

Gary: And but we anticipate this year should be active.

Gary: But we don't really forecast that into our numbers anything that happens along those lines as we actually look at as kind of an upside over the last couple of years of Mercury response have been.

Gary: On what muted and so it allows us to not try to live off of nonrecurring type work like that.

Yuri Link: Okay, that makes sense. I'll turn it over.

Speaker Change: Okay makes sense.

Speaker Change: I'll turn it over.

Operator: Thank you, and one moment as we move on to our next question. And our next question comes from the line of Frederick Bastin with Raymond James. Your line is open. Please go ahead.

Speaker Change: Alright, Thanks, Eric Thank you and one moment as we move on to our next question.

Speaker Change: And our next question comes from the line of Frederic Bastien with Raymond James Your line is open. Please go ahead.

Frederick Bastin: Good morning. Guys, you highlighted a slowing rate of growth in California and the upper Midwest. Just curious how relevant these markets are for Badger currently and whether you're seeing signs of potential slowdown or investment delays ahead of the presidential elections. Thank you.

Frederic Bastien: Good morning.

Frederic Bastien: As you highlighted a slowing rate of growth in California, and the Midwest just curious how relevant these markets are for Badger currently in on weather.

Frederic Bastien: Youre seeing signs of potential slowdown or investment delays have.

Speaker Change: Presidential elections.

Rob Blackadar: So, Frederick, it is somewhat tied to the change or potential change to the administration in the presidential election. Those are good markets for Badger, but in the U.S., they are one part of our entire opportunity and portfolio. The way it works in the U.S., especially in regards to some of the construction projects, the government typically will give some kind of economic incentive or some technology that the government wants to support or the current administration is in support of.

Rob: Rob So so fredrik.

Rob: It is somewhat tied to the change or potential change to the administration.

Rob: And the presidential election.

Speaker Change: <unk> are good markets for Badger.

Speaker Change: <unk>.

Speaker Change: In the U S.

Speaker Change: They are one part of our entire opportunity in portfolio.

Speaker Change: The way it works in the U S, especially in regards to.

Speaker Change: Some of the construction projects.

Speaker Change: The government typically we will give some kind of an economic incentive or.

Speaker Change: Some technology that the government wants to.

Speaker Change: Support or.

Speaker Change: The <unk>.

Speaker Change: Current administrations in support of for example, the chips Act that the U S. Federal government recently did to really drive.

Rob Blackadar: For example, the CHIPS Act that the U.S. federal government recently did to really drive U.S. chip manufacturing plants to be onshore in the state. In those markets specifically, the slowdowns were tied to some projects that were both renewable energy and oil and gas related. And the Upper Midwest was more oil and gas related, and Southern California more on the renewables side. Both of those technologies, depending on which administration comes into play, we believe certain economic incentives will be driven by whatever administration gets in. The good news is, Frederick, we are agnostics.

Speaker Change: U S chip manufacturing plants to be onshore it into the states.

Speaker Change: <unk> market specifically.

Speaker Change: The slowdown so were tied to some projects.

Speaker Change: That were both renewable energy.

Speaker Change: <unk> oil and gas related.

Speaker Change: And upper Midwest was more oil and gas related and.

Speaker Change: Southern California or more on the renewables side.

Speaker Change: <unk>.

Speaker Change: Both those technologies, depending on which administration gets comes into play.

Speaker Change: We believe.

Speaker Change: Certain economic incentives will be driven by whatever administration gets in the good news is fredrik.

Speaker Change: We are agnostic, we support both those technologies and we love working on both those types of projects.

Rob Blackadar: We support both those technologies, and we love working on both those types of projects. The one thing we feel very comfortable with, no matter which party gets in, will be that the technology sector, I think in terms of data centers and some of the chip manufacturing plants, but the technology sector, they have, over time, always been gravitating toward renewable energy. So we believe, over time, these projects will go forward, just whenever there's more certainty in whichever administration is going to be in play. So that's the world in which we're operating.

Speaker Change: The one thing we feel very comfortable with no matter, which party gets in.

Speaker Change: It will be.

Speaker Change: The technology sector.

Speaker Change: In terms of like data centers.

Speaker Change: And.

Speaker Change: Some of the chip manufacturing plants, but the technology sector. They over time always have been gravitating toward that renewable energy. So.

Speaker Change: We believe over time. These projects will go just whenever theres more surety.

Speaker Change: Whichever administration's going to be in play so.

Speaker Change: That's the that's a world in which we're operating.

Rob Blackadar: Okay, that's helpful. Thank you. With the new truck built, guided down slightly, can we expect a bigger ramp on the refurbishment program? Maybe an update on that would be super helpful.

Speaker Change: Okay. That's helpful. Thanks.

Speaker Change: With the new truck builds guided down slightly can we expect a bigger ramp up the refurbishment program, maybe an update on that would be super helpful. Thank you.

Rob Blackadar: Yeah, so our plan is... As we look at the truck fleet overall, we added 114 trucks year-over-year, and the trucks we've been building the new Gen 5s actually operate. They're the most efficient Badger truck that's ever been built. We believe we can actually drive more utilization into the fleet and not have to ramp up at the same pace and still be able to achieve and attain our revenues. We don't necessarily need to drive up refurbishments and offset it with a ramp-down in manufacturing. We believe that we still have some opportunity in our utilization, and that's what Rob was talking about in some of his comments earlier. You want to add anything to that, Rob? Okay.

Speaker Change: Yes, so our plan.

Speaker Change: As.

Speaker Change: As we look at the truck fleet overall, we added 114 trucks year over year.

Speaker Change: And the trucks as we've been building the new Gen fives.

Speaker Change: Actually operate.

Speaker Change: They are the most efficient badger truck that's ever been built we believe we can actually drive more utilization into the fleet.

Speaker Change: And not have to ramp up at the same pace and still be able to achieve and attain our revenues.

Speaker Change: We don't necessarily need to drive up refurbishments and offset it with <unk>.

Speaker Change: <unk> down in the manufacturing we believe.

Speaker Change: That we still have some opportunity on our utilization and Thats, what Rob was talking about in some of his comments earlier.

Rob: You want to add anything on that.

Speaker Change: Okay.

Roger: Okay. Thanks Roger.

Roger: Thank you.

Operator: And once again, ladies and gentlemen, if you would like to ask a question, please press star one on your telephone. And our next question is going to come from the line of Krista Friesen with CIBC. Your line is open. Please go ahead.

Speaker Change: And once again, ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone.

Speaker Change: And our next question is going to come from the line of Christopher <unk> with CIBC. Your line is open. Please go ahead.

Krista Friesen: Hi, thanks for taking my question. I was just wondering about these delayed Canadian projects. I assume at this point they're all still delayed, there hasn't been any sort of cancellation of any of them. And I was also just wondering if there's any form of compensation that you're able to kind of extract from it given the impact that it's had on your business, if that's been built into those contracts?

Christopher <unk>: Hi, Thanks for taking my question.

Christopher <unk>: I was just wondering on these that delayed Canadian projects.

Speaker Change: I'm assuming at this point Theyre, all still delayed there hasnt been any sort of cancel.

Speaker Change: Cancellation of any of them.

Speaker Change: And I was also just wondering if theres any any form of compensation that youre able to kind of extract from that given.

Speaker Change: Given the impact that it's that it's had on your business. If that's been built into those contracts.

Rob Blackadar: No, Krista, we're not able to; there's no penalty clause for a late start or delayed start in our contract. And if we had done some specific ramp-ups only for those projects, then we probably would have structured the contracts a little differently, but we don't have that type of clause in there. As far as they're actually getting canceled, moving from a delayed mode to a cancellation mode, we're not seeing any of that anywhere. It keeps kicking to later in 2024 and now beginning of 2025, some of the things we're seeing.

Speaker Change: No.

Speaker Change: Christine we're not able to there's no penalty cause of a late starter delayed start in our contracts.

Speaker Change: And.

Speaker Change: If we had.

Speaker Change: Done some specific ramp ups only for those projects.

Speaker Change: Then.

Speaker Change: We probably would've structure of the contracts a little differently, but we don't have that type of clause.

Speaker Change: And there as far as are they actually getting canceled moving from a delayed mode to a cancellation mode.

Speaker Change: Not seeing any of that anywhere just keeps kicking to later in 2024 and now beginning of 2025 some of the things we're seeing.

Rob Blackadar: If anything, Chris, you know... The awarded contracts that are in our pipeline have not been cancelled, but there are positive signs for even further large CapEx and infrastructure projects being announced with FID, particularly in Western Canada. Coastal Gas Link is complete, TMX is complete, but there are now two new LNG facilities, one in construction already and another one announced, and then a number of these infrastructure projects and public transportation projects in Santa Barbara are continuing to proceed. We remain, you know, pretty optimistic about Canada.

Chris: If anything Chris.

Chris: The awarded contracts that are in our pipeline that have not been canceled but there is positive signs for even further large capex and infrastructure projects being announced with <unk>.

Speaker Change: Particularly in Western Canada.

Speaker Change: Coastal gas link is complete.

Speaker Change: <unk> is complete but there's now two new LNG facilities, one in construction already and another one announced.

Chris: And then a number of these infrastructure projects in public transportation projects.

Speaker Change: Our continuing to proceed so.

Chris: We remain pretty pretty optimistic about Canada.

Rob Blackadar: Maybe just on that last point there, over almost the past year, we've seen the non-destructive units decline in Canada while they build in the U.S. Do you expect to kind of hold them at this level in Canada or continue to prioritize sending them down south?

Speaker Change: Maybe just on that last point there overall.

Chris: We're almost past year, we've seen that.

Speaker Change: Non destructive units.

Chris: Your line in Canada, while it builds in the U S.

Chris: Do you expect to kind of hold at this level in Canada, we're continue to prioritize spending them.

Chris: So.

Rob Blackadar: So we're going to flex the trucks to where the demand is and where we can get the return. So we look at both the return profile of the branches or the projects that we're feeding the assets to to make sure that it's additive to our returns and they're not diluting our returns. And then the second thing is where do we have the demand? If there is lower demand in Canada or we can handle or support our customers through increasing our utilization with fewer trucks, we're going to do that every time.

Chris: So we're going to.

Speaker Change: Flex the trucks to where the demand is and where we can get the return.

Chris: So we look at both.

Speaker Change: Of the return profile of the branches or the projects that we are feeding the assets too to make sure that it's being additive to our.

Speaker Change: Terms.

Speaker Change: And Theyre not diluting our returns and then the second thing is where do we have the demand.

Speaker Change: If there is lower demand in Canada or we can.

Speaker Change: Handle or support our customers through increasing our utilization.

Speaker Change: With less trucks, we're going to do that every time. It just gives us a much much better return profile.

Rob Blackadar: It gives us a much better return profile. But obviously, we don't want to keep pushing trucks into a market that doesn't have as much demand and if the return profile is not there. So those are the things we look at whenever we make the allocation decision about where the assets go.

Chris: But obviously, we don't want to keep pushing trucks.

Speaker Change: To our market.

Speaker Change: That doesn't have as much demand.

Speaker Change: And.

Speaker Change: If the return profile is not there. So those are the things we look at.

Speaker Change: Whenever we make.

Speaker Change: The allocation decision of where the assets go.

Krista Friesen: Okay, thanks. And just one last one for me. Is there anything to be said or read into about the decline in franchise agreements in Canada and the U.S. this quarter?

Speaker Change: Okay. Thanks, and just one last one for me.

Speaker Change: Is there anything.

Speaker Change: We said or read into just about.

Speaker Change: The decline in the.

Speaker Change: Franchise agreements in Canada, and the U S. This quarter.

Rob Dawson: You know, I don't think there's anything specific to be read into that at all. You would have seen a reduction of two this quarter, two very small, single-digit unit franchises that were more or less dormant, and so we've just canceled the agreements in partnership with the OP partners in both of those cases.

Speaker Change: Hello, everyone.

Speaker Change: I don't think theres anything specific to be read into that at all.

Speaker Change: You would have seen a reduction of two this quarter two very small single digit unit.

Speaker Change: Franchise is that we're more or less dormant.

Speaker Change: So.

Speaker Change: We have just canceled the agreements.

Speaker Change: And made an amicable.

Speaker Change: Departure with ERP partners and both of those cases.

Rob Blackadar: Yeah, and Chris, I'll also share, from time to time, with franchises, and it doesn't matter what industry or what business you're in; franchises, like any small business owner, have different periods of their lifecycle, and there are periods where they are starting into franchises, they are investing and growing, and then there are periods when people come up and say, hey, we want to retire, or I don't have a succession Does it make sense to retire the current franchise and turn it into a corporate store?

Speaker Change: And Chris I'll always I'll also share.

Chris: From time to time with franchises and it doesn't matter what industry or what business you're in.

Speaker Change: <unk> franchises like any small business owner.

Chris: They have different <unk>.

Speaker Change: Periods of their lifecycle and there's periods where.

Chris: They are starting into franchises.

Speaker Change: They are investing and growing.

Speaker Change: And then there's periods when people come up and say Hey, we want.

Speaker Change: Retire or I don't have a succession plan and at that point, we as a company look at those franchise and say does it make sense for us to continue with another franchisee visit makes sense too.

Speaker Change: Retire out the current franchise and turn it into a corporate store, what's the existing market etcetera. So we do all those evaluations, but as Rob suggested these two were pretty normal course.

Rob Blackadar: What's the existing market, etc.? So we do all those evaluations, but as Rob suggested, these two were pretty normal courses, but there's no change in our strategy on the franchises, generally speaking. If anything, Krista, the profitability of our community.

Rob: But theres no change in our strategy on the franchises generally speaking.

Rob Blackadar: If anything Krista, profitability of our Canadian fleet is, and we've talked about this in previous quarters, it's a key focus of ours and particularly in Ontario where there's a good mix of franchise and corporate store operations, if anything there's an increased level of coordination and cooperation, sales and business development, to ensure that we're not only getting the utilization up across the whole fleet, including within our franchises, but we can offer a seamless customer experience.

Rob: If anything crested profitability of our Canadian fleet is and we've talked about this in <unk>.

Speaker Change: Previous quarters.

Speaker Change: It's a key focus of ours.

Rob: And particularly in Ontario, where there is a good mix of franchise and corporate store operations.

Rob: Anything there is an increased level of coordination and cooperation sales and business development to ensure that we're not only getting the utilization up across the whole fleet, including within our franchises, but we can we can offer a seamless customer experience.

Speaker Change: Not yet.

Speaker Change: Separate markets.

Krista Friesen: Okay, great. Thank you. I'll jump back in the queue. Thanks, Chris.

Speaker Change: Okay, great. Thank you I'll jump back in the queue.

Operator: Thanks Chris. Thank you and one moment as we move on to our next question. And our next question is coming from the line of Ian Gillius with Stiefel. Your line is open, please go ahead.

Chris: Thanks, Chris Thank.

Speaker Change: Thank you and one moment as we move on to our next question.

Speaker Change: And our next question is coming from the line of Ian Gillies with Stifel. Your line is open. Please go ahead.

Ian Gillies: Good morning, everyone.

Speaker Change: Good morning, Ian.

Ian Gillius: As you think with the slower truck build program this year and as we start thinking about 25, the mechanism to get to 12 to 14 percent revenue growth next year obviously changes a little bit. Are you having enough success on the pricing side and with respect to some of these, I guess, customers starting up again later this year that you think next year you can get back into that 12 to 14% range based on what you know today?

Ian Gillies: As you think with the slower truck build program this year and as we start thinking about 25 mechanism to get to 12% to 14% revenue growth next year, obviously changes a little bit.

Ian Gillies: Are you having enough success on the pricing side and with respect to some of these I guess customers starting up again later this year that you think next year, you can get back into that 12% to 14% range.

Ian Gillies: Today.

Rob Blackadar: Yeah, so we feel comfortable, you know, and we do a lot of modeling on the fleet throughout every single month. We're all the time evaluating fleet levels where we need to move our assets and, because it's, you know, our business is both an asset and a labor-intensive business, we're all the time evaluating both Ian, from our perspective, our pricing. We're very pleased with what we've been able to achieve on pricing so far in the first half of the year.

Speaker Change: Yes, so we feel comfortable.

Speaker Change: And we do a lot of modeling on the fleet.

Speaker Change: Throughout.

Speaker Change: Every single month, we're all the time evaluating.

Speaker Change: Our fleet levels, where we need to move our assets.

Speaker Change: And because our business is both an asset and a labor intensive business.

Speaker Change: We're all the time evaluating both.

Speaker Change: And from our perspective, our pricing.

Speaker Change: Very pleased with what we've.

Speaker Change: Being able to achieve on pricing so far in the first half of the year again, we don't really release, what the pricing margin improvement has been but we're pleased with.

Rob Blackadar: Again, we don't really release what the pricing margin improvement has been, but we're pleased with what our targets were and how we're achieving them. If anything, as we've added 114 trucks. [inaudible] assets, and driving utilization really does improve the return profile. So for us, we feel like we have upside on our utilization of the trucks, so we're not concerned at all if we're on the lower end of that truck build. As I said in my comments, and Rob reiterated, of us hitting growth targets next year. Anything you want to add, Rob?

Speaker Change: What our targets were and how we're achieving to those.

Speaker Change: If anything as we've added 114 trucks.

Speaker Change: Yes.

Speaker Change: Year over year I would suggest that we have opportunity to drive more revenue through stronger utilization. The utilization is not bad its not down significantly, but there is opportunity to drive more utilization of the fleet.

Speaker Change: 'cause of an asset intensive business alongside of our labor.

Speaker Change: Obviously, the better utilization you can get the.

Speaker Change: Better returns you can get on the assets and driving utilization really does improve the return profile. So for US we feel like we have upside on our utilization of the trucks. So.

Speaker Change: So we're not concerned at all.

Speaker Change: If we're on the lower end of that truck build.

Speaker Change: As I said in my comments and Rob reiterated.

Speaker Change: Of us hitting.

Speaker Change: Growth targets next year anything you want to add Robert I think that caveat.

Ian Gillius: That's very helpful. Maybe switching gears a little bit. This one's probably more for Rob Dawson. How are you thinking about the toggle between usage of the NCIB and building trucks and the relative returns, et cetera, because obviously this NCIB is a bit of a new mechanism for this management.

Speaker Change: That's very helpful, maybe switching gears a little bit.

Speaker Change: This one is probably more for Rob Dawson.

Rob Dawson: How are you thinking about toggle between usage of the in CIB and building trucks and the.

Speaker Change: The relative returns et cetera, because obviously this in CIB is a bit of a new mechanism for for this management team.

Rob Dawson: They're obviously quite connected, but I don't think there's likely going to be a decision between should we build this next truck or should we buy back stock. I think the two can coexist quite well together.

Rob Dawson: There are obviously quite quite connected but I don't think there is likely going to be a decision between simply build this next truck or should we buy back stock I think the two can coexist quite quite quite well together on the announcement of an NCI b one it's just the <unk>.

Rob Dawson: The announcement of an NCIB, one, it's just a regular return of capital, the shareholder mechanism, that in due course, I think we'll have it on here and it's likely to remain on as a return function. Our leverage is starting to trend downwards, even with us independently assessing what our build and growth in our fleet should be. As our relative leverage is trending down, we have capacity on our balance sheet, I think, to do both.

Speaker Change: <unk> return of capital to shareholder mechanism.

Speaker Change: That we in normal in due course, I think we will.

Speaker Change: But on here and it's likely to remain on as a return of function.

Speaker Change: There is our leverage is starting to trend downwards, even with us independently assessing what our build and growth in our fleet should be and as our leverage relative leverage is trending down we have capacity on our balance sheet I think to do both.

Rob Dawson: And then finally, I think, you know, as we see, you know, 10 consecutive quarters of strong growth across all of our relevant metrics, and we see, you know, we just want to be very supportive and indicate our strong support down beside our shareholders and invest alongside them in our share price if we view the value of the business as perhaps lagging a little bit behind the value that's being created. So all of those things, I think, can exist without having to make that capital allocation decision between a new truck and buying back a stock.

Rob Dawson: And then finally I think as we see 10 consecutive quarters.

Rob Dawson: Strong growth across all of our all of our relevant metrics.

Speaker Change: And we see we just want to be very supportive and indicate our strong strong support and beside our shareholders and invest alongside them and our share price. If we view the value of the businesses is perhaps lagging a little bit the value that's being created so all of those things I think can exist.

Rob Dawson: Without having to make that capital allocation decision between a new truck.

Speaker Change: And and buying back stock the returns that we're generating on trucks, even if you were just to model.

Rob Dawson: The returns that we're generating on trucks, even if you were just to model today's RPT at $42,000 and today's margins with no change in margins. These trucks are delivering very strong returns on capital, and our plans, and our trends, and our expectations are for those returns to continue to grow. And the market is growing as well, so we're not necessarily at a stage where it's one or the other. We think it's both.

Rob Dawson: Today's RPT of $42000 and today's margins with no change in margins.

Rob Dawson: These trucks are delivering very strong returns on capital.

Rob Dawson: And our plans and our trends and our expectations are for those returns to continue to grow and the market is growing as well. So we're not not necessarily at a stage, where it's one or the other we think it is built out.

Rob Dawson: Okay.

Ian Gillius: And perhaps along those lines, Rob, just as a reminder for us all, could you maybe talk a little bit about where you think the target metrics should be and whether you're willing to put that net.diva.trend up for use in the NCIB?

Rob Dawson: And perhaps along those lines, Rob just as a reminder, for our salt could you maybe talk a little bit about where you think the target debt metrics should be whether you are willing to put that that net debt to EBITDA trend up to use the <unk> JV.

Rob Dawson: I think we've disclosed in the past that we guide to one to two times. And so, you know, we're at 1.5 times today, so we'd be heading into the lower half of that range, which gives us that flexibility. You know, whether or not we would be wanting to post a target and try to manage to that target, you know? I think we still have some discussion internally with management as well as with our board on what those things would be, but we're heading into the lower half of that range for sure.

Rob: I think we've disclosed in the past we guide to a one to two times.

Rob: And so our one five times today, so we'd be heading into the lower half of that range, which gives us that flexibility.

Rob: Whether or not we would be wanting to post.

Speaker Change: At target and try to manage to that target I think we still have some discussions.

Rob: Internally with management as well as with our board on what those things would be but we're heading into the lower half of that range for sure.

Ian Gillius: At the same time, we're seeing the breadth of the business, the depth of the business, and the diversification of all of our revenue streams across both geographies and different segments widen. So the volatility of the business is definitely lessening. So the debt capacity that our business can carry one to two, I think, if anything, over time, it is going to get even more, not less. So lots of flexibility. We're heading into the lower half of that range that we've disclosed, but we're not thinking of pegging ourselves to say we're going to be at one and a half, and if we go below that, we'll manage back up there. We definitely aren't.

Rob Dawson: At the same time, we're seeing the breadth.

Rob Dawson: The business the depths of the business and the diversification of all of our revenue streams across both geographies and different segments.

Rob Dawson: Widen so so so the volatility of the business is definitely.

Rob Dawson: Lessening so the debt capacity that our business can carry at one to two I think if anything over time is going to get even more not less so we've got lots of flexibility or heading into lower half of that range that we've disclosed, but we're not we're not thinking of pegging ourselves to saying, we're going to be at one five and if we go below that will will Matt.

Speaker Change: <unk> backup there, we're definitely not saying that.

Ian Gillius: Okay, understood. Thanks very much. I'll turn the call back over.

Speaker Change: Okay understood. Thanks, very much I'll turn the call back over.

Operator: Thank you, and one moment for our next question. And our next question is going to come from the line of Trevor Reynolds with Acumen Capital. Your line is open. Please go ahead.

Ian Gillies: Thanks, Ian thank.

Speaker Change: Thank you and one moment for our next question.

Speaker Change: And our next question is going to come from the line of Trevor Reynolds with acumen capital. Your line is open. Please go ahead.

Trevor Reynolds: Hey guys, just a couple questions here. Most have been asked, but you're at 71 retirements already for the year. Maybe just provide some commentary.

Trevor Reynolds: Hey, guys just a couple of questions here most have been asked but.

Speaker Change: Your ex <unk>.

Andy: Andy one retirements already for the year, maybe just provide some commentary.

Speaker Change: Do you think youll be right at the high end or the retirement.

Speaker Change: Retirements accelerated at the beginning of the year.

Rob Blackadar: Do you think you'll be right at the high end, or were the retirements accelerated at the beginning of the year?

Speaker Change: So if you remember we accelerated the Q1 <unk>.

Speaker Change: <unk>.

Speaker Change: We're very strong.

Speaker Change: <unk>.

Rob Blackadar: So if you remember, we accelerated the Q1 retirements very, very strongly because we were having these projects that were being delayed, and we decided instead of carrying the additional fleet through the year, normally you would want to spread out your retirements throughout the year, trying to hold on to the fleet as much as you can to extract the most value out of the revenue-producing assets, and then toward the latter, let's say one-third of the year is where you And this year, we basically pre-built or pre-structured the retirements.

Speaker Change: We were having these projects that were.

Speaker Change: Being.

Speaker Change: Delayed and we decided and.

Speaker Change: Net of carrying the additional fleet through the year normally you would.

Speaker Change: It's spread out your retirements.

Speaker Change: Throughout the year with.

Speaker Change: Trying to hold onto the fleet as much as you can to get to extract the most value out of the revenue producing assets and then towards the.

Speaker Change: The latter lets say one third of the year is where you really start to accelerate up on those retirements.

Speaker Change: And this year.

Speaker Change: We basically prebuilt.

Speaker Change: <unk> structured the retirements, we feel comfortable with where we are on that original range.

Rob Blackadar: We feel comfortable with where we are in that original range, and I believe the range was 70 to 90, and we'll be within that range. I don't see us, you know, if we're at 71 today, I don't see us being, you know, having to go back and go higher than 90 as we sit today, so I feel pretty comfortable with that right now.

Speaker Change: And.

Speaker Change: I believe the range of $70 million to $90 million and we'll we'll be within that range.

Speaker Change: <unk>.

Speaker Change: I don't see us.

Speaker Change: If we're at 71 today I don't see us being.

Speaker Change: Go back and go higher than the 90.

Speaker Change: As we sit today.

Speaker Change: So feel pretty comfortable with that right now.

Trevor Reynolds: Got it. Thanks. And just on the data analytics platform, maybe, is there any more cost associated with that in kind of the timeframe that you expect it to start having a positive impact or being able to collect and utilize the data from that?

Speaker Change: Got it thanks.

Speaker Change: Just on the data analytics platform.

Speaker Change: Maybe is there any more costs associated with that.

Speaker Change: And of the timeframe that you expect to.

Speaker Change: To start having a positive impact.

Speaker Change: Correct.

Speaker Change: Utilize the data from that.

Bob: Hi, Bob.

Rob Dawson: If you want to talk a little bit about the cost, I can...

Speaker Change: You want to talk a little bit about the cost.

Rob Dawson: Yeah, I would say, Trevor, it's Rob Dawson here, the costs of these Largely IT system projects are relatively nominal, this one in particular would be sub a million dollars. I think the message is that we are making steady improvements to our systems such that we can build efficiencies and in this case actually increase our level of intelligence about a wide range of subjects related to utilization of our trucks, revenue trends, profitability of our customers, and so that we can drive decisions both into operations, into business development, and to a variety of other things to help us continue to increase our margins on a consecutive quarter over quarter basis like we've done over the past ten quarters.

Speaker Change: I would say Trevor it's Rob Dodson here the costs of these <unk>.

Speaker Change: Largely it system projects.

Speaker Change: A relatively nominal.

Speaker Change: This one in particular would be $7 million I think the message is that we are making steady improvements to our systems such that we can build efficiencies and in this case actually increase our level of intelligence about a wide range of subjects related to the utilization of our trucks.

Speaker Change: Revenue revenue trends profitability of our customers and so that we can drive decisions both into operations into business development and to a variety of other things to help us continue to increase our margins on a consecutive quarter over quarter basis like we've done over the past 10 quarters and so that's probably that there's a very.

Rob Dawson: And so this project, there's a very small operating cost related to this with a team of three to four individuals, but other than that, it's a very high return, and we're just, I think it's going to come out of it.

Speaker Change: Small.

Speaker Change: Operating costs related to this with a team of three to four individuals but other than that.

Speaker Change: It's a very high return.

Speaker Change: And we're just very excited about it we're just at the point of going live here in the next several weeks.

Speaker Change: And there's lots of potential that we might not have it.

Speaker Change: Identified yet that I think is going to come out of it.

Rob Blackadar: Yeah, I'll add to that, too, Trevor. We're fortunate, Rob and I, I joined three years ago last month, and Rob joined about a year and a half ago, but we're fortunate the company had already pre-invested in the Oracle ERP system in the 2019-2020 timeframe, but we'd never really had a data platform to speak of, and so now we're able to leverage that with little money, as Rob suggested, roughly a million dollars, maybe even under But for that investment, we're now going to be able to have data analytics that can start to say, these are the projects that are the most profitable. These are, this is the contribution margin.

Speaker Change: Yes, I'll add to that too Trevor we're fortunate.

Rob: Rob and I.

Speaker Change: I joined three years ago last month, and Rob joined about a year and a half ago.

Speaker Change: But we're fortunate the company had already pre invested into.

Speaker Change: The Oracle ERP system in 'twenty.

Speaker Change: 19, 2020 timeframe and so.

Speaker Change: But we never really had a data platform to speak of.

Speaker Change: So now we're able to leverage that with little money as Rob suggested roughly million dollars, maybe even sub $1 million of right there close to that but for that investment. We're now going to going to be able to have the data analytics that can start to say.

Speaker Change: These are the projects that are the most profitable. These are this is the contribution margin.

Rob Dawson: Right now, anything we do along those lines is very manual in nature, very Excel-based, and requires a lot of labor and heavy lifting. And the way our new system's set up, it's actually going to be sending both push reports and dashboards for all of our team members to know. This is really good, and this is great, and we want to drive more toward that. Or in the case of, let's say, it's a cost line or an expense line, this is actually driving poorer behavior or poorer returns, but our teammates are experiencing that in real time.

Speaker Change: Right now anything we do along those lines is very manual in nature very XL based.

Speaker Change: And.

Speaker Change: It requires a lot of labor and heavy lifting.

Speaker Change: And the way our new system set up it's actually going to be doing both.

Speaker Change: Reports and dash.

Speaker Change: Dashboards for all of our all of our team members to know.

Speaker Change: This is really good and this is great and we weren't drive more toward that or in the case of let's say it's.

Speaker Change: Cost line arent expense line.

Speaker Change: This is actually driving.

Speaker Change: <unk> behaviour poor returns.

Speaker Change: But our teammates having that real time, the whole company is pretty excited about this because in the past again it was very manual in nature and now we're actually.

Rob Dawson: The whole company is pretty excited about this because in the past, again, it was very manual in nature, and now we're actually going to be pretty proud of it by the end of the 21st century with this system, and we have some team members that are leading this effort that are world class, so we're pretty excited about it, its real value.

Speaker Change: We're going to be.

Speaker Change: Pretty proud of it but into the 20 <unk> century with this.

Speaker Change: This system.

Speaker Change: We have.

Speaker Change: Some team members that are leading this effort that our world class. So we're pretty excited about it.

Speaker Change: The real value.

Rob Dawson: We're going into a little more detail here, and you can sense that we're pretty excited about it. You know, last year we spoke a lot about the new sales quoting system that we implemented. It's gone very, very well, particularly in our drive to improve pricing over the entire fleet and the entire geography. In the first half of this year, we went live on a fleet system, so now all of our entire fleet has now got central data, a data source that can help us to observe maintenance and repair work, locations, and utilization levels.

Speaker Change: And we're going into a little more detail here, but you can sense that we're pretty excited about it.

Speaker Change: Last year, we spoke a lot about the new <unk>.

Speaker Change: Sales quoting system that we implemented it's gone very very well, particularly in our journey and our drive to improve pricing over the entire fleet.

Speaker Change: And the entire geography.

Speaker Change: First half of this year, we went live on our fleet system. So now all of our all of our entire fleet is now got central data data source that can help us to observe maintenance and repair work locations utilization levels.

Rob Dawson: We're in the middle of going live with a human resource system, so now we can do company-wide workforce planning and see trends in that regard. And this data platform aggregates all of those so you can see all of the counter-dependencies and counter-relationships and all those things. It's the culmination of a lot of systems all coming online at the same time, and a lot of this has just been happening behind the scenes with these small amounts of capital on the steady. And it's going to continue to happen probably for the next two to three years.

Speaker Change: We've we're in the middle of going live with the human human resource system. So now we can do companywide workforce planning and see trends in that regard and this data platform aggregates all of those so you can see all of the counter dependencies encounter relationships between all those things.

Speaker Change: It's the culmination of a lot of systems, all coming online at the same time and it's been it's been a lot of this has just been happening behind the scenes with these small amounts of capital on a steady and it's going to continue to happen and probably for the next two to three years.

Speaker Change: Okay.

Trevor Reynolds: Great. Thanks for taking the questions.

Speaker Change: Great. Thanks for taking my questions.

Trevor Reynolds: Thanks Trevor.

Rob Blackadar: Thank you, and I would now like to hand the conference back over to Rob Blackadar for his closing remarks.

Rob <unk>: And I would now like to hand, the conference back over to Rob <unk> for closing remarks.

Operator: Thank you, operator. So I'll close with, on behalf of all of us at Badger, thanks to our customers, our employees, our suppliers, and our shareholders for your ongoing support that helps to drive Badger's success. Operator, you may end the call.

Rob: Thank you operator.

Rob: So I'll close with on behalf of all of Us at Badger. Thanks.

Speaker Change: Thanks to our customers our employees, our suppliers and our shareholders for your ongoing support that helps to drive Badger's success. Operator, you may end the call.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone have a great day.

Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect everyone have a great day.

Rob: Okay.

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Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: [music].