Q1 2025 Superior Plus Corp Earnings Call

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Good day, and thank you for standing by and welcome to the Superior plus 2025 first quarter results conference call.

Please be advised that today's conference is being recorded.

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I would now like to hand, the conference over to your speaker today, Chris.

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Chris: Vice President of Investor Relations. Please go ahead.

Thank you.

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Speaker Change: Good morning, everyone and welcome to the Superior plus this conference call and webcast to review our 2025 first quarter results.

Come to the superior plus 2025 first quarter results conference call.

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Speaker Change: On the call today, we have Allen Macdonald, President and CEO, and Greer culture, Executive Vice President and Chief Financial Officer for this morning's call. Alan agree will begin with their prepared remarks, and then we'll open the call for questions.

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I would now like to hand, the conference over to your speaker today, Chris.

Speaker Change: Listeners are reminded that some of the comments made today may be forward looking in nature and information provided me.

Speaker Change: Chris what can help.

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

Thank you.

Speaker Change: Refer to non-GAAP measures. Please refer to our continuous disclosure documents available on SEDAR, plus and our website. The dollar amounts discussed on today's call are expressed in U S dollars unless otherwise noted finally for those of you who weren't able to participate in our Investor day last month, we'd encourage you to review the related materials available on our website for more detail.

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Speaker Change: Everyone and welcome to Superior Pluses conference call and webcast to review, our 2025 first quarter results.

Please be advised that today's conference is being recorded.

On the call today, we have Allen Macdonald, President and CEO, Agriculture, Executive Vice President and Chief Financial Officer for this morning's call. Alan agree will begin with their prepared remarks, and then we'll open the call for questions listeners are reminded that some of the comments made today may be forward looking in nature and information provided me.

I would now like to hand, the conference over to your speaker today.

Chris what can help.

Vice President of Investor Relations. Please go ahead.

Thank you.

Everyone and welcome to Superior Pluses conference call and webcast to review, our 2025 first quarter results.

Speaker Change: And our long term plans and multi year financial outlook.

Speaker Change: I'll now turn the call over to Alan Thanks, Chris.

On the call today, we have Allen Macdonald, President and CEO, and Grier Colter Executive Vice President and Chief Financial Officer for this morning's call. Alan agree will begin with their prepared remarks, and then we'll open the call for questions listeners are reminded that some of the comments made today may be forward looking in nature and information provided me.

Speaker Change: Refer to non-GAAP measures. Please refer to our continuous disclosure documents available on SEDAR, plus and our website. The dollar amounts discussed on today's call.

Alan: Everybody and welcome to our Q1 call.

Speaker Change: I'm very pleased to speak with you today to share details around our first quarter results in both propane and C N G.

Speaker Change: Are expressed in U S dollars unless otherwise noted finally for those of you who weren't able to participate in our Investor day last month, we'd encourage you to review the related materials available on our website for more detail on our long term plans and multi year financial outlook.

Speaker Change: It was an excellent start to 2025 at superior plus.

Speaker Change: Beginning with propane R.

Refer to non-GAAP measures. Please refer to our continuous disclosure documents available on SEDAR, plus and our website. The dollar amounts discussed on today's call are expressed in U S dollars unless otherwise noted finally for those of you who weren't able to participate in our Investor day last month, we would encourage you to review the related materials available on our website for more details.

Speaker Change: Our teams performed well in the quarter focusing on serving our customers amid a relatively cold winter.

Speaker Change: Now I'll turn the call over to Alan Thanks, Chris Good morning, everybody and welcome to our Q1 call.

Speaker Change: Despite encountering some winter storm conditions that complicated our deliveries in some regions, we manage the situation very effectively.

Speaker Change: I'm very pleased to speak with you today to share details around our first quarter results in both propane and <unk>. It was an excellent start to 2025 at superior plus.

Speaker Change: Now while colder weather is indeed, a welcome change the financial performance seen in Q1 is about more than just weather.

On our long term plans and multi year financial outlook.

I'll now turn the call over to Alan Thanks, Chris.

Speaker Change: We delivered 24 million more gallons in Q1 compared to last year with fewer trucks and more efficient routes.

Speaker Change: Beginning with propane.

Everybody and welcome to our Q1 call.

Speaker Change: Our teams performed well in the quarter focusing on serving our customers amid a relatively cold winter.

I'm very pleased to speak with you today to share details around our first quarter results in both propane and CMG. It was an excellent start to 2025 at superior plus.

Speaker Change: We aggressively managed our costs despite inflationary pressures.

Speaker Change: Spike in countering some winter storm conditions that complicated our deliveries in some regions, we manage the situation very effectively.

Speaker Change: <unk> maintained our pricing discipline to ensure we keep customers for life.

Speaker Change: The changes we've made within superior undoubtedly contributed to the strength of the results in the quarter and more than anything offered a proof point of the value of preserving and growing our customer base over the long term.

Speaker Change: Now while colder weather is indeed, a welcome change the financial performance seen in Q1 is about more than just weather.

Beginning with propane.

Our teams performed well in the quarter focusing on serving our customers amid a relatively cold winter.

Speaker Change: We delivered 24 million more gallons in Q1 compared to last year with fewer trucks and more efficient routes.

Despite encountering some winter storm conditions that complicated our deliveries in some regions, we manage the situation very effectively.

Speaker Change: Additionally, while it's still early in the process, we're making good progress with superior delivers which contributed approximately $2 3 million of EBITDA in the quarter in line with our plans.

Speaker Change: We aggressively managed our costs, despite inflationary pressures and maintained our pricing discipline to ensure we keep customers for life.

Now while colder weather is indeed, a welcome change the financial performance seen in Q1 is about more than just weather.

Speaker Change: The value largely came from our customer growth initiatives, we're focused on offering our customers competitive pricing backed by exceptional service.

We delivered 24 million more gallons in Q1 compared to last year with fewer trucks and more efficient routes.

Speaker Change: The changes we've made within superior.

Speaker Change: Notably contributed to the strength of the results in the quarter and more than anything offered a proof point of the value of preserving and growing our customer base over the long term.

Speaker Change: During the next few quarters, we're executing more than 20 pilot programs and phased out rollouts across a variety of initiatives.

We aggressively managed our costs, despite inflationary pressures and maintained our pricing discipline to ensure we keep customers for life.

Speaker Change: Additionally, while it's still early in the process, we're making good progress with superior delivers which contributed approximately $2 3 million of EBITDA in the quarter in line with our plans.

Speaker Change: And our cost to serve where extreme for example, we're in the process of implementing a new company wide routing and scheduling capability that will see every route for every driver optimized to make us more efficient and help us serve our customers even more reliably.

The changes we've made within superior undoubtedly contributed to the strength of the results in the quarter and more than anything offered a proof point of the value of preserving and growing our customer base over the long term.

Speaker Change: The value largely came from our customer growth initiatives, we're focused on offering our customers competitive pricing backed by exceptional service.

Additionally, while it's still early in the process, we're making good progress with superior delivers which contributed approximately $2 3 million of EBITDA in the quarter in line with our plans.

Speaker Change: These improvements are key to enabling our customer growth initiatives and when married together, we will see we will serve more customers more efficiently with less cost enhancing customer lifetime value and long term profitability and growth prospects for superior plus.

Speaker Change: During the next few quarters.

Speaker Change: Executing more than 20 pilot programs and phased out rollouts across a variety of initiatives.

The value largely came from our customer growth initiatives, we're focused on offering our customers competitive pricing backed by exceptional service.

Speaker Change: And our cost to serve where extreme for example, we're in the process of implementing a new company wide routing and scheduling capability that will see every route for every driver optimized to make us more efficient and help us serve our customers even more reliably these.

Speaker Change: As we continue to launch pilot and rollout initiatives over the coming months superior delivers remains on track to contribute $20 million to adjusted EBITDA This year and $70 million by the end of 2027.

During the next few quarters, we're executing more than 20 pilot programs and phased out rollouts across a variety of initiatives.

Speaker Change: These improvements are key to enabling our customer growth initiatives and when married together, we will see we will serve more customers more efficiently with less cost.

And our cost to serve where extreme for example, we're in the process of implementing a new company wide routing and scheduling capability that will see every route for every driver optimized to make us more efficient and help us serve our customers even more reliably.

Speaker Change: Turning now to our <unk> business, we also had a strong quarter with the terrorist growing EBITDA by approximately 7%.

Speaker Change: Hansen customer lifetime value and long term profitability and growth prospects for superior plus.

Speaker Change: We're pleased with our performance in the quarter and are maintaining our guidance for the full year. However, with continued pricing pressure as customers become increasingly cautious about the broader economic landscape. We expect we may finish the year towards the lower end of our 5% to 10% growth range.

Speaker Change: As we continue to launch pilots and rollout initiatives over the coming months superior delivers remains on track to contribute $20 million to adjusted EBITDA This year and $70 million by the end of 2027.

These improvements are key to enabling our customer growth initiatives and when married together, we will see we will serve more customers more efficiently with less costs enhancing customer lifetime value and long term.

Speaker Change: In the meantime.

Speaker Change: We are advancing several continuous improvement initiatives at so tariffs that are helping to maintain strong margins and returns specifically, we're improving our driver and fleet utilization, increasing load fills and driving efficiencies within our repair and maintenance programs.

Speaker Change: Overall as I reflect on the quarter I'm extremely pleased with how our teams rose to the occasion and demonstrate our ability to drive strong profits and cash flow all while successfully executing pilots and new initiatives as part of superior delivers.

Unknown Executive: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Paris growing EBITDA by approximately 7%.

We're pleased with our performance in the quarter and are maintaining our guidance for the full year. However, with continued pricing pressure as customers become increasingly cautious about the broader economic landscape. We expect we may finish the year towards the lower end of our 5% to 10% growth range.

Speaker Change: First quarter felt like a turning point after two years of hard work.

Speaker Change: Our first proof point, if you will that we are becoming the company. We all know we can be.

Speaker Change: We can deliver strong results, while simultaneously expanding our capabilities and building for our future.

In the meantime, we are advancing several continuous improvement initiatives that the tariffs that are helping to maintain strong margins and returns specifically, we're improving our driver and fleet utilization, increasing load fills and driving efficiencies within our repair and maintenance programs.

Unknown Executive: Please be advised that today's conference is being recorded.

Chris Lichtenheldt: I would now like to hand the conference over to your speaker today, Chris Lichtenheldt, Vice President of Investor Relations. Please go ahead. Thank you.

Speaker Change: I'd like to thank our thousands of employees for their diligent work to support our customers across North America through a very busy winter season.

Allan MacDonald: Good morning everyone and welcome to Superior Plus' conference call and webcast to review our 2025 first quarter results. On the call today we have Allan MacDonald, President and CEO, and Grier Colter, Executive Vice President and Chief Financial Officer. For this morning's call, Allan and Grier will begin with their prepared remarks and then we'll open the call for questions.

Speaker Change: Our teams are what make this company a success they are committed to serving our customers when they need us most keeping their homes warm and their businesses operating safely and reliably.

Overall as I reflect on the quarter I'm extremely pleased with how our teams rose to the occasion and demonstrate our ability to drive strong profits and cash flow all while successfully executing pilots and new initiatives as part of superior delivers.

Speaker Change: We are incredibly confident in our ability to generate strong returns with the right plan and the right people in place to execute it so with that let's turn things over to Greer to walk through the Q1 results in detail.

Unknown Executive: Listeners are reminded that some of the comments made today may be forward-looking in nature and information provided may refer to non-GAP measures. Please refer to our continuous disclosure documents available on CDER Plus and our website. The dollar amounts discussed on today's call are expressed in U.S. dollars unless otherwise noted.

The first quarter felt like a turning point after two years of hard work.

Greer: Thanks, Alan and good morning.

Speaker Change: It was an excellent first quarter for the business across the entire portfolio and we are well positioned for 2025.

Our first proof point, if you will that we are becoming the company. We all know we can be.

We can deliver strong results, while simultaneously expanding our capabilities and building for our future.

Speaker Change: First quarter adjusted EBITDA of $260 5 million increased 10, 5% compared to the first quarter last year, which was driven by strong results in both propane and compressed natural gas.

Unknown Executive: Finally, for those of you who weren't able to participate in our Investor Day last month, we'd encourage you to review the related materials available on our website for more detail on our long-term plans and multi-year financial outlook.

I'd like to thank our thousands of employees for their diligent work to support our customers across North America through a very busy winter season.

Speaker Change: <unk> per share of <unk> 89 increased 19%.

Our teams are what make this company a success they are committed to serving our customers when they need us most keeping their homes warm and their businesses operating safely and reliably.

Allan MacDonald: I'll now turn the call over to Allan. Thanks, Chris. Good morning, everybody, and welcome to our Q1 call. I'm very pleased to speak with you today, to share details around our first quarter results in both propane and CNG. It was an excellent start to 2025 at Superior Plus. Beginning with Propane, our teams performed well in the quarter, focusing on serving our customers amid a relatively cold winter. Despite encountering some winter storm conditions that complicated our deliveries in some regions, we managed the situation very effectively. Now, while colder weather is indeed a welcome change, the financial performance seen in Q1 is above more than just weather.

Adjusted net earnings per share of <unk> 66 increased by 32% and free cash flow per share of <unk> 94 increased by 54%.

We are incredibly confident in our ability to generate strong returns with the right plan and the right people in place to execute it so with that let's turn things over to Greer to walk through the Q1 results in detail.

Speaker Change: All driven by strong operating results and a share count that is roughly 5% lower quarter over quarter as a result of our share repurchases.

Thanks, Alan and good morning.

Speaker Change: Free cash flow also benefited from lower Capex.

It was an excellent first quarter for the business across the entire portfolio and we are well positioned for 2025.

Speaker Change: Turning now to the businesses.

Speaker Change: And before going through the segmented results I want to highlight a change we made to our reporting in the quarter.

First quarter adjusted EBITDA of $260 5 million increased 10, 5% compared to the first quarter last year, which was driven by strong results in both propane and compressed natural gas.

Beginning in Q1, we have rolled the contribution from our wholesale business activities into the U S and Canadian propane segments.

Allan MacDonald: We delivered 24 million more gallons in Q1 compared to last year with fewer trucks and more efficient routes. We aggressively managed our costs despite inflationary pressures and maintained our pricing discipline to ensure we keep customers for life. The changes we've made within Superior undoubtedly contributed to the strength of the results in the quarter, and more than anything, offered a proof point of the value of preserving and growing our customer base over the long term. Additionally, while it's still early in the process, we're making good progress with Superior Delivers, which contributed approximately $2.3 million of EBITDA in the quarter, in line with our plans.

Speaker Change: As our wholesale operation becomes integrated with our propane distribution operations.

<unk> per share of <unk> 89 increased 19%.

Adjusted net earnings per share of <unk> 66 increased by 32% and free cash flow per share of <unk> 94.

Speaker Change: Time has come to merge the reporting to better reflect how we operate and how we think about the businesses.

Speaker Change: Within our MD&A.

Increased by 54%.

Speaker Change: We have included a breakdown of our previously disclosed wholesale business between U S and Canada for all of 2024 to facilitate comparability.

All driven by strong operating results and a share count that is roughly 5% lower quarter over quarter as a result of our share repurchases.

Speaker Change: For historical periods.

Free cash flow also benefited from lower Capex.

Speaker Change: U S propane had a good quarter and generated adjusted EBITDA of $163 6 million up 14% from last year.

Turning now to the businesses.

And before going through the segmented results I want to highlight a change we made to our reporting in the quarter.

Speaker Change: The growth was driven by higher volumes as well as the initial contribution from superior delivers.

Beginning in Q1, we have rolled the contribution from our wholesale business activities into the U S and Canadian propane segments.

Allan MacDonald: The value largely came from our customer growth initiatives, where we're focused on offering our customers competitive pricing backed by exceptional service. During the next few quarters, we're executing more than 20 pilot programs and phased out rollouts across a variety of initiatives. In our Cost to Serve Workstream, for example, we're in the process of implementing a new company-wide routing and scheduling capability that will see every route for every driver optimized to make us more efficient and help us serve our customers even more reliably. These improvements are key to enabling our customer growth initiatives, and when married together, we will serve more customers more efficiently, with less costs, enhancing customer lifetime value and long-term profitability and growth prospects for Superior Plus.

Speaker Change: The growth in the quarter aligned with weather in the U S, which was 15% colder than the prior year and 8% colder than the five year average.

As our wholesale operation becomes integrated with our propane distribution operations.

Time has come to merge the reporting to better reflect how we operate and how we think about the businesses.

Speaker Change: Canadian propane produced adjusted EBITDA of $49 1 million, which was up 7% versus Q1 2024.

Within our MD&A.

Speaker Change: Primarily due to higher volumes as well as a small contribution from superior delivers.

We have included a breakdown of our previously disclosed wholesale business between U S and Canada for all of 2024 to facilitate comparability over historical periods.

Speaker Change: Partly offset by the impact of a stronger U S dollar, which was 6% stronger than last year.

Speaker Change: Also we didnt sell any carbon credits in Q1 2025, preferring to sell later in 2025 versus the Q1 2024, where we sold approximately $3 million of these credits.

<unk>.

U S propane had a good quarter and generated adjusted EBITDA of $163 6 million up 14% from last year.

The growth was driven by higher volumes as well as the initial contribution from superior delivers.

Average weather across Canada was 6% colder than the prior year and 3% colder than the five year average.

The growth in the quarter aligned with weather in the U S, which was 15% colder than the prior year and 8% colder than the five year average.

Allan MacDonald: As we continue to launch pilots and roll out initiatives over the coming months, Superior Delivers remains on track to contribute $20 million to Adjusted EBITDA this year and $70 million by the end of 2027.

Speaker Change: Looking over the next several quarters.

Speaker Change: We expect superior delivers contributions to continue ramping up as we execute on our plans.

Canadian propane produced adjusted EBITDA of $49 1 million, which was up 7% versus Q1 2024.

Speaker Change: However, it's worth noting that the majority of the $20 million contribution for 2025 is expected during the fourth quarter when cold weather returns and volumes increase.

Allan MacDonald: Turning now to our CNG business, we also had a strong quarter with Soteris growing EBITDA by approximately 7%. We're pleased with our performance in the quarter and are maintaining our guidance for the full year.

Primarily due to higher volumes as well as a small contribution from superior delivers.

Speaker Change: Now in the value from our initiatives to materialize.

Partly offset by the impact of a stronger U S dollar, which was 6% stronger than last year.

Allan MacDonald: However, with continued pricing pressure, as customers become increasingly cautious about the broader economic landscape, we expect we may finish the year towards the lower end of our 5-10% growth rate. In the meantime, we're advancing several continuous improvement initiatives at Soteris that are helping to maintain strong margins and returns. Specifically, we're improving our driver and fleet utilization, increasing load fills and driving efficiencies within our repair and maintenance program.

Speaker Change: And compressed natural gas so tariffs delivered a strong quarter generating $55 1 million and adjusted EBITDA up 7% year over year, driven by a larger MSU asset base and operating efficiencies, partly offset by pricing pressure in the oil and gas segment.

Also we didnt sell any carbon credits in Q1 2025, preferring to sell later in 2025 versus the Q1 2024, where we sold approximately $3 million of these credits.

Average weather across Canada was 6% colder than the prior year and 3% colder than the five year average.

Speaker Change: Overall, capex, which includes lease additions was slightly less than expected for the quarter at $22 million.

Looking over the next several quarters, we expect superior delivers contributions to continue ramping up as we execute on our plans. However.

Speaker Change: But we still anticipate our full year capital spend to be in the $150 million range.

Allan MacDonald: Overall, as I reflect on the quarter, I'm extremely pleased with how our teams rose to the occasion and demonstrated our ability to drive strong profits and cash flow, all while successfully executing pilots and new initiatives as part of Superior delivery. The first quarter felt like a turning point after two years of hard work. our first proof point, if you will, that we're becoming the company we all know we can be. We can deliver strong results while simultaneously expanding our capabilities and building for our future.

Speaker Change: Turning to corporate results on leverage.

However, it's worth noting that the majority of the $20 million contribution for 2025 is expected during the fourth quarter when cold weather returns and volumes increase.

Speaker Change: Corporate operating costs were $7 3 million in the quarter up from $5 5 million a year ago.

Due to higher incentive plan expenses and some one time costs associated with our recent Investor day.

Allowing the value from our initiatives to materialize.

And compressed natural gas so tariffs delivered a strong quarter generating $55 1 million and adjusted EBITDA up 7% year over year, driven by a larger MSU asset base and operating efficiencies, partly offset by pricing pressure in the oil and gas segment.

Speaker Change: No we have not yet incurred any costs associated with achieving superior deliveries. We expect these charges to begin in the second quarter.

Speaker Change: As a reminder, as a reminder, we expect the cost to achieve the $70 million of run rate EBITDA to be in the range of $10 million to $15 million in each of 2025, and 2026 and due to the onetime nature of these costs will be excluded from adjusted EBITDA.

Allan MacDonald: I'd like to thank our thousands of employees for their diligent work to support our customers across North America through a very busy winter season. Our teams are what make this company a success. They're committed to serving our customers when they need us most, keeping their homes warm and their businesses operating safely and reliably.

Overall, capex, which includes lease additions was slightly less than expected for the quarter at $22 million.

But we still anticipate our full year capital spend to be in the $150 million range.

Speaker Change: Our leverage at the end of Q1 was three seven times down slightly from three eight times a year ago.

Turning to corporate results on leverage.

Allan MacDonald: We are incredibly confident in our ability to generate strong returns with the right plan and the right people in place to execute.

Speaker Change: Due to higher adjusted EBITDA and the impact of a strong U S. Dollar on the translation of Canadian denominated debt.

Corporate operating costs were $7 3 million in the quarter up from $5 5 million a year ago.

Speaker Change: We offset by an investment in working capital during the quarter.

Grier Colter: So with that, let's turn things over to Grier to walk through the Q1 results. Thanks, Alan, and good morning. It was an excellent first quarter for the business across the entire portfolio, and we are well positioned for 2025. First quarter adjusted EBITDA of $260.5 million increased 10.5% compared to the first quarter last year, which was driven by strong results in both propane and compressed natural gas. EBTDA per share of $0.89 increased 19%. Adjusted net earnings per share of $0.66 increased by 32% and free cash flow per share of $0.94 increased by 54%. All driven by strong operating results and a share count that is roughly 5% lower quarter over quarter as a result of our share repurchase.

Due to higher incentive plan expenses and some one time costs associated with our recent Investor day.

Speaker Change: We continue to expect we'll finish the year roughly half a turn lower or around three six times.

No we have not yet incurred any costs associated with achieving superior delivers we expect these charges to begin in the second quarter.

Speaker Change: The investment in working capital year over year was largely expected as we shifted our capital allocation away from dividends.

As a reminder, as a reminder, we expect the cost to achieve the $70 million of run rate EBITDA to be in the range of $10 million to $15 million in each of 2025, and 2026 and due to the onetime nature of these costs they will be excluded from adjusted EBITDA.

Speaker Change: Which generated significant payables at our quarter ends to share repurchases, which are settled daily.

Speaker Change: As well as higher receivables associated with increased sales in the quarter and this will reverse over the next quarter as these are collected.

Speaker Change: We continued our share repurchases during the quarter totaling $6 2 million shares or approximately two 6% of the outstanding float.

Our leverage at the end of Q1 was three seven times down slightly from three eight times a year ago.

Due to higher adjusted EBITDA and the impact of a strong U S. Dollar on the translation of Canadian denominated debt.

Speaker Change: From the time, we began repurchasing shares in the fourth quarter of last year up until today we.

Speaker Change: We have now repurchased approximately $16 5 million shares or 7% of our shares outstanding.

We offset by an investment in working capital during the quarter.

We continue to expect we'll finish the year roughly half a turn lower or around three six times.

Grier Colter: Precast Flow also benefited from lower capex.

Speaker Change: We continue to believe that this is an excellent use of our capital.

Speaker Change: At our current buyback pace, we expect our repurchases in 2025 to be somewhat front end loaded and it's likely we will reach the 10% threshold on our current NCI be in early Q3.

The investment in working capital year over year was largely expected as we shifted our capital allocation away from dividends.

Grier Colter: Turning now to the businesses, and before going through the segmented results, I want to highlight a change we made to our reporting in the quarter. Beginning in Q1, we have rolled the contribution from our wholesale business activities into the U.S. and Canadian propane segment. as our wholesale operation becomes integrated with our propane distribution operation. The time has come to merge the reporting to better reflect how we operate and how we think about the business. within our MD&A. We have included a breakdown of our previously disclosed wholesale business between U.S. and Canada for all of 2024 to facilitate comparability over historical periods.

Which generated significant payables at our quarter ends to share.

Speaker Change: We will seek renewal of our NCI be in mid November and fully anticipate repurchasing the Canadian dollar equivalent of $135 million in shares laid out in our 2025 expectations.

Purchases, which are settled daily.

As well as higher receivables associated with increased sales in the quarter and this will reverse over the next quarter as these are collected.

We continued our share repurchases during the quarter totaling $6 2 million shares or approximately two 6% of the outstanding float.

So in conclusion, it was a very good quarter for superior and consistent with our expectations for the business.

Speaker Change: And with that I will turn it back for Q&A.

From the time, we began repurchasing shares in the fourth quarter of last year up until today, we have now repurchased approximately $16 5 million shares or 7% of our shares outstanding.

Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to.

Speaker Change: To withdraw your question. Please press star one again.

We continue to believe that this is an excellent use of our capital.

Speaker Change: Please standby, while we compile the Q&A roster.

Grier Colter: U.S. propane had a good quarter and generated adjusted EBITDA of $163.6 million, up 14% from last year. The growth was driven by higher volumes, as well as the initial contribution from Superior Delivery. The growth in the quarter aligned with weather in the U.S., which was 15% colder than the prior year and 8% colder than the five-year average. Canadian Propane produced adjusted EBITDA of $49.1 million, which was up 7% versus Q1 2024, primarily due to higher volumes, as well as a small contribution from Superior Delivers, partly offset by the impact of a stronger U.S. dollar, which was 6% stronger than last year.

Speaker Change: Yes.

At our current buyback pace, we expect our repurchases in 2025 to be somewhat front end loaded and it's likely we will reach the 10% threshold on our current NCI would be in early Q3.

Speaker Change: Our first question comes from Nelson <unk> with RBC capital markets. Your line is open.

Speaker Change: Great. Thanks, Congrats on a strong quarter and good morning, everyone.

We will seek renewal of our NCI be in mid November and fully anticipate repurchasing the Canadian equivalent of $135 million in shares laid out in our 2025 expectations.

Speaker Change: My first question just relates to superior delivers.

Speaker Change: You mentioned that there are more than 20 initiatives that you're highlighting our that's being rolled out.

Speaker Change: Can you just talk about how in terms of the number of initiatives. How do you see that progressing in the next three or six months from now.

So in conclusion, it was a very good quarter for superior and consistent with our expectations for the business.

And with that I will turn it back for Q&A.

As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Nelson: Hey, Nelson good morning, Thanks for joining us.

Speaker Change: In terms of initiatives, how do we see them progressing well.

To withdraw your question. Please press star one again.

Nelson: We wanted to do this in <unk>.

Please standby, while we compile the Q&A roster.

Grier Colter: Also, we didn't sell any carbon credits in Q1 2025, preferring to sell later in 2025, versus a Q1 2024, where we sold approximately 3 million of these credits. Average weather across Canada was 6% colder than the prior year and 3% colder than the five-year average. Looking over the next several quarters, we expect Superior Deliver's contributions to continue ramping up as we execute on our plan. However, it's worth noting that the majority of the $20 million contribution for 2025 is expected during the fourth quarter when cold weather returns and volumes increase. allowing the value from our initiatives to materialize.

Nelson: By balancing speed and effectiveness. So it's always easier to go fast if you're prepared to make big mistakes.

Our first question comes from Nelson <unk> with RBC capital markets. Your line is open.

Nelson: And we try really hard to protect the.

Great. Thanks, Congrats on a strong quarter and good morning, everyone.

Nelson: The stability of the underlying business. So you want to make sure that you're not we're not going to do anything in terms of asset or <unk>.

My first question just relates to superior delivers.

You mentioned that there are more than 20 initiatives that you're highlighting our that's being rolled out and.

Nelson: Any reductions in the business, that's going to impact our ability to serve our customers and we don't want to make any pricing or customer facing changes that are going to.

Can you just talk about how.

Nelson: Impact churn or our ability to acquire so you always want to go carefully so the way that we progressed through it as well.

In terms of the number of initiatives, how do you see that progressing in the next two.

Three or six months from now.

Nelson: We've identified opportunities within the organization and sort of quantified those to understand the size of the prize. If you will than we designed the solution roll it out in a pilot phase to test the assumptions.

Hey, Nelson good morning, Thanks for joining us.

In terms of initiatives, how do we see them progressing well.

Grier Colter: In compressed natural gas, Soteris delivered a strong quarter, generating $55.1 million in adjusted EBITDA, up 7% year-over-year, driven by a larger MSU asset base and operating efficiencies, partly offset by pricing pressure in the oil and gas segment. Overall, CapEx, which includes lease additions, was slightly less than expected for the quarter at $22 million. But we still anticipate our full year capital spend to be in the $150 million range.

We wanted to do this in <unk>.

By balancing speed and effectiveness. So it's always easier to go fast if youre prepared to make big mistakes.

Nelson: And when we see.

Nelson: The numbers coming in as the us.

Nelson: Thankfully have been.

And we try really hard to protect.

Nelson: But they are encouraging we expand the size of the pilot.

The stability of the underlying business. So you want to make sure that you're not we're not going to do anything in terms of asset.

Nelson: To test it for at scale and then from there we roll it out across the company. So if you look at route optimization is a great example, we've as we've laid out in Investor day.

Speaker Change: Any reductions in the business, that's going to impact our ability to serve their customers and we don't want to make any pricing or customer facing changes that are going to.

Nelson: Are using new methodology on how we're routing our trucks, we've seen that the impact that that could have.

Impact churn or our ability to acquire so you always want to go carefully so the way that we progressed through it as well.

Grier Colter: Returning to Corporate Results and Leverage. Corporate operating costs were $7.3 million in the quarter, up from $5.5 million a year ago due to higher incentive plan expenses and some one-time costs associated with our recent investor day. Note, we have not yet incurred any costs associated with achieving Superior Delivers. We expect these charges to begin in the second quarter. As a reminder, we expect the cost to achieve the $70 million of run rate EBITDA to be in the range of $10 to $15 million in each of 2025 and 2026. And due to the one-time nature of these costs, they will be excluded from adjusted EBITDA.

Nelson: In design phase, we've now rolled it out to.

Chris: We've identified opportunities within the organization.

Nelson: A couple of areas one in Canada, one in the U S. Having completed those trials and affirmed our assumptions. We're now testing it at scale and then rolling it out across the company. So the change management. That's required is very very complex as you can imagine youre rolling these tools out to 1000 drivers that are doing millions of deliveries.

Speaker Change: And sort of quantified those to understand the size of the prize. If you will then we design the solution roll it out in a pilot phase to test the assumptions.

Speaker Change: And when we see.

Speaker Change: The numbers coming in as the.

Speaker Change: Thankfully have been.

Speaker Change: They are encouraging we expand the size of the pilot.

Nelson: As of year, you want to make sure that you get it right and unfortunately or Fortunately, depending on how you look at it I suppose you are going to test that into your busiest time of year. So the stakes are high so we want to make sure. We're we know what we're doing and they've been well tested that's the balance between speed and impact.

Speaker Change: To test it for at scale and then from there we we roll it out across the company. So if you look at route optimization.

Speaker Change: Great example, we've as we've laid out in Investor day.

Speaker Change: Are using new methodology on how we're routing our trucks, we've seen that the impact that that could have.

Grier Colter: Our leverage at the end of Q1 was 3.7 times, down slightly from 3.8 times a year ago due to higher adjusted EBITDA and the impact of a strong U.S. dollar on the translation of Canadian-denominated debt, partly offset by an investment of working capital during the quarter. We continue to expect to finish the year roughly half a turn lower, or around 3.6 times. The investment in working capital year-over-year was largely expected as we shifted our capital allocation away from dividends, which generated significant payables at our quarter ends, to share repurchases, which are settled daily. as well as higher receivables associated with increased sales in the quarter and this will reverse over the next quarter as these are collected.

Nelson: And I would say you can you can really look at that same process across all of these initiatives. It's really about design pilot scale and then implementation. So we're going to be incredibly busy over the summer it's no.

In design phase, we've now rolled it out to.

Speaker Change: Couple of areas one in Canada, one in the U S.

Speaker Change: Having completed those trials and affirmed our assumptions, we're now testing it at scale and then rolling it out across the company. So the change management. That's required is very very complex as you can imagine youre rolling.

Nelson: It's no coincidence that we're rolling it out in this way because we wanted to test as much as we can coming out of the busy season in Q1.

Nelson: And then rollout during the slower months through the summer so that we're in full production mode going into Q4, which also aligns to why Greer mentioned that.

Speaker Change: These tools out to 1000 drivers are doing millions of deliveries a year you want to make sure that you get it right and unfortunately or Fortunately depending on how you look how did I suppose you are going to test that into your busiest time of year. So the stakes are high so we want to make sure. We know what we're doing and they've been well tested that's the balance between speed.

Nelson: The majority of the benefits, we're going to see this year in the fourth quarter.

Speaker Change: Great color Island. So just one follow up on that so obviously there are a lot of initiatives on the propane side, but there is also a lot of similarities between propane.

Grier Colter: We continued our share repurchases during the quarter, totaling 6.2 million shares, or approximately 2.6% of the outstanding flow. From the time we began repurchasing shares in the fourth quarter of last year up until today, we have now repurchased approximately 16.5 million shares, or 7% of our shares outstanding. We continue to believe that this is an excellent use of our capital. At our current buyback pace, we expect our repurchases in 2025 to be somewhat front end loaded, and it's likely we will reach the 10% threshold on our current NCIB in early Q3. We will seek renewal of our NCIB in mid-November and fully anticipate repurchasing the Canadian dollar equivalent $135 million in shares laid out in our 2025 expectation.

Speaker Change: And impact.

Speaker Change: And I would say you can you can really look at that same process across all of these initiatives. It's really about design pilot scale and then implementations so.

Nelson: <unk> business do you see any.

Speaker Change: Yes. It is.

Speaker Change: Crossing over to <unk> or is that out of scope and something that you all explorer at a later date.

Speaker Change: We're going to be incredibly busy over the summer it's no.

Speaker Change: It's no coincidence that we're rolling it out in this way because we wanted to test as much as we can coming out of the busy season in Q1.

Speaker Change: I get to that same question at the board yesterday and.

Speaker Change: I'll tell you what I told them.

Speaker Change: The the initiatives.

Speaker Change: And then rollout during the slower months through the summer so that we're in full production mode going into Q4, which also aligns to why Greer mentioned that.

Speaker Change: I have less application because they are so specific but what I think has a lot of potential.

Speaker Change: The majority of the benefits, we're going to see this year in the fourth quarter.

Speaker Change: Is we're not just.

Speaker Change: Executing superior delivers and then putting the playbook away. This is really a transformation in how we work.

Speaker Change: Great color Island. So just one follow up on that so obviously there are a lot of initiatives on the propane side, but there is also a lot of similarities between propane, but propane and sitars business do you see any.

By the time, we're finished 2026, we'll have over 150 leaders in the organization our depth at the type of transfer transformation methodology I just talked about in your previous question.

Grier Colter: So in conclusion, it was a very good quarter for Superior and consistent with our expectations for the business.

Unknown Executive: And with that, I will turn it back for Q&A. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster.

Speaker Change: Initiatives, I guess crossing over to <unk> or is that out of scope and something that you all.

Speaker Change: And running the business using our performance management landscape. So if you take that same way of thinking and its across the organization not just the operators. The finance team is to human resources team.

Speaker Change: Floor at a later date.

It's funny I get to that same question at the board yesterday and.

Speaker Change: I'll tell you what I told them.

Nelson Ng: Our first question comes from Nelson Ng with RBC Capital Markets. Your line is open. Great, thanks.

Speaker Change: And.

The the initiatives.

Speaker Change: As a.

So tariffs looks at the efficiency within their distribution model, they're going to be applying the same.

Speaker Change: I have less application because they are so specific but what I think has a lot of potential.

Nelson Ng: Congrats on a strong quarter and good morning, everyone. First question just relates to Superior Delivers. You mentioned that there are more than 20 initiatives that you're piloting or that's being rolled out. Can you just talk about how, like, in terms of the number of initiatives, how do you see that progressing in the next three or six months from now? Hey Nelson, good morning. Thanks for joining us. In terms of initiatives, how do we see them progressing? Well, you know, We wanted to do this in... by balancing speed and effectiveness, so it's always easy to go fast if you're prepared to make big mistakes.

Speaker Change: Our analytical tools that we used in the propane business and the same type of discipline and executing so I think the institutional knowledge is going to be a real asset for us.

Speaker Change: Is we're not just executing superior delivers and then putting the playbook away. This is really a transformation in how we work.

Speaker Change: There are challenges and opportunities to be slightly different but the way that we're going to go out that will be exactly the same.

Speaker Change: By the time, we're finished 2026, we'll have over 150 leaders in the organization our depth at the type of transformer transformation methodology I just talked about in your previous question.

Speaker Change: Got it that makes sense and then just one final question before I get back in the queue.

Speaker Change: So on answer Paris, like obviously Q1's, a seasonally strong period and I think you flagged.

Speaker Change: And running the business using our performance management landscape. So if you take that same way of thinking and its across the organization not just the operators the finance team as the human resources team.

Speaker Change: There is obviously volatility in natural gas prices there is weakness in the oil price how are you seeing.

Speaker Change: Matt in margins in Q2 and Q3.

Speaker Change: And.

Speaker Change: Given that.

Speaker Change: As a.

Speaker Change: I believe you will need to reallocate some some excuse.

Allan MacDonald: And we try really hard to protect the stability of the underlying business. So you want to make sure that we're not going to do anything in terms of asset or any reductions in the business that's going to impact our ability to serve our customers. And we don't want to make any pricing or customer-facing changes that are going to impact churn or our ability to acquire. So you always want to go carefully. So the way that we progress through it is We've identified opportunities within the organization and sort of quantified those to understand the size of the prize, if you will.

Speaker Change: <unk> looks at the efficiency within their distribution model, they're going to be applying the same.

Speaker Change: Correct.

Speaker Change: Yes.

From Q1 to Q2 in terms of.

Speaker Change: Our analytical tools that we used in the propane business and the same type of discipline and executing so I think the institutional knowledge is going to be a real asset for us.

Speaker Change: Moving them around from different sectors.

Speaker Change: Well I think.

Speaker Change: The volatility in the market generally is beyond our control. So we're focused on the things we do control.

Speaker Change: There are challenges and opportunities to be slightly different but the way that we're going to go out that will be exactly the same.

Speaker Change: One is creating a cost structure that <unk>.

Speaker Change: Got it that makes sense and then just one final question before I get back in the queue.

Speaker Change: Protects our profitability at competitive pricing, so that's been a big focus for us.

Speaker Change: So on <unk>, obviously Q1's, a seasonally strong period and I think you flagged.

Speaker Change: When you have a company likes to terrorists that's grown so fast and so much.

Speaker Change: There is obviously volatility in natural gas prices there is weakness in the oil price how are you seeing you.

Allan MacDonald: Then we, you know, design the solution, roll it out in a pilot phase to test the assumptions. And when we see, you know, the numbers coming in as the as they thankfully have been, that they're encouraging, we expand the size of the pilot to test it for, you know, at scale. And then from there, we roll it out across the company. So if you look at route optimization, as a great example, we've, as we laid out an investor day, you know, are using new methodology on how we're routing our trucks, we've seen that the impact that that could have, in design phase, we've now rolled it out to a couple of areas, one in Canada, one in the US.

Speaker Change: Theres invariably opportunities to shift your focus to be much more focused on efficiency and cost management. So that's job number one.

Matt: No Matt in margins in Q2 and Q3.

Speaker Change: Given that.

Speaker Change: And then secondarily.

I believe you will need to reallocate some some msu's.

Speaker Change: Dale and his team are taking a fresh look at what business development opportunities. They have to increase the sales funnel not necessarily diverting away from a particular segment or customer base, but adding more opportunities to the funnel. So that we can make sure that we continue to keep our share continue to drive those volumes up and as.

Speaker Change: Correct.

Speaker Change: And yes.

Speaker Change: Like from Q1 to Q2 in terms of.

Speaker Change: Moving them around from different sectors.

Speaker Change: Well I think.

Speaker Change: The volatility in the market generally is beyond our control. So we're focused on the things we do control.

Speaker Change: More stability is introduced to the market and as the market continues to grow we fully expect we will see some recovery in the pricing.

Speaker Change: Number one is creating a cost structure that <unk>.

Speaker Change: Protects our profitability at competitive pricing, so that's been a big focus for us.

Speaker Change: Got it thanks, Alan I'll leave it there thanks.

Allan MacDonald: Having completed those trials and affirmed our assumptions, we're now testing it at scale and then rolling it out across the company. So the change management that's required is very, very complex, as you can imagine, you're, you know, you're rolling these tools out to 1000 drivers that are doing, you know, millions of deliveries a year, you want to make sure that you get it right. Great color Island.

Alan: Thanks, Neil so good to talk to you.

Speaker Change: When you have a company likes to terrorists that's grown so fast and so much.

Thank you. Our next question comes from Gary Ho with Chardan capital markets. Your line is open.

Speaker Change: Theres invariably opportunities to shift your focus to be much more focused on efficiency and cost management. So that's job number one.

Gary Ho: Hey, good morning, guys.

Gary Ho: Maybe.

Speaker Change: And then secondarily.

Gary Ho: Let me just start off maybe some backup last question there just on superior.

Speaker Change: Dale and his team are taking a fresh look at what business development opportunities. They have to increase the sales funnel not necessarily diverting away from a particular segment or customer base, but adding more opportunities to the funnel. So we can make sure that we continue to keep our share continue to drive those volumes up and as a more stability.

Gary Ho: Deliveries.

Gary Ho: Maybe can you talk about some of the wins early wins that contributed to the $2.3 million cost saves.

Gary Ho: What are you working on as well.

Gary Ho: A couple of quarters, I think you mentioned pricing.

Gary Ho: <unk> sales efforts, maybe just a couple of examples there and then just lastly.

Speaker Change: <unk> is introduced to the market and as the market continues to grow we fully expect we will see some recovery in the in the pricing.

Gary Ho: Any data you can share on client attrition side, if any post implementation of these initiatives.

Alan: Okay got it thanks, Alan I'll leave it there thanks.

Gary Ho: Yes sure.

Thanks, Neil so good to talk to you.

Gary Ho: Well starting with the first one.

Speaker Change: Thank you. Our next question comes from Gary Ho with Chardan capital markets. Your line is open.

Gary Ho: As we said, there's a couple of things actually.

Gary Ho: Coming out of last year.

Gary Ho: We're often asked about low hanging fruit and low hanging fruit is a real tough one sometimes to quantify.

Gary Ho: Hey, good morning, guys.

Speaker Change: Maybe.

Speaker Change: Let me start off maybe some backup last question there just on superior.

Gary Ho: But before we formally implemented superior delivers we're working really hard on all of the main topics you would see tightened taken some costs out of the business being very mindful of retention and acquisition.

Speaker Change: Delivers.

Speaker Change: Maybe can you talk about some of the wins early wins that contributed to the $2.3 million cost saves.

Allan MacDonald: So just one follow up on that. So like, obviously, there are a lot of initiatives on the propane side, but there's also a lot of similarities. between the Propain and Sotaris business. Do you see any initiatives, I guess, crossing over to Sotaris, or is that out of scope and something that you'll? You know it's funny, I got that same question at the board yesterday and I'll tell you what I told them. The initiatives... I have less application because they're so specific. But what I think has a lot of. is we're not just, you know, executing Superior Delivers and then putting the playbook away.

Gary Ho: And just some obvious opportunities we had around things like cost reduction.

Speaker Change: What are you working on as well.

Speaker Change: A couple of quarters, I think you mentioned pricing.

Gary Ho: We put into place late last year, they didn't have a big impact last year, but as you see a busy Q1 and variably they are going to make a contribution and sometimes it's cost avoidance I'm really pleased that.

Speaker Change: <unk> sales efforts, maybe just a couple of examples there and then just lastly.

Speaker Change: Any data you can share on client attrition side, if any post implementation of these initiatives.

Gary Ho: We delivered 24 million more gallons, but I think we managed our costs really really well in light of that.

Speaker Change: Yes sure.

Speaker Change: Well starting with the first one.

Speaker Change: As we said, there's a couple of things actually.

Gary Ho: In the quarter the.

Speaker Change: Coming out of last year.

Gary Ho: Contribution.

Speaker Change: We're often asked about low hanging fruit and low hanging fruit is a real tough one sometimes to quantify.

Gary Ho: Was modest but it was important it was things like addressing unprofitable customers.

Gary Ho: Customers that had tanks for many years.

Speaker Change: But before we formally implemented superior delivers we're working really hard on all of the main topics that you would see type taken some costs out of the business being very mindful of retention and acquisition.

Gary Ho: Low volume might be seasonal customers getting delivery once every year or two switching them to our rental <unk>.

Gary Ho: Program, so that they are meeting our requirements for profitability and we're able to still.

Allan MacDonald: This is really a transformation in how we work. By the time we're finished 2026, we'll have over 150 leaders in the organization that are adept at the type of transformation methodology I just talked about in your previous question, and running the business using a performance management landscape. So if you take that same way of thinking, and it's across the organization, it's not just the operators, it's the finance team, it's the human resources team, and as Soteris looks at the efficiency within their distribution model, they're going to be applying the same analytical tools that we used in the propane business, and the same type of discipline in executing.

Speaker Change: Just some obvious opportunities we had around things like cost reduction.

Keep them as customers.

Speaker Change: We've put into place late last year, they didn't have a big impact last year, but as you see a busy Q1 invariably theyre going to make a contribution and sometimes thats cost avoidance I'm really pleased that.

Gary Ho: Minimum use charges and.

Gary Ho: Implementing minimum mischarges for some seasonal customers that we're serving but they were unprofitable for us.

Gary Ho: And then looking at initial views of cost to serve and addressing some cohorts of customers that were were below our expectations of profitability so that type of.

Speaker Change: We delivered 24 million more gallons, but I think we managed our costs really really well in light of that.

Speaker Change: In the quarter the.

Speaker Change: The contribution.

Gary Ho: Early wins, we're by no means done but those types of early wins were.

Speaker Change: Was modest but it was important it was things like addressing unprofitable customers.

Gary Ho: Were completed late last year and early this year and when you see a high volume season, they make a bit of a contribution.

Speaker Change: Customers that had tanks for many years.

Speaker Change: Low volume might be seasonal customers getting delivery once every year or two switching them to a rental program.

In terms of attrition.

Gary Ho: It's really early days.

Allan MacDonald: So I think the institutional knowledge is going to be a real asset for us. There are challenges and opportunities to be slightly different, but the way that we're going to go at them will be exactly the same. Got it. That makes sense.

Speaker Change: Program, so that they are meeting our requirements for profitability and we're able to still.

Gary Ho: We're putting a number of.

Gary Ho: Of tools in place to address customer attrition and retention and of course, the acquiring new customers and they are really going to come into force later this year and early next year, but.

Speaker Change: Keep them as customers.

Speaker Change: Minimum use charges and.

Implementing minimum these charges for some seasonal customers that we were serving but they were unprofitable for us.

Nelson Ng: And then just one final question before I get back in the queue. So on Sotarus, like obviously Q1 is a seasonally strong period, and I think you flagged, like, there's obviously volatility in natural gas prices, there's weakness in the oil price. Like, how are you seeing demand and margins in Q2 and Q3, given that I believe you will need to reallocate some MSUs from Q1 to Q2 in terms of moving them around from different sectors. Well, I think, you know... The volatility in the market generally is beyond our control, so we're focused on the things we do.

Gary Ho: Intervening.

Speaker Change: And then looking at initial views of cost to serve and addressing some cohorts of customers that were well below our.

Gary Ho: No timeframe, we're seeing.

Gary Ho: Customer numbers that aren't really indicative of the work we're doing because of what I. Just described so we've addressed tens of thousands of customers that were either inactive or unprofitable.

Speaker Change: Our expectations of profitability so.

That type of.

Speaker Change: Those types of early wins, we're by no means done but those types of early wins were.

Gary Ho: And.

Gary Ho: A number of those customers.

Speaker Change: Were completed late last year and early this year and when you see a high volume season, they make a bit of a contribution.

Gary Ho: Excuse me had werent in fact seasonal they had stopped buying propane for one reason or another and never end didn't notify us. So we went to reclaim the tanks that's been really helpful for.

Speaker Change: In terms of attrition is it's really early days.

Gary Ho: Repurposing those tanks and having some cost avoidance on the capital side, but it affects your attrition numbers because it looks like a customer that's been that's.

Speaker Change: We're putting a number of of.

Speaker Change: Tools in place to address customer attrition and retention and of course, the acquiring new customers and they are really going to come into force later this year and early next year, but in the intervening.

Allan MacDonald: Number one is creating a cost structure that protects our profitability at competitive pricing. So that's been a big focus for us. And you know, when you have a company like Soteris that's grown so fast and so much, you know, there's invariably opportunities to shift your focus to be much more focused on efficiency. That's job number one. And then secondarily, Dale and his team are, you know, taking a fresh look at what business development opportunities they have to increase the sales funnel, not necessarily diverting away from a particular segment or customer base, but adding more opportunities to the funnel, so we can make sure that we continue to keep our share, continue to drive those volumes up.

Gary Ho: Thats not been retained when in fact, they werent to customer anyway, they just hadn't notified us so.

Gary Ho: Said really crassly, we're cleaning up some of our inactive customers, which is going to cause our attrition numbers to go up in the short term, but it really doesn't have any impact on the on the core customer base, which we're continuing you still obviously have a very very strong focus on.

Speaker Change: Timeframe, we're seeing.

Speaker Change: Customer numbers that aren't really indicative of the work we're doing because of what I. Just described so we've addressed tens of thousands of customers that were either inactive or unprofitable.

Speaker Change: And.

Speaker Change: A number of those customers excuse me had werent in fact seasonal they had stopped buying propane for one reason or another and never end didn't notify us. So we went to reclaim the tanks that's been really helpful for.

Gary Ho: Perfect. Thanks, Thanks for the color there and then my.

Gary Ho: Question I'm not sure if I caught it right in your prepared remarks, Alan you mentioned something at the lower end of your guidance not sure if that was the tariffs related.

Gary Ho: But I did see the EBITDA per MSU down year over year in the quarter. Just wondering how we should think about that metric as we look out to the remainder of 2025.

Speaker Change: Repurposing those tanks and having some cost avoidance on the capital side.

Nelson Ng: And as more stability is introduced to the market, and as the market continues to grow, we fully expect we'll see some recovery in the You got it. Thanks, Allan. I'll leave it there. Thanks, Nelson. Good to talk to you. Thank you.

Speaker Change: But it affects your attrition numbers because it looks like a customer thats been.

Speaker Change: That's not been retained when in fact, they weren't a customer anyway, they just hadn't notified us so.

Gary Ho: Well Greer will probably have a comment here, but what I would say categorically is.

Speaker Change: Said really crossly, we're cleaning up some of our inactive customers, which is going to cause or attrition numbers to go up in the in the short term, but it really doesn't have any impact on the on the core customer base, which we're continuing you still obviously have a very very strong focus on.

Gary Ho: We're really pleased.

Gary Ho: With the work that's happening right now it's the tariffs I feel like Theyre focused on the right things deals onboard.

Gary Ho: Our next question comes from Gary Ho with Desjardins Capital Markets. Your line is open. Hey, good morning, guys.

Gary Ho: And getting up to speed very very quickly.

Gary Ho: And.

Gary Ho: And we have every reason to be optimistic about.

Allan MacDonald: Maybe, Allan, maybe just to start off, maybe just on the back of the last question there, just on Superior Delivers, maybe can you talk about some of the wins, early wins that contributed to the $2.3 million cost saves? What are you working on as well, upcoming couple quarters? I think you mentioned pricing, increased sales efforts, maybe a couple examples there. And just lastly, any data you can share on client attrition side, if any post-implementation of these initiatives? Yeah, sure. Well, starting with the first one, you know, as we said, there's a couple things actually. Coming out of last year...

Speaker Change: Okay. Thanks, Thanks for the color there and then my.

Gary Ho: How's the terrorists is being run and what they're focused on the things we don't control or.

Speaker Change: My second question I'm not sure if I caught it right in your prepared remarks, Alan you mentioned something at the lower end of your guidance not sure. If that was so terrorists related but I did see the EBITDA right.

Gary Ho: Are the broader economic climate that is invariably having an impact on.

Gary Ho: Yeah.

Gary Ho: The activity when the oil sector and.

Speaker Change: <unk> down year over year in the quarter, just wondering how we should think about that metric as we look out to the remainder of 2025.

Gary Ho: And pricing aggressive pricing levels.

Gary Ho: The CMG business, we see that as being.

Gary Ho: Short term at least I do.

Speaker Change: Well Greer will probably have a comment here, but what I would say categorically is.

Gary Ho: But because of the things we don't control we want to.

Speaker Change: We're really pleased.

Gary Ho: Sure an air of caution that I think it would be foolish of us to be overly optimistic when there's so much uncertainty in that space generally like where you might have a comment or two there maybe.

With the work that's happening right now it's the tariffs I feel like Theyre focused on the right things deals onboard.

Speaker Change: And getting up to speed very very quickly.

Allan MacDonald: You know, we're often asked about low-hanging fruit, and low-hanging fruit is a real tough one sometimes to quantify. But before we formally implemented Superior Deliverance, we were working really hard on all of the main topics. Take some costs out of the business, being very mindful of retention and that. And just some obvious opportunities we had around, you know, things like cost reduction. We put into place late last year. They didn't have a big impact last year, but as you see a busy Q1, invariably they're going to make a contribution. And sometimes it's, you know, cost avoidance.

Gary Ho: Maybe I'll just.

Gary Ho: On the specific question on <unk>.

Speaker Change: And.

Speaker Change: And we have every reason to be optimistic about.

Speaker Change: And Alan's comments Alan's comments on the on the guidance range that was specifically the <unk> space or tariffs.

Speaker Change: How's the terrorists is being run and what they're focused on the things we don't control.

Gary Ho: Being a little bit lower than the center.

Speaker Change: Are the broader economic climate that is invariably having an impact on.

Gary Ho: Offsetting that is we're we're a snicker had on the propane side and so that's why overall guidance, we think we're still headed towards the bullseye.

Speaker Change: The activity when the oil sector and.

Speaker Change: And pricing aggressive pricing levels.

Okay great.

Speaker Change: The CMG business, we see that as being.

Gary Ho: While I have you.

Gary Ho: Just a quick numbers question just see the you folded in the wholesale business in their respective geographies.

Speaker Change: Short term at least I do.

Speaker Change: But because of the things we don't control we want to.

Allan MacDonald: We're, I'm really pleased that, you know, we delivered 24 million more gallons, but I think we managed our costs really, really well in light of that. In the order, the contribution was modest, but it was important. It was things like addressing unprofitable customers. Customers that had tanks for many years, low volume, might be seasonal customers getting delivery once every year or two, switching them to a rental program so that they're meeting our requirements for profitability and we're able to still keep them as customers. Minimum use charges and implementing minimum use charges for some seasonal customers that we were serving but they were unprofitable for us.

Gary Ho: If you had to parse it out this quarter can you tell me what the split would have been is that a good indicator in terms of percentage wise.

Speaker Change: Sure an air of caution that I think it would be foolish of us to be overly optimistic when there's so much uncertainty in that space generally, but where you might have a comment or two there maybe.

Gary Ho: Okay.

Gary Ho: Yeah for sure so.

Speaker Change: Maybe I'll just start.

Gary Ho: Q1, 2024, we provided the numbers it was around 17 million would've been wholesale around three quarters of that would have been.

Speaker Change: On the specific question on guidance on Alan's comments Alan's comments on.

Speaker Change: On the guidance range that was specifically the CMG space or tariffs.

Gary Ho: U S one quarter would've been Canadian.

Speaker Change: Being a little bit lower than the center.

Gary Ho: In Q1 of 2025% number is a little bit lower it's about.

Speaker Change: Offsetting that is we're we're a snick ahead on the propane side and so that's why overall guidance, we think we're still headed towards the Volvo.

Gary Ho: About $15 million and the percent the splits are little bit different it's about two thirds U S. One third.

Gary Ho: Adrian.

Speaker Change: Okay great.

Gary Ho: And thats, largely because we had kind of lower results out of our Cal.

Speaker Change: While I have you just a quick numbers question.

Gary Ho: California market, which is a big U S wholesale market for us so.

Speaker Change: You folded in the wholesale business in their respective geographies.

Gary Ho: So probably the the previous like the 2024 split is probably a little more representative but.

Allan MacDonald: And then looking at, you know, initial views of cost to serve and addressing some cohorts of customers that were below our expectations of profitability. So that type of, those types of early wins were by no means done. But those types of early wins were completed kind of late last year and early this year. And when you see a high volume season, they make a bit of a cost.

Speaker Change: If you had to parse it out this quarter can you tell me what the split would have been is that a good indicator in terms of percentage wise.

Gary Ho: Not too far off but I think that that's the way I would describe it.

Speaker Change: Okay.

Speaker Change: Yeah for sure so.

Speaker Change: Perfect. Okay. That's all my questions. Thanks, Thanks, very much thanks, Gary.

Speaker Change: Q1, 2024, we provided the numbers it was around 17 million would've been wholesale around three quarters of that would have been.

Daryl Young: Thank you. Our next question comes from Daryl Young with Stifel. Your line is open.

U S one quarter would've been Canadian.

Allan MacDonald: In terms of attrition, it's It's really early days. We're putting a number of tools in place to address customer attrition and retention, and of course, acquiring new customers. And they're really going to come into force later this year and early next year. But in the intervening timeframe, we're seeing customer numbers that aren't really indicative of the work we're doing because of what I just described. So we've addressed tens of thousands of customers that were either inactive or unprofitable. And a number of those customers weren't in fact seasonal. They had stopped buying propane for one reason or another and didn't notify us.

Hey, good morning, everyone.

Speaker Change: In Q1 of 2025 number is a little bit lower it's about $15 million and the percent the split a little bit different it's about two thirds U S. One third.

Daryl Young: Just wanted to follow up on the <unk>.

Speaker Change: Terrorists line of questioning.

Speaker Change: The segmentation of customers in the oil and gas space for the returns that you might consider more at risk of let's say cutting cutting guidance or cutting relationship with <unk> versus those that are say super low cost tier one producers.

Speaker Change: Adrian.

Speaker Change: And that's largely because we had kind of lower results out of our Cao.

Speaker Change: California market, which is a big U S wholesale market for us.

Speaker Change: So probably the the previous like the 2024 split.

Hmm.

Speaker Change: Not in so far as I can.

Speaker Change: Probably a little more representative but.

Speaker Change: Quote you chapter and verse and.

Speaker Change: Not too far off but I think that's the way I would describe it.

Speaker Change: Which segments I think.

Speaker Change: Everything I'm about to say qualify with we're in very uncertain times as it pertains to oil and gas in West Texas.

Speaker Change: Perfect. Okay. That's all my questions. Thanks, very much thanks, Gary.

Speaker Change: Thank you. Our next question comes from Daryl Young with Stifel. Your line is open.

Speaker Change: The.

Speaker Change: The.

Allan MacDonald: So we went and reclaimed the tanks. That's been really helpful for repurposing those tanks and having some cost avoidance on the capital side. But it affects your attrition numbers because it looks like a customer that's not been retained when in fact they weren't a customer anyway, they just hadn't notified us. So said really crassly, we're cleaning up some of our inactive customers, which is going to cause our attrition numbers to go up in the short term. But it really doesn't have any impact on the core customer base, which we're continuing to still obviously have a very, very strong.

Daryl Young: Hey, good morning, everyone.

Speaker Change: Traditionally.

Speaker Change: Wanted to follow up on the the terrorists.

Speaker Change: As equipment.

Speaker Change: Terrorists line of questioning.

Speaker Change: Equipments gets replace to retired it starts with diesel which presents an opportunity for us and the type of equipment that we're serving with CMG tends to be the newer equipment. So it's the last to be to be displaced in the market.

Speaker Change: Do you have the segmentation of customers in the oil and gas space for us the returns that you might consider more at risk of M. C.

Speaker Change: Cutting cutting guidance or cutting relationship with returns versus those that are say super low cost tier one producers.

Speaker Change: In terms of at normal pricing.

Speaker Change: <unk> providers.

Speaker Change: Hum.

Speaker Change: Invariably value the type of services. That's terrorists offers in terms of.

Speaker Change: Not in so far as I can.

Speaker Change: Quote you chapter and verse.

Speaker Change: The value added something that we talk a lot about but not so much on this call safety for example.

Speaker Change: Which segments I think.

Speaker Change: Everything I'm about to say qualify with we're in very uncertain times as it pertains to oil and gas in West Texas.

Speaker Change: Is incredibly important to the majors and we have a track record, we're very very proud of them.

Allan MacDonald: Perfect, thanks. Thanks for the colour there.

Allan MacDonald: And then my second question, I'm not sure if I caught it right in your previous remarks, Allan, you mentioned something at the lower end of your guidance, not sure if that was Soteris related, but I did see the EBITDA for MSU down year over year in the quarter. Just wondering how we should think about that metric as we look out to the remainder of 2025. Well, Grier will probably have a comment here. But what I would say categorically is You know, we're really pleased with the work that's happening right now at Soteris. I feel like they're focused on the right things.

Speaker Change: The.

Speaker Change: When it comes to the reliability and dynamic nature of this business, having a larger fleet means that we can be more responsive and some of the smaller providers.

Speaker Change: Bill.

Speaker Change: Traditionally.

Speaker Change: As.

Speaker Change: Equipment gets replaced a retired it starts with diesel which presents an opportunity for us and the type of equipment that we're serving with CMG tends to be the newer equipment. So it's the last to be to.

Speaker Change: But that's sort of cuts both ways because some of the smaller.

Speaker Change: Oil and gas companies.

Speaker Change: To be displaced in the market.

Speaker Change: Have that kind of dynamic environment, where that large fleet as a real asset to them too so I wouldn't necessarily equate.

Speaker Change: In terms of normal pricing.

Speaker Change: Your bigger providers.

Speaker Change: The lowest price is always the smallest provider.

Speaker Change: Invariably value the type of services. That's terrorists offers in terms of.

Speaker Change: In terms of that market, so it's not as easy to parse out.

Allan MacDonald: Dale's on board and getting up to speed very, very quickly and, you know, we have every reason to be optimistic about how Soteris is being run and what they're focused on. The things we don't control are the broader economic climate that's invariably having an impact on the activity in the oil sector and aggressive pricing levels within the CNG business. We see that as being short term, at least I do. But because of the things we don't control, we want to, you know... share an air of caution that I think it would be foolish of us to be overly optimistic when there's so much uncertainty in that space.

The value added something that we talk a lot about but not so much on this call safety for example.

Speaker Change: From a cohort level.

Speaker Change: I would say is that.

Speaker Change: There are very few companies that are as well positioned as we are.

Speaker Change: It's incredibly important to the majors and we have a track record we're very very proud of.

Speaker Change: The nature of our fleet and the economies of scale, we get give us the ability to be very very competitive so I have no hesitation that.

Speaker Change: When it comes to the reliability and dynamic nature of this business, having a larger fleet means that we can be more responsive than some of the smaller providers.

Speaker Change: You see some volatility in that space that we can continue to be amongst the most profitable and the most competitive in the sector.

Speaker Change: But.

Speaker Change: That sort of cuts both ways because some of the smaller.

Speaker Change: Got it Okay, and then switching to the propane in this business a bit maybe a higher level question, but.

Speaker Change: Oil and gas companies.

Speaker Change: Have a kind of a dynamic environment, where that large fleet as a real asset to them too so I wouldn't necessarily equate.

Speaker Change: With some of the tariff disruption and impacts on.

Speaker Change: U S exports of propane does that change the dynamics.

Speaker Change: The lowest price is always the smallest provider.

Speaker Change: Such that your regional competitors, maybe have better access and better supply of propane going forward.

Speaker Change: In terms of that market, so it's not as easy to parse out.

Grier Colter: But Grier, you might have a comment or two there. Yeah, maybe I'll just, on the specific question on guidance and Allan's comments, Allan's comments on the guidance range, that was specifically the CNG space or Soteris being a little bit lower than the center. Offsetting that is we're a snick ahead on the propane side, and so that's why, you know, overall guidance, we think we're still headed towards the bullseye.

Speaker Change: From a cohort level.

Speaker Change: And maybe some of your procurement advantages are diminished or is there anything to make up I guess the market fundamentals for propane today and potential for more supply domestically.

Speaker Change: I would say is that.

Speaker Change: There are very few companies that are as well positioned as we are.

Speaker Change: The nature of our fleet and the economies of scale, we get give us the ability to be very very competitive so I have no hesitation that.

Speaker Change: Well.

Speaker Change: I appreciate you asking that question because in a word no no one has.

Speaker Change: You see some volatility in that space that we can continue to be amongst the most profitable and the most competitive in the sector.

Speaker Change: The.

Speaker Change: Maybe not no one but.

Speaker Change: Certainly no regional competitors have the capability that we have in terms of sourcing and transporting propane at the wholesale level, we're very very proud of our wholesaling capabilities and I think they're one of the things that make us stand apart.

Speaker Change: Got it Okay, and then switching to the propane and this is a bit maybe higher level question, but.

Grier Colter: Okay, and then Grier, while I have you, just a quick numbers question. This either you folded in the wholesale business in their respective geographies. If you had to parse it out this quarter, can you tell me what the split would have been? And is that a good indicator in terms of percentage wise when I look out? Yeah, for sure. So, so Q1 2024, we provided the numbers, it was around 17 million, would have been wholesale, around three quarters of that would have been Q1 of 2025. That number is a little bit lower. It's about 15 million.

Speaker Change: With some of the tariff disruption impacts on us.

Speaker Change: U S exports of propane does that change the dynamics.

Speaker Change: I always think of it like this.

Speaker Change: Greer may or May not agree with me, but generally speaking we sell U S source propane to our American customers and Canadian source propane to our Canadian customers.

Speaker Change: Such that your regional competitors, maybe have better access and better supply to propane going forward and then maybe some of your procurement advantages are diminished or is there anything to make up I guess the market fundamentals for propane today and potential for more supply domestically.

Speaker Change: And.

The cross border or.

Speaker Change: Opportunities and invariably exist.

Speaker Change: Cross border.

Speaker Change: Well.

Speaker Change: Requirements would be in the very very low single digit percent of our supply.

Speaker Change: I appreciate you asking that question because in a word no no one has.

Speaker Change: And there are options for us to be able to to avoid that.

Grier Colter: And the split's a little bit different. It's about two-thirds U.S., one-third Canadian. And that's largely because we had kind of lower results out of the California market, which is a big U.S. wholesale market for us. So probably the previous, like the 2024 split, is probably a little more representative, but not too far off. But yeah, I think that's the way I would describe it. Perfect.

Speaker Change: The.

Speaker Change: So generally speaking I think.

Speaker Change: Maybe not no one but.

Speaker Change: Certainly no regional competitors have the capability that we have in terms of sourcing and transporting propane at the wholesale level. We're very very proud of our wholesaling capabilities and I think they are one of the things that make us stand apart.

Speaker Change: It's fair to say that we're better positioned.

Speaker Change: Physicians because of the flexibility, we have with our supply and the strength of our wholesale business I think is going to be something we're really grateful we have over the next year or two.

Speaker Change: Yeah, maybe I'll just.

Speaker Change: I always think of it like this.

Speaker Change: Part of it would be reiterating what Alan said, but certainly the retail side of the business is very domestic theres no doubt about that.

Speaker Change: Greer may or May not agree with me, but generally speaking we sell U S source propane to our American customers and Canadian source propane to our Canadian customers.

Speaker Change: Wholesale side there is.

Speaker Change: It is more complicated and there would be potentially more exposure what were seeing these markets are relatively liquid right. So.

Grier Colter: Okay, that's my question. Thanks. Thanks very much. Thanks, Gary. Thank you.

Speaker Change: And.

Speaker Change: Cross border or.

Speaker Change: We have the ability to buy in different places contracts.

Speaker Change: Opportunities and invariably exist.

Daryl Young: Our next question comes from Daryl Young with Stiefel. Your line is open. Good morning, everyone. Just wanted to follow up on the Sartaris line of questioning.

Cross border.

Speaker Change: Our set generally annually.

Speaker Change: Requirements would be in the very very low single digit percent of our supply.

Speaker Change: And they happened in the spring so our wholesale group.

Speaker Change: There are options for us to be able to to avoid that.

Allan MacDonald: Do you have a segmentation of customers in the oil and gas space for Sartaris that you might consider more at risk of, say, cutting guidance or cutting relationship with Sartaris versus those that are say, super low cost tier one producers? Not insofar as, you know, I could quote you chapter and verse. which segments I think. You know, everything I'm about to say qualify with, we're in very uncertain times as it pertains to oil and gas and West Tech. Traditionally. As equipment gets replaced or retired, it starts with diesel, which presents an opportunity for us. And the type of equipment that we're serving with CNG tends to be the newer equipment, so it's the last to be displaced in the market.

Speaker Change: We negotiate all the contracts this year with the knowledge of this.

Speaker Change: So generally speaking I think.

Speaker Change: These tariff discussions and Thats been incorporated and so what we're seeing is that.

Speaker Change: It's fair to say that we're better positioned because of the flexibility we have with our supply and the strength of our wholesale business I think is going to be something we're really grateful we have over the next year or two.

Speaker Change: The any tariff impact would be absorbed by the.

Speaker Change: The supplier not by us and so what we're seeing so far is that the impact overall to our business, whether wholesale or retail is minimal to none at this point.

Speaker Change: Yeah, maybe I'll just.

Speaker Change: Reiterating what Alan said, but certainly the retail side of the business is very domestic theres no doubt about that the wholesale side. There is it is more complicated and there would be potentially more exposure. What we're seeing these markets are relatively liquid right. So.

Speaker Change: Okay.

Speaker Change: I'm thinking more in terms of just the propane exports out of the U S. Maybe staying domestically and then being in an oversupply position for propane domestically, but it doesn't sound like that'll be much of an issue.

Speaker Change: We have the ability to buy in different places contracts.

Speaker Change: Generally annually.

Speaker Change: Yes for sure.

Speaker Change: And they happened in the spring so our wholesale group.

Speaker Change: Sure It will it would impact.

Markets generally right but were.

Speaker Change: Negotiate all the contracts this year with the knowledge of this.

Speaker Change: For the most part buying a spot selling at spot and adding margin to make money on the distribution component of it but there is disconnect from a country standpoint.

Speaker Change: These tariff discussions and that's been incorporated and so what we're seeing is that.

Speaker Change: Any any tariff impact would be absorbed by the.

Speaker Change: That disconnect is not coming through our P&L.

Allan MacDonald: In terms of at normal pricing, you know, your your bigger providers invariably value the type of services that Terrace offers in terms of The value added, something, you know, that we talk a lot about, but not so much on this call, you know, safety, for example, is incredibly important to the to the majors and we have a track record. We're very, very proud. When it comes to the reliability and dynamic nature of this business, having a larger fleet means that we can be more responsive than some of the smaller providers. But that sort cuts both ways because some of the smaller...

Speaker Change: The supplier not by us and so what we're seeing so far as the impact overall to our business, whether wholesale or retail is minimal turn on at this point.

Speaker Change: Not forecasting a supply challenge based on plenty of exports at this stage.

Speaker Change: Got it alright, thanks, very much guys.

Gary Ho: Thanks Darryl.

Speaker Change: Okay.

Speaker Change: Thank you. Our next question comes from Robert <unk> with CIBC capital markets. Your line is open.

Speaker Change: I'm thinking more in terms of just the propane exports out of the U S. Maybe staying domestically and then being in an oversupply position for propane domestically, but it doesn't sound like that'll be much of an issue.

Robert: Hey, good morning, everyone I, just wanted to follow up a little bit on tourists.

Robert: Wondering if you could speak more directly on the impact of commodity prices, particularly oil.

Speaker Change: Yes.

Speaker Change: Sure It will it would impact.

Speaker Change: Markets generally right but were.

Robert: Having on the activity level for us.

Speaker Change: For the most part buying spot selling a spot and adding margin to to make money on the distribution component of it but yes. There is disconnect from a country standpoint.

Robert: What about Permian producers.

Robert: Down activity due to low commodity prices.

Allan MacDonald: Oil and gas companies have a kind of dynamic environment where that large fleet is a real asset to them too. So I wouldn't necessarily equate, you know, the lowest price is always the smallest provider in terms of that market. So it's not as easy to parse out from a cohort level. What I would say is that there are very few companies that are as well positioned as we are. The nature of our fleet and the economies of scale we get give us the ability to be very, very competitive.

Robert: Seeing that.

Robert: Filter through to the operations of <unk>.

Speaker Change: That disconnect is not coming through our P&L.

Robert: I think that imports are still on the come.

Speaker Change: And forecasting a supply challenge based on plenty of exports at this stage.

Rob: Hey, Rob Thanks for joining us I'll start and then let.

Speaker Change: Got it alright, thanks, very much guys.

Greer: Greer jump in.

Darryl: Thanks Darryl.

Not materially yet, but we're worried about it.

Speaker Change: Thank you. Our next question comes from Robert <unk> with CIBC capital markets. Your line is open.

Greer: There's all kinds of speculation about what may or may not happen and.

Greer: The oil and gas businesses, obviously cyclical and.

Speaker Change: Hey, good morning, everyone I, just wanted to follow up a little bit on <unk>.

Greer: Exploration activities.

Allan MacDonald: So I have no hesitation that as and Volatility in that space that we can continue to be amongst the most profitable and the most competitive. Got it. Okay.

Wondering if you could speak more directly on the impact of commodity prices, particularly oil.

Greer: Our recovery activities will invariably track with it.

But to date, we're not seeing a material material slowdown.

Speaker Change: Having on the activity.

Greer: Completely agree I mean, this would be the.

Speaker Change: For us we've been reading a lot about Permian producers are slowing down activity due to low commodity prices have you seen that film.

Speaker Change: One of the drivers in Alan's comments, just so terrorists guidance a little bit more on the lower number just looking at the macro environment.

Allan MacDonald: And then switching to the propane, and this is a bit, maybe a higher level question, but with some of the tariff disruption and impacts on US exports of propane, does that change the dynamics such that your regional competitors maybe have better access and better supply to propane going forward? And then maybe some of your procurement advantages are diminished? Or is there anything to make of, I guess, the market fundamentals for propane today and potential for more supply domestically? Well, um... I appreciate you asking that question because in a word, no, no one has. the I don't know, maybe not no one, but...

Speaker Change: Filter through to the operations of <unk> scanners.

Greer: That's the driver there.

Speaker Change: I think that imports are still on the come.

Greer: Yes.

Greer: And just to confirm does not I'll call it.

Speaker Change: Hey, Rob Thanks for joining us I'll start and then let.

Speaker Change: I had some questions for him.

Greer: Greer jump in.

Greer: He's not on the call.

Greer: Not materially yet, but we're worried about it.

So just a bigger picture then what opportunities do you see for <unk> to work with us our former employer.

Greer: There's all kinds of speculation about what may or may not happen.

Greer: The oil and gas businesses, obviously cyclical and exploration.

Greer: Any.

Greer: Current arrangement that defense.

Greer: Trust to both companies.

Greer: Exploration activities or.

Greer: Well I think generally speaking.

Greer: Our recovery activities will invariably track with it.

Greer:

Greer: The rapid growth within <unk> tariffs when youre looking at Rfps, and you're 100 trailers oversubscribed, you tend to be very opportunistic.

But to date, we're not seeing a material material slowdown.

Greer: I completely agree I mean, this would be the.

Allan MacDonald: Certainly no regional competitors have the capability that we have in terms of sourcing and transporting propane at the wholesale level. We're very very proud of our wholesaling capabilities and I think they're one of the things that make us stand apart. I always think of it like this. Grier may or may not agree with me, but generally speaking, we sell U.S. sourced propane to our American customers and Canadian sourced propane to our Canadian customers. and the cross-border opportunities invariably exist, the cross-border requirements would be in the very, very low single-digit percent of our supply, and there are options for us to be able to avoid that.

Greer: One of the drivers in Alan's comments, just that the terrorists guidance a little bit more on the lower number just looking at the macro environment.

Greer: And one of the things deals bringing to the table is.

Greer: Really understanding and underscoring the value of having strategic relationships with bigger partners in.

Greer: That's the driver there.

Yep.

And just to confirm does not I'll call it.

Greer: The oil and gas space are generally in any vertical.

Speaker Change: I had some questions for him.

Greer: And that Hasnt been an area of focus for Soliris in a meaningful way understandably so.

Greer: He is not on the call.

Greer: So just a bigger picture then what opportunities do you see for <unk> to work with US our former employer is there any.

Greer: It is.

Greer: Review with us over the last couple of days, that's something that he is highlighted as an opportunity for us. So I can't speak specifically to any individual company, but what youre right on the money. What we've identified is we've got a.

Greer: Room for an arrangement that defense.

Greer: The interest of both companies.

Greer: Well I think generally speaking.

Greer: The rapid growth within the <unk> tariffs.

Greer: Really explore opportunities to have much more strategic relationships with the bigger providers historically those relationships left money on the table because there was more money to be made by being opportunistic, but the world's changed and were changing with it.

Grier Colter: So generally speaking, I think, you know, It's fair to say that we're better positioned because of the flexibility we have with our supply and the strength of our wholesale business I think is going to be something we're really grateful we have. Yeah, maybe I just thought a lot of it would be reiterating what Allan said, but certainly the retail side of the business is very domestic, there's no doubt about that. The wholesale side, there is, it is more complicated, and there would be potentially more exposure. What we're seeing, these markets are relatively liquid, right? So, you know, we have the ability to buy in different places, contracts, are set generally annually and they happen in the spring so our wholesale group renegotiated all the contracts this year with the knowledge of these tariff discussions and that's been incorporated and so what we're seeing is that Any tariff impact would be absorbed by the supplier, not by us, and so what we're seeing so far is that the impact overall to our business, whether wholesale or retail, is minimal to none.

Greer: When youre looking at Rfps, and you're 100 trailers oversubscribed, you tend to be very opportunistic.

Greer: And one of the things deals bringing to the table is.

Okay. That's helpful. So we'll look forward to that.

Greer: Really understanding and underscoring the value of having strategic relationships with bigger partners in the oil and gas space or generally in any vertical and that hasnt been an area of focus for some tariffs in a meaningful way understandably. So.

Greer: Evolving over time.

Greer: Okay. Thanks.

Greer: Thanks, Rob good to talk to you.

Thank you. Our next question comes from Stephen Hanson with Raymond James Your line is open.

Greer: It is.

Stephen Hanson: Yes, good morning, guys. Thanks for the time.

Greer: The review with us over the last couple of days, that's something that he is highlighted as an opportunity for us. So I can't speak specifically to any individual company, but what youre right on the money. What we've identified is we've got a.

At the risk of being a little too far in the weeds here is it possible to speak to the impact variance across these 20 different pilots and delivered program just trying to get a sense of what are the top five projects represent 75% of the savings or just how or whether perhaps more equally distributed that you've highlighted the route optimization a couple of times I assume that's a key.

Greer: Really explore opportunities to have much more strategic relationships with the bigger providers historically those relationships left money on the table because there was more money to be made by being opportunistic, but the world has changed and we're changing with it.

Stephen Hanson: But just as a broad context, how broadly.

Stephen Hanson: It's the savings programs.

Speaker Change: Yes, that's a good question.

Greer: Okay. That's helpful. So we'll look forward to that.

Stephen Hanson: I will have some comments too, but let me say.

Greer: Moving over time.

Rob: Thanks, Rob good to talk to you.

Stephen Hanson: Yes, the bigger there is some big initiatives that have a bigger contribution in 2025.

Speaker Change: Thank you. Our next question comes from Stephen Hanson with Raymond James Your line is open.

Grier Colter: Okay, and no, I'm thinking more in terms of just propane exports out of the US, maybe staying domestically and then being in an oversupply position for propane domestically. But but it doesn't sound like that'll be much of an issue. like it for sure it will it would impact markets generally right but we're You know, for the most part, buying at spot, selling at spot, and adding margin to make money on the distribution component of it, but yeah, if there's disconnect from a country standpoint, it's, you know, that disconnect is not coming through RP&L. And we're not forecasting.

Stephen Hanson: But a lot of these.

Stephen Hanson: I liken it to it's really complex to build a car, but you can't drive it with other key.

Stephen Hanson: Yes, good morning, guys. Thanks for the time.

Speaker Change: You see it.

Speaker Change: At the risk of being a little too far in the weeds here is it possible to speak to the impact of variance across these 20 different pilots in a delivered program trying to send.

Stephen Hanson: So there are some initiatives that aren't very big but they enable the bigger ones to be successful. So it really that's one.

Stephen Hanson: The risk of repeating myself I always say, it's a true transformation and if this is an ecosystem and it all has to work together that being said.

Speaker Change: What are the top five projects represent 75% of the savings.

Speaker Change: Or just how or whether perhaps some more equally distributed that you've highlighted the route optimization a couple of times I assume that's a key one but due to the broad context, how broadly.

Stephen Hanson: Route optimization, which is an amalgam of a number of initiatives things like reducing zero fills having more efficient routes managing.

Speaker Change: Split as the savings programs.

Stephen Hanson: Work scheduling things as simple as.

Speaker Change: Yes, that's a good question.

Speaker Change: I will have some comments too, but let me say.

Daryl Young: Supply Challenge, based on Plant X. Got it. All right. Thanks very much, guys. Thanks, Daryl. Thank you.

We traditionally when we get an alert that a customer needs a delivery we plan that three days out. So you could have an alert make a delivery and then on.

Yes, the bigger there is some big initiatives that have a bigger contribution in 2025.

Speaker Change: But a lot of these.

Robert Catellier: Our next question comes from Robert Catellier with CIBC Capital Markets. Your line is open. Hey, good morning, everyone. I just wanted to follow up a little bit on Sotoris. I'm wondering if you could speak more directly on the impact of commodity prices, particularly oil. Have you seen that filter through to the operations of Sitoris yet or is it… You think that influence is still on the comp?

Stephen Hanson: On the fourth day get an alert from some from a customer on the same street make another delivery, we've now expanded that out.

Speaker Change: I liken it to it's really complex to build a car, but you can't drive it with other key.

Speaker Change: So there are some initiatives that arent very big but they enable the bigger ones to be successful. So it really that's why.

2014 days, how do we make sure that the customers don't run out of fuel well. We've also got predictive models that look at historical consumption. So we'd be able to predict what their consumption rate is in relation to the weather to see if we what kind of a time window. We have so if it's critical and they're going to run out two or three days, we obviously are scheduled for delivery but.

Speaker Change: The risk of repeating myself I always say, it's a true transformation and this is an ecosystem and it all has to work together that being said.

Speaker Change: Route optimization, which is an amalgam of a number of initiatives things like reducing zero pills, having more efficient routes managing.

Stephen Hanson: If we see that they have 30 days of fuel remaining we can schedule it.

Speaker Change: Work scheduling things as simple as.

In tandem with other deliveries and on the same route so.

Speaker Change: We traditionally when we get an alert that a customer needs a delivery we plan that three days out. So you could have an alert make a delivery and then on.

Stephen Hanson: Route optimization like I say it is more than one initiative, it's kind of an amalgam thats a big one.

Allan MacDonald: Hey, Rob. Thanks for joining us. I'll start and let Grier jump in. Not materially yet, but we're worried about it. You know, there's all kinds of speculation about what may or may not happen. The oil and gas business is obviously cyclical, and exploitation activity.

Stephen Hanson: And then we've got some.

Stephen Hanson: Some pricing.

Stephen Hanson: Tools that we've been using in the past that we're augmenting that are also going to make a big contribution.

Speaker Change: On the fourth day get an alert from some of the customer on the same street make another delivery, we've now expanded that out.

Stephen Hanson: I'd say so the pricing.

Speaker Change: 2014 days.

Stephen Hanson: Yeah.

Speaker Change: How do we make sure that the customers don't run out of fuel well. We've also got predictive models that look at historical consumption. So we'd be able to predict what the consumption rate is in relation to the weather to see if we what kind of a time window. We have so if it's critical and they're going to run out two or three days. We obviously are scheduled for delivery, but if we see that they have 30 days of fuel remain.

Stephen Hanson: You'll have to forgive me I don't want get too deep into that one for competitive reasons.

Grier Colter: Our recovery activities will invariably track with it, but to date, we're not seeing a material Yeah, I completely agree. I mean, that's, this would be the, one of the, you know, drivers in Allan's comments, just that the Soterios guidance a little bit more on the lower end, we're just looking at the macro environment. And that's a, that's a driver. Yeah, understandable.

Stephen Hanson: But one of our pricing programs and route optimization will be the lion's share of the contribution we get this year, but I got to underscore we couldnt do those two things with the other <unk> initiatives on my list.

Stephen Hanson: I understood that's a good color.

Speaker Change: Just shifting back to tariffs for a moment can you just perhaps describe some of the.

Speaker Change: We can schedule it.

Speaker Change: In tandem with other deliveries.

Speaker Change: On the same route so.

Speaker Change: The more recent efforts to expand beyond the wellhead again, and maybe where you were at at that understand this leadership teams there for redefining some of these programs, but how.

Robert Catellier: Just to confirm, Dale's not on the call, is he? Because I would have had some questions for him. He's not on the call.

Speaker Change: Route optimization like I say it is more than one initiative, it's kind of an amalgam thats a big one.

Speaker Change: And then we've got some.

Speaker Change: Some pricing.

Speaker Change: How far advanced are you in terms of branching out beyond.

Allan MacDonald: Alright, so just a bigger picture then, what opportunities do you see for Sitaris to work with his former employer? Is there any room for an arrangement that advances the interest of both companies? Well, I think generally speaking, The rapid growth within Soterra. When you're looking at RFPs and you're a hundred trailers oversubscribed, you tend to be very optimistic. And one of the things Dale's bringing to the table is... really understanding and underscoring the value of having strategic relationships with bigger partners in the oil and gas space, or generally in any... And that hasn't been an area of focus for Soteris in a meaningful way, understandably.

Speaker Change: Of tools that we've been using in the past that we're augmenting that are also going to make a big contribution so that I'd say so the pricing.

Speaker Change: At the wellhead today in terms of trying to like level load some of the Msos we've got in place. Thanks.

Speaker Change: Yes, we have.

Speaker Change: Done a pretty decent job over the course of the last couple of years of being.

Speaker Change: You'll have to forgive me I don't want get too deep into that one for competitive reasons, but one of our pricing programs and route optimization will be the lion's share of the contribution we get this year, but I got to underscore we couldnt do those two things with the other 18 initiatives.

Growing beyond the well site is not a new.

Speaker Change: For <unk> I would say that it's one that's.

Speaker Change: Excuse me struggle to compete with the demand in the in the oil space and you always have that debt.

Speaker Change: Understood.

Speaker Change: Good color and just shifting back to tariffs for a moment can you just perhaps describe some of the more recent efforts to expand beyond the wellhead again, and maybe where you're at at that understand this leadership change there for redefining some of these programs, but you know how far advanced are you in terms of branching out beyond.

Natural tension, where theres just so much business in the oil space and you know it makes such a big contributions very dense.

Speaker Change: Geographically central so it's hard to walk away from.

Speaker Change: Versus Greenfield expansion, which are variably requires investment and some uncertainty having said that we are.

Allan MacDonald: So, you know, in his review with us over the last couple of days, that's something that he's highlighted as an opportunity for us. So I can't speak specifically to any individual company, but what, you're right on the money. What we've identified is we've got to really explore opportunities to have much more strategic relationships with the bigger providers. Historically, those relationships left money on the table because there was more money to be made by being opportunistic. But the world's changed, and we're changing.

Speaker Change: At the wellhead today in terms of trying to like level load some of the M. A c's you've got in place.

We're doing yeoman's work right now and it's something deals really got a careful eye on in terms of.

Speaker Change: Yes.

Speaker Change: We've got four new hubs, we're looking at.

Speaker Change: We've done a pretty decent job over the course of the last couple of years of being.

Speaker Change: Over the next year I would say if I had to handicap. It today, we will probably open at least two of those in the next 12 months.

Speaker Change: Growing beyond the well site is not a new.

Speaker Change: First the tariffs I would say that it's one that's.

Speaker Change: He is continuing to look at the segments that we outlined in the.

Speaker Change: Excuse me struggle to compete with the demand in the in the oil space and you always have that debt.

Speaker Change: In the Investor.

Speaker Change: Investor day around.

Speaker Change: Supporting utility support and.

Speaker Change: Natural tension, where there's just so much business in the oil space and you know it makes such a big contribution to very dense very you know geographically central so it's hard to walk away from.

Robert Catellier: Okay, that's helpful. So we'll look forward to that evolving over time.

Speaker Change: And sort of pipeline.

Speaker Change: Pipeline support I think those are the two biggest initiatives will have and then we've seen some opportunities in a couple of metropolitan areas and this goes to the earlier question about strategic partnerships. We have won.

Unknown Executive: That's it for me. Thank you. Thanks Rob, good to talk to you.

Steven Hansen: Thank you. Our next question comes from Steven Hansen with Raymond James. Your line is open. Yeah, good morning, guys. Thanks for the time.

Speaker Change: Versus you know greenfield expansion, which invariably requires investment and some uncertainty having said that we are.

Speaker Change: That's a bit of a strategic partnership with a pipeline company to help them with their support and co.

Speaker Change: We're doing yeoman's work right now and it's something deals really got a careful eye on in terms of.

Speaker Change: Collaboratively put a hub in place so.

Steven Hansen: At the risk of being a little too far in the weeds here, is it possible to speak to the impact variance across these 20 different pilots in the delivered program? Trying to sense where the top five projects represent 75% of the savings, or just how or whether perhaps more equally distributed, you've highlighted the road optimization a couple times, I assume that's a key one. But just as a broad context, how broadly split is the savings program? Yeah, that's a good question. Um, Grier will have some comments too, but let me say... Yes, there's some big initiatives that have a bigger contribution in 2020.

Speaker Change: The efforts are well underway and.

Speaker Change: We've got four new hubs, we're looking at.

Speaker Change: They will bear fruit over the next year I think right now our focus is continuing to keep our sales funnel.

Speaker Change: Over the next year I'd say, if I had to handicap. It today, we'll probably open at least two of those in the next 12 months.

Speaker Change: In the oil patch and outside and then getting our costs too.

Speaker Change: And he.

Speaker Change: He is continuing to look at the segments that we outlined in the in.

Speaker Change: To a place where we can be as profitable as we once were at lower market prices at least in the short term.

Speaker Change: In the Investor.

Speaker Change: Investor day around.

Speaker Change: Supporting utility support and <unk>.

Speaker Change: That's helpful. Thanks, guys I appreciate it.

Speaker Change: And sort of.

Speaker Change: Pipeline support I think those are the two biggest initiatives will have and then we've seen some opportunities in a couple of metropolitan areas.

Rob: Thanks, Rob.

Speaker Change: Thank you. Our next question comes from Ben Isaacson with Scotiabank. Your line is open good morning, Ben.

Speaker Change: This goes to the earlier question about strategic partnerships, we have won.

Speaker Change: Thank you very much for taking my questions just two quick ones.

Allan MacDonald: But a lot of these, you know, I liken it to, it's really complex to build a car, but you can't drive it without the key. So there are some initiatives that aren't very big, but they enable the bigger ones to be. So it really, that's when I, the risk of repeating myself, I always say it's a true transformation and this is an ecosystem and it all has. That being said, route optimization, which is an amalgam of a number of initiatives, it's things like reducing zero-fills, having more efficient routes. work scheduling, things as simple as we traditionally, when we get an alert that a customer needs a delivery, we plan that three days out.

Speaker Change: That's a bit of a strategic partnership with a pipeline coming.

Speaker Change: To help them with their support.

Speaker Change: First one is on propane at the Investor Day, and I think in previous quarterly conference calls Alan you had mentioned moving a little bit towards a fixed price model.

Speaker Change: Collaboratively put a hub in place so.

Speaker Change: The efforts are well underway.

Speaker Change: And.

Speaker Change: They will bear fruit over the next year I think right now our focus is continuing to keep our sales funnel.

Just to try and kind of maximize the margin as volumes had been trending a little bit lower my question is can you talk about how is that progressing what is the uptake in what is the plan and kind of what's the goal in terms of the fixed pricing model is the goal to have a quarter or half of customers on that and why.

Speaker Change: Both in the oil patch and outside and then getting our costs too.

Speaker Change: To a place where we can be as profitable as we once were at lower market prices at least in the short term.

Speaker Change: That's helpful. Thanks, guys appreciate it.

Speaker Change: Thanks, Rob.

Speaker Change: Type of margin differential should we expect thank you.

Ben Isaacson: Thank you. Our next question comes from Ben Isaacson with Scotiabank. Your line is open good.

Speaker Change: Yeah, that's great.

Allan MacDonald: So you could have an alert, make a delivery, and then on the fourth day, get an alert from a customer on the same street, make another delivery. Well, we've now expanded that out to 14 days. How do we make sure that the customers don't run out of fuel? Well, we've also got predictive models that look at historical consumption. So we'd be able to predict what their consumption rate is in relation to the weather to see if we, you know, what kind of a time window we have. So if it's critical and they're going to run out two or three days, we obviously schedule the delivery.

Speaker Change: And I'm going to.

Speaker Change: To answer your question as best I can without tilt.

Rob: Morning, Ben.

Thank you very much for taking my questions. Just two quick ones. The first one is on propane.

Speaker Change: Tipping my cards to all our competitors.

Speaker Change: Yes.

Speaker Change: I love the fixed price model.

Speaker Change: Investor Day, and I think in previous quarterly conference calls Alan you had mentioned moving a little bit towards a fixed price model.

Speaker Change: It's good for the customers it's good for superior.

Speaker Change: Our good customers, they've got better lifetime value because they stay longer they have lower churn and frankly.

Speaker Change: Just to try and kind of maximize the margin as volumes had been trending a little bit lower my question is can you talk about how is that progressing what is the uptake and what is the plan and kind of what's the goal in terms of the fixed pricing model is the goal to have a quarter or half of customers on that and why.

Speaker Change: It's been a strategy that's not always been broadly adopted by the industry because it doesn't give you margin management flexibility.

Allan MacDonald: But if we see that they have 30 days of fuel remaining, we can schedule it in tandem with other deliveries in the same route. So route optimization, like I say, is more than one initiative. It's kind of an amalgam. That's a big one. And then we've got some some pricing tools that we've been using in the past that we're augmenting that that are also going to make a big. So that, I'd say, so the pricing, which I, you'll have to forgive me, I don't want to get too deep into that one for competitive reasons, but one of our pricing programs in route optimization will be the lion's share of the contribution we get this year.

Speaker Change: When you have some adverse.

Speaker Change: Pressures on the business said differently, you can't raise prices on a fixed price customer middle of the year, which I love because it gives us great discipline.

Speaker Change: Type of margin differential should be expected. Thank you.

Speaker Change: For all the reasons I just described we're expanding that program I mentioned, the two big initiatives too.

Speaker Change: Yeah, that's great.

Speaker Change: And I'm going to.

Speaker Change: To answer your question as best I can without tilt.

Speaker Change: Two.

Speaker Change: Tipping my cards to all of our competitors.

Speaker Change: To an earlier question.

Speaker Change: Route optimization and pricing fixed pricing is one of those two big big.

Speaker Change: I love the fixed price model.

Speaker Change: Big initiatives.

Speaker Change: It's good for the customers it's good for superior.

Speaker Change: <unk>.

Speaker Change: <unk> it to get it more in line with competitive pricing in the market.

Speaker Change: Good customers, they've got a better lifetime value because they stay longer they have lower churn and frankly.

Speaker Change: And we'll be looking to once we reestablish this program.

Speaker Change: It's been a strategy that's not always been broadly adopted by the industry because it doesn't give you margin management flexibility.

Allan MacDonald: But I've got to underscore, we couldn't do those two things without the other eight. Understood, that's a good color.

Speaker Change: We are in the process of doing as we speak literally the renewals are going out in the tens of thousands.

Speaker Change: We're going to be aggressively trying to expand this program and make it attractive for our customers. We think is a competitive differentiator theres not a lot of small companies that have the ability to.

Allan MacDonald: And just shifting back to Sotaras for a moment, can you just perhaps describe some of the more recent efforts to expand Beyond the Wellhead again, and maybe where you're at at that? I understand there's leadership change there, and you're sort of re-devising some of these programs, but you know, how far advanced are you in terms of branching out beyond the Wellhead today in terms of trying to like level load some of the MSUs you've got in place? Thanks. Yeah, well, we've done a pretty decent job over the course of the last couple of years of being, you know, growing beyond the well site's not a new idea for Soterra's.

Speaker Change: When you have some adverse.

Speaker Change: Pressures on the business said differently, you can't raise prices on a fixed price customer middle of the year, which I love because it gives us great discipline.

Speaker Change: Buy forward contracts and the volumes that we're talking about.

Speaker Change: For all the reasons I just described we're expanding that program I mentioned, the two big initiatives too.

Speaker Change: So we're happy to provide this to our customers. We think it's good for them and we think it's good for us and it secures the long term relationships. So I can't give you exact numbers I'd love to believe me.

Speaker Change: <unk>.

Speaker Change: To an earlier question.

Speaker Change: Route optimization and pricing fixed pricing is one of those two big.

Speaker Change: We like the program, we're going to continue to drive it.

Speaker Change: Big initiatives.

Speaker Change: Sure.

Speaker Change: <unk> it to get it more in line with competitive pricing in the market.

Speaker Change: I mean youre close to two would you add anything to that.

Speaker Change: Perfect.

Speaker Change: Great. Thank you and then just maybe Greer a follow up question for you.

Speaker Change: And we'll be looking to once we reestablish this program.

Allan MacDonald: I would say that it's one that's Excuse me, struggle to compete with the demand in the oil space, and you always have that uh... natural tension where there's just so much business in the oil space and you know it makes such a big contribution. It's very dense, it's very, you know, geographically central so it's hard to walk away from it. versus, you know, greenfield expansion, which invariably requires investment and Having said that, we're doing Yeoman's work right now and it's something Dale's really got a careful eye on in terms of we've got four new hubs we're looking at over the next year.

Speaker Change: We're in the process of doing right as we speak literally the renewals are going out in the tens of thousands.

Speaker Change: Operating costs were $7 3 million.

Speaker Change: A little bit of a bump from a year ago could you just talk about the reasons for that bump and what should we expect out of that line item on a run rate basis. Thank you.

Speaker Change: We're going to be aggressively trying to expand this program and make it attractive for our customers. We think is a competitive differentiator theres not a lot of small companies that have the ability to.

Speaker Change: Yes.

Speaker Change: I think we maybe gave a rough full year number for that.

Speaker Change: Buy forward contracts to the volumes that we're talking about.

Speaker Change: These were a little bit higher than they would be on a normal kind of run rate basis part of this was the cost to be with.

Speaker Change: So we're happy to provide this to our customers. We think it's good for them and we think it's good for us and it secures the long term relationships. So I can't give you exact numbers I'd love to believe me [laughter].

Speaker Change: Investor Day, which.

Speaker Change: Anticipated that they would be in this quarter they came in a little bit higher than.

Speaker Change: But we like the program, we're going to continue to drive it.

Speaker Change: What we had expected so that's that's really the key driver and they should go back to a more.

Speaker Change: Close to Steve would you add anything to that.

Allan MacDonald: I'd say if I had to handicap it today, we'll probably open at least two of those in the next 12 months. And he's continuing to look at the segments that we outlined in the investor day around supporting utility support and pipeline support. I think those are the two biggest initiatives we'll have. And then we've seen some opportunities in a couple of metropolitan areas. And this goes to the earlier question about strategic partnerships. We have one that's a bit of a strategic partnership with a pipeline company to help them with their support. collaboratively put a hub in place.

Speaker Change: Perfect.

Speaker Change: Great. Thank you and then just maybe Greer a follow up question for you.

Speaker Change: Normalized level.

Consistent with kind of.

Speaker Change: Previous years, but.

Speaker Change: Operating costs were $7 3 million.

Speaker Change: But yes, it's higher it should it should go back down to more normalized level as we.

A little bit of a bump from a year ago could you just talk about the reasons for that bump and what should we expect out of that line item on a run rate basis. Thank you.

Sad when we produced our guidance that our expectation that it would be kind of $25 million. So if you.

Speaker Change: If you look at $25 million divided by four you can see we were definitely higher this quarter.

Speaker Change: Yes.

I think we maybe gave a rough a full year number for that.

Speaker Change: I would expect it to be as I say it primarily that's the cost of the Investor day.

Speaker Change: That makes sense. Okay. Thanks, so much that's it for me thanks.

Speaker Change: These were a little bit higher than they would be on a normal kind of run rate basis part of this was the cost to do with our Investor day, which.

Speaker Change: Thanks Ben.

Speaker Change: Thank you I'm showing no further questions at this time I would now like to turn it back to Alan Macdonald, President and CEO for closing remarks.

Anticipated that they would be in this quarter. They came in a little bit higher than what we had expected. So that's that's really the key driver.

Allan MacDonald: So the efforts are well underway, and they'll bear fruit over the next year.

Alan Macdonald: Well, thanks, Daniel and thank all of you for joining the call today.

Allan MacDonald: I think right now, our focus is continuing to keep our sales funnel full, both in the oil patch and outside, and then getting our costs to a place where we can be as profitable as we once were at lower market prices. Let's help them. Thanks guys, appreciate it. Thanks, Rob. Oh, Steve, sorry. Thank you.

Speaker Change: They should go back to a more.

Speaker Change: We're just so pleased that we're able to share some encouraging.

Speaker Change: Normalized level.

Speaker Change: Consistent with kind of.

Speaker Change: Previous years, but.

Alan Macdonald: <unk> coming out of Q1.

Speaker Change: But yes, so it's higher it should it should go back down to more normalized level as we.

Alan Macdonald: I couldnt be happier with the progress, we're making with superior delivers and as I said in my prepared remarks like I feel like this is evidence of a lot of hard work that we've been doing that was really hard to describe and quantify to all of you as we're coming through November and December and January.

Speaker Change: Sad when we produced our guidance that our expectation that it would be kind of $25 million. So if you.

Speaker Change: If you look at $25 million divided by four you can see we were definitely higher this quarter.

Benjamin Isaacson: Our next question comes from Ben Isaacson with Scotiabank. Your line is open. Morning, Ben. Morning. Thank you very much for taking my questions. Just two quick ones. The first one is on propane. At the Investor Day and I think in previous quarterly conference calls, Allan, you had mentioned moving a little bit towards a fixed price model, just to try and kind of maximize the margin as volumes had been trending a little bit lower. My question is, can you talk about how is that progressing? What is the uptake and what is the plan and kind of what's the goal in terms of the fixed pricing model?

Speaker Change: I would expect it to be understated, primarily that's the cost of the Investor day.

Alan Macdonald: But in totality there.

Alan Macdonald: Starting to make an impact on the business and you know.

Speaker Change: That makes sense. Okay. Thanks, so much that's it for me thanks.

Ben Isaacson: Thanks Ben.

Alan Macdonald: More than anything I want to thank you all for your patience and your continued support because.

Speaker Change: Thank you I'm showing no further questions at this time I would now like to turn it back to Alan Macdonald, President and CEO for closing remarks.

Alan Macdonald: We said this was going to be a journey, but we also said.

Alan Macdonald: Transforming superior was a job that was going to take us being deliberate and determined and building a foundation that will set the company up to be successful for generations to come and if you look at the progress we've made on share buybacks on the capital structure on superior delivers and.

Alan Macdonald: Well, thanks, Daniel and thank all of you for joining the call today.

Alan Macdonald: We're just so pleased that we're able to share some encouraging results coming out of Q1.

Alan Macdonald: I couldnt be happier with the progress, we're making with superior delivers and I as I said in my prepared remarks like I feel like this is evidence of a lot of hard work that we've been doing that was really hard to describe and quantify to all of you as we're coming through November and December and January.

Alan Macdonald: Even when we're focusing on <unk> I'm really proud of the work. The team has done so far and I'm looking forward to even more progress through the course of 2025. So thank you all very very much and look forward to talking to you in the intervening months and again next quarter.

Allan MacDonald: Is the goal to have a quarter or half of customers on that and what type of margin differentials should we expect? Thank you. Yeah, that's great.

Alan Macdonald: But in totality.

Grier Colter: Ben, I'm gonna, I'm gonna answer your question as best I can without tilting, tipping my cards to all our competitors. The, I love the fixed price model. It's, it's good for the customers. It's good for Superior. These are good customers. They've got better lifetime value, because they stay longer, they have lower churn. And frankly, it's been a strategy that's not always been broadly adopted by the industry, because it doesn't give you margin management flexibility when you have some adverse, you know, pressures on the business. Said differently, you can't raise prices on a fixed price customer middle of the year, which I love because it gives us great discipline.

Alan Macdonald: Turning to make an impact on the business and you know more than anything I want to thank you all for your patience and your continued support because we said this was going to be a journey, but we also said.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Alan Macdonald: That transforming superior was a job that was going to take us being deliberate and determined and building a foundation.

Alan Macdonald: We will set the company up to be successful for generations to come and if you look at the progress we've made on share buybacks on the capital structure on superior delivers.

And even when we're focusing on so terrorists I'm really proud of the work. The team has done so far and I'm looking forward to even more progress through the course of 2025. So thank you all very very much and look forward to talk to you in the intervening months and again next quarter.

Allan MacDonald: For all the reasons I just described, we're expanding that program. I mentioned the two big initiatives to an earlier question, you know, route optimization and pricing. Fixed pricing is one of those two big initiatives. We're augmenting it to get it more in line with competitive pricing in the market. and uh... we'll be looking to uh... once we've reestablished this program uh... which we're in the process of doing right as we speak literally the renewals are going out in the tens of thousands We're going to be aggressively trying to expand this program and make it attractive for our customers.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Alan Macdonald: Yeah.

Alan Macdonald: Okay.

Alan Macdonald: [music].

Alan Macdonald: Okay.

Alan Macdonald: [music].

Allan MacDonald: We think it's a competitive differentiator. There's not a lot of small companies that have the ability to buy forward contracts in the volumes that we're talking about. So we're happy to provide this to our customers. We think it's good for them, and we think it's good for us, and it secures a long-term relationship.

Alan Macdonald: Yes.

Alan Macdonald: Mhm.

Allan MacDonald: So I can't give you exact numbers. I'd love to, believe me. But we like the program. We're going to continue to drive it.

Alan Macdonald: [music].

Alan Macdonald: Uh huh.

Alan Macdonald: [music].

Grier Colter: Grier, I mean, you're closest to. Would you add anything to that?

Alan Macdonald: Okay.

Unknown Executive: Perfect. Great, thank you.

Alan Macdonald: [music].

Grier Colter: And then just maybe Grier, a follow up question for you. Corporate operating costs were $7.3 million, a little bit of a bump from a year ago. Can you just talk about the reasons for that bump? And what should we expect out of that line item on a run rate basis? Thank Yeah, I think we maybe gave a rough full year number for that. These were a little bit higher than they would be on a normal kind of run rate basis. Part of this was the cost to do with Investor Day, which, you know, we anticipated that they would be in this quarter.

Alan Macdonald: Okay.

Grier Colter: They came in a little bit higher than what we had expected, so that's really the key driver then. And they should go back to a more normalized level, consistent with kind of what we're said when we produced our guidance that our expectation that it would be kind of 25 million, so if you look at 25 million divided by 4, you can see we were definitely higher this quarter than last year. That makes sense.

Grier Colter: Okay, thanks so much.

Grier Colter: That's it for me. Thanks, Ben. Thank you.

Unknown Executive: I'm showing no further questions at this time.

Allan MacDonald: I would now like to turn it back to Allan MacDonald, President and CEO, for closing remarks. Well, thanks, Daniel. And thank all of you for joining the call today. We're just so pleased that we're able to share some encouraging results coming out of Q1. You know, I couldn't be happier with the progress we're making with Superior Delivers. And as I said in my prepared remarks, I feel like this is evidence of a lot of hard work that we've been doing that was really hard to describe and quantify to all of you as we're coming through November and December and January.

Alan Macdonald: [music].

Allan MacDonald: But in totality, they're starting to make an impact on the business.

Allan MacDonald: And, you know, more than anything, I want to thank you all for your patience and your continued support because we said this was going to be a journey, but we also said that transforming Superior was a job that was going to take us being deliberate and determined and building a foundation that will set the company up to be successful for generations to come. And if you look at the progress we've made on share buybacks, on the capital structure, on Superior Delivers, and, you know, even when we're focusing on Soteris, I'm really proud of the work the team's done so far.

Allan MacDonald: I'm looking forward to even more progress through the course of 2025. So thank you all very, very much. I look forward to talk to you in the intervening months and again next quarter.

Unknown Executive: This concludes today's conference call. Thank you for participating. You may now disconnect.

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Speaker Change: Good day, and thank you for standing by and welcome to the Superior plus 2025 first quarter results conference call.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session you will need to press star one on your telephone you will then hear an automated message advising your hand is raised.

Speaker Change: To withdraw your question. Please press star one one again.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference of your speaker today.

Speaker Change: This can help.

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

Speaker Change: Thank you.

Speaker Change: Good morning, everyone and welcome to Superior Pluses conference call and webcast to review, our 2025 first quarter results on.

Speaker Change: On the call today, we have Allen Macdonald, President and CEO, and Greer culture, Executive Vice President and Chief Financial Officer for this morning's call. Alan agree will begin with their prepared remarks, and then we'll open the call for questions.

Listeners are reminded that some of the comments made today may be forward looking in nature and information provided me.

Speaker Change: Refer to non-GAAP measures. Please refer to our continuous disclosure documents available on SEDAR, plus and our web site. The dollar amounts discussed on today's call are expressed in U S dollars unless otherwise noted finally for those of you who weren't able to participate in our Investor day last month, we encourage you to review the related materials available on our website for more detail.

Speaker Change: On our long term plans and multi year financial outlook.

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

Speaker Change: Everybody and welcome to our Q1 call.

Speaker Change: I'm very pleased to speak with you today to share details around our first quarter results in both propane and CMG. It was an excellent start to 2025 at superior plus.

Speaker Change: Beginning with propane.

Speaker Change: Our teams performed well in the quarter focusing on serving our customers amid a relatively cold winter.

Speaker Change: Despite encountering some winter storm conditions that complicated our deliveries in some regions, we manage the situation very effectively.

Speaker Change: Now while colder weather is indeed, a welcome change the financial performance seen in Q1 is about more than just weather.

Speaker Change: We delivered 24 million more gallons in Q1 compared to last year with fewer trucks and more efficient routes.

Speaker Change: We aggressively managed our costs, despite inflationary pressures and maintained our pricing discipline to ensure we keep customers for life the.

Speaker Change: The changes we've made within superior undoubtedly contributed to the strength of the results in the quarter and more than anything offered a proof point of the value of preserving and growing our customer base over the long term.

Speaker Change: Additionally, while it's still early in the process, we're making good progress with superior delivers which contributed approximately $2 3 million of EBITDA in the quarter in line with our plans.

Speaker Change: The value largely came from our customer growth initiatives, we're focused on offering our customers competitive pricing backed by exceptional service.

Speaker Change: During the next few quarters, we're executing more than 20 pilot programs and phased out rollouts across a variety of initiatives.

Speaker Change: And our cost to serve work stream for example, we're in the process of implementing a new company wide routing and scheduling capability that will see every route for every driver optimized to make us more efficient and help us serve our customers even more reliably these.

Speaker Change: These improvements are key to enabling our customer growth initiatives and when married together, we will see we will serve more customers more efficiently with less cost.

Speaker Change: Answering customer lifetime value and long term profitability and growth prospects for superior plus.

Speaker Change: As we continue to launch pilot and rollout initiatives over the coming months superior delivers remains on track to contribute $20 million to adjusted EBITDA This year and $70 million by the end of 2027.

Speaker Change: Turning now to our CMG business, we also had a strong quarter with the terrorists growing EBITDA by approximately 7%.

Speaker Change: We're pleased with our performance in the quarter and are maintaining our guidance for the full year. However, with continued pricing pressure as customers become increasingly cautious about the broader economic landscape. We expect we may finish the year towards the lower end of our 5% to 10% growth range in.

Speaker Change: In the meantime, we are advancing several continuous improvement initiatives that the tariffs that are helping to maintain strong margins and returns specifically, we're improving our driver and fleet utilization, increasing load fills and driving efficiencies within our repair and maintenance programs.

Speaker Change: Overall as I reflect on the quarter I'm extremely pleased with how our teams rose to the occasion and demonstrate our ability to drive strong profits and cash flow all while successfully executing pilots and new initiatives as part of superior delivers.

Speaker Change: The first quarter felt like a turning point after two years of hard work are.

Speaker Change: Our first proof point, if you will that we are becoming the company. We all know we can be.

Speaker Change: We can deliver strong results, while simultaneously expanding our capabilities and building for our future.

Speaker Change: I'd like to thank our thousands of employees for their diligent work to support our customers across North America through a very busy winter season.

Speaker Change: Our teams are what make this company a success they are committed to serving our customers when they need us most keeping their homes warm and their businesses operating safely and reliably.

Speaker Change: We are incredibly confident in our ability to generate strong returns with the right plan and the right people in place to execute it so with that let's turn things over to Greer to walk through the Q1 results in detail.

Greer Culture: Thanks, Alan and good morning.

Speaker Change: It was an excellent first quarter for the business across the entire portfolio and we are well positioned for 2025.

Speaker Change: First quarter adjusted EBITDA of $260 5 million increased 10, 5% compared to the first quarter last year, which was driven by strong results in both propane and compressed natural gas.

Speaker Change: <unk> per share of <unk> 89 increased 19%.

Speaker Change: Adjusted net earnings per share of <unk> 66 increased by 32% and free cash flow per share of <unk> 94.

Speaker Change: Increased by 54%.

Speaker Change: All driven by strong operating results and a share count that is roughly 5% lower quarter over quarter as a result of our share repurchases.

Speaker Change: Free cash flow also benefited from lower Capex.

Speaker Change: Turning now to the businesses.

Speaker Change: And before going through the segmented results I want to highlight a change we made to our reporting in the quarter.

Speaker Change: Beginning in Q1, we have rolled the contribution from our wholesale business activities into the U S and Canadian propane segments.

Speaker Change: Our wholesale operation becomes integrated with our propane distribution operations.

Speaker Change: Time has come to merge the reporting to better reflect how we operate and how we think about the businesses.

Speaker Change: Within our MD&A.

Speaker Change: We've included a breakdown of our previously disclosed wholesale business between U S and Canada for all of 2024 to facilitate comparability.

Speaker Change: Over historical periods.

Speaker Change: Yeah.

Speaker Change: U S propane had a good quarter and generated adjusted EBITDA of $163 6 million up 14% from last year.

Speaker Change: The growth was driven by higher volumes as well as the initial contribution from superior delivers.

Speaker Change: The growth in the quarter aligned with weather in the U S, which was 15% colder than the prior year and 8% colder than the five year average.

Speaker Change: Canadian propane produced adjusted EBITDA of $49 1 million, which was up 7% versus Q1 2024.

Speaker Change: Primarily due to higher volumes as well as a small contribution from superior delivers.

Speaker Change: The offset by the impact of a stronger U S dollar, which was 6% stronger than last year.

Speaker Change: Also we didnt sell any carbon credits in Q1 2025, preferring to sell later in 2025 versus a Q1 2024, where we sold approximately $3 million of these credits.

Speaker Change: Average weather across Canada was 6% colder than the prior year and 3% colder than the five year average.

Speaker Change: Looking over the next several quarters.

Speaker Change: We expect superior delivers contributions to continue ramping up as we execute on our plans.

Speaker Change: However, it's worth noting that the majority of the $20 million contribution for 2025 is expected during the fourth quarter when cold weather returns and volumes increase.

Wowing the value from our initiatives to materialize.

Speaker Change: And compressed natural gas so tariffs delivered a strong quarter generating $55 1 million and adjusted EBITDA up 7% year over year, driven by a larger MSU asset base and operating efficiencies.

Speaker Change: Partly offset by pricing pressure in the oil and gas segment.

Speaker Change: Overall, capex, which includes lease additions was slightly less than expected for the quarter at $22 million.

Speaker Change: But we still anticipate our full year capital spend to be in the $150 million range.

Speaker Change: Turning to corporate results in leverage.

Corporate operating costs were $7 3 million in the quarter up from $5 5 million a year ago.

Speaker Change: Due to higher incentive plan expenses and some one time costs associated with our recent Investor day.

Speaker Change: No we have not yet incurred any costs associated with achieving superior delivers we expect these charges to begin in the second quarter.

Speaker Change: As a reminder, as a reminder, we expect the cost to achieve the $70 million of run rate EBITDA to be in the range of $10 million to $15 million in each of 2025, and 2020 and due to the onetime nature of these costs they will be excluded from adjusted EBITDA.

Speaker Change: Our leverage at the end of Q1 was three seven times down slightly from three eight times a year ago.

Speaker Change: Due to higher adjusted EBITDA and the impact of a strong U S. Dollar on the translation of Canadian denominated debt.

Speaker Change: Partly offset by an investment in working capital during the quarter.

Speaker Change: We continue to expect we'll finish the year roughly half a turn lower or around three six times.

Speaker Change: The investment in working capital year over year was largely expected.

Speaker Change: As we shifted our capital allocation away from dividends.

Speaker Change: Which generated significant payables at our quarter ends to share repurchases, which are settled daily.

Speaker Change: As well as higher receivables associated with increased sales in the quarter and this will reverse over the next quarter as these are collected.

Speaker Change: We continued our share repurchases during the quarter totaling $6 2 million shares or approximately two 6% of the outstanding float.

Speaker Change: From the time, we began repurchasing shares in the fourth quarter of last year up until today, we have now repurchased approximately $16 5 million shares or 7% of our shares outstanding.

Speaker Change: We continue to believe that this is an excellent use of our capital.

At our current buyback pace, we expect our repurchases in 2025 to be somewhat front end loaded and it's likely we will reach the 10% threshold on our current NCI would be in early Q3.

Speaker Change: We will seek renewal of our NCI be in mid November and fully anticipate repurchasing the Canadian dollar equivalent of $135 million in shares laid out in our 2025 expectations.

Speaker Change: So in conclusion, it was a very good quarter for superior and consistent with our expectations for the business.

Speaker Change: And with that I will turn it back for Q&A.

Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Speaker Change: To withdraw your question. Please press star one one again.

Speaker Change: Please standby, while we compile the Q&A roster.

Yes.

Speaker Change: Our first question comes from Nelson <unk> with RBC capital markets. Your line is open.

Nelson: Great. Thanks, Congrats on a strong quarter and good morning, everyone.

Speaker Change: First question just relates to superior delivers.

Speaker Change: You mentioned that there are more than 20 initiatives that you're piloting our that's being rolled out.

Speaker Change: Just talk about how I guess in.

Speaker Change: In terms of the number of initiatives, how do you see that progressing in the next three or six months from now.

Nelson: Hey, Nelson good morning, Thanks for joining us.

Nelson: In terms of initiatives, how do we see them progressing well.

Nelson: Yeah.

We wanted to do this in <unk>.

Nelson: By balancing speed and effectiveness. So it's always easier to go fast if you're prepared to make big mistakes.

Nelson: And we try really hard to protect the.

Nelson: The stability of the underlying business. So you want to make sure that you're not we're not going to do anything in terms of asset or.

Nelson: Any reductions in the business, that's going to impact our ability to serve their customers and we don't want to make any pricing or customer facing changes that are going to.

Nelson: Impact churn or our ability to acquire so we always want to go carefully so the way that we progressed through it is.

Nelson: We have identified opportunities within the organization and sort of quantify those to understand the size of the prize. If you will than we designed the solution roll it out in a pilot phase to test the assumptions.

Nelson: And when we see.

Nelson: The numbers coming in as the.

Nelson: Thankfully have been that.

Nelson: They are encouraging we expand the size of the pilot.

Nelson: To test it for at scale and then from there we we roll it out across the company. So if you look at route optimization.

Nelson: Great example, we've as we've laid out in Investor day.

Nelson: You know are using new methodologies on how we're routing our trucks, we've seen that the impact that that could have.

Nelson: In design phase, we've now rolled it out to.

Nelson: Couple of areas one in Canada, one in the U S.

Nelson: Having completed those trials and affirmed our assumptions, we're now testing it at scale and then rolling it out across the company. So the change management. That's required is very very complex as you can imagine youre rolling these tools out to 1000 drivers are doing millions of deliveries a year you want to make sure that you get it right.

Nelson: And unfortunately, or Fortunately, depending on how you look at it I suppose youre going to test that into your busiest time of year. So the stakes are high so we want to make sure. We're we know what we're doing and they've been well tested that's the balance between speed and impact.

Nelson: And I would say you can you can really look at that same process across all of these initiatives. It's really about design pilot scale and then implementation. So we're going to be incredibly busy over the summer it's no.

Nelson: It's no coincidence that we're rolling it out in this way because we wanted to test as much as we can coming out of the busy season in Q1.

Nelson: And then rollout during the slower months through the summer so that we're in full production mode going into Q4, which also aligns to why Greer mentioned that the.

Nelson: The majority of the benefits, we're going to see this year in the fourth quarter.

Speaker Change: Great color Island. So just one follow up on that so obviously there are a lot of initiatives on the propane side, but there is also a lot of similarities between propane, but propane and sitars business do you see any.

Speaker Change: Initiatives, I guess crossing over to <unk> or is that out of scope and something that you all.

Speaker Change: Floor at a later date.

Speaker Change: It's funny I get to that same question at the board yesterday and.

I'll tell you what I told them.

Speaker Change: The the initiatives.

Speaker Change: I have less application because they are so specific but what I think has a lot of potential.

Speaker Change: Is we're not just executing superior delivers and then putting the playbook away. This is really a transformation in how we work.

Speaker Change: By the time. We're finished 2026, we will have over 150 leaders in the organization. There are depth at the type of transformation transformation methodology I just talked about in your previous question.

Speaker Change: And running the business using our performance management landscape. So if you take that same way of thinking and its and its across the organization not just the operators the finance team, it's the human resources team.

And.

Speaker Change: As a.

Speaker Change: <unk> looks at the efficiency within their distribution model, they're going to be applying the same.

Speaker Change: Our analytical tools that we used in the propane business and the same type of discipline and executing so I think the institutional knowledge is going to be a real asset for us their challenges and opportunities to be slightly different but the way that we're going to go out that will be exactly the same.

Got it that makes sense and then just one final question before I get back in the queue.

Speaker Change: So on answer tourists, obviously Q1's, a seasonally strong period and I think you flagged.

Speaker Change: There is obviously volatility in natural gas prices there is weakness in the oil price like how are you seeing.

Speaker Change: No Matt in margins in Q2 and Q3.

Speaker Change: Given that.

Speaker Change: I believe you will need to reallocate some some msu's.

Speaker Change: Correct.

Speaker Change: Yes.

Speaker Change: From Q1 to Q2 in terms of.

Moving them around from different sectors.

Speaker Change: Well I think.

Speaker Change: The volatility in the market generally is beyond our control. So we're focused on the things we do control.

Speaker Change: Number one is.

Speaker Change: Creating a cost structure that protects.

Speaker Change: Protects our profitability at competitive pricing, so that's been a big focus for us.

Speaker Change: When you have a company likes to terrorists that's grown so fast and so much.

Speaker Change: Theres invariably opportunities to shift your focus to be much more focused on efficiency and cost management. So that's job number one and then secondarily.

Speaker Change: Dale and his team are taking a fresh look at what business development opportunities. They have to increase the sales funnel not necessarily diverting away from a particular segment or customer base, but adding more opportunities to the funnel. So we can make sure that we continue to keep our share continue to drive those volumes up and as a more stability.

Speaker Change: <unk> is introduced to the market and as the market continues to grow we fully expect we will see some recovery in the in the pricing.

Alan Macdonald: Okay got it thanks, Alan I'll leave it there thanks.

Alan Macdonald: Thanks, Neil so good to talk to you.

Speaker Change: Thank you. Our next question comes from Gary Ho with Jordan <unk> capital markets. Your line is open.

Gary Ho: Hey, good morning, guys.

Alan Macdonald: Maybe.

Alan Macdonald: Let me start off maybe some backup last question there just on superior.

Alan Macdonald: Delivers.

Alan Macdonald: Maybe can you talk about some of the wins early wins that contributed to the 2.3 million cost saves.

Alan Macdonald: What are you working on as well.

Alan Macdonald: A couple of quarters, I think you mentioned pricing.

Alan Macdonald: <unk> sales efforts, maybe just a couple of examples there and then just lastly.

Alan Macdonald: Any data you can share on client attrition side, if any post implementation of these initiatives.

Alan Macdonald: Yes sure.

Alan Macdonald: Well starting with the first one.

Alan Macdonald: As we said, there's a couple of things actually.

Alan Macdonald: Coming out of last year.

Alan Macdonald: We're often asked about low hanging fruit and low hanging fruit is a real tough one sometimes to quantify.

Alan Macdonald: But before we formally implemented superior delivers we're working really hard on all of the main topics you would see tight taken some costs out of the business being very mindful of retention and acquisition.

Alan Macdonald: Just some obvious opportunities we had around things like cost reduction.

Alan Macdonald: We put into place late last year, they didn't have a big impact last year, but as you see a busy Q1 invariably theyre going to make a contribution and sometimes it's cost avoidance, where I'm really pleased that.

Alan Macdonald: We delivered 24 million more gallons, but I think we managed our costs really really well in light of that.

Alan Macdonald: In the quarter.

Alan Macdonald: The contribution was modest but it was important it was things like addressing unprofitable customers.

Alan Macdonald: Customers that had tanks for many years.

Low volume might be seasonal customers getting delivery once every year or two switching them to a rental.

Alan Macdonald: Program, so that they're meeting our requirements for profitability and we're able to still.

Alan Macdonald: Keep them as customers.

Alan Macdonald: Minimum use charges and.

Alan Macdonald: Implementing minimum use charges for some seasonal customers that we're serving but they were unprofitable for us.

Alan Macdonald: And then looking at initial views of cost to serve and addressing some cohorts of customers that were were below our expectations of profitability so that type of those.

Alan Macdonald: Those types of early wins, we're by no means done but those types of early wins were.

Alan Macdonald: Were completed late last year and early this year and when you see a high volume season, they make a bit of a contribution.

Alan Macdonald: In terms of attrition is it's really early days.

Alan Macdonald: We're putting a number of.

Alan Macdonald: Of tools in place to address customer attrition and retention and of course, the acquiring new customers and they are really going to come into force later this year and early next year, but.

Alan Macdonald: The intervening.

Alan Macdonald: Timeframe, we're seeing.

Alan Macdonald: Customer numbers that aren't really indicative of the work we're doing because of what I just described.

Alan Macdonald: So we've addressed tens of thousands of customers that were either inactive or unprofitable.

Alan Macdonald: And.

Alan Macdonald: A number of those customers excuse me had werent in fact seasonal they had stopped buying propane for one reason or another and never end didn't notify us. So we went to reclaim the tanks.

Alan Macdonald: Been really helpful for.

Alan Macdonald: Repurposing those tanks and having some cost avoidance on the capital side, but it affects your attrition numbers because it looks like a customer that's been.

Alan Macdonald: That's not been retained when in fact, they werent the customer anyway. They just haven't notified us so.

Alan Macdonald: Said really crassly, we're cleaning up some of our inactive customers, which is going to cause our attrition numbers to go up in the in the short term, but it really doesn't have any impact on the on the core customer base, which we're continuing you still obviously have a very very strong focus on.

Speaker Change: Perfect. Thanks, Thanks for the color there and then my.

Speaker Change: Question I'm not sure if I caught it right in your prepared remarks, Alan you mentioned something at the lower end of your guidance I'm not sure if that was <unk> related.

Speaker Change: But I did see the EBITDA or MSU down year over year in the quarter.

Speaker Change: Wondering how we should think about that metric as we look out to the remainder of 2025.

Speaker Change: Well in Greer will probably have a comment here, but what I would say categorically is.

Speaker Change: We're really pleased.

Speaker Change: With the work that's happening right now it's the tariffs I feel like Theyre focused on the right things deals onboard.

Speaker Change: And getting up to speed very very quickly and.

Speaker Change: And we have every reason to be optimistic about.

Speaker Change: How <unk> is being run and what they're focused on the things we don't control.

Speaker Change: Are the broader economic climate that is invariably having an impact on.

Speaker Change: Sure.

Speaker Change: The activity when the oil sector and.

Speaker Change: And pricing aggressive pricing levels.

Speaker Change: The CMG business, we see that as being.

Speaker Change: Short term at least I do.

Speaker Change: But because of the things we don't control we want to.

Speaker Change: Sure an air of caution that I think it would be foolish of us to be overly optimistic when there's so much uncertainty in that space generally, but Barry you might have a comment or two there maybe.

Speaker Change: Maybe I'll just start.

Speaker Change: On the specific question on <unk>.

Alan Macdonald: <unk> comments Alan's comments on the on the guidance range that was specifically the <unk> space or tariffs.

Speaker Change: Being a little bit lower than in the center.

Speaker Change: Offsetting that is we're we're a snicker had on our propane items. So that's why overall guidance, we think we're still headed towards the boat.

Speaker Change: Okay.

Speaker Change: While I have you.

Speaker Change: Just a quick numbers question.

Speaker Change: You folded in the wholesale business in their respective geographies.

Speaker Change: If you had to parse it out this quarter can you tell me what the split would have been is that a good indicator in terms of percentage wise.

Speaker Change: Okay.

Speaker Change: Yes for sure so.

Speaker Change: So Q1 2024, we provided the numbers.