Q4 2024 Superior Plus Corp Earnings Call

[music].

Thank you for standing by and welcome to the Superior plus fourth 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 this session you will need to press star one on your telephone.

If your question has been answered I would like to remove yourself from the queue simply press Star One again as a reminder, today's program is being recorded and <unk>.

Chris Listen: Now I'd like to introduce your host for today's program Chris listen.

Speaker Change: Vice President Investor Relations. Please go ahead Sir.

Speaker Change: Thank you Jonathan Good morning, everyone and welcome to Superior Pluses Conference call and webcast to review, our 2020 for fourth quarter and full year results on the call today are Alan Macdonald, President and CEO, and Greer culture, Executive Vice President and Chief Financial Officer.

Speaker Change: This morning's call I agree we will begin with their prepared remarks, and then we will open the call for questions listeners are reminded that some of the comments made today maybe forward looking in nature and are based on superior current expectations estimates judgments projections and risks.

Speaker Change: Further some of the information provided refers to non-GAAP measures. Please refer to superiors continuous disclosure documents available on SEDAR plus appears website for further details.

Speaker Change: Dollar amounts discussed on today's call are expressed in U S dollars unless otherwise noted.

Alan Macdonald: I'll now turn the call over to Alan.

Chris Listen: Chris Good morning, everyone. It's a pleasure to be speaking with all of you as we begin 2025.

Alan Macdonald: And look back on 2024.

Chris Listen: 24 was a pivotal year for our company.

Chris Listen: One year ago. It became apparent we did not have the operational capability and customer orientation to deliver growth when challenged by competitors or weather.

Chris Listen: Years of M&A has seen the company Oak Grove, it's operating capability, we relied too heavily on increased margins.

Chris Listen: We lost touch with our customers and growth was something but not earned.

Chris Listen: And this was simply unsustainable, our shareholders and employees expect better.

Chris Listen: They have every right to expect we can and will outperform our peers and grow in the face of normal market pressures.

Chris Listen: So we began a journey to change that narrative once and for all.

Chris Listen: Throughout the year, we worked tirelessly planning and staffing superior delivers our transformative initiative announced in November.

Chris Listen: Now transformation isn't easy.

Chris Listen: In fact, it's almost as difficult as it is necessary.

Speaker Change: But when you have a company with as much potential as superior Theres No question. Its the right thing to do.

One of the things that makes transformation heart is time.

Results never come as fast as you want.

Speaker Change: We needed to work hard through 2024 to build the superior we all know exists.

Speaker Change: But we also had to continue to serve our customers and not be taken off course by short term challenges.

Speaker Change: Well, we stood fast and persevered.

Speaker Change: Committed to the more difficult path.

Speaker Change: Rebuilding the foundation of our company and beginning a new era of growth and profitability.

Speaker Change: Looking forward now I can say with pride the green shoots of superior delivers are starting to show and we couldnt be more energized about our plan for 2025 and the road ahead.

We've made good progress in a short time.

Speaker Change: And while the impacts may not be seen in our Q4 performance.

Speaker Change: <unk> Foundation, we laid in 2024 has set us up for success in 'twenty five and beyond.

Speaker Change: This is why we felt confident and issuing 25 guidance of 8% growth in the propane segment.

Speaker Change: Which is supported by a $20 million contribution from superior delivers.

Speaker Change: This $20 million in 2025 equates to a roughly $40 million improvement in our EBITDA run rate.

Speaker Change: Now thats almost 80% of our original superior delivers target of $50 million achieved by the end of 2025, great progress, but were mined by no means done.

Speaker Change: We see even greater potential and we will continue to show the same discipline going forward focusing on building, our customer base setting ambitious targets and delivering results.

Speaker Change: As the tariffs 2024 also saw some changes with a clear shift in market dynamics right.

Speaker Change: Rising supply pressured margins and returns, prompting us to adjust our strategy.

Speaker Change: This year, we'll be scaling back capital spending and refocusing the business on optimizing the performance of our MSC use and strengthening free cash flow.

Speaker Change: Long term, we see we continue to see significant expansion opportunities in new markets, but we will continue to grow CMG and our approach will be disciplined focused on balancing growth with delivering returns and sustainable cash flow.

Speaker Change: Beyond operations, we also made key capital allocation decisions in 2024 to position the company for long term success.

Speaker Change: A critical decision was shifting our dividend strategy in favor of share repurchases and balance sheet flexibility.

Speaker Change: We have acted decisively.

Speaker Change: As of today, we've invested $86 million Canadian repurchasing more than 5% of our outstanding shares.

Speaker Change: Now this shift has naturally led to some changes in our shareholder base.

Speaker Change: So our new shareholders. Welcome we're thrilled to have you onboard and believe yield share our excitement about the opportunities ahead.

Speaker Change: To those who have been with us throughout the transition. Thank you.

Speaker Change: We recognize this has been a difficult period of change, but we appreciate your support as we enter what we believe will be the most exciting phase of our company's history.

Speaker Change: We're shareholders too.

Speaker Change: And we've never been more confident in our ability to generate strong returns we have the right plan and the right people to execute it.

Speaker Change: So thanks to the efforts of the past year weathering, a storm of unfavorable weather and some difficult decisions. We look forward to an exciting year in 2025.

Speaker Change: We have a clearly defined path to doubling our free cash flow by growing EBITDA and reducing capital expenditures.

Speaker Change: This will enable us to buyback nearly 10% of the company, while meaningfully de levering our balance sheet.

Speaker Change: Greer will elaborate on the specifics, but needless to say 2000 22025 is set up to be a great year.

Speaker Change: Finally in just over a month, we will have the opportunity to present a more in depth look at our business. Our go forward plans and a multi year financial outlook, we will look forward to connecting with many of you at our Investor Day on April 2nd now with that I'll turn things over to Greer to talk about our financial results and 2025.

Greer Culture: Thank you Alan and good morning, everyone.

Greer Culture: The fourth quarter was characterized by some of the same challenges we enter we encountered throughout the year, which was warm weather impacting the propane results and competitive pressure on pricing and CMG.

Greer Culture: Looking at Q4, adjusted EBITDA of $159 1 million declined approximately $3 million relative to last year, driven by lower EBITDA in our Canadian and wholesale propane businesses, partially offset by a $4 5 million dollar increase in <unk> and a $1 million increase in U S propane.

Greer Culture: Despite this modest decline <unk> per share held flat in Q4 compared to last year due to lower interest cost on our debt and lower average shares outstanding.

Greer Culture: Full year, adjusted EBITDA was $455 5 million, representing a $48 million increase over our 2023.

Greer Culture: This growth was primarily from a full year contribution from <unk> tariffs, partially offset by lower results in our propane distribution segments.

Greer Culture: <unk> per share increase from $1 25 in 2023 to $1 27 in 2024, and this was primarily due to the accretive return profile of our <unk> acquisition.

Greer Culture: Now looking into the businesses.

Greer Culture: U S propane had a good quarter, considering the circumstances and generated $85 2 million of adjusted EBITDA in Q4 that was up 1% from last year. The growth is off the back of a 4% colder weather in the regions that we operate.

Greer Culture: Partially offset by the impact of a small divestiture. We made in Q3 of 2024 and that represented about a half a million.

Greer Culture: It does impact and also the sale of various distillate distillate assets in Q4 of 2023, which had an impact of about $1 million.

Greer Culture: So if you look at organic growth for the business, it's actually closer to 3%, which is reasonably aligned to the weather impact.

Greer Culture: Relative to expectations.

Greer Culture: Whether in the in the quarter was 7% warmer than the five year average, which was obviously a warmer than we had expected.

Greer Culture: For the full year adjusted EBITDA in the business was $218 5 million or.

Greer Culture: A 2% decline largely due to the impact of warmer weather than expected.

Greer Culture: While there was 2% warmer than the prior year and 10% warmer than the five year average.

Greer Culture: And then also the previously mentioned divestitures, which on a full year at about a $2 million EBITDA impact.

Greer Culture: Canadian propane produced adjusted EBITDA of $29 7 million in Q4, which was down about 20% year over year.

Greer Culture: The decline was primarily due to the timing of carbon credit sales in this business and this had an impact of about $5 million versus our expectations.

As we accelerated some of these credits into Q1 of 2020 for taking advantage of very strong carbon credit markets and then made the decision to defer selling of some of these as well into 2025 because of our current market that is weaker.

Greer Culture: Also causing headwind in the quarter as the divestiture of the northern Ontario assets in the prior year, which impacted about $1 2 million in the quarter and weakness in the Canadian dollar, which impacted about $1 1 million in the quarter.

Average weather across Canada was 5% colder than the prior year and 6% warmer than the five year average, but it should be noted that it was colder in the western region, where we have a higher concentration of commercial customers that generate lower margins.

Greer Culture: For the full year adjusted EBITDA was $82 3, million% to 17% decline, reflecting the divestiture of the northern Ontario assets.

Greer Culture: As previously disclosed these generated about $7 million in 2023.

Greer Culture: Average weather for the year was consistent with the prior year and 8% warmer than the five year average, but again the colder weather was showing up in the west where our margins are tighter.

Greer Culture: And wholesale propane.

Greer Culture: Fourth quarter, adjusted EBITDA of $10 5 million was down 13% year over year, driven by a weaker market differentials and lower sales volumes due to the warmer weather full year adjusted EBITDA was $32 million and represents a 31% decrease.

Greer Culture: The majority of this expected as we generated about $10 million of EBITDA in 2023 from unusual differentials that were not expected to repeat.

Greer Culture: And of course warm weather being the other key factor in the results for this business in 2024.

Greer Culture: And compressed natural gas distribution tariffs delivered a strong quarter generating $39 2 million and adjusted EBITDA up 13% year over year as our winter related activity picked up in November and December.

We ended the quarter with 842, Msu's up about 15% from the previous year, which was the main driver of growth in the quarter.

Greer Culture: For the full year.

Greer Culture: <unk> contributed $148 million of adjusted EBITDA, reflecting a $77 $7 million increase over 2023.

Greer Culture: Primarily due to the inclusion of a full <unk> full year of ownership in 2024 versus seven months in 2023.

Greer Culture: On an organic basis this business grew roughly 7%.

Greer Culture: Overall capex came in around $190 million.

Greer Culture: Which is in line with our expectation communicated at Q3 and about $40 million lower than our original number as we drove higher capital discipline in the businesses.

Greer Culture: Turning to corporate results and leverage Q.

Greer Culture: Q4, corporate operating costs were relatively flat year over year for the full year as higher incentive plan costs were partially offset by lower management on boarding expenses related to last year's senior leadership transition.

Greer Culture: Our leverage ratio was four one times at year end up from three nine times a year earlier this increase aligns with our updated Q3 expectations, reflecting the impact of share repurchases in Q4.

Greer Culture: And also lower adjusted EBITDA due to the warmer weather experienced in Q4.

Now looking at 2025 guidance and expectations.

Greer Culture: Full year 2025, adjusted EBITDA is expected to increase by approximately 8% compared to 2024, primarily due to the implementation of superior delivers initiatives.

Greer Culture: <unk> growth in the compressed natural gas segment.

Greer Culture: As well as the normalization of weather to be in line with the five year average.

Greer Culture: Our adjusted EBITDA guidance is based on the following assumptions.

Greer Culture: We are anticipated anticipating 5% to 10% growth in our North American propane business.

Greer Culture: Which includes 1% to 5% growth in each of the U S Canadian and wholesale divisions.

Greer Culture: In the case of the Canadian business, we have calculated this growth on a constant currency basis.

Greer Culture: And if you don't neutralize for that currency growth in the Canadian division declined to negative 1% to 5%.

Greer Culture: The main factor for growth in these businesses as colder weather and we've assumed a five year average weather for 2025 and in addition, we have updated for the month of January where we experienced conditions that were favorable to the five year average.

Greer Culture: We are also targeting $20 million of additional in year EBITDA from superior delivers.

Greer Culture: As our transformation program begins to generate and year EBITA improvement and this has been included in the 5% to 10% growth for the total North American propane business.

Greer Culture: As Alan mentioned, we expect to end the year with about $40 million and run rate from superior delivers there will be approximately $10 million to $15 million in one time costs incurred in 2025 to generate the improvements associated with superior delivers some of these potentially capital in nature, but the exact split on accounting for these costs is to be determined at this point.

Greer Culture: <unk>.

Greer Culture: We are expecting growth in the <unk> business of 5% to 10% as we shift to a more balanced approach to managing growth and capital investment in <unk>.

Greer Culture: Corporate operating costs are expected to be $25 million, which is relatively consistent with 2024 levels.

Greer Culture: Primarily as a result of lower Capex and our CMG business capital expenditures are expected to be approximately $150 million, which is inclusive of lease additions and we expect to repurchase about $135 million Canadian dollars worth of our outstanding common shares.

Greer Culture: Bringing all this together our 2025 plan is expected to delever the balance sheet by half a turn split between outright debt reduction and the impact of higher adjusted EBITDA.

Greer Culture: And with that I'll turn it back to the operator for Q&A.

Speaker Change: Certainly and ladies and gentlemen, as a reminder, if you do have a question at this time. Please press star one on your telephone.

Speaker Change: First question comes from the line of Gary Ho from <unk> capital markets. Your question. Please.

Gary Ho: Yes. Thanks.

Speaker Change: Morning, everyone.

Speaker Change: I just wanted to start off with the superior delivery. So I know I know you provide a bit more information in the upcoming Investor day.

Speaker Change: The $20 million.

Speaker Change: So maybe can you talk about some of the initiatives that is already underway I think in your.

Speaker Change: Our remarks, and MDA MD&A, you mentioned kind of improving low margin customer contracts, reducing inefficient customer tanks et cetera.

Speaker Change: Maybe yes, what's your early read.

Speaker Change: On this and any customer retention risk or those that you'd like to keep any comment on that please.

Gary Ho: Hey, Gary.

Alan Macdonald: Good morning, it's Alan.

Alan Macdonald: Superior dealers is really all encompassing so we're.

Alan Macdonald: We're.

Alan Macdonald: Making an impact on the business all the way through our operations, but as you noted we cited some of the examples that are having an impact sort of in the short term.

Alan Macdonald: One of the big things that that we've been addressing as you look at your customer base and you start to rationalize it you realize that.

Alan Macdonald: Taking in factors like delivery distance volume and the contracts that people might be paying and then how people change overtime, we identified some opportunities to implement some of the new pricing schemes.

Alan Macdonald: All under the guidance of course of wanting to retain these customers and be competitive.

Alan Macdonald: As many of the situations as possible. So some of the examples of things like customers that were home heat users that converted to having propane as a secondary fuel supply and their volumes decreased.

Alan Macdonald: We implemented.

Alan Macdonald: Rental agreements or adjusted rental agreements on the facilities, we have still good customers just need to be priced differently.

Alan Macdonald: Some unprofitable customers that we had for reasons of just being charged up of regional price, but geographically where they're located meant the cost of delivery was really high so we adjusted those.

Alan Macdonald: And what we're seeing right now is.

Alan Macdonald: It's kind of a mixed bag I think of course, you're always going to see a little churn it doesn't show up as.

Alan Macdonald: As quick as you think.

Alan Macdonald: And with the cold weather of course people are our reliance on the service so.

Alan Macdonald: Early days, we're pretty pleased and of course, we're testing all of this we're not just making wholesale changes so.

Alan Macdonald: I'm really pleased with what we're seeing so far in right sizing our pricing for some of the customers that were underwater.

Alan Macdonald: Some of the things we've done of course as things like reducing inefficient tank feels better monitoring and.

Alan Macdonald: And better.

Alan Macdonald: Route.

Alan Macdonald: Density planning and route management has been implemented which means that we are.

Alan Macdonald: We're delivering more fuel and less frequency.

Alan Macdonald: Which is of course going to be a big help for us.

Alan Macdonald: Bulk plant in truck rationalization, which youre not going to see really show up in the short term.

Alan Macdonald: In short term performance measures, but that's going to deliver value for the long term.

Alan Macdonald: And things like introducing.

Alan Macdonald: Amalgamating our wholesale division so our wholesale division, primarily operated with wholesale customers and the Canadian business and it is now taking over all of the procurement and distribution of our wholesale.

Alan Macdonald: In the U S of course, serving all of our both plants across the U S. So here's a these are just small examples but.

Alan Macdonald: They're sort of four or five of of many that are all having an impact across the board we're testing.

Alan Macdonald: New pricing initiatives, new retention initiatives those are going to take longer to have an impact, but we're really encouraged by the short term results. We are seeing and looking forward to scaling those up over the next year.

Alan Macdonald: Okay. Thanks, Alan Thats great color.

Alan Macdonald: Then maybe just moving on to the <unk> Capex, that's down year over year, I think historically the team as a message.

Alan Macdonald: Spending to maintain your leading market share it sounds like theres a bit of a shift there. So can you talk about the trade off between maybe better economics versus <unk>.

Alan Macdonald: Market share looking at.

Alan Macdonald: Yes.

Greer Culture: I'll comment then grier might have something he wants to add but.

Greer Culture: Gaining market share is really about growing with the segments and growing with our competition and.

Greer Culture: You know this as well as I do I mean, this is a vertical especially in the oil and gas market that growth. So that grew so fast.

Greer Culture: There was a point where the waiting list for an MSU was 12 to 18 months.

Greer Culture: <unk>.

Greer Culture: And we did a really good job of keeping up with that growth and creating the share that we have today.

Greer Culture: On a short term view so if you look out the next.

Greer Culture: 12 to 18 months.

Greer Culture: We think the investment we're making right now will keep us in line.

Greer Culture: In terms of where we were in the market. So we don't see a big reduction in share volume is going to be growing over those time periods. So it's not just an MSU count it's really about where we are deciding to allocate those msu's how much of the share of the aftermarket we're actually going after so.

Greer Culture: We're feeling really good that these.

Greer Culture: These growth numbers are going to be in line with where the market is right now and then we're going to continue to be at or at least very close to the share we have today.

Speaker Change: I mean, the only thing I would add.

Speaker Change: It is just the approach has changed a little bit I think the previous approach of just.

Speaker Change: It really <unk>.

Speaker Change: Difficulty in the supply chain getting as many of US use as you, possibly could the market was growing so quickly and so it was an approach of really get as much as you kind of put them into the market.

Speaker Change: Things have changed a little bit I think it's a little bit more of a.

Speaker Change: Call it probably a disciplined approach a little more cautious.

Speaker Change: Not to say that.

Speaker Change: This is.

Speaker Change: It cannot be the pathway forever I think.

Speaker Change: The ability to ramp this up if we see.

Speaker Change: Opportunities is there the supply chain as Alan said is not nearly as tight we can get access to more so if we see opportunities and we look at these and understand these opportunities is going to return opportunities and we will do that.

Speaker Change: But I think at this point, we're just being a little bit more cautious or as I said before I think we would just be as many as we can get these things just let's do that and we'll find a place to put them. So it's really just a change in the approach as well.

Speaker Change: Okay, great. Thanks for those comments.

Gary Ho: Thanks, Gary.

Speaker Change: Thank you. Our next question comes from the line of Ben Isaacson from BNS. Your question. Please.

Ben Isaacson: Great. Thank you very much and good morning, everyone.

Ben Isaacson: So when I look at the guidance. The headlines are very impressive, 8% EBITDA growth, 10% buybacks half a turn down in leverage.

Ben Isaacson: Yes.

Ben Isaacson: Detailed guidance I believe in the notes you've stated that the guidance does not include.

Ben Isaacson: The impact of tariffs or inflation or higher interest rates.

Ben Isaacson: Obviously that.

Ben Isaacson: Tariffs are moving from a threat to reality and maybe a little bit slower than we thought initially but in your scenario planning for tariffs.

Ben Isaacson: Kind of elasticity do you expect to see in each of the divisions, and where where is the threat from tariffs in each segment.

Ben Isaacson: Yes.

Ben Isaacson: Hey, Ben.

Ben Isaacson: Good question.

Ben Isaacson: The.

Ben Isaacson: We're at the highest level we are.

Ben Isaacson: Our two markets or both.

Ben Isaacson: Producers of propane and CMG. So in terms of the impact of cross border supply.

Ben Isaacson: We've been doing as you would well expect a lot of work to make sure that we have sufficient supply in each domestic market that we are able to avoid having sort of any degree.

Ben Isaacson: <unk> degree at least of cross border transport and we're feeling very confident today that the.

Ben Isaacson: The risk of that our business plan in 2025 is quite minimal.

Ben Isaacson: Throughout the course of the last quarter. We've also been making sure that if we had any contracts where you had a supply in Quebec that was being transported into Vermont contractually that we make sure we tighten those up so we weren't didn't have an exposure and so far touchwood.

Ben Isaacson: That's been that's been well managed in terms of the broader economic impact I mean, anyone's guess is as good as mine but.

Ben Isaacson: Being in the in the home heat and essential services business, we see them.

Ben Isaacson: We feel comfortable that we're fairly well insulated.

Ben Isaacson: In terms of consumer sentiment and then from an inflationary standpoint, we're going to take that in stride and make sure that we not only manage.

Ben Isaacson: Our costs carefully as we can but we're going to be very prudent in passing on any price increases to customers that we don't think is sustainable.

Ben Isaacson: Great. Thank you for that and then just second question.

Ben Isaacson: Both those headline numbers, which I think are pretty impressive.

Ben Isaacson: But when I look at the share price.

Ben Isaacson: Getting close to an all time low.

Ben Isaacson: And we know the market is forward looking.

Ben Isaacson: These growth numbers aren't really a surprise and you came out with superior delivers a few months ago, and we will get more.

Ben Isaacson: More info on that shortly.

Ben Isaacson: Do you think the market is.

Ben Isaacson: And yet and still needs time is it the strategy is it the targets is it execution.

Ben Isaacson: Or maybe something else entirely.

Ben Isaacson: Yes.

Speaker Change: Great question, when we ask ourselves quite often around here.

Ben Isaacson: <unk>.

Ben Isaacson: Far be it for me to guess whats in the minds of investors, but I will tell you is some things that I am concerned about I mean, I think there was some.

Ben Isaacson: Yes.

Ben Isaacson: Institutional investor rebalancing that we experienced over the last year of course, you would know as well as either.

Ben Isaacson: Sentiment around things like share overhang following the <unk> acquisition.

Ben Isaacson: Those things all come into play.

Ben Isaacson: We had a lot of questions leading up to November in terms of what we're going to do with the dividend and that always creates uncertainty when it comes to share price performance.

Ben Isaacson: And then.

Ben Isaacson: Perhaps rightly so theres a bit of wait and see this as a segment that I think needs to do a little bit more work to earn the trust of investors.

Ben Isaacson: We've tried to be really cautious and not over promising but really be as transparent as we know how and what we think the issues are and where we're focusing.

Ben Isaacson: Turning to see as I said in my prepared comments you know the green shoots of success, which we've always believed to have been there, but you can't turn.

Ben Isaacson: Those on overnight.

Ben Isaacson: And it's my sincere hope that our investors.

Ben Isaacson: Are going to start to see a renewed sense of confidence that the team and more importantly, the segment has a lot of value to offer and it's just been a matter of us capitalizing on that.

Ben Isaacson: I'll tell you the investors I meet with and I'm sure Yours.

Ben Isaacson: Always seem to be very encouraging in terms of youre doing the right things keep focused on running the business really well the sector has a lot of potential and we're excited to see where youre going to take it. So I think that is probably the best sort of example of the wait and see attitude, we've been seeing and hopefully as we progress.

Ben Isaacson: Through 2025, we're going to give our investors lots to be excited about it.

Ben Isaacson: Yes.

Speaker Change: Sorry, if I can add I think this is part of the reason why we made the switch on capital allocation.

Speaker Change: And it will be on pace to Erie, obviously, we're pretty aggressive in the fourth quarter buying stock back and we.

Speaker Change: We'll continue to go on this path and as Alan said, we'll buyback roughly 10% and if the market is going to value of the stock at $6.

Speaker Change: Canadian Unlike can all these numbers we're talking about here are you also.

Speaker Change: We think it's great value in.

Speaker Change: Hopefully the market is seeing that through our capital allocation approach.

Speaker Change: That makes sense. Thanks, guys I appreciate it thanks, Matt.

Speaker Change: Thank you and our next question comes from the line of Robert <unk> from CIBC capital markets. Your question. Please.

Speaker Change: Hey, good morning, everyone I just wanted to follow up on <unk>, a little bit really trying to understand your appetite to allocate capital there.

Speaker Change: And later the pricing pressure. So maybe you can answer it this way how was the $50 billion of Capex or Allergan disinterest in 25 going to be spent so wondering you're adding the misuse what vertical markets. So the extent you can.

Speaker Change: Discuss that.

Speaker Change: Why don't I, Hi, Rob Jorge It's Greer.

Speaker Change: I'll start because I have the stuff in front of me, but I'm sure Alan will have a few comments.

Speaker Change: Yes.

Speaker Change: We've targeted kind of 25 to 30, new msu's that of the overall kind of total capital envelope. It represents kind of roughly half I would say.

Speaker Change: The majority of those new EMS Hughes will be going into.

Speaker Change: The utility space.

Speaker Change: Where they're earmarked.

Speaker Change: We've got a huge portfolio of MFS use and a great opportunity to sit back and have a look at where these assets are and we believe theres an opportunity to reallocate some of them from kind of lower return areas to higher return areas. So there is there is there is a very large inventory and if they are kind of.

Speaker Change: Our new opportunities we have that are quite lucrative we can pull from.

Speaker Change: The suite of assets that are sitting in kind of lower return areas and so that's the strategy, but I think yes.

Speaker Change: Definitely fewer that is where those are going and part of that was just because of the nature that was required they are slightly different from some of the ones. We had in inventory and so that's why we why we.

Speaker Change: Earmark those and those are largely bought that kind of 25 to 30 of those are.

Speaker Change: Sitting here today, that's probably all bought so yes.

Speaker Change: Hey, Rob it's Alan the only other thing I'd add is.

Speaker Change: I'll remind everyone listening these are by nature mobile storage units. So they are quite dynamic.

Speaker Change: So we're looking at how much capacity, we think we have in our existing fleet and you can free up capacity by move.

Speaker Change: Moving segments moving geographies, having quicker.

Speaker Change: Quicker turnaround higher volume contracts versus lower and you balance all the pricing and everything.

Speaker Change: Our ability to to look at where we have some margin opportunities and capitalizing on that and then where we wanted to do more expansion beyond the well site.

Speaker Change: So it's it's not as simple as saying, we don't think of it like we're buying 27 msu's to put into utility support we're thinking more like we want to continue to grow our utility segment.

Speaker Change: And.

Speaker Change: To do that and achieve our overall goal.

Speaker Change: We need 27 more msu's so at.

Speaker Change: At the end of the year it could turn out that on a annualized basis, we've actually put more msu's into that space, but it might be 100 for two quarters and 10 for two quarters. So it's a little dynamic so it's not as sort of linear as some people might think.

Speaker Change: But all that to say.

Speaker Change: Think.

Speaker Change: There's lots and lots of opportunity to continue to grow this business and this is just one example that we are going to be pursuing in 'twenty five.

Speaker Change: Okay.

Speaker Change: Another question on the tourist side I'm, just curious how you see the recent increase in natural gas costs impacting customer demand.

Speaker Change: Okay.

Speaker Change: You have to look at the rig count it looks like we're not really seeing a response there.

Speaker Change: And the energy sector.

Speaker Change: So maybe just a comment on the.

Speaker Change: Natural gas costs are impacting the margins.

Speaker Change: Not seeing a material shift in our rig count or our forecast as a result of really any of the dynamics of the market over the last quarter I would say.

Speaker Change: It's been it remains optimistic.

Speaker Change: But in terms of material shifts.

Speaker Change: Not seeing anything Thats really noteworthy.

Speaker Change: And maybe I'll just add Rob just make sure we're covering us.

Speaker Change: It is all pass through right, so higher Nat gas cost we pass through to the customers. The idea here is that we're making our margin on moving it compressing it moving it decompressing. It so it is pass through.

Speaker Change: Despite higher Nat gas prices are still quite a lot of.

Distance between the overall cost of diesel so looking at it.

Speaker Change: Customers have dual fuel or easily type equipment powering with Nat gas theres still quite an advantage even though it has.

Speaker Change: So.

Speaker Change: That's also important but yes.

Speaker Change: So spending admissions as well right.

Speaker Change: That's right for sure.

Speaker Change: Pardon me I was just focusing on the economic side.

Speaker Change: Yes last question I'm, just curious if you could elaborate on the comment about the wholesale division entering new markets presumably.

Speaker Change: Presumably we're talking about geographic expansion or are you, referring to new products as well.

Speaker Change: Well historically are.

Rob Jorge: Clarify my comments Rob.

Speaker Change: Historically.

Speaker Change: Our U S propane division effectively.

Speaker Change: In sourced their wholesale procurement.

Speaker Change: So despite the fact that we had a wholesale division that division focused primarily on supplying our retail businesses in Canada and wholesale customers in Canada.

Speaker Change: Primarily in the southwestern U S.

Speaker Change: Well the decision we've made late last year in the transition. We're entering right now is that our wholesale division. We will now take responsibility for the wholesale procurement for the entire company. So it will be now servicing.

Speaker Change: Our retail needs.

Speaker Change: All across the United States.

Speaker Change: And that gives us a couple of benefits it gives us some.

Speaker Change: Some modest improvements in our procurement.

Speaker Change: It gives us.

Speaker Change: A bigger buffer in terms of certainty of supply which in quarters like the one we're experiencing are not insignificant, but it also gives them more of a beach a beachhead to grow from.

Speaker Change: Especially in the northeastern U S and that's a really competitive market and we're not attributing big growth in the short term. So this move it's more.

Speaker Change: More of an internal capabilities, but.

Speaker Change: It's not insignificant either I mean, there'll be some opportunities coming out of our wholesale division now having a presence all across North America.

Speaker Change: Okay. Thanks, very much everyone.

Speaker Change: Thanks, Rob.

Speaker Change: Thank you and our next question comes from the line of Nelson <unk> from RBC capital markets. Your question. Please.

Speaker Change: Great. Thanks, and good morning, everyone. Just another quick follow up on.

Speaker Change: The Paris.

Speaker Change: So do you have any you talked about.

Speaker Change: Or diversifying our adding more msas into the utility segment in the coming year.

But do you have any additional comments on diversifying into other markets I think you've previously talked about adding more hubs, but I'm not sure whether.

Speaker Change: Adding more MFC into the utility market requires hubs can you just talk about that in more detail.

Nelson: Hey, Nelson.

Nelson: Yes, I think so if I understand your question right.

Nelson: So theres two things I mean, we're looking at <unk>.

Nelson: Continuing to to.

Nelson: The work our business development with our business development teams on opportunities both inside the oil and gas sector, but beyond the well site.

Nelson: And we're seeing more and more inbound opportunities coming from.

Nelson: The utility support vertical if you will and thats quite widely distributed so we can.

Nelson: Start to go after some of that market with the existing hub network that we have today, so that would be kind of point number one secondarily we've identified.

Nelson: Two three.

Nelson: On the outside four five.

Geographies, where we think there could be a good business case to to expand into new hubs in terms of line of sight in 'twenty five.

Nelson: <unk>.

Nelson: Its quite probable that we will announce a couple of new hubs in 25, we're not ready to do that today.

Nelson: But.

Nelson: In terms of them, making an impact on the business in year, it's more of a 2026 business development initiatives and 25.

Nelson: Okay that makes sense.

Nelson: Yes, and then just to clarify on the 50 million of Capex versus the tourists.

Nelson: How many.

Speaker Change: Is that all going to miss use or combination of MSU and Hudson could you just remind me how many skus you're adding.

Nelson: Over there over the next year.

Nelson: Yes for sure announcements career, so think about this.

Nelson: So $50 million in capital I'd say little over half of it would be kind of knew MSC use and the associated here that kind of comes with it so.

Nelson: Let's call that.

Nelson: <unk> 25, and 30 of the 50.

Nelson: 20.

Nelson: <unk>.

Nelson: Would be kind of maintenance type Capex and then.

Speaker Change: Earmark for our Hopper two kind of thing as Alan said still kind of working on the details and we'll as we kind of evolve through the year well.

Speaker Change: Be clear on that but yeah. That's that's the breakdown if thats helpful.

Speaker Change: Any comment on that about hubs Nelson just a follow up to my comments.

Speaker Change: Don't mistake my comments for any decision.

Speaker Change: Putting a hub when you decided you want to have a geography that's of interest.

Speaker Change: Finding locations for the hub working out the.

Speaker Change: Access arrangements with the providers the pipeline companies and then all of a zoning and planning those are not small task because you can well imagine.

Speaker Change: So it's not just a matter of us trying to decide that theres a lot of work goes into being able to establish a hub for the company.

Speaker Change: Okay great.

Alan Macdonald: And then Alan.

Alan Macdonald: I think April 2nd Investor Day, just over a month from now.

Alan Macdonald: Now that you've given out 2025 guidance you provide a bit of color on superior de levers.

Alan Macdonald: Can you just give us a quick preview in terms of what else, we should expect to see whether it's a multi year guidance are.

Alan Macdonald: Or any color on that.

Speaker Change: Yes, additional info that we should expect to see.

Alan Macdonald: Im happy to I mean.

Speaker Change: With that I'd like you to meet the team.

Speaker Change: I'd like you to get grounded in.

Speaker Change: How the business was actually operating we do all of these.

<unk>.

Speaker Change: These calls every quarter and it's such a small glimpse into the business and Theres. So much financial data to get through and then of course, you have the complications of weather in the different business units. So much that all of you I know one one ask.

Speaker Change: It will give us an opportunity to really spend a little more time, explaining some of the businesses and some of the how.

Speaker Change: We run the business.

Speaker Change: One of the biggest.

Speaker Change: Kind of.

Speaker Change: Insights gained in my time here is just how attractive the propane segment is.

Speaker Change: And why it's performed the way it has.

Speaker Change: And when you understand those things then you can.

Speaker Change: Really.

Speaker Change: Get invested in terms of okay. So what are you is the team going to do about it how long is it going to take what will be the measures of success and where your focus. So it would be my goal that you will walk away with a much better view as to.

Speaker Change: Why we're doing superior delivers how its focused and the benefit that we see coming out of it from.

Speaker Change: From a <unk> side same thing understanding the dynamics of the market why we grew the way we did.

Speaker Change: Primarily understanding why we think that the strategy of a balanced growth strategy and really good cash.

Speaker Change: Productivity there is an important one and a prudent one at this point in the development of that of that segment and then what our outlook is for the organization going forward over the next three to five years, how we see.

Speaker Change: Our operating objectives translate into financial performance and why that.

Speaker Change: Really supports the thesis that superior is a great company to be investing.

Speaker Change: So all that to say.

We really believe in the potential of the organization I don't think we've had a great opportunity and frankly at the time.

Speaker Change: To bring you all into the tent in terms of that discussion and I'm looking really looking forward to doing that on the April cycle.

Speaker Change: Great. Thanks for the color and I'll see you then.

Speaker Change: Thanks.

Speaker Change: Thank you and our next question comes from the line of Patrick Kenny from <unk>. Your question. Please.

Speaker Change: Thank you good morning, guys.

Speaker Change: Maybe just on the buyback you have been repurchasing shares for a few months now.

Speaker Change: On top of committing another.

Speaker Change: 35 million CAD this year.

Speaker Change: But to an earlier point the stock has not reacted favorably to this capital allocation strategy. So I'm, just wondering why not reallocate that $100 million U S call it towards accelerating debt repayment.

Speaker Change: Beyond the half a turn.

Speaker Change: Deleveraging that youre looking for this year.

Speaker Change: Accelerate that timeline towards your three times target.

Patrick: Alright, Patrick you are asking.

Patrick: So the split with the free cash flow allocating it to repurchases versus debt and you're asking why not accelerate but that more than by a fewer shares.

Patrick: Yeah, just reallocating that $135 million Canadian towards the balance sheet instead of share repurchases just given you've.

Patrick: You've seen somewhat of a.

Patrick: Lackluster market reaction to the buyback so far.

Patrick: Yes.

Patrick: Answer it this way and Alan May have comments as well I think we.

Patrick: We think regardless of the market reaction in the short run here, we think that these share repurchases are going to be great value in the longer run and so we're going to we're going to continue to do that we also are trying to balance obviously the management our balance sheet get the leverage down it's been an important goal for us for a while and so I think taking a half a turn out it's really important.

Patrick: I would say incrementally if there were extra dollars that come as a result outperformance either through superior delivers or even colder weather than we had expected I think those incremental extra dollars will go to share repurchases not debt redox. So if you look we think we're doing a lot here, taking leverage down half a turn I think.

Patrick: If there was incremental extra dollars it would not be going to debt reduction will be going to share repurchases.

Patrick: Yes, I agree.

Patrick: Similar.

Patrick: Similar to my opening comments I mean.

Patrick: You got to you got to choose when you believe it.

Patrick: And.

Gary Ho: Gary and I and the team came aboard our number one priority is what's it going to take to run the company well.

Gary Ho: And make sure that this is a company has a solid foundation and we will be able to outperform its peers for years to come.

Gary Ho: And there are days when that is hard to do.

Gary Ho: A lot of short term distractions.

Gary Ho: Similarly, when we look at capital allocation, we said, we want to invest our our cash wisely.

Gary Ho:

Gary Ho: Our conservative investment grade balance sheet.

Gary Ho: And not be too distracted by short term pressures so.

Gary Ho: I think we have that balance in a really good spot.

Gary Ho: We're going to demonstrate material improvement or change to the leverage position. This year and we're investing in what we believe is very undervalued stock so from my standpoint.

Gary Ho: We're we're living our values here.

Gary Ho: We're focused on the long term and doing the right things and to <unk> point.

Gary Ho: These are these are not decisions you make once and never revisit. These are this is something we talk about on a on a weekly basis and as as conditions change, we're going to change with them.

Gary Ho: Okay got it thanks for that.

Speaker Change: And then Alan you mentioned on the propane side.

Speaker Change: <unk> versus earned strategy that didn't work over the past several years. So just wanted to check in to see if you've uncovered any smaller non core platforms or perhaps geographies that just don't fit with your superior delivers initiative here.

Speaker Change: Which.

Speaker Change: It might make more sense to let go and redeploy those proceeds towards either the balance sheet or like you said moving into other core hubs for the company.

Speaker Change: Yes.

Speaker Change: It's a really important question one of the fundamental tenets of where we think that competitiveness.

Speaker Change: Growth comes from profitability.

Speaker Change: And propane is density and it's almost like the E Commerce model, where the more density you have the more disproportionately profitable businesses and when you have assets like the ones Youre, describing they actually dilute your density and create a bit of a cost drag. So ideally if you had 1000 customers in an isolated community they would be less valuable 1000 customers that we are.

Speaker Change: Or in the community are already serving.

Speaker Change: So we're looking at that right now I can tell you from an early point of view.

Speaker Change: There arent any sort of big material markets that we're in that we think we should exit or.

Speaker Change: Big communities that we think are arent going to be value in the long term.

Speaker Change: That's not a.

Speaker Change: That's not a marketing.

Speaker Change: Throwaway comment I mean, I think this team.

Speaker Change: That preceded us did a really good job of buying in markets, we want to be in so.

Speaker Change: Never say never we're going through that exercise, we may find that there is some some thinning out to do in terms of some of our more remote locations but.

Speaker Change: Nothing at this stage is screaming kind of big material changes.

Speaker Change: Okay, that's great I'll leave it there guys.

Speaker Change: Guys. Thanks, Thanks very much.

Speaker Change: Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Alan Macdonald for any further remarks.

Speaker Change: Hello, Thank you very much operator and to all of you. Thank you very much it's been quite the journey we've been on here over the last couple of years.

Speaker Change: It's an exciting time exciting time for superior delivers where we're so pleased with the progress we're making.

Speaker Change: We've got a lot of work to do but I hope you can you can hear it in our in our tone and in.

Speaker Change: And the messages, we're sending you today that we have a great sense of optimism and I'm really proud of the work we did in 2024 difficult those might've been has been in the best interest of the shareholders in the company for the longer term and it's going to pay dividends for years to come. So thank you very very much for your time today and we look forward to seeing you all.

Speaker Change: In a month if not sooner.

Speaker Change: Yes.

Speaker Change: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: Thank you for standing by and welcome to the Superior plus fourth 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 this session you will need to press star one on your telephone if your question has been at.

Chris Listen: Third I'd like to remove yourself from the queue simply press Star One again as a reminder, today's program is being recorded and now I'd like to introduce your host for today's program, Chris <unk>, Vice President Investor Relations. Please go ahead Sir.

Chris Listen: Thank you Jonathan.

Speaker Change: Everyone and welcome to Superior Pluses conference call and webcast to review, our 2020 for fourth quarter and full year results on the call today are Alan Macdonald, President and CEO, and Greer culture, Executive Vice President and Chief Financial Officer.

Chris Listen: For this morning's call will begin with their prepared remarks, and then we will open the call for your questions.

Listeners are reminded that some of the comments made today maybe forward looking in nature and are based on superior current expectations estimates judgments projections and risks.

Chris Listen: Further some of the information provided reverse to non-GAAP measures. Please refer to superiors continuous disclosure documents available on SEDAR plus <unk> website for further details.

Chris Listen: Dollar amounts discussed on today's call are expressed in U S dollars unless otherwise noted.

Alan Macdonald: Now I will turn the call over to Alan.

Alan Macdonald: Thanks, Chris and good morning, everyone. It's a pleasure to be speaking with all of you as we begin 2025 and.

Alan Macdonald: And look back on 2024.

Alan Macdonald: 24 was a pivotal year for our company.

Alan Macdonald: One year ago. It became apparent we did not have the operational capability and customer orientation to deliver growth when challenged by competitors or weather.

Alan Macdonald: Years of M&A has seen the company Oak Grove, it's operating capability, we relied too heavily on increased margins, we lost touch with our customers.

Alan Macdonald: And growth was something bought not earned.

Alan Macdonald: And this was simply unsustainable, our shareholders and employees expect better.

Alan Macdonald: They have every right to expect we can and will outperform our peers and grow in the face of normal market pressures.

Alan Macdonald: So we began a journey to change that narrative once and for all.

Alan Macdonald: Throughout the year, we worked higher Leslie planning and staffing superior delivers our transformative initiative.

Alan Macdonald: Announced in November.

Alan Macdonald: Now transformation is an easing.

Alan Macdonald: In fact, it's almost as difficult as it is necessary.

Alan Macdonald: But when you have a company with as much potential as superior Theres No question. Its the right thing to do.

Alan Macdonald: One of the things that makes transformation heart is time.

Alan Macdonald: Results never come as fast as you want.

Alan Macdonald: We needed to work hard through 2024 to build the superior we all know exists.

Alan Macdonald: We also have to continue to serve our customers and not be taken off course by short term challenges.

Alan Macdonald: While we stood fast and persevered.

Alan Macdonald: Committed to the more difficult path.

Alan Macdonald: Rebuilding the foundation of our company and beginning a new era of growth and profitability.

Alan Macdonald: Looking forward now I can say with pride the green shoots of superior delivers are starting to show and we couldnt be more energized about our plan for 2025 and the road ahead.

Alan Macdonald: We've made good progress in a short time.

Alan Macdonald: And while the impacts may not be seen in our Q4 performance. The foundation. We laid in 2024 has set us up for success in 'twenty five and beyond.

Alan Macdonald: This is why we felt confident and issuing 25 guidance of 8% growth in the propane segment.

Alan Macdonald: Which is supported by a $20 million contribution from superior delivers.

Alan Macdonald: This $20 million in 2025.

Alan Macdonald: Equates to a roughly $40 million improvement in our EBITDA run rate.

Alan Macdonald: Now thats almost 80% of our original superior delivers target of $50 million achieved by the end of 2025, great progress, but we are by no means done.

Alan Macdonald: We see even greater potential and we will continue to show the same discipline going forward focusing on building, our customer base setting ambitious targets and delivering results.

Alan Macdonald: And so tariffs 2024 also saw some changes with a clear shift in market dynamics rising supply pressured margins and returns, prompting us to adjust our strategy.

Alan Macdonald: This year, we'll be scaling back capital spending and refocusing the business on optimizing the performance of our MSC use and strengthening free cash flow.

Alan Macdonald: Long term, we see we continue to see significant expansion opportunities in new markets, but we will continue to grow CMG and our approach will be disciplined focused on balancing growth with delivering returns and sustainable cash flow.

Alan Macdonald: Beyond operations, we also made key capital allocation decisions in 2024 to position the company for long term success.

Alan Macdonald: A critical decision with shifting our dividend strategy in favor of share repurchases and balance sheet flexibility.

Alan Macdonald: And we have acted decisively.

Alan Macdonald: As of today, we've invested $86 million Canadian repurchasing more than 5% of our outstanding shares.

Alan Macdonald: Now this shift has naturally led to some changes in our shareholder base and to our new shareholders. Welcome. We're thrilled to have you onboard and believe yield share our excitement about the opportunities ahead.

Alan Macdonald: So those who have been with us throughout the transition. Thank you.

Alan Macdonald: We recognize this has been a difficult period of change, but we appreciate your support as we enter what we believe will be the most exciting phase of our company's history.

Alan Macdonald: We're shareholders too.

Alan Macdonald: And we've never been more confident in our ability to generate strong returns we have the right plan and the right people to execute it.

Alan Macdonald: So thanks to the efforts of the past year.

Alan Macdonald: During a storm of unfavorable weather and some difficult decisions, we look forward to an exciting year in 2025.

Alan Macdonald: We have a clearly defined path to doubling our free cash flow by growing EBITDA, and reducing capital expenditures, which will enable us to buyback nearly 10% of the company, while meaningfully de levering our balance sheet.

Alan Macdonald: Greer will elaborate on the specifics, but needless to say 2000 22025 is set up to be a great year.

Alan Macdonald: Finally in just over a month will have the opportunity to present a more in depth look at our business. Our go forward plans and a multi year financial outlook.

Speaker Change: Look forward to connecting with many of you at our Investor Day on April 2nd now with that I'll turn things over to Greer to talk about our financial results and 2025.

Greer Culture: Thank you Alan and good morning, everyone.

Greer Culture: The fourth quarter was characterized by some of the same challenges we enter we encountered throughout the year, which was warm weather impacting the propane results and competitive pressure on pricing and CMG.

Greer Culture: Looking at Q4, adjusted EBITDA of $159 1 million declined approximately $3 million relative to last year, driven by lower EBITDA in our Canadian and wholesale propane businesses, partially offset by a $4 $5 million increase in CMG at a $1 million increase in U S propane.

Greer Culture: Despite this modest decline <unk> per share held flat in Q4 compared to last year.

Greer Culture: Due to lower interest cost on our debt and lower average shares outstanding.

Greer Culture: Full year adjusted EBITDA was 455 5 million, representing a $48 million increase over our 2023.

Greer Culture: This growth was primarily from a full year contribution from <unk> tariffs, partially offset by lower results in our propane distribution segments.

Greer Culture: <unk> per share increased from $1 25 in 2023 to $1 27 in 2024, and this was primarily due to the accretive return profile of our <unk> acquisition now.

Greer Culture: Now looking into the businesses.

Greer Culture: U S propane had a good quarter, considering the circumstances and generated $85 2 million of adjusted EBITDA in Q4 that was up 1% from last year. The growth is off the back of 4% colder weather in the regions that we operate.

Greer Culture: Partially offset by the impact of a small divestiture. We made in Q3 of 2024 and that represented about a half a million dollars of EBITDA impact and also the sale of various distillate distillate assets in Q4 of 2023, which had an impact of about $1 million.

Greer Culture: So if you look at organic growth for the business, it's actually closer to 3%, which is reasonably aligned to the weather impact.

Greer Culture: Relative to expectations.

Greer Culture: Whether in the in the quarter was 7% warmer than the five year average, which was obviously warmer than we had expected.

Greer Culture: For the full year adjusted EBITDA in the business was $218 5, million% to 2% decline largely due to the impact of warmer weather than expected.

Greer Culture: While there was 2% warmer than the prior year and 10% warmer than the five year average.

Greer Culture: And then also the previously mentioned divestitures, which on a full year at about a $2 million EBITDA impact.

Greer Culture: Canadian propane produced adjusted EBITDA of $29 7 million in Q4, which was down about 20% year over year.

Greer Culture: The decline was primarily due to the timing of carbon credit sales in this business and this had an impact of about $5 million versus our expectations.

Greer Culture: As we accelerated some of these credits into Q1 of 2020 for taking advantage of very strong carbon credit markets and then made the decision to defer selling of some of these as well into 2025 because of our current market that is weaker.

Greer Culture: Also causing headwind in the quarter as the divestiture of the northern Ontario assets in the prior year, which impacted about $1 2 million in the quarter and weakness in the Canadian dollar, which impacted about $1 1 million in the quarter.

Greer Culture: Average weather across Canada was 5% colder than the prior year and 6% warmer than the five year average, but it should be noted that it was colder in the western region, where we have a higher concentration of commercial customers that generate lower margins.

Greer Culture: For the full year adjusted EBITDA was $82 3, million% to 17% decline, reflecting the divestiture of the northern Ontario assets as previously disclosed these generated about $7 million in 2023.

Average weather for the year was consistent with the prior year and 8% warmer than the five year average, but again the colder weather, what's showing up in the west where our margins are tighter.

Greer Culture: And wholesale propane.

Greer Culture: Fourth quarter, adjusted EBITDA of $10 5 million was down 13% year over year, driven by a weaker market differentials and lower sales volumes due to the warmer weather full year adjusted EBITDA was $32 million and represents a 31% decrease the majority of that is expected as we generated about $10 million of <unk>.

Greer Culture: EBITDA in 2023 from unusual differentials that were not expected to repeat.

Greer Culture: And of course warm weather being the other key factor in the results for this business in 2024.

Greer Culture: And compressed natural gas distribution, so tariffs delivered a strong quarter generating $39 2 million and adjusted EBITDA up 13% year over year as our winter related activity picked up in November and December.

Greer Culture: We ended the quarter with 842, Msu's up about 15% from the previous year, which was the main driver of growth in the quarter.

Greer Culture: For the full year the.

The business contributed $148 million of adjusted EBITDA, reflecting a $77 7 million increase over 2023.

Greer Culture: Primarily due to the inclusion of a full <unk> full year of ownership in 2024 versus seven months in 2023.

Greer Culture: On an organic basis this business grew roughly 7%.

Greer Culture: Overall capex came in around $190 million.

Greer Culture: Which is in line with our expectations communicated at Q3 and about $40 million lower than our original number as we drove higher capital discipline in the businesses.

Greer Culture: Turning to corporate results and leverage Q.

Greer Culture: Q4, corporate operating costs were relatively flat year over year for the full year as higher incentive plan costs were partially offset by lower management on boarding expenses related to last year's senior leadership transition.

Greer Culture: Our leverage ratio was four one times at year end up from three nine times a year earlier this increase aligns with our updated Q3 expectations, reflecting the impact of share repurchases in Q4.

Greer Culture: And also lower adjusted EBITDA due to the warmer weather experienced in Q4.

Greer Culture: Now looking at 2025 guidance on expectations.

Greer Culture: Full year 2025, adjusted EBITDA is expected to increase by approximately 8% compared to 2024, primarily due to the implementation of superior delivers initiatives.

Greer Culture: <unk> growth in the compressed natural gas segment as.

Greer Culture: As well as the normalization of weather to be in line with the five year average.

Greer Culture: Our adjusted EBITDA guidance is based on the following assumptions.

Greer Culture: We are anticipated anticipating 5% to 10% growth in our North American propane business.

Greer Culture: Which includes 1% to 5% growth in each of the U S Canadian and wholesale divisions.

Greer Culture: In the case of the Canadian business, we have calculated this growth on a constant currency basis.

Greer Culture: And if you don't neutralize for that currency growth in the Canadian division declined to negative 1% to 5%.

Greer Culture: The main factor for growth in these businesses as colder weather and we've assumed a five year average weather for 2025 and in addition, we have updated for the month of January where we experienced conditions that were favorable to the five year average.

Greer Culture: We are also targeting $20 million of additional in year EBITDA from superior.

Greer Culture: Okay.

Greer Culture: As our transformation program begins to generate and year EBITDA improvement and this has been included in the 5% to 10.

Greer Culture: Growth for the total North American propane business.

Greer Culture: As Alan mentioned, we expect to end the year with about $40 million and run rate from superior delivers.

Greer Culture: There will be approximately $10 million to $15 million in one time costs incurred in 2025 to generate the improvements associated with superior delivers some of these potentially capital in nature, but the exact split on accounting for these costs is to be determined at this point.

Greer Culture: We are expecting growth in the <unk> business of 5% to 10% as we shift to a more balanced approach to managing growth and capital investment in MF use.

Greer Culture: Corporate operating costs are expected to be $25 million.

Greer Culture: Relatively consistent with 2024 levels.

Greer Culture: Primarily as a result of lower Capex in our <unk> business capital expenditures are expected to be approximately $150 million, which is inclusive of lease additions and we expect to repurchase about $135 million Canadian dollars worth of our outstanding common shares.

Greer Culture: Bringing all this together our 2025 plan is expected to delever the balance sheet by half a turn split between outright debt reduction and the impact of higher adjusted EBITDA.

Greer Culture: And with that I will turn it back to the operator for Q&A.

Greer Culture: Okay.

Speaker Change: Ladies and gentlemen, as a reminder, if you do have a question at this time please.

Speaker Change: One on your telephone our first question comes from the line of Gary Ho from <unk> capital markets. Your question. Please.

Gary Ho: Yes, thanks, good morning, everyone.

Gary Ho: So I just wanted to start off with the superior delivery. So I know I know you provided.

Gary Ho: Information and the upcoming Investor day.

Gary Ho: Given that the $20 million guide posts. So maybe can you talk about.

Gary Ho: The initiatives that is already underway I think in your.

Gary Ho: Okay.

Gary Ho: The MD&A mentioned kind of improving low margin.

Gary Ho: Through our contracts reducing.

Gary Ho: Efficient customer tanks et cetera.

Gary Ho: Maybe yes, what's your early read.

Gary Ho: On this and any customer retention risk or those that you'd like to keep any comments on that please.

Gary Ho: Hey, Gary good.

Alan Macdonald: Good morning, it's Alan.

Alan Macdonald: Yes, I mean as superior dealers is really all encompassing so we're.

Alan Macdonald: We're.

Alan Macdonald: The impact on the business all the way through our operations, but as you noted we cited some of the examples that are having an impact.

Alan Macdonald: Shorter term.

Alan Macdonald: One of the big things that we've been addressing as you look at your customer base and you start to rationalize that you realize that.

Alan Macdonald: Taking in factors like delivery distance volume and the contracts.

Alan Macdonald: We'll be paying and then how people change overtime, we identified some opportunities to implement some new pricing schemes.

Alan Macdonald: All under the.

Alan Macdonald: Of course of wanting to retain these customers and be competitive.

Alan Macdonald: Okay.

Alan Macdonald: The situations as possible. So some of the examples of things like customers that were home heat users that converted to having propane as a secondary fuel supply and their volumes decreased.

Alan Macdonald: We implemented.

Alan Macdonald: Rental agreements or adjusted rental agreements on the facilities, we have still good customers just need to be priced differently.

Alan Macdonald: For some unprofitable customers that we had for reasons of just being charged.

A regional price, but geographically where they're located meant the cost of delivery was really high so we adjusted those and what we're seeing right now is.

Alan Macdonald: It's kind of a mixed bag I think of course.

Alan Macdonald: As you can see a little churn it doesn't show up as.

Alan Macdonald: As quick as you think and with the cold weather of course people are around our reliance on the service so.

Alan Macdonald: Early days, we're pretty pleased and of course, we're testing all of this we're not just making wholesale changes so.

Alan Macdonald: I'm really pleased with what we're seeing so far in right sizing our.

Alan Macdonald: Pricing for some of the customers that were underwater.

Alan Macdonald: Some other things we've done of course as things like reducing inefficient tank feels better monitoring.

Alan Macdonald: Okay.

Alan Macdonald: Route.

Alan Macdonald: Density planning and route management has been implemented which means that we are.

Alan Macdonald: We're delivering more fuel and less frequency.

Alan Macdonald: Of course going to be a big help for US we've got bulk plant in truck rationalization, which youre not going to see really show up in short term and short term performance measures, but that's going to deliver value for the long term.

Alan Macdonald: And things like introducing.

Alan Macdonald: Our wholesale division so our wholesale division primarily operated with wholesale.

Alan Macdonald: The Canadian business and it's now taking over all the procurement and distribution of our wholesale.

Alan Macdonald: In the U S of course, serving all of our book plants across the U S. So here's a these are just small examples but.

Alan Macdonald: They're sort of four or five of of many that are all having an impact across the board.

Speaker Change: We're testing.

New pricing initiatives, new retention initiatives those are going to take longer to have an impact, but we're really encouraged by the short term results. We are seeing and looking forward to scaling those up over the next year.

Speaker Change: Okay. Thanks, Alan that's great color and then maybe just moving on to the <unk> Capex, that's down year over year I think historically the team is the message.

Speaker Change: Spending to maintain your leading market share it sounds like theres a bit of a shift there. So can you.

Speaker Change: Talk about the trade off between maybe better economics versus.

Speaker Change: Market share looking at.

Speaker Change: Yes.

Speaker Change: Comment then grier might have something he wants to add but.

Speaker Change: Gaining market share, it's really about growing with the segments and growing with our competition and.

Speaker Change: You know this as well as I do I mean, this is a vertical especially in the oil and gas market that grows so that grew so fast.

There was a point where the waiting list for an MSU was 12 to 18 months.

Speaker Change: And we did a really good job of keeping up with that growth and creating the share that we have today.

Speaker Change: On a short term view so if you look out the next.

Speaker Change: 12 to 18 months.

Speaker Change: We think the investment we're making right now will keep us in line.

Speaker Change: In terms of where we were in the market. So we don't see a big reduction in share volume is going to be growing over those time periods. So it's not just an MSU accounts.

Speaker Change: Really about where were decided to allocate those msu's.

Speaker Change: How much of the share of the aftermarket we're actually going after so.

Speaker Change: We're feeling really good that.

Speaker Change: These growth numbers are going to be in line with where the market is right now and then we're going to continue to be at or at least very close to the share we have today.

Speaker Change: Yes, I mean, the only thing I would add is.

Speaker Change: Just the approach has changed a little bit I think the previous approach of just.

Speaker Change: No really.

Speaker Change: Difficulty in the supply chain getting as many of us.

Speaker Change: It's used as you, possibly could the market was growing so quickly and so it was an approach it really get as much as you can put them into the market.

Speaker Change: Things have changed a little bit I think it's a little bit more.

Speaker Change: Call it probably a disciplined approach a little more cautious.

Speaker Change: Okay.

Speaker Change: Not to say that.

Speaker Change: This is.

Speaker Change: Okay, that's going to be the pathway forever I think.

Speaker Change: The ability.

Speaker Change: Wrap this up if we see.

Speaker Change: Opportunities is there in the supply chain.

Speaker Change: That is not nearly as tight we can get access to more so if we see opportunities and we look at.

Speaker Change: I understand these opportunities are as good return opportunities and we'll do that.

Speaker Change: But I think it.

Speaker Change: First point, we're just being a little bit more cautious or as I said before.

Speaker Change: I think we would just be as many as we can get it.

Speaker Change: Let's do that and we'll find a place to put them. So it's really just a change in the approach as well.

Speaker Change: Okay, great. Thanks for those comments thank.

Gary Ho: Thanks, Gary.

Speaker Change: Thank you and our next question comes from the line of Ben Isaacson from BNS. Your question. Please.

Ben Isaacson: Great. Thank you very much and good morning, everyone.

Ben Isaacson: So when I look at the guidance the headlines are very impressive 8% EBITDA growth.

Ben Isaacson: Half, a turn down and leverage.

Ben Isaacson: And.

Ben Isaacson: Detailed guidance I believe in the notes you stated that the guidance does not include.

Ben Isaacson: The impact of tariffs or inflation or higher interest rates.

Ben Isaacson: Obviously that's.

Ben Isaacson: We're moving from a threat to reality, maybe a little bit slower than we thought initially but in your scenario planning for tariffs.

Ben Isaacson: What kind of elasticity do you expect to see.

Ben Isaacson: That division and where where is the threat from Paris and in each segment.

Ben Isaacson: Okay.

Ben Isaacson: Hey, Ben.

Ben Isaacson: Good question.

Ben Isaacson: Yeah.

Ben Isaacson: The.

Ben Isaacson: We're at the highest level.

Ben Isaacson: Our two markets or both.

Ben Isaacson: Producers of propane and CMG. So in terms of the impact of cross border supply.

Ben Isaacson: We've been doing as you would well expect a lot of work to make sure that we have sufficient supply in each domestic market that we are able to avoid having.

Ben Isaacson: Any degree of material degree at least of cross border transport and we're feeling very confident today that the.

Ben Isaacson: The risk of that our business plan and the 25 is quite minimal.

Ben Isaacson: Throughout the course of the last quarter. We've also been making sure that if we had any contracts where you had a supply in Quebec that was being transported into Vermont contractually that we make sure we tighten those up so we weren't didn't have an exposure and so far touchwood.

That's been that's been well managed in terms of the broader economic impact I mean, anyone's guess is as good as mine.

Ben Isaacson: Okay.

Ben Isaacson: Being in the in the home heat and essential services business, we see them, we feel comfortable that we're fairly well.

Ben Isaacson: In terms of consumer sentiment and then.

Ben Isaacson: Larry standpoint, we're going to take that in stride and make sure that we not only manage.

Ben Isaacson: Our costs carefully as we can but we're going to be very prudent in passing on any price increases to customers that we don't think are sustainable.

Ben Isaacson: Great. Thank you for that and then just second question.

Ben Isaacson: Both those headline numbers, which I think are pretty impressive.

Ben Isaacson: But when I look at the share price.

Ben Isaacson: Getting close to an all time low.

Ben Isaacson: And we know the market is.

Ben Isaacson: Okay.

Ben Isaacson: These growth numbers aren't really a surprise and you came out with superior delivers a few months ago, and we will get more.

Ben Isaacson: More info on that shortly.

Ben Isaacson: Do you think the market.

Ben Isaacson: Buying yet and still needs time is it the strategy is that the target is it execution.

Ben Isaacson: Or maybe something else entirely.

Ben Isaacson: Great question.

Ben Isaacson: When we ask ourselves quite often around here.

Ben Isaacson: <unk>.

Ben Isaacson: Far be it for me to guess whats in the minds of investors, but I will tell you is some things that I'm concerned about I mean, I think there was some.

Ben Isaacson: Yes.

Ben Isaacson: Institutional investor rebalancing that we experienced over the last year of course, you would know as well as either.

Ben Isaacson: Sentiment around things like share overhang following the <unk> acquisition.

Ben Isaacson: Those things all come into play.

Ben Isaacson: We had a lot of questions leading up to November in terms of what we're going to do with the dividend and that always creates uncertainty when it comes to share price performance.

Ben Isaacson: And then.

Perhaps rightly so theres a bit of wait and see this as a segment that.

Ben Isaacson: It needs to do a little bit more work to earn the trust of investors.

Ben Isaacson: We've tried to be.

Ben Isaacson: And not over promising but really be as transparent as we know how and what we think the issues are and where we're focusing we're starting to see as I said in my prepared comments you know the green shoots of success, which we've always believed to have been there, but you can't turn.

Ben Isaacson: Those on overnight.

Ben Isaacson: It's my sincere hope that our investors.

Ben Isaacson: Are going to start to see a renewed sense of confidence that the team and more importantly, the segment has a lot of value to offer and it's just been a matter of us capitalizing on that that's all I'll tell you the investors I meet with and I'm sure Yours.

Ben Isaacson: Always seem to be very encouraging in terms of youre doing the right things keep focused on running the business really well the sector has a lot of potential and we're excited to see what are you going to take it. So I think that is probably the best sort of example of a wait and see attitude, we've been seeing and hopefully as we.

Ben Isaacson: <unk> 2025, we're going to give our investors lots to be excited about.

Ben Isaacson: And if I could.

Ben Isaacson: Sorry, if I could add I think this is part of the reason why we made the switch on capital allocation.

Ben Isaacson: We will be on pace to obviously, we're pretty aggressive in the fourth quarter buying stock back.

Speaker Change: We'll continue to go on this path and as Alan said, we will buyback roughly 10% and if the market is going to value in the stock at $6.

Speaker Change: Canadian and like in all these numbers we're talking about here are you also.

Speaker Change: We think it has great value in.

Speaker Change: Hopefully the market has seen that through our capital allocation approach.

Speaker Change: That makes sense. Thanks, guys I appreciate it thanks, Matt.

Speaker Change: Thank you and our next question comes from the line of Robert <unk> from CIBC capital markets. Your question. Please.

Speaker Change: Hey, good morning, everyone I just wanted to follow up on <unk>, a little bit really trying to understand your appetite to allocate capital there.

Speaker Change: And what is the pricing pressure. So maybe you can answer it this way how was the $50 billion of Capex Youre, Alexander <unk> and 'twenty five going to be spent so wondering you're adding the misuse what vertical markets to the extent you can.

Discuss that.

Speaker Change: Why don't I, Hi, Rob Jorge it's clear.

Speaker Change: Maybe I'll start because I have the stuff in front of me, but I'm sure Alan will have a few comments.

Alan Macdonald: Yes, what we've we've.

Alan Macdonald: I'd kind of 25 to 30, new MSU as that of the overall kind of total capital envelope. It represents kind of roughly half I would say.

Alan Macdonald: The majority of those new EMS use will be going into the utility space.

Alan Macdonald: Where they're earmarked.

Alan Macdonald: We've got a huge portfolio of MFS use and a great opportunity to sit back and have a look at where these assets are and we believe theres an opportunity to reallocate some of them from kind of lower return areas to higher return area. So there is there is there is a very large inventory and if they are kind of new.

Alan Macdonald: There are new opportunities, we have that are quite lucrative we can pull from.

Alan Macdonald: The suite of assets that are sitting in kind of a lower return areas and so that's.

That's the strategy, but I think.

Alan Macdonald: Definitely fewer that is where those are going and part of that was just because of the nature that was required they are slightly different from some of the ones. We had in inventory and so that's why we why we.

Alan Macdonald: Mark those and those are largely bought that kind of 25 to 30 of those are.

Alan Macdonald: Sitting here today, that's probably all bought so.

Alan Macdonald: Yeah, Hey, Rob it's Alan the only other thing I'd add is.

Alan Macdonald: I'll remind everyone listening these are by nature mobile storage units. So they are quite dynamic.

Speaker Change: So we're looking at how much capacity, we think we have in our existing fleet and you can free up capacity by <unk>.

Alan Macdonald: Moving segments moving geographies, having quicker.

Alan Macdonald: Quicker turnaround higher volume contracts versus lower and you balance all the pricing and everything.

Alan Macdonald: Our ability to to look at where we have some margin opportunities and capitalizing on that and then where we wanted to do more expansion beyond the well site.

Alan Macdonald: So it's it's not as simple as saying, we don't think of it like we're buying 27 msu's to put into utility support we're thinking of more like we want to continue to grow our utility segment.

Alan Macdonald: <unk>.

Alan Macdonald: To do that and achieve our overall goal.

Alan Macdonald: We need 27 more msu's so at.

Alan Macdonald: At the end of the year it could turn out that on an annualized basis, we've actually put more <unk> into that space, but it might be 100 for two quarters and 10 for two quarters. So it's a little dynamic so it's not as sort of linear as some people might think.

Alan Macdonald: But all that to say.

Alan Macdonald: Think.

Alan Macdonald: There is lots and lots of opportunity to continue to grow this business and this is just one example that we are going to be pursuing in 'twenty five.

Alan Macdonald: Okay.

Speaker Change: Another question on tourist side I'm, just curious how you see the recent increase in natural gas cost impacting customer demand.

Alan Macdonald: Okay.

Alan Macdonald: If you look at the rig count it looks like we're not really seeing a response there.

Alan Macdonald: And the energy sector.

Alan Macdonald: So maybe just a comment on how the.

Alan Macdonald: Natural gas cost is impacting the margins.

Alan Macdonald: Not seeing a material shift in our rig count our forecast as a result of really any of the dynamics of the market over the last quarter I would say.

Alan Macdonald: It's been it remains optimistic but.

Alan Macdonald: In terms of material shifts.

Alan Macdonald: Not seeing anything Thats thats really noteworthy.

Alan Macdonald: And maybe I'll just add Rob just make sure we're covering us.

Alan Macdonald: It is all pass through right, so higher Nat gas cost we pass through to the customers. The idea here is that we're making our margin on moving it compressing.

Alan Macdonald: Compressing it moving it decompressing it so it is pass through.

Alan Macdonald: Despite higher Nat gas prices are still quite a lot of.

Alan Macdonald: Distance between the overall cost of diesel so looking at it.

Alan Macdonald: Customers have dual fuel or fleet type equipment.

Alan Macdonald: During with knock us theres still quite an advantage even though it has.

Alan Macdonald: Increase.

Alan Macdonald: That's also important but yes.

Alan Macdonald: So spending admissions as well right.

Alan Macdonald: That's right for sure.

Alan Macdonald: I was just focusing on the economic side by Jeff.

Alan Macdonald: Yes.

Alan Macdonald: Question I was just curious if you could elaborate on the comment about the wholesale division entering new markets.

Alan Macdonald: <unk>, we're talking about geographic expansion or are you, referring to new products as well.

Alan Macdonald: Well historically our <unk>.

Speaker Change: Clarify my comments Rob.

Alan Macdonald: Historically.

Alan Macdonald: Our U S propane division effectively.

Alan Macdonald: In sourced their wholesale procurement.

Alan Macdonald: So despite the fact that we had a wholesale division that division focused primarily on supplying our retail businesses in Canada and wholesale customers in Canada.

Alan Macdonald: Primarily in the southwestern U S.

Alan Macdonald: Well the decision we've made late last year in the transition. We're entering right now is that our wholesale division will now take responsibility for the wholesale procurement for the entire company. So it will be now servicing.

Alan Macdonald: Our retail needs.

Alan Macdonald: All across the United States.

Alan Macdonald: And that gives us a couple of benefits it gives us some.

Alan Macdonald: Some modest improvements in our procurement.

Alan Macdonald: It gives us.

Alan Macdonald: A bigger buffer in terms of certainty of supply which in quarters like the one we're experiencing are not insignificant, but it also gives them more of a beach a beachhead to grow from.

Alan Macdonald: Especially in the northeastern U S and that's a really competitive market and we're not attributing big growth in the short term. So this move it's more.

Alan Macdonald: More of an internal capabilities, but.

Alan Macdonald: It's not insignificant either I mean, there'll be some opportunities coming out of our wholesale division now having a presence all across North America.

Alan Macdonald: Okay. Thanks, very much everyone.

Alan Macdonald: Thanks, Rob.

Speaker Change: Thank you and our next question comes from the line of Nelson <unk> from RBC capital markets. Your question. Please.

Speaker Change: Great. Thanks, and good morning, everyone. Just another quick follow up on.

Speaker Change: The Paris.

Speaker Change: So do you have any you talked about.

Speaker Change: Or diversifying our adding more msas into the utility segment in the coming year.

Speaker Change: But do you have any additional comments on diversifying into other markets I think you've previously talked about adding more hubs, but I'm not sure why there.

Speaker Change: Adding more MFC into the utility market requires hubs can you just talk about that a bit more detail.

Nelson: Hey, Nelson.

Nelson: Yes, I think so if I understand your question right.

Speaker Change: So theres two things I mean, we're looking at.

Nelson: Continuing to to.

Nelson: Our business development with our business development teams on opportunities both inside the oil and gas sector, but beyond the well site.

Nelson: And we're seeing more and more inbound opportunities coming from.

Nelson: The utility support vertical if you will and thats quite widely distributed so we can.

Nelson: Start to go after some of that market with the existing hub network that we have today.

Nelson: So that would be kind of point number one secondarily we've identified.

Nelson: Two three.

Speaker Change: On the outside four or five.

Speaker Change: Geographies, where we think there could be a good business case to to expand into new hubs in terms of line of sight in 'twenty five.

Speaker Change: Its quite probable that we'll announce a couple of new hubs in 25, we're not ready to do that today.

Speaker Change: But.

Speaker Change: In terms of them, making an impact on the business in year, it's more of a 2026 business development initiatives and 25.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Yes, and then just to clarify on the 50 million of Capex versus Harris.

Speaker Change: How many.

Speaker Change: Is that all going to msu's or a combination of MSU and Hudson could you just remind me how many how many skus you are adding.

Speaker Change: Over there over the next year.

Speaker Change: Yes for sure announcements career, so think about this.

Speaker Change: $50 million in capital I would say a little over half of it would be kind of knew MSC use and the associated here that kind of comes with it so.

Speaker Change: Let's call that between 25 and 30 of the 50.

Speaker Change: Other <unk>.

Speaker Change: <unk>.

Speaker Change:

Speaker Change: Would be kind of maintenance type Capex and then.

Speaker Change: Earmark for our Hopper two kind of thing as Alan said still kind of working on the details of more as we've kind of evolved through the year.

Speaker Change: Be clear on that but yeah. That's that's the.

Speaker Change: Take down if thats helpful.

Speaker Change: Comment on add about hubs Nelson just a follow up to my comments.

Speaker Change: Don't mistake my comments for <unk> decision.

Speaker Change: Putting a hub when you decide you want to have a geography that's of interest.

Speaker Change: Finding location for the hub working out the.

Speaker Change: Access arrangements with the providers the pipeline companies and then all of the zoning and planning those are not small task because you can well imagine.

Speaker Change: So it's not just a matter of us trying to decide that theres a lot of work goes into being able to establish a hub for the company.

Speaker Change: Sure.

Speaker Change: Okay great.

Speaker Change: It's Alan.

Speaker Change: I think April 2nd Investor Day, that's just over a month from now.

Speaker Change: I think now that you've given out 2025 guidance you provide a bit of color on superior de levers.

Speaker Change: Can you just give us a quick preview in terms of what else, we should expect to see whether it's a multi year guidance are.

Speaker Change: Or any color on that.

Speaker Change: Yes, additional info that we should expect to see.

Speaker Change: Im happy to I mean.

Speaker Change: Start with I'd like you to meet the team.

Speaker Change: I'd like you to get grounded in.

Speaker Change: The business was actually operating we do all of these.

Speaker Change: These calls every quarter and it's such a small glimpse into the business and Theres. So much financial data to get through and then of course, you have the complications of weather in the different business units. So much that all of you I know one I want to ask.

Speaker Change: It will give us an opportunity to really spend a little more time, explaining some of the businesses. Some of the how we run the business I think one of the biggest kind of.

Speaker Change: Insights gained in my time here is just how attractive the propane segment is.

Speaker Change: And why it's performed the way it has and when you understand those things then you can.

Speaker Change: Really.

Speaker Change: Get invested in terms of okay. So what are you is the team going to do about it how long is it going to take what will be the measures of success and where your focus so.

Speaker Change: It would be my goal that you will walk away with a much better view as to.

Speaker Change: Why we're doing superior delivers how it's focused in the benefit that we see coming out of it.

Speaker Change: From a <unk> side same thing understanding the dynamics of the market why we grew the way we did.

Speaker Change: Primarily understanding why we think that the strategy of a balanced growth strategy and really good cash.

Speaker Change: Activity there is an important one and a prudent one at this point in the development of that of that segment and then what our outlook is for the organization going forward over the next three to five years, how we see.

Speaker Change: Our operating objectives translate into financial performance and why that.

Speaker Change: It really supports the thesis that superior is a great company to be investing.

Speaker Change: So all that to say.

Speaker Change: We really believe in the potential of the organization I don't think we've had a great opportunity and frankly the time.

Speaker Change: To bring you all into the tent in terms of that discussion and I'm looking really looking forward to doing that on April 2nd.

Speaker Change: Great. Thanks for the color and I'll see you then.

Speaker Change: Thanks.

Speaker Change: Thank you and our next question comes from the line of Patrick Kenny from <unk>. Your question. Please.

Speaker Change: Thank you good morning, guys.

Speaker Change: Maybe just on the buyback you have been repurchasing shares for a few months now.

Speaker Change: On top of committing another.

Speaker Change: 35 million CAD this year.

Speaker Change: But to an earlier point the stock has not reacted favorably to this capital allocation strategy. So I'm, just wondering why not reallocate that $100 million U S call it towards accelerating debt repayments.

Speaker Change: Beyond the half a turn.

Speaker Change: Deleveraging that youre looking for this year.

Speaker Change: Yeah.

Speaker Change: To accelerate that timeline towards your three times target.

Speaker Change: Alright, Patrick you are asking.

Speaker Change: So the split with the free cash flow allocating it to repurchases versus debt and you're asking why not accelerate the debt more than by a fewer shares.

Speaker Change: Yeah, just reallocating that $135 million Canadian towards the balance sheet instead of share repurchases just given you've.

Speaker Change: You've seen somewhat of a.

Speaker Change: Lackluster market reaction to the buyback so far.

Speaker Change: Yes.

This way and Alan May have comments as well I think.

Speaker Change: We think regardless of the market reaction in the short run here. We think this these share repurchases are going to be great value in the longer run and so we're going to we're going to continue to do that we also are trying to balance obviously the management our balance sheet get the leverage down it's been an important goal for us for a while and so I think taking a half a turn out is really <unk>.

Speaker Change: I would say incrementally if there were extra dollars that come as a result outperformance either through superior delivers or <unk>.

Speaker Change: Even colder weather than we have expected I think those incremental extra dollars will go to share repurchases not debt redux. So if you look we think we're doing.

Speaker Change: A lot youre, taking leverage down half a turn I think if there was incremental extra dollars. It would not be going to debt reduction will be going to share repurchases.

Speaker Change: I agree.

Speaker Change: Similar.

Speaker Change: Similar to my opening comments I mean.

Speaker Change: You got to you got to choose what you believe it.

And.

Speaker Change: <unk>.

Speaker Change: <unk> and the team came aboard our number one priority is what's it going to take to run the company well and make sure that this is a company has a solid foundation and we will be able to outperform its peers for years to come.

Speaker Change: And there are days when thats hard to do.

Speaker Change: A lot of short term distractions.

Speaker Change: <unk> when we look at capital allocation, we said, we want to invest our cash wisely.

Speaker Change: Our conservative investment grade balance sheet.

Speaker Change: And not.

Speaker Change: Not be too distracted by short term pressures so.

Speaker Change: I think we have that balance in a really good spot.

Speaker Change: We're going to ship demonstrate material improvement or change to the leveraged position this year and we're investing in what we believe is very undervalued stock so from my standpoint.

Speaker Change: We're.

Speaker Change: We're living our values here.

Speaker Change: We're focused on the long term and doing the right things and to <unk> point.

Speaker Change: These are not decisions you make once and never revisit. These are this is something we talk about on a weekly basis and as as conditions change.

Speaker Change: We're going to change with them.

Speaker Change: Okay got it thanks for that.

Speaker Change: And then Alan you mentioned on the propane side.

Speaker Change: <unk> versus earned strategy that didn't work over the past several years. So just wanted to check in to see if you've uncovered any smaller non core platforms or perhaps geographies that just don't fit with your superior delivers initiative here.

Speaker Change: Which.

Speaker Change: It might make more sense to let go and redeploy those proceeds towards either.

Speaker Change: The balance sheet or like you said moving into other core hubs for the company.

Speaker Change: Yes, that's a really important question one of the fundamental tenants, where we think that competitiveness in.

Speaker Change: Growth comes from profitability in.

Speaker Change: And propane is density and it's almost like the E Commerce model, where the more density you have the more disproportionately profitable your businesses and when you have assets like the ones Youre, describing they actually dilute your density and create a bit of a cost drag.

Speaker Change: Ideally if you had 1000 customers in an isolated community they would be less valuable 1000 customers that we are in the community are already serving.

Speaker Change: So we're looking at that right now I can tell you from an early point of view.

Speaker Change: There arent any sort of big material markets that we're in that we think we should exit or.

Speaker Change: Big communities that we think are aren't going to be value in the long term and that's not a.

Speaker Change: That's not a marketing.

Speaker Change: Throwaway comment I mean, I think this team.

Speaker Change: That preceded us did a really good job of buying in markets, we want to be in so.

Speaker Change: Never say never we're going through that exercise, we may find that there is some some thinning out to do in terms of some of our more remote locations but.

Speaker Change: Nothing at this stage is.

Speaker Change: Screaming kind of big material changes.

Speaker Change: Okay, that's great I'll leave it there guys.

Speaker Change: Thanks, Thanks very much.

Speaker Change: Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Alan Macdonald for any further remarks.

Alan Macdonald: Well, thank you very much operator and to all of you. Thank you very much it's been quite the journey we've been on here over the last couple of years.

Alan Macdonald: It's an exciting time exciting time for superior delivers where we're so pleased with the progress we're making.

Alan Macdonald: We've got a lot of work to do.

Alan Macdonald: But I hope you can you can hear it in our in our tone and the messages. We're sending you today that we have a great sense of optimism and I'm really proud of the work we did in 2024 difficult those might've been has been in the best interest of the shareholders in the company for the longer term and that's going to pay dividends for years to come. So thank you very very much for your time today.

Alan Macdonald: Look forward to seeing you all in them.

Alan Macdonald: Month, if not sooner.

Speaker Change: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.