Q2 2025 Mattr Corp Earnings Call

Isn't an answer session to ask a question during the session will need to press star one on your telephone you will then hear an automated message device in your hand is raised to withdraw your question. Please press star one again, please be advised today's conference is being recorded.

I would now like to turn the conference over to your Speaker today, Megan Cochrane, Vice President Investor Relations and external communications. Please go ahead.

Yeah.

Good morning, before we begin this morning's conference call I would like to take a moment to remind all listeners that today's call includes forward looking statements that involve estimates judgments risks and uncertainties that may cause actual results to differ materially from those projected the complete text of matter statement on forward looking information is included in section four Plano.

Michael Reeves: Good day, and thank you for standing by. Welcome to the Mattr Second Quarter 2025 Results Webcast Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press *11 again. Please be advised today's conference is being recorded. I would now like to turn the conference over to your speaker today, Meghan MacEachern, Vice President, Investor Relations and External Communications. Please go ahead.

Speaker #2: Good day, and thank you for standing by. Welcome to the matter's second quarter 2025 results webcast conference call. At this time, all participants are in a listen-only mode.

Speaker #2: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press *11 on your telephone. You will then hear an automated message advising that your hand is raised.

Of the second quarter 2025 earnings press release, and the MD&A, that's available on SEDAR, plus and on the company's website at <unk> Dot com for those joining via webcast. You may follow the visual presentation that accompanies this call I'll now turn it over to matters, President and CEO, Mike Reeves.

Speaker #2: To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Meghan MacEachern, Vice President and Investor Relations at External Communications.

Speaker #2: Please go ahead.

Good morning, and thank you for attending our second quarter conference call today, Megan and I are joined by a senior Vice President of Finance and CFO Tom Hollaway.

Meghan MacEachern: Good morning. Before we begin this morning's conference call, I would like to take a moment to remind all listeners that today's call includes forward-looking statements that involve estimates, judgments, risks, and uncertainties that may cause actual results to differ materially from those projected. The complete text of Mattr Inc.'s statement on forward-looking information is included in section 4.0 of the Q2 2025 earnings press release in the MD&A that is available on SEDAR Plus and on the company's website at mattr.com. For those joining via webcast, you may follow the visual presentation that accompanies this call. I will now turn it over to Mattr Inc.'s President and CEO, Michael Reeves.

Speaker #3: Good Good morning. Before we begin this morning's conference call, I would like to take a moment to remind all listeners that today's call includes forward-looking statements that involve estimates, judgments, risks, and uncertainties, that may cause actual results to differ materially from those projected.

During the second quarter matters, continuing operations delivered 5% year over year, adjusted EBITDA growth, while navigating rising macroeconomic uncertainty and a rapidly evolving tariff landscape.

Speaker #3: The complete text of matter's statement on forward-looking information is included in Section 4.0 of the Second Quarter 2025 Earnings Press Release, in the MD&A that's available on cedarplus and on the company's website at matter.com.

In parallel matter successfully achieved all initial onboarding objectives surrounding our recently acquired ammo cable business and concluded the final steps in our multi year fundamental transformation with the completion of our North American production footprint modernization expansion and optimization investments and the sale of our Brazilian.

Speaker #3: For those joining via webcast, you may follow the visual presentation that accompanies this call. I'll now turn it over to matter's president and CEO, Mike Reeves.

Michael Reeves: Good morning, and thank you for attending our second quarter conference call. Today, Meghan and I are joined by our Senior Vice President of Finance and CFO, Thomas Holloway. During the second quarter, Mattr Inc.'s continuing operations delivered 5% year-over-year adjusted EBITDA growth while navigating rising macroeconomic uncertainty and a rapidly evolving tariff landscape. In parallel, Mattr Inc. successfully achieved all initial onboarding objectives surrounding our recently acquired Amber Cable business and concluded the final steps in our multi-year fundamental transformation, with the completion of our North American production footprint modernization, expansion, and optimization investments, and the sale of our Brazilian pipe coating business. With these key strategic initiatives behind us, Mattr Inc.

Speaker #4: Good morning. And thank you for attending our second quarter conference call. Today, Meghan and I are joined by our senior vice president of finance and CFO, Tom Holloway.

In pipe coating business.

With these key strategic initiatives behind US matter is now positioned to focus intensely on enhancing our cash generation and margin profile.

Speaker #4: During the second quarter, Matter's continuing operations delivered 5% year-over-year adjusted EBITDA growth while navigating rising macroeconomic uncertainty and a rapidly evolving tariff landscape. In parallel, Matter successfully achieved all initial onboarding objectives surrounding our recently acquired Ammocable business and concluded the final steps in our multi-year fundamental transformation.

By levering technology investments to accelerate high margin market share gains by enhancing workforce experience and utilizing our modernized facilities to drive elevated operational efficiency.

And by moving with pace to minimize any negative impacts of substantial and unpredictable U S tariffs.

The sustained strength of our balance sheet ensures matches ability to navigate current market uncertainty.

Speaker #4: With the completion of our North American production footprint modernization, expansion, and optimization investments, and the sale of our Brazilian pipe coating business, these key strategic initiatives are now behind us. Mattr is now positioned to focus intensely on enhancing our cash generation and margin profile.

We are committed to further lowering net debt, while remaining alert to capital deployment opportunities, which accelerate shareholder value creation, including via organic growth investment carefully timed accretive acquisitions and the continued repurchase of shares under our and CIB, which we exhausted and renewed during the quarter.

Michael Reeves: is now positioned to focus intensely on enhancing our cash generation and margin profile by leveraging technology investments to accelerate high-margin market share gains, by enhancing workforce experience, and utilizing our modernized facilities to drive elevated operational efficiency, and by moving with pace to minimize any negative impacts of substantial and unpredictable U.S. tariffs. The sustained strength of our balance sheet ensures Mattr Inc.'s ability to navigate current market uncertainty. We are committed to further lowering net debt while remaining alert to capital deployment opportunities, which accelerate shareholder value creation, including via organic growth investment, carefully timed accretive acquisitions, and the continued repurchase of shares under our NCIB, which we exhausted and renewed during the quarter.

Speaker #4: By leveraging technology investments to accelerate high-margin market share gains, by enhancing workforce experience and utilizing our modernized facilities to drive elevated operational efficiency, and by moving with pace to minimize any negative impacts of substantial and unpredictable US tariffs, the sustained strength of our balance sheet ensures matter's ability to navigate current market uncertainty.

Looking at each of our segments.

Connection technologies achieved a new second quarter record for both revenue and adjusted EBITDA with sales nearly doubling and adjusted EBITDA, increasing by 28% compared to the previous year. Despite the impact of over $7 million and non capitalized <unk> MTO costs tied to the final establishment of two new production.

Speaker #4: We are committed to further lowering net debt, while remaining alert to capital deployment opportunities which accelerate shareholder value creation. Including via organic growth investment, carefully tying to creative acquisitions, and the continued repurchase of shares under our NCIB, which we exhausted and renewed during the quarter.

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Year over year adjusted EBITDA improvement was driven by the addition of Ammar cable, which more than offset the final quarter of segment <unk> cost recognition temporary disruption to Shaw flex product shipments as the business completed its move into our new manufacturing site and higher manufacturing costs in DSG Coosa as its new.

Michael Reeves: Looking at each of our segments, Connection Technologies achieved a new second quarter record for both revenue and adjusted EBITDA, with sales nearly doubling and adjusted EBITDA increasing by 28% compared to the previous year, despite the impact of over $7 million in non-capitalizable MEO costs tied to the final establishment of two new production facilities. Year-over-year adjusted EBITDA improvement was driven by the addition of Amber Cable, which more than offset the final quarter of segment MEO cost recognition, temporary disruption to ShoreFlex product shipments as the business completed its move into a new manufacturing site, and higher manufacturing costs in DSG Kenosha, as its new Ohio site continued to build workforce scale and proficiency.

Speaker #4: Looking at each of our segments, Connection Technologies achieved a new second quarter record for both revenue and adjusted EBITDA, with sales nearly doubling and adjusted EBITDA increasing by 28% compared to the previous year.

Ohio site continued to build workforce scale and proficiency.

Wire and cable revenue moved slightly down sequentially, primarily driven by previously anticipated reductions in Amor cable sales into specific large mining projects, which concluded in late Q1 and.

Speaker #4: Despite the impact of over $7 million in non-capitalizable MEO costs tied to the final establishment of two new production facilities. Year-over-year adjusted EBITDA improvement was driven by the addition of Ammocable, which more than offset the final quarter of segment MEO cost recognition, temporary disruption to ShoreFlex product shipments as the business completed its move into a new manufacturing site, and higher manufacturing costs in DSG Kanusa as its new Ohio site continued to build workforce scale and proficiency.

And by lower shipments of Shaw flex products as the business navigated temporary bottlenecks tied to relocation of production activity into a new facility.

With this move complete output from the New show Flex site has rebounded to pre move levels in early Q3 and is expected to move beyond pre move levels. During the second half of 2025.

While tariff and broader economic impacts caused further slowing in baseline activity from some customers in mining and onshore oilfield markets during Q2.

Michael Reeves: Wire and cable revenue moved slightly down sequentially, primarily driven by previously anticipated reductions in Amber Cable sales into specific large mining projects, which concluded in late Q1, and by lower shipments of ShoreFlex products as the business navigated temporary bottlenecks tied to relocation of production activity into a new facility. With this move complete, output from the new ShoreFlex site has rebounded to pre-move levels in early Q3 and is expected to move beyond pre-move levels during the second half of 2025. While tariff and broader economic impacts caused further slowing in baseline activity from some customers in mining and onshore oilfield markets during Q2, Mattr's Amber Cable team were successful in securing offsetting industrial and marine orders in the quarter.

Speaker #4: Wire and cable revenue moved slightly down sequentially, primarily driven by previously anticipated reductions in Ammocable's sales into specific large mining projects, which concluded in late Q1.

Matters Amor cable team was successful in securing offsetting industrial and marine orders in the quarter.

Speaker #4: And by lower shipments of ShoreFlex products as the business navigated temporary bottlenecks tied to relocation of production activity into a new facility. With this move complete, output from the new ShoreFlex site has rebounded to pre-move levels in early Q3, and is expected to move beyond pre-move levels during the second half of 2025.

In addition, Ammar cable and Shaw flex together secured several initial orders arising from our cross selling strategy and have already built a significant backlog of industrial and infrastructure opportunities for 2026.

Looking forward. The recent introduction of U S tariffs on certain copper products unlikely to impact sure flex dynamic cable both directly and indirectly.

Speaker #4: While tariff and broader economic impacts caused further slowing in baseline activity from some customers in mining and onshore oilfield markets during Q2, matter's Ammocable team were successful in securing offsetting industrial and marine orders in the quarter.

Copper products and related services on matters largest single material input cost with between 101 hundred $30 million spent annually on such items.

In both businesses, we purchased raw copper from U S and Canadian sources.

Michael Reeves: In addition, Amber Cable and ShoreFlex together secured several initial orders arising from our cross-selling strategy and have already built a significant backlog of industrial and infrastructure opportunities for 2026. Looking forward, the recent introduction of U.S. tariffs on certain copper products are likely to impact ShoreFlex and Amber Cable, both directly and indirectly. Copper products and related services are Mattr's largest single material input cost, with between $100 and $130 million spent annually on such items. In both businesses, we purchase raw copper from U.S. and Canadian sources, rely on third parties to provide conversion and refinement services in both the U.S. and Canada, and then consume these refined inputs in both the U.S. and Canada. We preemptively took actions to reduce the potential risk tied to tariffs prior to August and are taking further steps designed to lower the impact of tariffs moving forward.

Speaker #4: In addition, Ammocable and ShoreFlex together secured several initial orders arising from our cross-selling strategy, and have already built a significant backlog of industrial and infrastructure opportunities for 2026.

Ally on third parties to provide conversion and refinement services in both the U S and Canada.

And then consume these refined inputs in both the U S and Canada.

We preemptively took actions to reduce the potential risk tied to tariffs prior to August and are taking further steps designed to lower the impact of tariffs moving forward.

Speaker #4: Looking forward, the recent introduction of US tariffs on certain copper products are likely to impact ShoreFlex and Ammocable, both directly and indirectly. Copper products and related services are matter's largest single material input cost.

Despite these mitigating actions it is realistic to expect incremental tariff and logistics expenses will raise the cost of our finished wire and cable products if current tariffs prevail.

Speaker #4: With between $100 million and $130 million spent annually on such items, in both businesses, we purchase raw copper from U.S. and Canadian sources, rely on third parties to provide conversion and refinement services in both the U.S. and Canada, and then consume these refined inputs in both the U.S. and Canada.

Costs that we anticipate passing on which the customers.

While we generally believe our competitors in the wire and cable sector are likely to be similarly impacted.

In certain sub markets, we may acquire a modest market advantage or disadvantage from these tariffs.

It is not yet clear how customer buying behavior will be impacted by broadly higher pricing.

Speaker #4: We preemptively took actions to reduce the potential risk tied to tariffs prior to August, and are taking further steps designed to lower the impact of tariffs moving forward.

But we anticipate some degree of non critical order slowing or deferrals during the second half of 2025, our supply chain rebalance.

Michael Reeves: Despite these mitigating actions, it is realistic to expect incremental tariff and logistics expenses will raise the cost of our finished wire and cable products if current tariffs prevail, costs that we anticipate passing onwards to customers. While we generally believe our competitors in the wire and cable sector are likely to be similarly impacted, in certain submarkets, we may acquire a modest market advantage or disadvantage from these tariffs. It is not yet clear how customer buying behavior will be impacted by broadly higher pricing, but we anticipate some degree of non-critical order slowing or deferral during the second half of 2025 as supply chains rebalance. Given the uncertainty of future changes to current tariffs or the potential implementation of counter tariffs by Canada, it is too early to offer more specific details on future impacts.

Speaker #4: Despite these mitigating actions, it is realistic to expect that incremental tariff and logistics expenses will raise the cost of our finished wire and cable products if current tariffs prevail.

Given the uncertainty of future changes to current tariffs or the potential implementation of counter tariffs by Canada.

It's too early to offer more specific details on future impacts.

Speaker #4: Costs that we anticipate passing onwards to customers. While we generally believe our competitors in the wire and cable sector are likely to be similarly impacted, in certain sub-markets, we may acquire a modest market advantage, or disadvantage from these tariffs.

Performance in the segments DSG <unk> business was modestly lower year over year and similar sequentially.

As continued tariff driven disruption to north American automotive activity and weakness in eurozone manufacturing activity was largely offset by market share gains in both industrial and automotive markets.

Speaker #4: It is not yet clear how customer buying behavior will be impacted by broadly higher pricing. However, we anticipate some degree of non-critical order slowing or deferral during the second half of 2025, as supply chains rebalance.

The businesses new facility in Ohio made further output and efficiency gains in Q2.

And while it is slightly behind its anticipated mid year output level, we remain confident that the facility will reach efficiency equivalent to the prior Toronto site around year end before moving beyond these levels in 2026.

Speaker #4: Given the uncertainty of future changes to current tariffs, or the potential implementation of countertariffs by Canada, it's too early to offer more specific details on future impacts.

Michael Reeves: Performance in the segment's DSG Kenosha business was modestly lower year over year and similar sequentially, as continued tariff-driven disruption to North American automotive activity and weakness in Eurozone manufacturing activity was largely offset by market share gains in both industrial and automotive markets. The business's new facility in Ohio made further output and efficiency gains in Q2, and while it is slightly behind its anticipated mid-year output level, we remain confident that the facility will reach efficiency equivalent to the prior Toronto site around year-end before moving beyond these levels in 2026. During the quarter, the segment concluded its final MEO activities, with production equipment installation occurring on time and on budget within the new ShoreFlex Ontario and DSG Kenosha Ohio sites.

Speaker #4: Performance in the segments DSG Kanusa business was modestly lower year-over-year, and similar sequentially. As continued tariff-driven disruption to North American automotive activity and weakness in eurozone manufacturing activity was largely offset by market share gains in both industrial and automotive markets.

During the quarter. The segment concluded its final <unk> activities with production equipment installation occurring on time and on budget within the new Shaw Flex, Ontario, and DSG Colusa, Ohio sites.

The company expects the segment's third quarter adjusted EBITDA will be similar to the second quarter as the contributions from first half mining projects roll off.

Speaker #4: The business's new facility in Ohio made further output and efficiency gains in Q2. While it is slightly behind its anticipated mid-year output level, we remain confident that the facility will reach efficiency equivalent to the prior Toronto site around year-end before moving beyond these levels in 2026.

Commodity price driven declines in some mining in oilfield activity persist.

And copper tariff driven input cost escalation and corresponding wire and cable customer ordering behavior changes unfold.

Offsetting these factors in the third quarter. This segment will not incur any costs anticipates stronger shipments of Shaw flex products now that their production site relocation is complete and expect steady demand for higher margin nuclear products.

Speaker #4: During the quarter, the segment concluded its final MEO activities, with production equipment installation occurring on time and on budget, within the new ShoreFlex Ontario and DSG Kanusa Ohio sites.

We maintain our constructive outlook on longer term electrification driven demand across the segment and are very pleased with our enhanced position to serve this demand through the union of Amick cable and Shaw flex.

Michael Reeves: The company expects the segment's Q3 adjusted EBITDA will be similar to the Q2, as the contributions from first-half mining projects roll off, commodity price-driven declines in some mining and oilfield activity persist, and copper tariff-driven input cost escalation and corresponding wire and cable customer ordering behavior changes unfold. Offsetting these factors, in the Q3, the segment will not incur MEO costs, anticipate stronger shipments of ShoreFlex products now that their production site relocation is complete, and expect steady demand for higher margin nuclear products. We maintain our constructive outlook on longer-term electrification-driven demand across the segment and are very pleased with our enhanced position to serve this demand through the union of Amber Cable and ShoreFlex. In the six months since Mattr acquired Amber Cable, our teams have completed all intended back-office integration efforts, with a small volume of remaining actions to be completed by year-end.

Speaker #4: The company expects the segment's third quarter adjusted EBITDA will be similar to the second quarter, as the contributions from first half mining projects roll off, commodity price-driven declines in some mining and oilfield activity persist, and copper tariff-driven input cost escalation and corresponding wire and cable customer ordering behavior changes unfold.

And the six months since matter acquired <unk> cable our teams have completed all intended back office integration efforts with a small volume of remaining actions to be completed by year end.

Speaker #4: Offsetting these factors in the third quarter, the segment will not incur MEO costs, anticipate stronger shipments of ShoreFlex products now that their production site relocation is complete, and expect steady demand for higher margin nuclear products.

Ammar cable has already delivered incremental sales into industrial applications, most notably in the data center sector, where ammo cable previously had no direct market presence and now has a secured backlog in excess of $10 million.

Speaker #4: We maintain our constructed outlook on longer-term electrification-driven demand across the segment, and are very pleased with our enhanced position to serve this demand through the union of Ammocable and ShoreFlex.

Close collaboration between Shaw Flex and <unk> cable sales teams have established a pipeline of additional incremental opportunities, which given the typical length of order cycles has the potential to convert into revenue during the early part of 2026.

Speaker #4: In the six months since matter acquired Ammocable, our teams have completed all intended back-office integration efforts, with a small volume of remaining actions to be completed by year-end.

Turning to the composite technology segment.

Second quarter revenue decreased by 5% year over year, driven primarily by lower sales of flex pipe into international markets, partially offset by higher flex pipe sales in the U S and increased sales of <unk> fuel products.

Michael Reeves: Amber Cable has already delivered incremental sales into industrial applications, most notably in the data center sector, where Amber Cable previously had no direct market presence and now has a secured backlog in excess of $10 million. Close collaboration between ShoreFlex and Amber Cable sales teams have established a pipeline of additional incremental opportunities, which, given the typical length of order cycles, has the potential to convert into revenue during the early part of 2026. Turning to the composite technologies segment, second quarter revenue decreased by 5% year over year, driven primarily by lower sales of flex pipe into international markets, partially offset by higher flex pipe sales in the U.S. and increased sales of Xerxes fuel products.

Speaker #4: Ammocable has already delivered incremental sales into industrial applications, most notably in the data center sector, where Ammocable previously had no direct market presence, and now has secured backlog in excess of $10 million.

Segment, adjusted EBITDA decreased by 10% year over year, primarily result of lower revenue and less favorable weighting between flex pipe and xerxes and higher manufacturing costs tied to the segment's new and newly refurbished production facilities, which are continuing to build workforce scale and proficiency. These.

Speaker #4: Close collaboration between ShoreFlex and Ammocable sales teams have established a pipeline of additional incremental opportunities, which, given the typical length of order cycles, has the potential to convert into revenue during the early part of 2026.

These impacts were partially offset by a lack of <unk> related expenses in the current quarter.

Speaker #4: Turning to the composite technology segment, second quarter revenue decreased by 5% year-over-year, driven primarily by lower sales of flexpipe into international markets. This was partially offset by higher flexpipe sales in the U.S. and increased sales of Xerxes fuel products.

<unk> revenue in the second quarter increased both sequentially and versus the prior year, reaching a new post COVID-19 quarterly record as customer demand for premium fuel storage and water management products remains high.

Michael Reeves: Segment adjusted EBITDA decreased by 10% year over year, primarily a result of lower revenue, a less favorable weighting between flex pipe and Xerxes, and higher manufacturing costs tied to the segment's new and newly refurbished production facilities, which are continuing to build workforce scale and proficiency. These impacts were partially offset by a lack of MEO-related expenses in the current quarter. Xerxes revenue in the second quarter increased both sequentially and versus the prior year, reaching a new post-COVID quarterly record, as customer demand for premium fuel storage and water management products remains high. Across our retail fuel, data center, fire suppression, and broader infrastructure customer base, orders for Xerxes' market-leading solutions have exceeded revenue generation throughout the first half of the year, and we currently have the highest delivery backlog in this business since 2021.

Across our retail fuel data center fire suppression and broader infrastructure customer base orders for <unk> market, leading solutions have exceeded revenue generation throughout the first half of the year and we currently have the highest delivery backlog in this business since 2021.

Speaker #4: Segment adjusted EBITDA decreased by 10% year-over-year, primarily a result of lower revenue, a less favorable weighting between flexpipe and Xerxes, and higher manufacturing costs tied to the segment's new and newly refurbished production facilities.

Speaker #4: Which are continuing to build workforce scale and proficiency. These impacts were partially offset by a lack of MEO-related expenses in the current quarter. Xerxes revenue in the second quarter increased both sequentially and versus the prior year, reaching a new post-COVID quarterly record, as customer demand for premium fuel storage and water management products remains high.

I have noted in prior calls that while xerxes benefits from one of our company's most robust demand profiles. It also faces matters, most significant labor expansion requirement seeking.

Seeking to establish a new workforce and its recently established South Carolina manufacturing facility, while enhancing production teams across its site network. Following the right sizing actions taken in 2023 and 2024.

Speaker #4: Across our retail fuel, data center, fire suppression, and broader infrastructure customer base, orders for Xerxes market-leading solutions have exceeded revenue generation throughout the first half of the year, and we currently have the highest delivery backlog in this business since 2021.

Progress on this front fell short of our internal targets during Q2, limiting the pace at which tank production could accelerate and weighing on margins.

Entering the third quarter, we've seen substantial improvement in hiring rates, although this will likely take until the fourth quarter to translate into meaningful output increases.

Michael Reeves: I've noted in prior calls that while Xerxes benefits from one of our company's most robust demand profiles, it also faces Mattr's most significant labor expansion requirement, seeking to establish a new workforce in its recently established South Carolina manufacturing facility while enhancing production teams across its site network, following the right sizing actions taken in 2023 and 2024. Progress on this front fell short of our internal targets during Q2, limiting the pace at which tank production could accelerate and weighing on margins. Entering the third quarter, we've seen substantial improvement in hiring rates, although this will likely take until the fourth quarter to translate into meaningful output increases. Workforce development will remain a focal point within Xerxes for the remainder of 2025.

Speaker #4: I've noted in prior calls that, while Xerxes benefits from one of our company's most robust demand profiles, it also faces Mattr's most significant labor expansion requirement.

Workforce development will remain a focal point within <unk> for the remainder of 2025.

Speaker #4: Seeking to establish a new workforce in its recently established South Carolina manufacturing facility, while enhancing production teams across its site network, following the right-sizing actions taken in 2023, and 2024.

While total tank production capacity is currently slightly lower than expected customer demand is exceptionally strong and we believe the Fuji Xerox. These manufacturing network and reached new record levels of output during 2026.

Speaker #4: Progress on this front fell short of our internal targets during Q2, limiting the pace at which tank production could accelerate and weighing on margins.

Q2 saw flex pipe continue to deliver strong performance in its primary U S onshore market onboarding incremental customers and setting a new revenue record for its large diameter product offering despite an 8% year over year decline in U S well completions.

Speaker #4: Entering the third quarter, we've seen substantial improvement in hiring rates, although this will likely take until the fourth quarter to translate into meaningful output increases.

Speaker #4: Workforce development will remain a focal point within Xerxes for the remainder of 2025. While total tank production capacity is currently slightly lower than expected, customer demand is exceptionally strong, and we believe the full Xerxes manufacturing network can reach new record levels of output during 2026.

<unk> International revenue remained at the lower end of its recent historical range, leading to a modest decline in overall flex pipe revenue versus the second quarter of 2024, which benefited from substantial international deliveries.

Michael Reeves: While total tank production capacity is currently slightly lower than expected, customer demand is exceptionally strong, and we believe the full Xerxes manufacturing network can reach new record levels of output during 2026. Q2 saw flex pipe continue to deliver strong performance in its primary U.S. onshore market, onboarding incremental customers, and setting a new revenue record for its large diameter product offering, despite an 8% year-over-year decline in U.S. well completions. Flex pipe's international revenue remained at the lower end of its recent historical range, leading to a modest decline in overall flex pipe revenue versus the second quarter of 2024, which benefited from substantial international deliveries. Crude oil has generally continued to trade in a range below $70 USD per barrel, with OPEC Plus gradually increasing output and U.S. domestic production reaching a new all-time record in Q2.

Crude oil has generally continued to trade in a range below $70 per barrel with OPEC, plus gradually increasing output and U S. Domestic production, reaching a new all time record in Q2.

Speaker #4: Q2 saw Flexpipe continue to deliver strong performance in its primary U.S. onshore market, onboarding incremental customers and setting a new revenue record for its large diameter product offering, despite an 8% year-over-year decline in U.S. well completions.

These conditions have continued to drive progressively lower customer capital spending and well completion activity in North America and have limited the initiation of large new international projects.

Speaker #4: Flexpipe's international revenue remained at the lower end of its recent historical range, leading to a modest decline in overall Flexpipe revenue versus the second quarter of 2024, which benefited from substantial international deliveries.

Against this backdrop flex pipe has consistently outperformed its primary market measures driven by the introduction of new product sizes and capabilities.

I will speak more about this in a moment.

Productive output from flex pipes, New Texas facility continued to elevate during the quarter meeting internal expectations.

Speaker #4: Crude oil has generally continued to trade in a range below 70 US dollars per barrel. With OPEC+ gradually increasing output, and US domestic production reaching a new all-time record in Q2.

While the business will carry elevated levels of manufacturing cost tied to this new location for the remainder of 2025. The site remains on track to reach normalized levels of efficiency during 2026 and freight savings arising from the Texas sites are expected to virtually offset increased manufacturing costs by late this year.

Michael Reeves: These conditions have continued to drive progressively lower customer capital spending and well completion activity in North America and have limited the initiation of large new international projects. Against this backdrop, flex pipe has consistently outperformed its primary market measures, driven by the introduction of new product sizes and capabilities. I will speak more about this in a moment. Productive output from flex pipe's new Texas facility continued to elevate during the quarter, meeting internal expectations. While the business will carry elevated levels of manufacturing costs tied to this new location for the remainder of 2025, the site remains on track to reach normalized levels of efficiency during 2026, and freight savings arising from the Texas site are expected to virtually offset increased manufacturing costs by late this year.

Speaker #4: These conditions have continued to drive progressively lower customer capital spending and well completion activity in North America, and have limited the initiation of large new international projects.

Speaker #4: Against this backdrop, Flexpipe has consistently outperformed its primary market measures, driven by the introduction of new product sizes and capabilities. I’ll speak more about this in a moment.

Urgent nimble action by the flex pipe and Xerxes teams have so far limited tariff impacts within the segment and entering Q3, we now have access to cost competitive non Chinese origin supply chain for all of the segments input materials.

Speaker #4: Productive output from flexpipe's new Texas facility continued to elevate during the quarter, meeting internal expectations. While the business will carry elevated levels of manufacturing cost tied to this new location for the remainder of 2025, the site remains on track to reach normalized levels of efficiency during 2026, and freight savings are rising from the Texas site are expected to virtually offset increased manufacturing costs by late this year.

Looking forward the company expects the segment's third quarter adjusted EBITDA will be modestly below the second quarter.

As further north American oilfield activity declines are partially offset by continued strength in demand for <unk> products and further technology, driven flex pipe share gains.

The flex pipe business has proven highly resilient in the face of unfavorable market conditions. These last two years.

Michael Reeves: Urgent, nimble action by the flex pipe and Xerxes teams have so far limited tariff impacts within the segment, and entering Q3, we now have access to cost-competitive, non-Chinese origin supply chains for all of the segment's input materials. Looking forward, the company expects the segment's third quarter adjusted EBITDA will be modestly below the second quarter, as further North American oilfield activity declines are partially offset by continued strength in demand for Xerxes products and further technology-driven flex pipe share gains. The flex pipe business has proven highly resilient in the face of unfavorable market conditions these last two years. The strong performance of recently introduced 5 and 6-inch product variants has enabled substantial new customer capture, virtually offsetting declines in U.S. well completion activity. Between 2021 and the first half of 2025, flex pipe has more than doubled its revenue per completed well in North America.

Speaker #4: Urgent nimble action by the flexpipe and Xerxes teams have so far limited tariff impacts within the segment, and entering Q3, we now have access to cost-competitive, non-Chinese origin supply chains for all of the segment's input materials.

The strong performance of recently introduced five and six inch product variance as enabled substantial new customer capture virtually offsetting declines in U S well completion activity.

Between 2021, and the first half of 2025 flex pipe has more than doubled its revenue per completed well in North America.

Speaker #4: Looking forward, the company expects the segment's third quarter adjusted EBITDA will be modestly below the second quarter, as further North American oilfield activity declines are partially offset by continued strength in demand for Xerxes products and further technology-driven Flexpipe share gains.

Despite this impressive performance the opportunity for further flex pipe growth remains robust with a majority of global gathering line applications still served by traditional steel pipe.

Within today's North American composite pipe market over one third is tied to products larger than six inches in diameter, which flex pipe will introduce early in 2026, adding more than 50% to its immediately addressable market.

Speaker #4: The flexpipe business has proven highly resilient in the face of unfavorable market conditions these last two years. The strong performance of recently introduced five and six-inch product variants has enabled substantial new customer capture, virtually offsetting declines in US well completion activity.

Our commitment to technology development gives us confidence that flex pipes growth story has many years to run.

Speaker #4: Between 2021 and the first half of 2025, flexpipe has more than doubled its revenue per completed well in North America. Despite this impressive performance, the opportunity for further flexpipe growth remains robust, with a majority of global gathering line applications still served by traditional steel pipe.

Tom will now walk through the company's second quarter financial highlights.

Thanks, Mike the second quarter's revenue from continuing operations was $321 million, 33% higher than the second quarter of 2024, and reflecting an increase of $87 8 million and the connection technologies segment, along with an $8 $1 million decrease in the composite technology segment.

Michael Reeves: Despite this impressive performance, the opportunity for further flex pipe growth remains robust, with a majority of global gathering line applications still served by traditional steel pipe. Within today's North American composite pipe market, over one-third is tied to products larger than six inches in diameter, which flex pipe will introduce early in 2026, adding more than 50% to its immediately addressable market. Our commitment to technology development gives us confidence that flex pipe's growth story has many years to run. Tom will now walk through the company's second quarter financial highlights.

Speaker #4: Within today's North American composite pipe market, over one-third is tied to products larger than six inches in diameter, which flexpipe will introduce early in 2026.

Adjusted EBITDA from continuing operations was $42 5 million.

Speaker #4: Adding more than 50% to its immediately addressable market. Our commitment to technology development gives us confidence that flexpipe's growth story has many years to run.

A 5% increase from the comparative period in the prior year, primarily attributed to the inclusion of <unk> results in 2025, and hires <unk> fuel and water product sales offset by less favorable product mix and under absorption within certain manufacturing facilities.

Speaker #4: Tom will now walk through the company's second-quarter financial highlights.

Thomas Holloway: Thanks, Mike. The second quarter's revenue from continuing operations was $321 million, 33% higher than the second quarter of 2024, reflecting an increase of $87.8 million in the Connection Technologies segment, along with an $8.1 million decrease in the Composite Technologies segment. Adjusted EBITDA from continuing operations was $42.5 million, a 5% increase from the comparative period in the prior year, primarily attributed to the inclusion of Amber Cable results in 2025 and higher Xerxes fuel and water product sales offset by less favorable product mix and under absorption within certain manufacturing facilities. We also recorded and reported as part of adjusted EBITDA $7.3 million related to our modernization, expansion, and optimization activities during the quarter, with $6 million included in selling general and administrative costs and $1.3 million in gross margin, all of which was recorded entirely within the Connection Technologies segment.

Speaker #5: Thanks, Mike. The second quarter's revenue from continuing operations was $321 million, 33% higher than the second quarter of 2024, and reflecting an increase of $87.8 million in the connection technology segment, along with an 8.1 million dollar decrease in the composite technology segment.

We also recorded and reported as part of adjusted EBITDA $7 $3 million related to our modernization expansion and optimization activities. During the quarter was $6 million included in selling general and administrative costs and $1 3 million and gross margin.

Speaker #5: Adjusted EBITDA from continuing operations was $42.5 million, a 5% increase from the comparative period in the prior year, primarily attributed to the inclusion of Ammocable results in 2025 and higher Xerxes fuel and water product sales, offset by less favorable product mix and under absorption within certain manufacturing facilities.

All of which was recorded entirely within the connection technologies segment.

The company reported $8 million of EMEA will cost in the second quarter of 2024 all included in SG&A.

The second quarter of 2025 marks the final quarter of EMEA cost and completion of the non capitalized costs, which have reduced reported results.

Speaker #5: We also recorded and reported as part of adjusted EBITDA $7.3 million related to our modernization expansion and optimization activities during the quarter, with $6 million included in selling, general and administrative costs, and $1.3 million in gross margin.

Matter will not incur costs on a go forward basis.

In the second quarter of 2025, the company incurred $800000 of costs related to the acquisition of <unk> cable and an acquisition related inventory adjustment, which decreased gross profit by $2 6 million.

Speaker #5: All of which was recorded entirely within the connection technology segment. The company reported $8 million of MEO costs in the second quarter of 2024, all included in SG&A.

Thomas Holloway: The company reported $8 million of MEO costs in the second quarter of 2024, all included in SG&A. The second quarter of 2025 marks the final quarter of MEO costs and completion of the non-capitalizable costs, which have reduced reported results. Mattr will not incur MEO costs on a go-forward basis. In the second quarter of 2025, the company incurred $800,000 of cost related to the acquisition of Amber Cable and an acquisition-related inventory adjustment, which decreased gross profit by $2.6 million. Share-based incentive compensation during the quarter resulted in an expense of $3.2 million compared to $1.6 million during the comparative quarter, reflecting the relative share price movements during those periods. All of these items were added back to adjusted EBITDA and are included in our reconciliation of non-GAAP measures.

Share based incentive compensation during the quarter resulted in an expense of $3 2 million compared to $1 6 million during the comparative quarter, reflecting the relative share price movements during those periods.

Speaker #5: The second quarter of 2025 marks the final quarter of MEO costs and the completion of the non-capitalizable costs, which have reduced reported results. The matter will not incur MEO costs on a go-forward basis.

All of these items were added back to adjusted EBITDA and are included in our reconciliation of non-GAAP measures.

We also completed the sale of the Thermo type business to <unk> in early June for proceeds of roughly $24 million subject to normal working capital adjustments.

Speaker #5: In the second quarter of 2025, the company incurred $800,000 of costs related to the acquisition of Ammocable, and an acquisition related inventory adjustment which decreased gross profit by 2.6 million dollars.

During the quarter and prior to its sale the business was reported as discontinued operations and generated a loss of $3 1 million of adjusted EBITDA. During the final two months of operations owned by matter as project activity slowed.

Speaker #5: Share-based incentive compensation during the quarter resulted in an expense of $3.2 million compared to $1.6 million during the comparative quarter, reflecting the relative share price movements during those periods.

Turning to segment results. The connection technologies segment delivered a new second quarter revenue record of $176 5 million, which was 99% higher than the second quarter of 2024, primarily driven by the inclusion of the newly acquired <unk> cable business.

Speaker #5: All of these items were added back to adjusted EBITDA and are included in our reconciliation of non-GAAP measures. We also completed the sale of the thermotype business to Valorec in early June for proceeds of roughly $24 million subject to normal working capital adjustments.

Thomas Holloway: We also completed the sale of the thermotype business to Valorec in early June for proceeds of roughly $24 million, subject to normal working capital adjustments. During the quarter and prior to its sale, the business was reported as discontinued operations and generated a loss of $3.1 million of adjusted EBITDA during the final two months of operations owned by Mattr as project activity slowed. Turning to segment results, the Connection Technologies segment delivered a new second quarter revenue record of $176.5 million, which was 99% higher than the second quarter of 2024, primarily driven by the inclusion of the newly acquired Amber Cable business. Segment adjusted EBITDA was $4.8 million higher than the prior year's second quarter, primarily as a consequence of Amber Cable's results being included into the segment's reported numbers.

Segment, adjusted EBITDA was $4 $8 million higher than the prior year second quarter, primarily as a consequence of Ameren cable's results being included into the segments reported numbers.

Speaker #5: During the quarter, and prior to its sale, the business was reported as discontinued operations and generated a loss of $3.1 million of adjusted EBITDA during the final two months of operations owned by Matter as project activity slowed.

The increase in segment revenue was slightly offset by a less favorable product mix in our <unk> business and the inclusion of previously mentioned non capitalized <unk> costs of $7 $3 million.

Speaker #5: Turning to segment results, the connection technology segment delivered a new second-quarter revenue record of $176.5 million, which was 99% higher than the second quarter of 2024, primarily driven by the inclusion of the newly acquired Ammocable business.

This segment recorded minimal EMEA costs in the second quarter of 2024.

Composite technologies segment revenue was $144.4 million, a 5% decrease compared to the second quarter of 2024, while adjusted EBITDA decreased by 10% over the same time period. This.

Speaker #5: Segment adjusted EBITDA was $4.8 million higher than the prior year's second quarter, primarily as a consequence of Ammocable's results being included in the segment's reported numbers.

This decrease in revenue was primarily attributable to international project activity in the prior year for flex pipe, which did not occur in 2025, partially offset by stronger Xerxes tank and water management product sales in the current year period adjusted EBITDA was further impacted by.

Thomas Holloway: The increase in segment revenue was slightly offset by a less favorable product mix in our ShoreFlex business and the inclusion of previously mentioned non-capitalizable MEO costs of $7.3 million. The segment recorded minimal MEO costs in the second quarter of 2024. Composite Technologies segment revenue was $144.4 million, a 5% decrease compared to the second quarter of 2024, while adjusted EBITDA decreased by 10% over the same time period. This decrease in revenue was primarily attributable to international project activity in the prior year for flex pipe, which did not occur in 2025, partially offset by stronger Xerxes tank and water management product sales in the current year period. Adjusted EBITDA was further impacted by an unfavorable revenue mix, with Xerxes contributing a larger percentage of segment revenue than flex pipe and higher manufacturing under absorption, tied mainly to the newly established production sites.

Speaker #5: The increase in segment revenue was slightly offset by a less favorable product mix in our ShawFlex business, and the inclusion of previously mentioned non-capitalizable MEO cost of $7.3 million.

Speaker #5: The segment recorded minimal MEO costs in the second quarter of 2024. Composite technology segment revenue was $144.4 million a 5% decrease compared to the second quarter of 2024, while adjusted EBITDA decreased by 10% over the same time period.

An unfavorable revenue mix with <unk> contributing a larger percentage of segment revenue than flex pipe and higher manufacturing under absorption tied mainly to the newly established production sites.

Turning to cash flow.

Cash provided by operating activities from continuing operations in the second quarter was $10 6 million compared to cash used in operations in the comparative period in 2024 of $6 $5 million driven by solid working capital performance, including the positive impact of results from <unk>.

Speaker #5: This decrease in revenue was primarily attributable to international project activity in the prior year for Flexpipe, which did not occur in 2025. This was partially offset by stronger Xerxes tank and water management product sales in the current year period.

Speaker #5: Adjusted EBITDA was further impacted by an unfavorable revenue mix with Xerxes contributing a larger percentage of segment revenue than flexpipe, and higher manufacturing under absorption tied mainly to the newly established production sites.

Cable.

Discontinued operations related to the sale of the Thermo type business also contributed favorably as the business generated positive cash flow during the second quarter of 2025.

Cash used in investing activities in the second quarter was $11 $2 million related to capital spend outflow on property plant and equipment, primarily EMEA projects.

Thomas Holloway: Turning to cash flow, cash provided by operating activities from continuing operations in the second quarter was $10.6 million compared to cash used in operations in the comparative period in 2024 of $6.5 million, driven by solid working capital performance, including the positive impact of results from Amber Cable. Discontinued operations related to the sale of the thermotype business also contributed favorably, as the business generated positive cash flow during the second quarter of 2025. Cash used in investing activities in the second quarter was $11.2 million related to capital spend outflow on property, plant, and equipment, primarily MEO projects. This cash outflow for capital spend includes amounts previously accrued that were paid in the second quarter of 2025.

Speaker #5: Turning to cash flow, cash provided by operating activities from continuing operations in the second quarter was $10.6 million compared to cash used in operations in the comparative period in 2024 of $6.5 million.

This cash outflow for capital spend includes amounts previously accrued that were paid in the second quarter of 2025.

During the second quarter cash used in financing activities was $26 $8 million, primarily driven by a $14 $5 million net repayment on the Companys credit facility repurchases of over 700000 shares under the company's normal course issuer bid and lease.

Speaker #5: Driven by solid working capital performance, including the positive impact of results from Ammocable. Discontinued operations related to the sale of the thermotype business also contributed favorably as the business generated positive cash flow during the second quarter of 2025.

Speaker #5: Cash used in investing activities in the second quarter was $11.2 million related to capital spend outflow on property plant and equipment, primarily MEO projects.

<unk> payments.

During the quarter in early June the company exhausted. The previously authorized in CIB program, we renewed the program in late June as expected.

Speaker #5: This cash outflow for capital spend includes amounts previously accrued that were paid in the second quarter of 2025. During the second quarter, cash used in financing activities was $26.8 million primarily driven by a 14.5 million dollar net repayment on the company's credit facility, repurchases of over 700,000 shares under the company's normal course issuer bid, and lease liability payments.

As of June 32025, we had a cash balance of $52 $9 million net debt of $534 $3 million and $28 $5 million of standard letters of credit.

Thomas Holloway: During the second quarter, cash used in financing activities was $26.8 million, primarily driven by a $14.5 million net repayment on the company's credit facility, repurchases of over 700,000 shares under the company's NCIB, and lease liability payments. During the quarter in early June, the company exhausted the previously authorized NCIB program. We renewed the program in late June, as expected. As of June 30, 2025, we had a cash balance of $52.9 million, net debt of $534.3 million, and $28.5 million of standard letters of credit. As of the end of the quarter, the company's net debt to adjusted EBITDA ratio was 3.5 times, including lease liabilities, which reflects the additional debt raised to fund the acquisition of the Amber Cable business.

As of the end of the quarter the company's net debt to adjusted EBITDA ratio was three five times, including lease liabilities, which reflects the additional debt raised to fund the acquisition of the <unk> cable business.

Speaker #5: During the quarter, in early June, the company exhausted the previously authorized NCIB program. We renewed the program in late June, as expected. As of June 30, 2025, we had a cash balance of $52.9 million, net debt of $534 million, and $28.5 million of standard letters of credit.

Adjusting for the <unk> cable transaction earnings and the sale of thermo tied on a pro forma basis, our trailing 12 month net debt to adjusted EBITDA ratio at June 32025 would have been three one times or two two times if lease liabilities were excluded.

As discussed previously we remain committed to returning to our normal course ratio of two times or below.

Okay.

Speaker #5: As of the end of the quarter, the company's net debt to adjusted EBITDA ratio was 3.5 times, including lease liabilities, which reflects the additional debt raised to fund the acquisition of the Ammocable business.

Matter retains financial flexibility and expect capital allocation priorities will continue to emphasize debt repayment complete existing growth investments and continued share repurchases under our in CIB.

Thomas Holloway: Adjusting for the Amber Cable transaction earnings and the sale of thermotype on a pro forma basis, our trailing 12-month net debt to adjusted EBITDA ratio at June 30, 2025, would have been 3.1 times or 2.2 times if lease liabilities were excluded. As discussed previously, we remain committed to returning to a normal course ratio of two times or below. Mattr retains financial flexibility and expects capital allocation priorities. We will continue to emphasize debt repayment, complete existing growth investment, and continue share repurchases under our NCIB. We also continue to cultivate our pipeline of acquisition opportunities, primarily focused on further enhancement of our Connection Technologies segment. Capital expenditures in the quarter were $14.5 million, with $11.3 million of cash deployed, including $4.6 million of capital expenditures previously accrued in the first quarter. Of the capital expenditures, $10.9 million was related to growth expenditures.

Speaker #5: Adjusting for the Ammocable transaction earnings and the sale of the Thermotype on a pro forma basis, our trailing 12-month net debt to adjusted EBITDA ratio at June 30, 2025, would have been 3.1 times, or 2.2 times if lease liabilities were excluded.

We also continue to cultivate our pipeline of acquisition opportunities primarily focused on further enhancement of our connection technologies segment.

Capital expenditures in the quarter were $14 $5 million with $11 3 million of cash deployed including $4 6 million of capital expenditures previously accrued in the first quarter.

Speaker #5: As discussed previously, we remain committed to returning to a normal course ratio of two times or below. Mattr retains financial flexibility and expects capital allocation priorities will continue to emphasize debt repayment, complete existing growth investments, and continue share repurchases under our NCIB.

Of the capital expenditures $10 9 million was related to growth expenditures.

These were primarily related to new products and <unk> projects, which are intended to increase production capacity and efficiency within both segments.

Speaker #5: We also continue to cultivate our pipeline of acquisition opportunities, primarily focused on further enhancement of our connection technology segment. Capital expenditures in the quarter were $14.5 million with $11.3 million of cash deployed including $4.6 million of capital expenditures previously accrued in the first quarter.

I'll now turn it back over to Mike.

Thank you Tom.

<unk> has now concluded its multiyear transformation with our business portfolio rationalization and production network modernization expansion and optimization activities complete.

Over the last three and a half years, we have fundamentally enhanced our ability to efficiently develop and deliver highly differentiated critical infrastructure products from an optimized footprint that limits, our direct exposure to ongoing trade friction.

Speaker #5: Of the capital expenditures, $10.9 million was related to growth expenditures. These were primarily related to new products and MEO projects, which are intended to increase production capacity and efficiency within both segments.

Thomas Holloway: These were primarily related to new products and MEO projects, which are intended to increase production capacity and efficiency within both segments. I will now turn it back over to Mike.

Across the match our organization, we are intensely focused on accelerating workforce proficiency and operational efficiency to enable margin and cash flow enhancement.

Speaker #5: I will now turn it back over to Mike.

Michael Reeves: Thank you, Tom. Mattr has now concluded its multi-year transformation, with our business portfolio rationalization and production network modernization, expansion, and optimization activities complete. Over the last three and a half years, we have fundamentally enhanced our ability to efficiently develop and deliver highly differentiated critical infrastructure products from an optimized footprint that limits our direct exposure to ongoing trade friction. Across the Mattr organization, we are intensely focused on accelerating workforce proficiency and operational efficiency to enable margin and cash flow enhancement. In parallel, we continue to exercise tight cost control, adjusting our cost base as needed to appropriately reflect activity levels. The frequency and magnitude of U.S. tariff policy changes and corresponding market uncertainty make it very difficult to accurately predict business performance beyond the current quarter.

In parallel we continue to exercise tight cost control adjusting our cost base as needed to appropriately reflect activity levels.

Speaker #6: Thank you, Tom. Matter has now concluded its multi-year transformation, with our business portfolio rationalization and production network modernization expansion and optimization activities complete. Over the last three and a half years, we have fundamentally enhanced our ability to efficiently develop and deliver highly differentiated, critical infrastructure products from an optimized footprint that limits our direct exposure to ongoing trade friction.

The frequency and magnitude of U S tariff policy changes and corresponding market uncertainty makes it very difficult to accurately predict business performance beyond the current quarter.

However, we pride ourselves on our ability to embrace change to be nimble and to act swiftly when opportunities or challenges arise aimco.

I am confident that the actions taken to revitalize our production footprint and diversifying our supply chain has better positioned the company to navigate today's unpredictable geopolitical environment.

Speaker #6: Across the matter organization, we are intensely focused on accelerating workforce proficiency, and operational efficiency, to enable margin and cash flow enhancement. In parallel, we continue to exercise tight cost control adjusting our cost bases needed to appropriately reflect activity levels.

While we expect market uncertainty will cause near term slowing in buying patterns by some customers the compelling need remains for investments into north American and critical infrastructure renewal and expansion and underlying demand for our core products is expected to persist.

Speaker #6: The frequency and magnitude of US tariff policy changes and corresponding market uncertainty makes it very difficult to accurately predict business performance beyond the current quarter.

Given our current view of likely market conditions and customer demand, we expect our reported business performance in the third quarter will be modestly below the second quarter of 2025.

Michael Reeves: However, we pride ourselves on our ability to embrace change, to be nimble, and to act swiftly when opportunities or challenges arise. I'm confident that the actions taken to revitalize our production footprint and diversify our supply chain have better positioned the company to navigate today's unpredictable geopolitical environment. While we expect market uncertainty will cause near-term slowing in buying patterns by some customers, the compelling need remains for investment into North American critical infrastructure renewal and expansion, and underlying demand for our core products is expected to persist. Given our current view of likely market conditions and customer demand, we expect our reported business performance in the third quarter will be modestly below the second quarter of 2025. We remain disciplined in capital deployment, with a sustained focus on lowering net debt, investing in technology development, and returning capital to shareholders through our NCIB.

Speaker #6: However, we pride ourselves on our ability to embrace change, to be nimble, and to act swiftly when opportunities or challenges arise. I'm confident that the actions taken to revitalize our production footprint and diversify our supply chain have better positioned the company to navigate today's unpredictable geopolitical environment.

We remain disciplined in capital deployment with a sustained focus on lowering net debt investing in technology development and returning capital to shareholders through our NCI.

We firmly believe the company remains well positioned to deliver on its longer term growth profitability and cash flow objectives.

Speaker #6: While we expect market uncertainty will cause near-term slowing in buying patterns by some customers, the compelling need remains for investment into North American critical infrastructure renewal and expansion, and underlying demand for our core products is expected to persist.

I'll now turn the call over to the operator and open it up for any questions. You may have for myself, Tom or Megan.

Thank you ladies and gentlemen, if you have a question or a comment at this time. Please press star one on your telephone mix your.

Speaker #6: Given our current view of likely market conditions and customer demand, we expect our reported business performance in the third quarter will be modestly below the second quarter of 2025.

Question has been answered or you were seeing with yourself from the queue. Please press star one again, we will pause for a moment, while we compile the Q&A roster.

Speaker #6: We remain disciplined in capital deployment, with a sustained focus on lowering net debt, investing in technology development, and returning capital to shareholders through our NCIB.

Our first question comes from Ian Gillies with Stifel. Your line is open.

Michael Reeves: We firmly believe the company remains well-positioned to deliver on its longer-term growth, profitability, and cash flow objectives. I'll now turn the call over to the operator and open it up for any questions you may have for myself, Tom, or Meghan.

Speaker #6: We firmly believe the company remains well-positioned to deliver on its longer-term growth, profitability, and cash flow objectives. I'll now turn the call over to the operator, and open it up for any questions you may have for myself, Tom, or Meghan.

Good morning, everyone.

Good morning.

Could you maybe expand a bit upon what's transpiring in the shelf flex business. It seems like cable has fared extremely well, but <unk> probably seen a bit weaker topline growth. Obviously tariffs are paid claim part of that but maybe you could talk about end markets and alike.

Operator: Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press *11 on your telephone. If your question has been answered or you wish to move yourself from the queue, please press *11 again. We will pause for a moment while we compile our Q&A roster. Our first question comes from Ian Gillies with Stifler. Your line is open.

Speaker #7: Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press *11 on your telephone. If your question has been answered or you are seeing with yourself from the queue, please press *11 again.

Yes, certainly.

Speaker #7: We'll pause for a moment while we compile our Q&A roster. Our first question comes from Ian Gillies with Steeply. Your line is open.

Obviously the.

<unk> business is one that focuses primarily on the supplier wiring cable into the Canadian markets, we've seen stability and continued demand coming out of some of our key markets their nuclear in particular.

Ian Gillies: Morning, everyone. Morning. Could you maybe expand a bit upon what is transpiring in the ShoreFlex business? It seems like Amber Cable is faring extremely well, but ShoreFlex is probably seeing a bit weaker top-line growth. Obviously, tariffs are playing part of that, but maybe you could talk about end markets and the like.

Speaker #8: Morning, everyone.

But we do see industrial.

Speaker #6: Morning.

Speaker #8: Could you maybe expand a bit upon what's transpiring in the ShawFlex business? It seems like Ammocable is faring extremely well, but ShawFlex is probably seeing a bit weaker top-line growth, obviously tariffs are playing part of that, but maybe you could talk about end markets and the like.

Demand in Canada remaining a little lower than we would have anticipated at the start of the year.

The other thing that has impacted Shaw flex in the first half of the year, obviously as the relocation to a brand new manufacturing facility. We saw some impacts in Q2 as we finished that relocation move the final equipment. There was some backlog that we were unable to deliver during Q2.

Michael Reeves: Yes, certainly. The ShoreFlex business is one that focuses primarily on the supply of wire and cable products into the Canadian markets. We have seen stability and continued demand coming out of some of our key markets there, nuclear in particular, but we do see industrial demand in Canada remaining a little lower than we would have anticipated at the start of the year. The other thing that has impacted ShoreFlex in the first half of the year, obviously, is the relocation to a brand new manufacturing facility. We saw some impacts in Q2 as we finished that relocation, moved the final equipment. There was some backlog that we were unable to deliver during Q2 as we worked our way through that move. That move is now complete. The facility is now up and running fully.

Speaker #6: Yeah, certainly. So obviously the ShawFlex business is one that focuses primarily on the supply of wire and cable into the Canadian markets. We've seen stability and continued demand coming out of some of our key markets there, nuclear in particular.

As we worked our way through that but that moves now complete the facility is now up and running fully as I think I mentioned earlier, we are back to pre move production levels here early in Q3, and I would expect by the time, we get to the end of Q3, we will already be at run rates above premium levels. So I think we've.

Speaker #6: But we do see industrial demand in Canada remaining a little lower than we would have anticipated at the start of the year. The other thing that has impacted ShawFlex in the first half of the year, obviously, is the relocation to a brand new manufacturing facility.

Put the internal moves related challenges behind us obviously, we've now put the.

<unk> costs associated with those moves that move behind us, which has been dragging on margins for that business and as we move through what's left of the year I think what we'll see in Schwab Flex is a business, where we have to work very hard to continue to find new.

Speaker #6: We saw some impacts in Q2 as we finished that relocation, moved the final equipment, there was some backlog that we were unable to deliver during Q2, as we worked our way through that move.

Speaker #6: But that move's now complete. The facility is now up and running fully. As I think I mentioned earlier, we are back to pre-move production levels here early in Q3.

Higher margin opportunities, while we navigate a relatively low level of industrial demand in Canada, I think those opportunities are there and now with incremental production capacity and the opportunity to offer that capacity at competitive lead times, we can begin to make further pro.

Michael Reeves: As I think I mentioned earlier, we are back to pre-move production levels here early in Q3, and I would expect by the time we get to the end of Q3, we will already be at run rates above pre-move levels. I think we have put the internal move-related challenges behind us. Obviously, we have now put the MEO costs associated with that move behind us, which has been dragging our margins for that business. As we move through what is left of the year, I think what we will see in ShoreFlex is a business where we have to work very hard to continue to find new higher margin opportunities while we navigate a relatively low level of industrial demand in Canada.

Speaker #6: And I would expect by the time we get to the end of Q3, we will already be at run rates above pre-move levels. So I think we've put the internal move-related challenges behind us.

<unk> in both utility and other higher margin markets.

Speaker #6: Obviously, we've now put the MEO costs associated with those that moved behind us, which has been dragging our margins for that business. As we move through what's left of the year, I think what we'll see in ShawFlex is a business where we have to work very hard to continue to find new, higher-margin opportunities.

Got it.

You've talked previously about some pretty meaningful margin expansion by mid 2026, just given.

Efficiencies at the plants and alike.

Does that commentary still holds or.

Speaker #6: While we navigate a relatively low level of industrial demand in Canada, I think those opportunities are there, and now with incremental production capacity and the opportunity to offer that capacity at competitive lead times, we can begin to make further progress in both utility and other higher-margin markets.

The recent copper tariffs put in kind of put a lid on that at least for the time being.

Michael Reeves: I think those opportunities are there, and now with incremental production capacity and the opportunity to offer that capacity at competitive lead times, we can begin to make further progress in both utility and other higher margin markets.

Yes, so I mean two.

<unk> 2026 is certainly an interesting time period to try to predict I think we'd start with the obvious statement that the biggest unknown is the demand environment that we're facing some of our end markets, whether it's wiring cable or elsewhere.

Ian Gillies: Got it. You have talked previously about some pretty meaningful margin expansion by mid-2026, just given efficiencies of the plants and the like. Does that commentary still hold, or the recent copper tariffs put in kind of put a lid on that, at least for the time being?

Speaker #7: Got Got it. You've talked

Certain what the U S economy will look like in 'twenty six it's uncertain, what tariff and trade policies will look like in 'twenty six.

Speaker #8: previously about some pretty meaningful margin expansion by mid-2026. Just given efficiencies of the plants and the like, does that commentary still hold, or do the recent copper tariffs put in kind of put a lid on that, at least for the time being?

But what I can tell you is that I think across this organization, we've consistently demonstrated our commitment.

<unk> commitment to technology allows us to.

To grow market share even in some difficult business conditions and I certainly would expect that that will continue in 'twenty six.

Michael Reeves: Yeah, so I mean, 2026 is certainly an interesting time period to try to predict. I think we'd start with the obvious statement that the biggest unknown is the demand environment that we'll face in some of our end markets, whether it's wire & cable products or elsewhere. It's uncertain what the U.S. economy will look like in 2026. It's uncertain what tariffs and trade policies will look like in 2026. But what I can tell you is that I think across this organization, we've consistently demonstrated our commitment to technology allows us to grow market share, even in some difficult business conditions. I certainly would expect that that will continue in 2026. Internally, the things we can control, I fully expect that in 2026, we will see margin improvement from where we are in 2025, and there's a few things that underpin that confidence.

Internally the things we can control.

Speaker #6: Yeah, so I mean, 2026 is certainly an interesting time period to try to predict. I think we'd start with the obvious statement that the biggest unknown is the demand environment that we'll face in some of our end markets, whether it's wiring cable or elsewhere.

Fully expect that in 2006, we will see margin improvement from where we are in 25.

And there's a few things that underpin that confidence. The first obviously is the elimination of <unk> costs. So it will no longer be reporting expenses that dilute.

Speaker #6: It's uncertain what the U.S. economy will look like in 2026. It's uncertain what tariff and trade policies will look like in 2026. But what I can tell you is that I think across this organization, we've consistently demonstrated our commitment to technology, which allows us to grow market share.

Diluted earnings and margins.

Secondly is the enhanced efficiency across our production networks in all businesses.

It is currently ramping up a new production site and while some are about a year into that process. Others are just a couple of quarters.

Speaker #6: Even in some difficult business conditions, I certainly would expect that this will continue in '26. Internally, the things we can control, I fully expect that in '26 we will see margin improvement from where we are in '25.

So we will see improved efficiency and that will lead to improved margin profile.

I think we are.

Very much on track to continue launching new technology, including in the flex pipe business, which we expect will have a positive contribution in 2006 and further elevate margin profile and I think we will continue to see improvements in supply chain efficiencies. So all of these things gives me confidence that across the business, we will see margin improvement.

Speaker #6: And there's a few things that underpin that confidence. The first, obviously, is the elimination of MEO costs. So we'll no longer be reporting expenses that dilute earnings and margins.

Michael Reeves: The first, obviously, is the elimination of MEO costs, so we'll no longer be reporting expenses that dilute earnings and margins. The second is the enhanced efficiency across our production networks in all businesses. I'll say it is currently ramping up a new production site, and while some are about a year into that process, others are just a couple of quarters. So we will see improved efficiency, and that will lead to improved margin profile. I think we are very much on track to continue launching new technology, including in the flex pipe business, which we expect will have a positive contribution in 2026 and further elevate margin profile. I think we will continue to see improvement in supply chain efficiencies. So all of these things give me confidence that across the business, we will see margin improvement.

Speaker #6: The second is the enhanced efficiency across our production networks in all businesses. Just to say it, we are currently ramping up a new production site, and while some are about a year into that process, others are just a couple of quarters.

And then in one business particular, xerxes, which I'm comfortable with what we.

We see extraordinarily strong and.

End market demand and I do not expect that to change going into 2026.

Our opportunity in <unk> is to increase our productive output, which I have high confidence, we can which will drive not just revenue expansion, but margin expansion as well.

Speaker #6: So we will see improved efficiency and that will lead to improved margin profile. I think we are very much on track to continue launching new technology, including in the flexpipe business, which we expect will have a positive contribution in '26 and further elevate margin profile.

And then last one for me is embedded in the notes to the financials. There was a small acquisition in the quarter.

Speaker #6: And I think we will continue to see improvement in supply chain efficiencies. So, all of these things give me confidence that across the business, we will see margin improvement.

Im just wondering if you could talk to that at all and what it may mean for the operating platform for the business as much.

If anything.

Michael Reeves: Then in one business in particular, Xerxes, which I'm not sure we'll talk about, we see extraordinarily strong end market demand, and I do not expect that to change going into 2026. Our opportunity in Xerxes is to increase our productive output, which I have high confidence we can, which will drive not just revenue expansion, but margin expansion as well.

Speaker #6: And then in one business in particular, Xerxes, which I'm not sure we'll talk about, we see extraordinarily strong end market demand, and I do not expect that to change going into 2026.

Yes, we will we'll likely talk more about that when we were.

Yes.

But we did make a small post quarter acquisition to vertically integrate.

Some of the supply chain on the composite technology side of the house, particularly around metallic components.

Speaker #6: Our opportunity in Xerxes is to increase our productive output, which I have high confidence we can. Which will drive not just revenue expansion, but margin expansion as well.

Well, that's not a huge part of our supply chain is an important point and it's one that historically has had some exposure to.

Ian Gillies: The last one for me, embedded in the notes of the financials, there was a small acquisition in the quarter. I am just wondering if you could talk to that at all and what it may mean for the operating platform for the business, if much, if anything.

Great.

Speaker #8: And then last one for me, embedded in the notes of the financials, there was a small acquisition in the quarter. I'm just wondering if you could talk to that at all, and what it may mean for the operating platform for the business, if much, if anything.

Thirdly, Heinz so this acquisition compresses that supply chain.

<unk> allows us to be far more nimble lower our cost of supply lower our exposure to tariffs and in that process I think will enhance modestly the margins of the composite segment as we roll through late 'twenty five.

Michael Reeves: Yes, we will likely talk more about that when we review that. But we did make a small post-quarter acquisition to vertically integrate some of the supply chain on the composite technologies side of the house, particularly around metallic components. While that is not a huge part of our supply chain, it is an important part, and it is one that historically has had some exposure to fairly high tariffs. So this acquisition compresses that supply chain and allows us to be far more nimble, lower our cost of supply, lower our exposure to tariffs, and in that process, I think we will enhance modestly the margins of the composite technologies segment as we roll through late 2025.

Speaker #6: Yes, we'll likely talk more about that when we review. However, we did make a small post-quarter acquisition to vertically integrate some of the supply chain on the composite technology side of the house, particularly around metallic components.

Index.

Thanks, very much I will turn the call back over.

One moment for our next question.

Speaker #6: While that's not a huge part of our supply chain, it's an important part. And it's one that historically has had some exposure to certain kinds.

Our next question comes from affirmative severity with TD Cowen Your line is open.

Hey, good morning, Arturo is speaking on behalf of my question.

Speaker #6: So, this acquisition compresses that supply chain and allows us to be far more nimble. It lowers our cost of supply, reduces our exposure to tariffs, and in that process, I think it will enhance modestly the margins of the composite segment as we roll through late 2025.

Good morning.

Can you provide more detail on how much exposure you have to use copper.

Iron capable person assigned for products you make in the U S exactly batten Javier impacted by copper tariff.

So yes, as I said on the call earlier, the copper supply chain is our largest single source of cost when you look at our total corporation. So we spend around $100 million to $130 million Canadian dollars a year on copper.

Ian Gillies: Thanks very much. I will turn the call back over.

Speaker #8: Thanks very much. I'll turn the call back over.

Operator: One moment for our next question. Our next question comes from Athurvan Zaveri with TD Cowan. Your line is open.

Speaker #7: One moment for our next question. Our next question comes from Atharva Zaveri with TD Cow. And your line is open.

Which includes.

Atharvan Zaveri: Hey, good morning. Atharvan speaking on behalf of Michael Teplon.

Copper cathodes copper raw.

Speaker #9: Hey, good morning. Atharva speaking on behalf of Michael Taplon.

Copper as well as the services to convert copper from its starting point to the ending point.

Ian Gillies: Good morning.

Atharvan Zaveri: Can you provide more detail on how much exposure you had to U.S. copper tariffs in your wire and cable business and for products you make in the U.S., exactly where and how you are impacted by copper tariffs?

Speaker #6: Good morning.

Speaker #9: Just can you provide more detail on how much exposure you had to US copper tariff in your wire and cable business, and for products you make in the US?

I think in total we would expect the currently announced copper tariffs when combined with the mitigating actions that we've either already taken or in the process of taking probably leads to who.

Speaker #9: Exactly where and how you're impacted by copper tariff?

Michael Reeves: As I said on the call earlier, the copper supply chain is our largest single source of cost when you look at our total corporation. We spend around $100 million to $130 million Canadian dollars a year on copper, which includes copper cathodes, copper rods, copper, as well as the services to convert copper from its starting point to the ending point. I think in total, we would expect that the currently announced copper tariffs, when combined with the mitigating actions that we've either already taken or are in the process of taking, probably lead to an increase in our overall spend of, let's say, mid-single-digit percentage. As I said earlier, I would expect that we pass that through to customers.

Speaker #6: So, as I said over the call earlier, the copper supply chain is our largest single source of cost when you look at our total corporation.

An increase in our overall spend of let's say mid single digit percentage.

As I said earlier I would expect that we pass that through to customers.

Speaker #6: So we spend around $100 to $130 million Canadian dollars a year on copper, which includes copper cathodes, copper rods, copper as well as the services to convert copper from its starting point to the ending point.

We are fortunate our finished goods both armored cable and Shaw Flex brand are not listed on the current copper tariff HTS code listing which means we are we are not paying and our customers are not paying a 50% tariff on finished wire and cable, but there are elements of the supply chain, where there is now.

Speaker #6: I think in total, we would expect that the currently announced copper tariffs when combined with the mitigating actions that we've either already taken or are in the process of taking, probably leads to an increase in our overall spend of, let's say, mid-single-digit percentage.

Increased.

Friction and cost.

Which we will have to incorporate into the price of our finished goods.

Yeah.

Offshore flex business, which is the Canadian manufacturing business has a round about 15% to 20% of its revenue associated with products sold into the U S that is likely the most impacted revenue strength.

Speaker #6: As I said earlier, I would expect that we pass that through to customers. We are fortunate, our finished goods, both Ammocable and ShawFlex brand, are not listed on the current copper tariff HTS code listing, which means we are not paying and our customers are not paying a 50% tariff on the finished wire and cable, but there are elements of the supply chain where there's now increased friction, and cost, which we will have to incorporate into the price of our finished goods.

Michael Reeves: We are fortunate our finished goods, both Amber Cable and ShoreFlex brand, are not listed on the current copper tariff HTS code listing, which means we are not paying and our customers are not paying a 50% tariff on the finished wire & cable products, but there are elements of the supply chain where there's now increased friction and cost, which we will have to incorporate into the price of our finished goods. Our ShoreFlex business, which is the Canadian manufacturing business, has around about 15% to 20% of its revenue associated with products sold into the U.S. That is likely the most impacted revenue string, as I said, not directly by a tariff, but by the risk that U.S. customers would either defer or delay orders placed to ShoreFlex because they are uncertain whether those products may become covered by this tariff.

As I said not directly by a tariff.

But by the risk that U S customers would either defer or delay.

Orders placed to Shaw flex because they are.

Whether those products may become covered by this tariff.

You've probably seen the tariff announcement included notification that there may be enhancements to the HTS code listing in 90 days, which would be in October. So obviously, we are keenly aware of that accelerating the shipment of oil products that we already have U.

Speaker #6: Our ShawFlex business, which is the Canadian manufacturing business, has around 15% to 20% of its revenue associated with products sold into the U.S.

U S orders for to ensure that they are delivered before that date and working with our customers to manage any concerns. They may have as we approach that date, if we can get past October without our products being directly tariffs then I would generally say that my concerns in this space start to lower but it's very difficult to know whether that is going to happen.

Speaker #6: That is likely the most impacted revenue stream. As I said, not directly via tariff, but by the risk that US customers would either defer or delay orders placed to ShawFlex because they are uncertain whether those products may become covered by this tariff.

Michael Reeves: As you've probably seen, the tariff announcement included notification that there may be enhancements to the HTS code listing in 90 days, which would be in October. Obviously, we are keenly aware of that, accelerating the shipment of all products that we already have U.S. orders for to ensure that they are delivered before that date, and working with our customers to manage any concerns they may have as we approach that date. If we can get past October without our products being directly tariffed, then I would generally say that my concerns in this space start to lower, but it's very difficult to know whether that is going to happen or not.

No.

Speaker #6: As you probably have seen, the tariff announcement included notification that there may be enhancements to the HTS code listing, in 90 days, which would be in October.

Thank you very helpful.

And sorry, just a follow up you talked about mitigation steps youre, taking can you elaborate on that or what strategies are you using right now.

Speaker #6: So obviously we are keenly aware of that. Accelerating the shipment of all products that we already have US orders for, to ensure that they are delivered before that date.

Yes, probably the largest is to procure more of the input materials within the U S.

Speaker #6: And working with our customers to manage any concerns they may have as we approach that date. If we can get past October without our products being directly tariffed, then I would generally say that my concerns in this space start to lower.

So our supply chain, serving our wire and cable businesses both shortly.

And <unk> been distributed both north and south of the border.

And we've taken steps over the last six months and we are taking further steps to consolidate that into the U S where we can we're having success and it's one of the reasons why.

Speaker #6: But it's very difficult to know whether that is going to happen or not.

Atharvan Zaveri: Thank you. Very helpful. And sorry, just to follow up, you talked about mitigation steps you are taking. Can you elaborate on that? What strategies are you using right now?

Speaker #9: Thank you, very helpful. And, sorry, just to follow up, you talked about the mitigation steps you're taking. Can you elaborate on that? What strategies are you using right now?

The the approximate cost impact to our supply chain is nowhere near the top.

Okay great.

Okay perfect. Thank you.

One moment for our next question.

Michael Reeves: Yeah, probably the largest is to procure more of the input materials within the U.S. So our supply chain serving our wire and cable businesses, both ShoreFlex and Amber Cable, has been distributed both north and south of the border. We've taken steps over the last six months, and we are taking further steps to consolidate that into the U.S. where we can. We're having success, and it's one of the reasons why the approximate cost impact to our supply chain is nowhere near the tariff rate.

Speaker #6: Yeah, probably the largest is to procure more of the input materials within the US. So our supply chain serving our wire and cable businesses, both ShawFlex and directly been distributed, both North and South of the border.

Our next question comes from Arthur coordinate with RBC. Your line is open.

Hey, good morning.

Good morning.

Just touch on every cable a bit more.

I know you don't want to get into the numbers, but can you give us a sense of how integration is going there and I know you talked about the backlog.

Speaker #6: And we've taken steps over the last six months, and we are taking further steps, to consolidate that into the US, where we can. We're having success, and it's one of the reasons why the approximate cost impact to our supply chain is nowhere near the tariff rate.

Kind of between Ameren cable onshore flex and how thats kind of building but.

Can you give us maybe a bit more of a sense of what that looks like as well.

Yes, so I'll just start by I don't think we could be any happier with the acquisition of armor cable here six months post transaction.

Atharvan Zaveri: Perfect. Thank you.

Speaker #9: Perfect, thank you.

Operator: One moment for our next question. Our next question comes from Arthur Nagorny with RBC. Your line is open.

Speaker #7: One moment for our next question. Our next question comes from Arthur Nagorni, with RBC, your line is open.

The team there.

Have proven themselves to be an extraordinary group of individuals that leadership team have adapted to life inside matter almost overnight.

Ian Gillies: Good morning.

Speaker #10: Hey, good morning.

Operator: Morning.

The integration, which was already intended to be light touch is effectively complete we have one or two steps at the tail end of the year payrolls related items, but other than that we are effectively done.

Speaker #6: Morning.

Ian Gillies: I just touched on Amber Cable a bit more. I know you do not want to get into the numbers, but can you give us a sense of how integration is going there? I know you talked about the backlog kind of between Amber Cable and ShoreFlex and how that is kind of building, but can you give us maybe a bit more of a sense of what that looks like as well?

Speaker #10: Just touching on Ammocable a little bit more. I know you don't want to get into the numbers, but can you give us a sense of how integration is going there?

Speaker #10: And I know you talked about the backlog, kind of between Ammocable and ShawFlex, and how that's kind of building, but can you give us maybe a bit more of a sense of what that looks like as well?

So that gives us the opportunity to focus on optimizing business performance and I think we already see that the combination of market knowledge and product offerings between ammo cable ensure flex is starting to gain some traction I mentioned, we've secured orders modest at this stage for delivery in 2025.

Michael Reeves: Yeah, so I will just start by. I do not think we could be any happier with the acquisition of Amber Cable here six months post-transaction. The team there has proven themselves to be an extraordinary group of individuals. The leadership team has adapted to life inside Mattr almost overnight. The integration, which was already intended to be light touch, is effectively complete. We have one or two steps at the tail end of the year, payrolls-related items, but other than that, we are effectively done. That gives us the opportunity to focus on optimizing business performance, and I think we already see that the combination of market knowledge and product offering between Amber Cable and ShoreFlex is starting to gain some traction.

Speaker #6: Yeah, so I'll just start by saying I don't think we could be any happier with the acquisition of Ammocable here six months post-transaction. The team there has proven themselves to be an extraordinary group of individuals.

We've got a backlog of opportunities that is well in excess of $10 million at this stage and I expect it will grow as we roll forward.

Speaker #6: The leadership team have adapted to life inside matter almost overnight. The integration which was already intended to be light touch is effectively complete. We have one or two steps at the tail end of the year.

And we've been with the nimbleness of the armored cable business over the course of the last quarter in particular there.

Speaker #6: Payrolls-related items, but other than that, we are effectively done. So that gives us the opportunity to focus on optimizing business performance, and I think we already see that the combination of market knowledge and product offering between Ammocable and ShawFlex is starting to gain some traction.

Markets have been impacted by some of the economic uncertainty the oilfield market, obviously is impacted by oil price and we've seen some Canadian miners that have slowed activity in the.

Around their cost base going forward.

Michael Reeves: I mentioned we have secured orders, modest at this stage, for delivery in 2025. We have got a backlog of opportunities that is well in excess of $10 million at this stage, and I expect it will grow as we roll forward. We have been with the nimbleness of the Amber Cable business over the course of the last quarter in particular. Their markets have been impacted by some of the economic uncertainty. Their oilfield market obviously is impacted by oil price, and we have seen some Canadian miners that have slowed activity in the base around their cost base going forward. What we found from the Amber Cable team is the urgency and the ability to seek and secure opportunities to plug those gaps.

What we found from the amicable team is the urgency and the ability to seek and secure.

Speaker #6: I mentioned we've secured orders, modest at this stage, for delivery in 2025. We've got a backlog of opportunities that is well in excess of $10 million at this stage, and I expect it will grow as we roll forward.

Opportunities to plug those gaps so I mentioned on the call.

Got substantial orders now in backlog for datacenter deliveries, which historically have not been a large part of our cables business and I think the scale of those opportunities continues to rise.

Speaker #6: And we've been with the nimbleness of the Ammocable business over the course of the last quarter in particular. Their markets have been impacted by some of the economic uncertainty.

26 could be a very interesting year when it comes to data centers for ammo cable.

Speaker #6: Their oilfield market obviously is impacted by oil price, and we've seen some Canadian miners that have slowed activity in the space around their cost base going forward.

So all in all sitting here today I would expect that full year performance from our cable is going to meet or exceed.

It's a time of the acquisition despite the.

Speaker #6: What we found from the Ammocable team is that the urgency and the ability to seek and secure opportunities to plug those gaps. So, I mentioned on the call that we've got substantial orders now in backlog for data center deliveries, which historically have not been a large part of Ammocable's business.

The insanity of the world around us, which is very very positive.

Alright, thats good to hear.

Then DSG can use seems to be performing well. Despite the disruptive operating background can you maybe detail out a bit more what you're seeing between your automotive and industrial customers globally.

Michael Reeves: I mentioned on the call that we have got substantial orders now in backlog for data center deliveries, which historically have not been a large part of Amber Cable's business. I think the scale of those opportunities continues to rise, and 2026 could be a very interesting year when it comes to data centers for Amber Cable. All in all, sitting here today, I would expect that full-year performance from Amber Cable is going to meet or exceed the exact same time of the acquisition, despite the insanity of the world around us, which is very, very positive.

Yes, so the DSD business has really done very well I think two.

Speaker #6: And I think the scale of those opportunities continues to rise, and 2026 could be a very interesting year, when it comes to data centers for Ammocable.

The format its current level. Despite what has been a very uncertain market for automotive.

Speaker #6: So, all in all, sitting here today, I would expect that full-year performance from Ammocable is going to meet or exceed the time of the acquisition, despite the insanity of the world around us, which is very, very positive.

Largely the most impactful changes in automotive has been in North America and have been tariff.

And we have seen a little bit of weakness in the eurozone auto market, but broadly speaking what we're what we are seeing our automotive customers that continue to prioritize.

Ian Gillies: All right, that's good to hear. DSG Kenosha seems to be performing well despite the disruptive operating background. Can you maybe detail out a bit more what you're seeing between your automotive and industrial customers globally?

Speaker #8: All right, that's good to hear. And then DSG Kanusa seems to be performing well despite the disruptive operating background. Can you maybe detail out a bit more what you're seeing between your automotive and industrial customers globally?

Technology evolution in their vehicles.

And the demand is for ever increasing capabilities from heat shrink tubing.

<unk> provides we are very focused on that auto market and that sales team and have continued to be able to capture share both in North America and in the Eurozone and I've been particularly pleased with the early success of some strategic shifts we've made in China as you probably know the Chinese auto market.

Michael Reeves: Yeah, the DSG business has really done very well, I think, to perform at its current level despite what has been a very uncertain market for automotive. Largely, the most impactful changes in automotive have been in North America and have been tariff-related. We had seen a little bit of weakness in the Eurozone auto market, but broadly speaking, what we are seeing are automotive customers that continue to prioritize technology evolution in their vehicles, and the demand is for ever-increasing capabilities from the heat shrink tubing that DSG provides. We are very focused on that auto market in that sales team and have continued to be able to capture share both in North America and in the Eurozone. I've been particularly pleased with the early success of some strategic shifts we've made in China.

Speaker #6: Yeah, so the DSG business has really done very well, I think, to perform at its current level despite what has been a very uncertain market for automotive.

Speaker #6: Largely the most impactful changes in automotive have been in North America and have been tariff-related. We have seen a little bit of weakness in the eurozone auto market, but broadly speaking, what we are seeing are automotive customers that continue to prioritize technology evolution in their vehicles, and the demand is for ever-increasing capabilities from the heat shrink tubing that DSG provides we are very focused on that auto market in that sales team, and have continued to be able to capture share both in North America and in the eurozone.

Has seen a fairly substantial decline in activity from western auto manufacturers offset by a very substantial increase in activity from domestic auto manufacturers. Historically DSG had been focused on supporting Western auto manufacturers in China, We pivoted late last year and have already seen some very good <unk>.

Success.

At domestic Chinese market.

Our Chinese production footprint. So on the auto side, we've performed very well on the industrial side, we are still a relatively small.

Speaker #6: And I've been particularly pleased with the early success of some strategic shifts we've made in China. As you probably know, the Chinese auto market has seen a fairly substantial decline in activity from Western auto manufacturers offset by a very substantial increase in activity from domestic auto manufacturers.

Player and growing our share both in North America and in Europe through the introduction of incremental technology.

Michael Reeves: As you probably know, the Chinese auto market has seen a fairly substantial decline in activity from Western auto manufacturers, offset by a very substantial increase in activity from domestic auto manufacturers. Historically, DSG had been focused on supporting Western auto manufacturers in China. We pivoted late last year and have already seen some very good success in that domestic Chinese market from our Chinese production footprint. On the auto side, we've performed very well. On the industrial side, we are still a relatively small player and growing our share both in North America and in Europe through the introduction of incremental technology into our sales force over time.

Our sales force over time, so as we think about ESG rolling forward.

Move into a brand new facility in the U S, which has both cost and efficiency benefits I would expect we will see this business continue to drive.

Speaker #6: Historically, DSG had been focused on supporting Western auto manufacturers in China. We pivoted late last year and have already seen some very good success.

In terms of both revenue and margin expansion as we move from 25%.

Speaker #6: That domestic Chinese market from our Chinese production footprint. So on the auto side, we've performed very well. On the industrial side, we are still a relatively small player, and growing our share, both in North America and in Europe through the introduction of incremental technology into our sales force over time.

Lisa.

Alright, and then last one from me just on <unk> I think you previously.

<unk> backlog was kind of full for the year in that business.

Curious where that sits today.

Hum.

Thats kind of progressed.

I guess between the fuel and storm water market specifically.

Michael Reeves: As we think about DSG rolling forward, moved into a brand new facility in the U.S., which has both cost and efficiency benefits, I would expect we will see this business continue to drive growth in terms of both revenue and margin expansion as we move from 2025 into 2026.

Yes, both markets are very strong right now so we look at fuel for example.

Speaker #6: So, as we think about DSG rolling forward, moved into a brand new facility in the U.S., which has both cost and efficiency benefits, I would expect we will see this business continue to drive growth in terms of both revenue and margin expansion as we move from 2025 into 2026.

I think when the year is complete.

The customer base in the fuel markets for the U S. We'll have built.

10% more new fuel stations than they did in 2024.

And while not all of our customers in that space are public those who are have generally indicated that on average they intend to grow by another 15% in 2026.

Ian Gillies: All right, and then the last one for me just on Xerxes. I think you previously outlined that the backlog was kind of full for the year in that business. Just curious where that sits today, you know how that is kind of progressed, and I guess between the fuel and stormwater markets specifically.

Speaker #8: All right, and then the last one for me is just on Xerxes. I think you previously outlined that the backlog was kind of full for the year in that business.

Speaker #8: Just curious, where that sits today, you know how that's kind of progressed, and I guess between the fuel and stormwater markets specifically.

And I think their indications are quite consistent with some of our larger private customers.

Customers as well so.

Speaking demand for new fuel station construction, and therefore Xerxes brand fuel tanks is as high as we've ever seen it and likely to move higher.

Michael Reeves: Yes, both markets are very strong right now. We look at fuel, for example. I think when the year is complete, the customer base in the fuel markets for the U.S. will have built around 10% more new fuel stations than they did in 2024. While not all of our customers in that space are public, those who are have generally indicated that on average they intend to grow by another 15% in 2026. I think their indications are quite consistent with some of our larger private customers as well. Broadly speaking, demand for new fuel station construction and therefore for Xerxes brand fuel tanks is as high as we have ever seen it and likely to move higher.

Speaker #6: Yes, both markets are very strong right now. If we look at fuel, for example, I think when the year is complete, the customer base in the fuel markets for the U.S. will have built around 10% more new fuel stations than they did in 2024.

The business set a new revenue record in Q2 and did so while quite frankly underperforming in terms of total productive output.

Which is something we control and.

Speaker #6: And while not all of our customers in that space are public, those who are have generally indicated that, on average, they intend to grow by another 15% in 2026.

Efficacy, while continuing to take steps to move in the right direction. So as we roll from mid year through to the end of the year and into 2026, what I think we will see with <unk>.

Speaker #6: And I think their indications are quite consistent with some of our larger private customers as well. So broadly speaking, demand for new fuel station construction and therefore for Xerxes brand fuel tanks is as high as we've ever seen it, and likely to move higher.

As a continuous improvement in terms of productive output and site efficiency, which will enhance margin profile while the.

Evergreen increasing revenue generation.

So I think the opportunity for <unk> as we roll through the rest of this year and next year is very very bright the backlog right now extends well into the first half of 2026 and the same is true on the water side.

Michael Reeves: The business set a new revenue record in Q2 and did so while quite frankly underperforming in terms of total productive output, which is something we control, and that is actually how we are continuing to take steps to move in the right direction. As we roll from mid-year through to the end of the year and into 2026, what I think we will see with Xerxes is a continuous improvement in terms of productive output and site efficiency, which will enhance margin profile while enabling ever-increasing revenue generation. I think the opportunity for Xerxes as we roll through the rest of this year and next year is very, very bright. The backlog right now extends well into the first half of 2026, and the same is true on the water side, remembering that our water business includes the sale of water tanks, same sites that produce fuel tanks.

Speaker #6: The business set a new revenue record in Q2 and did so while, quite frankly, underperforming in terms of total productive output. This is something we control, and we are continuing to take steps to move in the right direction.

Remembering that our water business includes the sale of <unk>.

Mr Tang St sites that produce fuel tanks.

Speaker #6: So, as we roll from mid-year through to the end of the year and into 2026, I believe we will see with Xerxes a continuous improvement in terms of productive output and site efficiency, which will enhance margin profiles while enabling ever-increasing revenue generation.

In fairness to our sales team on the water side, while they have set I expect they will set a new revenue record in 2025, they could have performed better than that if our production sites could keep up with tank production to the to the level that we'd like to see so.

Not quite where we'd like to be the opportunity on the table for <unk> is really robust and one that we will be pursuing very aggressively. So I think the future both near mid and long term is <unk> is very bright.

Speaker #6: I think the opportunity for Xerxes, as we roll through the rest of this year and next year, is very, very bright. The backlog right now extends well into the first half of 2026.

Speaker #6: And the same is true on the water side. Remembering that our water business includes the sale of water and water tanks—same sites that produce fuel tanks. So, in fairness to our sales team on the water side, while they have set, I expect they will set a new revenue record in 2025, they could have performed better than that if our production sites could keep up with tank production.

Perfect. That's all for me thank you.

One moment for our next question.

Our next question comes from Tim Marcelo with ATB capital markets. Your line is open.

Michael Reeves: In fairness to our sales team on the water side, while they have set, I expect they will set a new revenue record in 2025. They could have performed better than that if our production sites could keep up with tank production to the level that we would like to see. Not quite where we would like to be. The opportunity on the table for Xerxes is really robust and one that we will be pursuing very aggressively. I think the future both near mid and long term for Xerxes is very bright.

Tim Your line is open you can ask your question. If your line is muted could you. Please UN mute your line.

Speaker #6: To the level that we'd like to see. So, not quite where we'd like to be; the opportunity on the table for Xerxes is really robust.

Okay.

Good morning.

First question was just on.

And Mark and market demand elasticity for copper products I would imagine that if your services servicing infrastructure.

Speaker #6: And one that we will be pursuing very aggressively. So I think the future, both near, mid, and long-term for Xerxes is very bright.

And other sort of.

Ian Gillies: Perfect. That's all for me. Thank you.

Speaker #8: Perfect, that's all for me. Thank you.

Operator: One moment for our next question. Our next question comes from Tim Monacello with ATB Capital Markets. Your line is open. Tim, your line is open. You can ask your question. If your line is muted, could you please unmute the line?

Areas, where the cabling isn't necessarily a huge component of total cost.

Speaker #7: One moment for our next question. Our next question comes from Tim Monticello with ATB Capital Markets. Your line is open. Tim, your line is open.

A little bit of a price increase.

Cable, which is a critical component seems like copper price increase across the board might not necessarily have a huge impact on demand, maybe I'm missing something there.

Speaker #7: You can ask your question. If your line is muted, could you please unmute the line?

Ian Gillies: Oh, sorry. Class mute. Good morning. First question just on end market demand elasticity for copper products. I would imagine that, you know, if you are servicing infrastructure and other sort of areas where the cabling is not necessarily a huge component of total cost, that, you know, a little bit of a price increase on cable, which is a critical component, and it seems like, you know, copper prices must be increased across the board, might not necessarily have a huge impact on demand, but maybe I am missing something.

I think youre right in many cases.

Speaker #8: Good Good morning. First question, just on end market demand elasticity for copper products. I would imagine that you know if your servicing infrastructure and other sort of areas where the cabling isn't necessarily a huge component of total cost, that you know a little bit of price increase on cable, which is a critical component, seems like you know copper price must be increased across the board, might not necessarily have a huge impact on demand, but maybe I'm missing something there.

So I see our customers buy.

Only at the moment that they intend to deploy the product while others choose to maintain an inventory of their own. So that they can they can act a little bit more nimbly. So I think what we're likely to see us.

Customers, who have specific projects that require cable are going to buy cable obviously, we've got to ensure they continue to buy our cable, but but that's a fight unwilling to fight every day.

Where we have a little uncertainty is what will we see from customers, including some distributors, who hold inventory of product will they use. This next six months to draw down that inventory, while they wait to see how this tariff situation will unfold overlay continue with buying behavior that is consistent with recent practice.

Michael Reeves: I think you're right in many cases. Our customers buy only at the moment that they intend to deploy the product, while others choose to maintain an inventory of their own so that they can act a little bit more nimbly. I think what we're likely to see is customers who have specific projects that require cable are going to buy the cable. Obviously, we've got to ensure they continue to buy our cable, but that's a fight I'm willing to fight every day. Where we have a little uncertainty is what will we see from customers, including some distributors who hold inventory of product. Will they use this next six months to draw down that inventory while they wait to see how this tariff situation will unfold, or will they continue with buying behavior that is consistent with recent practice?

Speaker #6: I think you're right in many cases. Our customers buy only at the moment that they intend to deploy the product. While others choose to maintain an inventory of their own so that they can act a little bit more nimbly.

That's why we offer I would say a cautious outlook I think there is there is a pathway forward here, where we see virtually no impact to the marketplace, but I can't be certain of that and I think it's just prudent.

Speaker #6: So I think what we're likely to see is customers who have specific projects that require cable are going to buy cable. Obviously, we've got to ensure they continue to buy our cable.

Hi.

We need to see a few months, perhaps a couple of quarters unfold here before we will know exactly the environment, we're working with.

Speaker #6: But that's a fight I'm willing to fight every day. Where we have a little uncertainty is what we will see from customers, including some distributors who hold inventory of product.

Are you seeing dislocations in copper pricing between.

Speaker #6: Will they use this next six months to draw down that inventory while they wait to see how this tariff situation will unfold, or will they continue with buying behavior that is consistent with recent practice?

Brian on the vessel buying in Florida.

We saw steel prices and there was a lot lower in Canada versus the U S and that sort of level the playing field for.

Michael Reeves: That's why we offer, I would say, a cautious outlook. I think there is a pathway forward here where we see virtually no impact to the marketplace, but I can't be certain of that. I think it's just proven to height. We need to see a few months, perhaps a couple of quarters unfold here before we'll know exactly the environment we're working with.

Steel made products.

Speaker #6: That's why we offer a cautious outlook. I think there is a pathway forward here where we see virtually no impact to the marketplace.

Seeing something similar in copper is not the case we.

Haven't seen that yet remembering that north American traded copper tends to be priced on comex.

Speaker #6: But I can't be certain of that. I think it's just proven to us that we need to see a few months, perhaps a couple of quarters, unfold here before we'll know exactly the environment we're working with.

So there is some consistency on pricing.

It would not surprise me if we saw some dislocation over time here I think.

Ian Gillies: Are you seeing dislocations in copper pricing between buying in the U.S. and buying in Canada? We have seen steel prices move a lot lower in Canada versus the U.S., and that has sort of leveled the playing field for steel-made products. Are you seeing something similar in copper, or is that not the case?

Speaker #9: Are Are you seeing dislocations in copper pricing between buying in the US and buying in Canada? We've seen steel prices move a lot lower in Canada versus the US.

The U S doesn't have sufficient copper supply to meet the entire demand. So there is inevitably going to be some procurement from outside the U S and that likely keeps any dislocation to fairly limited range, but let's see how things evolve over the next couple of quarters I think we'll know generally.

Speaker #9: And that's sort of leveled the playing field for steel-made products. Are you seeing something similar in copper as is that not the case?

What we're dealing with as we get into the tail end of the year.

Michael Reeves: We haven't seen that yet, remembering that North American traded copper tends to be priced on COMEX. So there is some consistency on pricing, but it would not surprise me if we saw some dislocation over time here. I think, the U.S. doesn't have sufficient copper supply to meet the entire demand. So there is inevitably going to be some procurement from outside the U.S., and that likely keeps any dislocation to a fairly limited range. But let's see how things evolve over the next couple of quarters. I think we'll know generally what we're dealing with as we get into the tail end of the year.

Speaker #6: We haven't seen that yet. Remembering that North American traded copper tends to be priced on COMEX, there is some consistency in pricing. However, it would not surprise me if we saw some dislocation over time here.

Okay.

Paul.

In terms of five and six inch diameter pipe record revenue in the quarter.

Hum.

What percentage of flex type revenue is large diameter at this point.

Speaker #6: I think you know the US doesn't have sufficient copper supply to meet the entire demand. So there is inevitably going to be some procurement from outside the US.

And it's obviously evolving as we continue to gain share, we're now, let's say plus or minus 40%.

Speaker #6: And that likely keeps any dislocation to a fairly limited range. But let's see how things evolve over the next couple of quarters. I think we'll know generally what we're dealing with as we get into the tail end of the year.

$5 six instruments and I would not be surprised if it's closer to 50 as we get towards the second tail end of the second half.

Okay are you still gaining share in your small diameter papers that sort of trending with the market.

Ian Gillies: Okay, that's helpful. In terms of 5 and 6-inch diameter pipe record revenue in the quarter, what percentage of flex pipe revenue is large diameter at this point?

Speaker #8: Okay, that's helpful. In terms of five- and six-inch diameter pipe revenue recorded in the quarter, what percentage of flex pipe revenue is large diameter at this point?

The way we try to look at that is through a metric.

Revenue per completed well and I would tell you that our data tells us that our revenue per completed well for the.

The four inch and smaller products has been fairly stable. The last couple of years. So I don't believe we've seen any substantial decline in consumption of that product really what we've seen is the elevation of five inch six inch sales per well and unfortunately, a decline in the total number of wells, which has largely.

Michael Reeves: is obviously evolving as we continue to gain share. We are now, let us say, plus or minus 40% is in that five and six-inch range, and I would not be surprised if it is closer to 50% as we get towards the tail end of the second half.

Speaker #6: That's obviously evolving as we continue to gain share. We're now, let's say, plus or minus 40%. Isn't that in the five- and six-inch range? I would not be surprised if it's closer to 50% as we get towards the tail end of the second half.

Offset the market share.

Ian Gillies: Are you still gaining share in your small diameter pipe, or is that trending with the market?

Speaker #8: Okay, are you still gaining share in your small diameter pipe, or is that sort of trending with the market?

Okay. That's helpful.

And then storm water.

Can you talk a little bit about the growth rate that you are seeing in the storm water management product lines.

Michael Reeves: The way we try to look at that is through a metric: revenue per completed well. I would tell you that our data tells us that our revenue per completed well for the 4-inch and smaller products has been fairly stable the last couple of years. I do not believe we have seen any substantial decline in consumption of that product. Really, what we have seen is the elevation of 5-inch and 6-inch sales per well, and unfortunately, a decline in the total number of wells, which has largely set.

Speaker #6: The way we try to look at that is through a metric revenue per completed well, and I'd tell you that our data tells us that our revenue per completed well for the four-inch and smaller products has been fairly stable the last couple of years.

On a year over year basis in the first half of this year.

Yes, so our water revenue stream is generally divided into two so we have the storage tank revenue, which I referenced earlier, we will set a new record this year in water storage tanks sales, but it will be.

Speaker #6: So, I don't believe we've seen any substantial decline in consumption of that product. Really, what we've seen is the elevation of five-inch and six-inch sales per well.

Lower than it would otherwise have been if our production sites could keep up with demand. There. We are not production constraints on the second revenue stream, which is R infiltration chambers.

Speaker #6: And unfortunately, a decline in the total number of wells, which has largely offset the market share.

Meghan MacEachern: the market share.

Michael Reeves: Okay. That's helpful. Can you talk a little bit about the growth rate that you're seeing in the Stormwater Management product lines on a year-over-year basis in the first half of this year?

Speaker #8: Okay, that's helpful. And then stormwater, can you talk a little bit about the gross rate that you're seeing in the stormwater management product lines?

And I think when all is said and done the revenue from that side of the business will likely to be.

Close to double what it was last year. So we are.

Speaker #8: On a year-over-year basis in the first half of this year.

Are seeing substantial share gain we are continuing to make positive progress on our strategic pathway to convert fuel customers to become water customers as well.

Meghan MacEachern: Our water revenue stream is generally divided into two. We have the storage tank revenue, which I referenced earlier. We will set a new record this year in water storage tank sales, but it will be lower than it would otherwise have been if our production sites could keep up with demand there. We are not production constrained on the second revenue stream, which is our infiltration chambers. I think when all is said and done, the revenue from that side of the business will likely be close to double what it was last year. We are seeing substantial share gain. We are continuing to make positive progress on our strategic pathway to convert fuel customers to become water customers as well.

Speaker #6: Yeah, so our water revenue stream is generally divided into two. So we have the storage tank revenue, which I'm referenced earlier will set a new record this year in water storage tank sales.

Think as we emerge from this limitation of tank production.

Speaker #6: But it will be lower than it would otherwise have been if our production sites could keep up with demand there. We are not production constrained on the second revenue stream, which is our infiltration chambers.

This included here and into the early part of next year that will position the water team to deliver on a consolidated basis and even higher percentage rate of growth next year than this year.

Speaker #6: And I think when all is said and done, the revenue from that side of the business will likely be close to double what it was last year.

And where do you stand on <unk>.

Our longer term aspiration.

While we're being relatively the same size as the fuel market.

Okay.

An entirely achievable objective I think we've.

Probably fallen a little behind what I would have originally anticipated was our curve there largely because of this production capacity limit on tanks.

Meghan MacEachern: I think as we emerge from this limitation of tank production, as we move this year through the year and into the early part of next year, that will position the water team to deliver on a consolidated basis an even higher percentage rate of growth next year than this year.

But I would think that over the course of the next let's say four ish years, we can get into a range that is similar to the fuel side of the business. The demand is there the products are there our production capacity is the key it's one of the reasons, we invested in the new site in South Carolina.

Michael Reeves: Where do you stand on, I guess, the longer-term aspiration of Stormwater being relatively the same size as the fuel and market, like a proportional revenue?

Okay.

Helpful. And then as we think about Q4 relative to Q3 results. It sounds like youre going to get some margin expansion across probably.

Meghan MacEachern: I think the fuel side is an entirely achievable objective. I think we have probably fallen a little behind what I would have originally anticipated was our curve there, largely because of this production capacity limit on tanks. But I would think that over the course of the next, let us say, four-ish years, we can get into a range that is similar to the fuel side of the business. The demand is there. The products are there. Our production capacity is the key. It is one of the reasons we invested in the new site in South Carolina.

Most of our end markets as you.

Good efficiency levels up.

The facilities.

Is there any other.

Attributes et cetera, the unknowns around U S copper tariffs that we should be thinking about it in terms of the progression.

Consolidated results in Q4 versus Q3.

Yes, I think obviously.

The world around us has the potential to change, but let's assume it doesn't.

Michael Reeves: Okay. That is helpful. As we think about Q4 relative to Q3 results, it sounds like you are going to get some margin expansion across probably most end markets as you get efficiency levels up in new facilities. Is there any other key attributes outside of the unknowns around U.S. copper tariffs that we should be thinking about in terms of the progression of consolidated results in Q4 versus Q3?

Absent any any modifications to tariff policies or economic conditions, I think we would fully expect that oil field activity in North America continues to down in Q4 from Q3.

But outside of that I'm not sure I see a lot in the marketplace that is likely to be materially different in Q4 from Q3.

Yes.

Q3, moving into Q4 will be.

Hard to know with certainty, but it wouldn't surprise me if it was similar to Q3.

Meghan MacEachern: I think obviously the world around us has the potential to change, but let us assume it does not. Absent any modifications to tariff policies or economic conditions, I think we would fully expect that oil field activity in North America continues to move down in Q4 from Q3. Outside of that, I am not sure I see a lot in the marketplace that is likely to be materially different in Q4 from Q3. I guess Q3 moving into Q4 will be hard to know with certainty, but it would not surprise me if it was similar to Q3. We will just have to see where things go. We have opportunities to move in a more favorable direction than that, but the external market is the piece that really hit it right now.

We'll just have to see where things go we have opportunities to move.

In a more favorable direction on that but the external market is the piece of it.

Really predict right now.

Okay I appreciate it.

All my questions.

One moment for our next question.

Our next question comes from Zachary <unk> with National Bank Financial your line is open.

Good morning, everyone. Thanks for taking my questions good morning.

Could you tell us a little bit about the interplay between taking pricing in wire and cable and how that works through your backlog, where you think there might be stickiness on repricing.

So in the wire and cable business, we typically pursue two different pricing strategies depends on customer preference one would be a fixed selling price.

Michael Reeves: Okay, I appreciate it. That is all my questions.

Meghan MacEachern: One moment for our next question. Our next question comes from Zachary Evershed with National Bank Financial. Your line is open.

And the other would be.

Price that is variable based on the cost of copper at the time of delivery, obviously tariffs are an overlay to that.

Thomas Holloway: Good morning, everyone. Thanks for taking my questions.

Yes.

Michael Reeves: Morning.

In the majority of our fixed price.

Thomas Holloway: Could you tell us a little bit about the interplay between taking pricing in wire & cable products and how that works through your backlog, where you think there might be stickiness on repricing?

Contracts with customers.

Have either pre purchased.

Or in some other ways fixed or cost of copper. So our exposure there is relatively limited.

Meghan MacEachern: In the wire and cable business, we typically pursue two different pricing strategies. It depends on customer preference. One would be a fixed selling price, and the other would be a price that is variable based on the cost of copper at the time of delivery. Obviously, tariffs are an overlay to that. In the majority of our fixed price contracts with customers, we have either pre-purchased or in some other ways fixed our cost of copper. Our exposure there is relatively limited. On the variable side, you will have noticed the copper price has moved down quite substantially since the tariff announcement. That will factor into the ultimate cost that we charge our customer. We are working with that customer base to ensure that any modest uplift in cost that is not specific to copper price, but is more about tariff, is appropriately shared.

And on the variable side.

We will have noticed copper price has moved down quite substantially since the tariff announcement.

So that will factor into the ultimate cost that we charge, our customer and we're working with that customer base to ensure that any modest uplift in.

Cost that is not specific to copper price, but it is more about tariff.

Is appropriately shared.

In some cases I think we'll get a pass it through entirely in others, we may have to <unk>.

Sure the pain for a brief period of time, but everything that we're quoting or have quoted since the date that the tariff announcements came out we have incorporated our expected costs to ensure that we are made whole.

Broadly speaking so far that has been a difficult, but ultimately successful come our conversation with customers.

Got you thanks.

And that.

On the international market in flex pipe.

Can you maybe comment on how competitive you think your product is on the larger diameters as we did notice a bit of a pushback on the timing of when those orders may come back.

Meghan MacEachern: In some places, I think we will be able to pass it through entirely. In others, we may have to share the pain for a brief period of time. Everything that we are quoting or have quoted since the date that the tariff announcements came out, we have incorporated our expected costs to ensure that we are made whole. Broadly speaking, so far, that has been a difficult but ultimately successful conversation with customers.

Yes, I think the international market for the oilfield is one that has been a little quieter in 'twenty. Five then we would have anticipated, although given what's happened with commodity price.

Production versus consumption in that space not entirely surprising.

Thomas Holloway: Gotcha. Thanks. On the international market in flex pipe, can you maybe comment on how competitive you think your product is on the larger diameters as we did notice a bit of a pushback on the timing of when those orders may come back?

We've got customers internationally that typically procure and 30 large volume and they do so sporadically and then they will work down their inventory until they reach a point, where they are ready to replenish.

Certainly seeing some of our customers who are willing to go into slightly lower levels of inventory this year than they normally would do.

Meghan MacEachern: Yeah, I think the international market for the oil field is one that has been a little quieter in 2025 than we would have anticipated. Although, given what has happened with commodity price and production versus consumption in that space, not entirely surprising. We have got customers internationally that typically procure in fairly large volume, and they do so sporadically. Then they will work down their inventory until they reach a point where they are ready to replenish. We have certainly seen some of our customers who are willing to go to slightly lower levels of inventory this year than they normally would do, just because they are trying to control their costs. What I would expect is that we will start to see some larger international tenders come out later in the year, although I would expect any revenue associated with those to be 2026.

Just because they are trying to control their costs.

What I would expect is that we'll start to see some larger international tenders come out.

Later in the year.

Though I would expect any revenue associated with those to the 2006 broadly speaking from a technical perspective.

What we can offer to the market internationally today.

We've got customers internationally that typically procure and 30 large volume and they do so sporadically and then they will work down their inventory until they reach a point, where they are ready to replenish.

A portion of the market.

We certainly do not have the full range of temperature and sizes that every market internationally would choose to deploy which is in large part why steel is still use so heavily internationally, but in the portions that we conserve I can tell you that I don't believe we have lost any substantial tenders to anybody else. So it's not a question.

Certainly seeing some of our customers who are willing to go to slightly lower levels of inventory this year than they normally would do.

Just because they are trying to control their costs.

I would expect is that we'll start to see some larger international tenders come out.

Not winning it's been a question of tenders not happening.

In the year.

Thank you very much and then on that last point on capabilities I believe they were planning to introduce higher temperature reading products towards the end of this year how's that going.

So I would expect any revenue associated with those to be 26 broadly speaking from a technical perspective.

Meghan MacEachern: Broadly speaking, from a technical perspective, what we can offer to the market internationally today serves a portion of the market. We certainly do not have the full range of temperature and sizes that every market internationally would choose to deploy, which is in large part why steel is still used so heavily internationally. But in the portions that we can serve, I can tell you that I do not believe we have lost any substantial tenders to anybody else. So, it is not a question of not winning. It has been a question of tenders not happening.

What we can offer to the market internationally today.

Yeah, our technical technology team and flex hyper focused on two things larger diameters and higher temperatures as we've commented before and I'll just remind everybody we will be introducing the new larger diameter solutions as we cross from 25 into 'twenty six and higher temperature.

Serves a portion of the market.

We certainly do not have the full range of temperature and sizes that every market internationally would choose to deploy at which is in large part why steel is still use so heavily internationally, but in the portions that we can serve I can tell you that I don't believe we lost any substantial tenders to anybody else. So it's not a question.

I would expect that we will have final customer sign off as we roll into the early part of 'twenty six.

Not winning it's been a question of tenders not happening.

That's the case, then we could start to offer that product commercially during the course of 2026. So all of that activity is on schedule and so far the technologies are performing well.

Thomas Holloway: Thank you very much. On that last point on capabilities, I believe there are plans to introduce higher temperature rating products towards the end of this year. How is that going?

Thank you very much and then on that last point on capabilities. I believe there are plans to introduce higher temperature reading products towards the end of this year how's that going.

Thank you very much I'll turn it over.

And I'm not showing any further questions at this time I would like to turn the call back over to Mike for any closing remarks.

Meghan MacEachern: Our technology team in flex pipe is focused on two things: larger diameters and higher temperatures. As we have commented before, and I will just remind everybody, we will be introducing the new larger diameter solutions as we cross from 2025 into 2026. Higher temperature, I would expect that we will have final customer sign-off as we roll into the early part of 2026. If that is the case, then we could start to offer that product commercially during the course of 2026. All of that activity is on schedule, and so far, the technologies are performing well.

Yeah, our technical technology team and flex hyper focused on two things larger diameters and higher temperatures as we've commented before and I'll just remind everybody we will be introducing the new larger diameter solutions as we cross from 25 into 'twenty six.

Thank you very much for your interest in matter and we look forward to speaking to everybody in another 90 days.

Have a great day. Thank you ladies and gentlemen. This does conclude today's presentation. We thank you for your participation you may now disconnect and have a wonderful day.

Higher temperature.

I would expect that we will have final customer sign off as we roll into the early part of 'twenty six.

Yes.

That's the case, then we could start to offer that product commercially during the course of 2026. So all of that activity is on schedule and so far the technologies are performing well.

Thomas Holloway: Thank you very much. I will turn it over.

Thank you very much I'll turn it over.

Meghan MacEachern: Not much showing any further questions at this time. I would like to turn the call back over to Mike for any closing remarks.

And I'm not showing any further questions at this time I would like to turn the call back over to Mike for any closing remarks.

Meghan MacEachern: Thank you very much for your interest in Mattr. We will look forward to speaking to everybody in another 90 days. Have a great day.

Thank you very much for your interest in matter and we look forward to speaking to everybody in another 90 days.

Meghan MacEachern: Thank you, ladies and gentlemen. This concludes today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day.

Have a great day. Thank you ladies and gentlemen. This does conclude today's presentation. We thank you for your participation you may now disconnect and have a wonderful day.

Okay.

[music].

Okay.

Okay.