Q2 2025 Mullen Group Ltd Earnings Call

We are in listen only mode and the conference is being recorded after the presentation there'll be an opportunity to ask questions to join the question queue Press Star then one on your telephone keypad should you need assistance during the conference call. He may signal, an operator by pressing Star then zero.

Speaker Change: I would now like to turn the conference over to Murray K Mullen Chair Senior Executive Officer and President.

Speaker Change: Go ahead.

Speaker Change: Thank you and welcome to Mullen group's quarterly conference call.

Speaker Change: The format for today's call will be similar to previous Investor update call. This morning.

Speaker Change: We will once again cover remains subject matters before turning the call over to you for the Q&A session. Now I will provide a review of the macro environment. That's a recap of Q2.

Speaker Change: Cautionary locker will provide an overview of the second quarter financial highlights and for those interested in all of the details of Q2 interim report has been posted on our website.

Speaker Change: At Www Dot Mullen hyphen group Dot com as well as filed on SEDAR plus 60.

Speaker Change: It's 60 days plus documents contains all of the information you need as it relates to our Q2 financial results and balance sheet, then I will close with our expectations and plans for Q3 and the balance of 'twenty five.

Thank you for standing by. This is the conference operator. Welcome to the Mullen group. Limited second quarter earnings conference call and webcast. As a reminder, all participants are in listen-only mode. And the conference is being recorded after the presentation. There will be an opportunity to ask questions to join the question. Queue press star, then 1 on your telephone keypad. Should you need assistance during the conference? Call you may signal an operator by pressing star then zero?

Speaker Change: <unk> commenced today's review I'll remind everyone that our presentation contains forward looking statements that are based upon current expectations and are subject to a number of risks and uncertainties and as such actual results may differ materially.

Speaker Change: I would now like to turn the conference over to Murray. K, Mullen chair, senior executive officer and president. Please go ahead.

Speaker Change: Thank you and welcome to Mullen groups quarterly conference call.

Speaker Change: Further information identifying the risks uncertainties and assumptions can be found in the disclosure documents.

Speaker Change: the format for today's call will be similar to previous investor update calls, and this morning,

Speaker Change: With me this morning on enjoined in OCA talks with the entire senior executive team, that's Richard Maloney Senior operating as Officer, Carson Urlacher Senior financial Officer, and Joanna Scott Who's a senior corporate officer.

Speaker Change: The first item is.

Speaker Change: Overview of the macro environment so.

Speaker Change: In preparation for today's presentation I'll refer to my previous conference calls nodes.

Speaker Change: No AI for me on this one I read the transcripts.

Speaker Change: And in summary, there are two major themes that have been repeatedly articulated to investors since the start of the year. The first was that we expected. The overall 2025 economy generally in line with 24, no growth, but significant decline no significant declines either just.

Speaker Change: Beat our plus. And now this 60 paid plus. Document contains all of the information you need as it relates to our Q2 Financial results and balance sheet. Then I will close with our expectations and plans for Q3 and the balance of 25.

Speaker Change: Let's call it more of the same in other words, we were not planning on our independently managed business units to generate any internally driven growth.

Speaker Change: Now, before I commence to today's review, I'll remind everyone that our presentation contains forward-looking statements that are based upon current expectations, and our subject to a number of risks and uncertainties. And as such actually results, May differ materially, uh, further information, identifying the risks, the uncertainties and assumptions can be found in the disclosure documents,

Speaker Change: The problem you have under this scenario is that when demand is not growing the competition reverse to survival mode, which from my experience is not a healthy long term strategy, but it is a short term reality. Furthermore, the longer the economy remains in a no growth territory. The more competitors that come to lowering rates just to maintain some level of cash flow.

Speaker Change: With me this morning, uh, I'm enjoyed in oaky's with the entire senior executive team. That's Richard Maloney, senior, operating as officer uh, Carson or lacer, senior financial officer, in Joanna, Scott, who's a senior corporate officer.

Speaker Change: Um, first item is uh, the overview of the macro environment. So,

Speaker Change: This is precisely why we asked our business units to buckle up heading into 2025 simply.

Speaker Change: Kind of in preparation for today's presentation. I, I refer to my previous conference calls notes and

Speaker Change: Simply put.

Speaker Change: No, AI. For me on this 1, I read the transcripts.

Speaker Change: In the absence of any meaningful growth in the economy, the consumer gains the leverage advantage and one must adapt to a lower cost structure as painful as it is to implement.

Speaker Change: and in summary, there are 2 major themes that uh have been repeatedly articulated to investors since the start of the year the first

Speaker Change: The alternative is to chase internal growth by offering price concessions, which is a flawed strategy that Mullen group does not embark upon because.

Speaker Change: Was that we expected the overall 2025 economy to generally in line with 24 no growth.

Speaker Change: Honestly this would require that we asked employees to take less or investors to make nothing.

Speaker Change: But significant uh, decline. No significant declines, either just

Speaker Change: So we prefer to protect margins rather than attempting to gain market share when pricing is under attack.

Speaker Change: Let's call it more of the same. In other words, we were not planning on our independently managed business units to generate any internally driven growth.

Speaker Change: The second theme, we highlighted was the acquisitions would drive growth.

Speaker Change: Here at Mullen, we are a counter cyclical thinker.

Speaker Change: Prefer to pursue acquisitions when internal growth is difficult and this strategy allows our organization to grow regardless of the economy when.

Speaker Change: Now, the problem you have under this scenario is that when demand is not growing, the competition reversed to survival mode, which from my experience is not a healthy long-term strategy, but it is a short-term reality. Furthermore, the longer the economy remains and in no growth territory, the more competitors succumb to lowering rates, just to maintain some level of cash flow.

Speaker Change: When the economy economic growth is abundant and we grow with our customers when the economy struggles.

Speaker Change: Now, this is precisely why we asked our business units to buckle up heading into 2025.

Speaker Change: It has been for a couple of years now we acquire are good companies and verticals of the economy and where we believe there is long term potential.

Speaker Change: Simply put.

Speaker Change: To be clear this is not a grow just to grow strategy. It is based upon expanding where we see long term opportunity and a solid customer base. It just so happens that great opportunities are presented more frequently during times of stress when others do not or cannot take a longer term view, we can in <unk>.

Speaker Change: In the absence of any meaningful growth in the economy, the consumer gains The Leverage advantage and 1 must adopt a lower cost structure as painful as it is to implement.

Speaker Change: The alternative is to chase internal growth by offering price concessions, which is a flawed strategy, that Mullen group does not embarked upon because

Speaker Change: We do at Mullen group now with this as a backdrop, let me turn to a few highlights from the second quarter.

Speaker Change: Honestly, this would require that we asked employees to take less or investors to make nothing. So we prefer to protect margins rather than attempting to gain market share when pricing is under attack.

Speaker Change: 9% growth in topline revenues.

Speaker Change: The second theme we highlighted was that Acquisitions would drive growth.

Speaker Change: In this market I would say that is fantastic our business generated over $540 million in consolidated revenues and this during a time of economic stagnation.

Speaker Change: In the second quarter, we reported headline GDP.

Speaker Change: You know, here at Mullen, you know, we're a counter cyclical thinker. Uh, we'd prefer to pursue Acquisitions when internal growth is difficult, and this strategy allows our organization to grow regardless of the economy.

Speaker Change: We didn't report it was reported that headline Canadian GDP came in very soft for April and May and that corresponds directly to what we saw in our sales channels. Despite the economic headwinds. However, we grew revenues impressively.

Speaker Change: when the economy economic growth is abundant, we grow with our customers,

Speaker Change: when the economy struggles.

Speaker Change: Like it has been for a couple of years. Now, we acquire good companies in verticals of the economy where we believe there's long-term potential.

Speaker Change: And the main reason is acquisitions, which added $52 6 million in incremental rentals revenues.

Speaker Change: But I don't want to discount the hard work of the.

Speaker Change: Of all of the teams are 41 business units collectively.

Speaker Change: They did a really nice job managing in the current economy I know it was not easy.

Speaker Change: And the discussions that many of our business units have with their customers were challenging.

Speaker Change: The two were dealing with their own set of issues. So to generate same store sales of $440 8 million.

Speaker Change: Now to be clear, this is not a growth, just a growth strategy, it is based upon expanding or we see long-term opportunity in a solid customer base, it just so happens. The great opportunities are presented more frequently during times of stress when others do not or cannot take a longer term view, we can and we do at Mullen group. Now what this is about is a backdrop. Let me turn to a few highlights in the second quarter.

Speaker Change: How does 9% growth in Topline Revenue sound?

Speaker Change: Which is after adjusting for fuel surcharge revenues.

Speaker Change: It came in virtually flat year over year, which is impressive from my perspective, I've got to say well done team.

In this market, I say that is fantastic. Our business generated over 540 million in Consolidated revenues and this during a time of economic stagnation,

Speaker Change: Another highlight.

Speaker Change: In the second quarter, we reported headline GDP.

Speaker Change: I have to point out is the issuance of the new long term bonds approximately $400 million Canadian dollars, which was finalized and closed in July.

Speaker Change: Now I'll, let <unk> talk to the specifics, but let's just say I'm pretty damn proud of the fact that we can close this bond deal at a time when there's so much uncertainty not only did we put this organization in a great spot for the next decade, but we've also had we've now got over $100 million in available cash to continue.

Speaker Change: Uh we didn't report. It was reported that headline Canadian GDP came in very soft for April and May and that corresponds directly to what we saw in our sales channels despite the economic headwinds however we were we grew in revenues impressively and the main reason is Acquisitions which added 52.6 million in incremental, rentals revenues know, but I don't want to Discount the hard work of the of all of the teams at our 41 business units. Collectively, they did a really nice job managing in the current economy. I know it was not easy.

Speaker Change: Growing our business quite simply.

Speaker Change: There is so much to like about this transaction and I'd be remiss, if I did not thank the investors who made such a meaningful investment in <unk> group.

Speaker Change: And the discussions that many of our business units had with their customers were challenging as they too were dealing with their own set of issues. So to generate same store sales of 440.8 million

Speaker Change: In terms of profitability, we did okay, but given especially within the context of the market and the circumstances and there was a lot of noise associated with big swing in the Canadian dollar versus the U S dollar.

Speaker Change: Uh, which is after adjusting for fuel search charge revenues.

Speaker Change: It came in virtually flat year-over-year which is impressive for my prospective I got to say Well done team.

Speaker Change: Another highlight.

Speaker Change: Which negatively impacted corporate costs associated with our U S dollar holdings.

Speaker Change: In addition, as I mentioned earlier pricing remains under pressure.

Speaker Change: That's never good for profitability.

Speaker Change: I have to uh, point out, uh, is the issuance of the new long-term bonds approximately 400 million Canadian dollars, which was finalized and closed in July.

Speaker Change: Our cost saving initiatives at the business unit level mitigated some of these pressures, but not all and lastly, the last two acquisitions of size that we completed there are asset light businesses and they don't generate the same or will be dollar margins as our heavy asset business units do but here's the number I really focus on <unk>.

Speaker Change: Cash from operations remained a healthy $117 million virtually the same as 2024.

Speaker Change: Now, I'll let Carson talk to the specifics, but let's just say, I'm pretty dang proud of the fact that we could close this Bond deal at a time. When there's so much uncertainty. Not only did we put this organization in a great spot for the next decade? But we've also, and we've now got over hundred million dollars in available cash to continue growing. Our business, quite simply

Speaker Change: In terms of a little bit of segment discussion I'm not going to repeat whats presented in the MD&A and the press release.

Speaker Change: Uh, there's so much to like about this transaction and I'd be remiss if I did not uh, thank the investors who made such a meaningful investment in Mullen group.

Speaker Change: Documents that conclude a very detailed analysis, but I'll offer some key highlights for each segment, let's start with the most stable and once again, our largest and Thats LTM revenues were up $11 million over the same quarters last year climbing to $200 million Mark.

Speaker Change: Um, in terms of profitability, yeah, we did okay. But uh, given you know, specially within the context of the market and the circumstances, and there was a lot of noise uh associated with big swing in the Canadian dollar versus the US dollar, uh, which negatively impacted corporate costs associated with our US dollar Holdings.

Speaker Change: Press it within the context of a no growth economy, and the fact that fuel surcharge revenues were down by nearly $3 2 million. EBITDA. However was declined slightly due to cost pressures and higher purchase transportation, but still came in at a very respectable $35 7 million in the quarter.

Speaker Change: In addition, as I mentioned earlier, pricing remains Under Pressure. Uh, that's never good for profitability.

Speaker Change: Now the <unk> market is steady.

Speaker Change: But as I noted earlier prices what matters most today from shippers.

Speaker Change: So there were no price increases and some modest gift bags in the quarter and that led to the lower margin.

Speaker Change: Uh, our cost-saving initiative is that the business unit level, uh, mitigated, some of these pressures, but not all. And lastly, the last 2, uh, Acquisitions of size that we completed, you know, there are asset like businesses and they don't generate the same Hobie doll margins as our heavy asset, business units do. But here's the number. I really focus on cash from

Speaker Change: Logistics and warehousing is where we really saw a nice boost primarily due to acquisitions of course rising by a healthy 15% to $173 6 million what is most impressive.

Speaker Change: Operations remained a healthy 117 million virtually the same as 2024.

Speaker Change: In terms of a little bit of segments discussion, uh, you know, I'm not going to repeat what's presented in the mdna and the press release.

Speaker Change: Both the quarter and my view was that the segment business units sell revenues close to last year. Despite no growth in the economy and issues associated with the trade tariff steelmaking customers. It seemed we're reacting to market conditions rather than forward planning.

Speaker Change: So all I BDA grew old, albeit margins fell by nearly 1%.

Speaker Change: But thats, primarily due to the cost structures, we inherit with acquisitions.

Speaker Change: There is no doubt that we have some work to do with these new business unit to tighten up on the cost side.

Speaker Change: And I was mentioning this I'll go off script, a little bit now when you invest.

Speaker Change: You know, documents that conclude a very detailed analysis, but I'll offer some key highlights for each segment. Let's start with the most stable and once again, our largest and that's LTL revenues were up 11 million over the same quarters last year climbing to 200 million. Mark, it impressive within the context of a no growth economy and the fact that fuel surcharge revenues were down by nearly 3.2 million Obi. However, was declined slightly due to cost pressures and higher purchase Transportation, but still came in at a very respectable 35.7. Million in the quarter. Now, the LTL Market is steady

Speaker Change: No different than moving into Europe, if you build a house it takes a little bit of time before you can move in and I wish I could put the investment upfront acquisitions are exactly the same way.

Speaker Change: but as I noted earlier prices what matters most today for shippers?

Speaker Change: So there were no price increases and some modest givebacks in the quarter and that led to the lower margin.

Speaker Change: To make the acquisition and just like all the other ones that we've done since we've acquired them then you improve it over time.

Speaker Change: Which is exactly what our focus will be here.

Speaker Change: Corporate office.

Speaker Change: Now similar story in the U S and International Logistics segment, we grew the acquisition of Cole USA boosted revenues by 36, 7% to 64 million.

Speaker Change: Logistics and warehousing is where we really saw a nice boost primarily due to Acquisitions of course, Rising by a healthy, 15% to 173.6 million. What is most impressive?

Speaker Change: And for the first time in a few quarters will be increased in the segment.

Speaker Change: about the quarter in my view was that the segment business units, held revenues close to last year despite no growth in the economy and issues associated with the trade tariff stalemate,

Speaker Change: Margins are not where we want it but this segment's characterize it has no fixed assets of <unk> technology. So margins on gross revenues will be smaller due to the nature of the business. What we will be looking at with these usb's teams is improved margins on invested capital.

Speaker Change: Customers it seemed were reacting to market conditions rather than forward planning.

Speaker Change: Our specialized industrial service segment, we struggled declined by $3 7 million to $105 5 million drilling activity in Western Canada slowed as producers cut drilling programs due to declines in crude oil and natural gas prices during the quarter.

Speaker Change: Uh, so oibda, it it grew all albeit margins fell by nearly 1% uh but that's primarily due to the cost structures. We inherited with Acquisitions uh but there's no doubt that we have some work to do with these new business units to tighten up on the cost side. You know, and I was mentioning this, I'll go off script a little bit now, when you invest

Speaker Change: No different than moving into your if you build a house, it takes a little bit of time before you can move in and out. She got to put the investment up. First Acquisitions are exactly the same way.

Speaker Change: We also took the very necessary step up the marketing some project work when pricing fell below acceptable levels.

Speaker Change: You got to make the acquisition and just like all the other ones that we've done since we've acquired them, then you improve it over time. So, uh, which is exactly what our Focus will be here at the corporate office.

Speaker Change: Our response was to give up the business rather than invest new capital at unacceptable terms. We this leave this to our on disciplined competition.

Speaker Change: now a similar story in the US and international Logistics segment, we grew, uh, the acquisition of call USA boosted revenues by 36.7% to 64 million,

Speaker Change: One of the business units that did overachieve was our Canadian Dewatering group.

Speaker Change: Uh and for the first time in a few quarters, what we do uh increased uh in the segment.

Speaker Change: They opened a new facility in northwest, Ontario, let's call that mining country, where activity levels are accelerating.

Speaker Change: The overall decline in business was primarily the reason will be draw fell in the quarter by $2 9 million, but our diversity amongst service offerings and strong performance by Canadian New water <unk>.

Speaker Change: <unk> health so all in all boy, we were busy corporate office and exciting group was exciting time for our group.

Speaker Change: And I would say is probably a decent quarter given the circumstances.

Speaker Change: And along with.

Speaker Change: And when you do acquisitions, you have onetime costs associated with acquisitions as I highlighted a little bit earlier.

Speaker Change: Are specialized Industrial Service segment. Uh, you know we struggled uh to decline by 3.7 million to 105.5 million drilling activity, in Western CL Canada, slowed as producers cut drilling programs. Due to declines in crude oil and natural gas prices uh during the quarter.

Speaker Change: Most importantly, we've been.

Speaker Change: Uh, we also took the very necessary step of demarketing. Some Project work when pricing fell below acceptable levels.

Speaker Change: <unk> positioned our company for better days, we've expanded into a new vertical within the economy.

Speaker Change: We are positioned to capitalize once the economy starts growing that's for sure.

Speaker Change: Uh, our response was to give up the business rather than invest New Capital at unacceptable terms. We just leave this to our undisciplined competition.

Speaker Change: Now when this happens I don't know, but history tells us it will happen again, just as it has in the past and the Mullen group will be prepared.

Speaker Change: 1 of the business units that did overcharge was our Canadian dewatering group.

Carsten: Turn the call over to Carsten.

Carsten: For more of the second quarter quarterly financial performance and the impact of the new bond deal on our balance sheet Carson taken away.

Carsten: Perfect. Thank you Mary and welcome everyone.

Carsten: I'll provide some of the additional highlights from the second quarter. The details of which are fully explained in our second quarter interim report.

Speaker Change: They opened a new facility in Northwest Ontario. Let's call that mining country where activity levels were are accelerating. The overall decline in business was primarily the reason I'll be doing a fell on the quarter by 2.9 Million but our diversity of our service offerings and strong performance by Canadian. The water definitely helped. So all in all

Carsten: Overall, despite a stagnant Canadian economy, we generated record revenues compared to any previous quarter at just over $540 million, an increase of $45 3 million or nine 1% from the same period last year.

Speaker Change: Boy, we were busy with corporate office and exciting group was exciting time for our our group. Uh, and I would say it's probably decent quarter, given the circumstances

Carsten: So acquisitions is what drove this revenue growth by adding $52 6 million of incremental revenue and consisted mainly from including one month of it the results of KOL group. One final months from the results of container World and a full quarter from Pacific Northwest.

Speaker Change: And along with you, you know, when you do Acquisitions, you have 1-time costs associated with Acquisitions as I highlighted a little bit earlier.

Speaker Change: Most importantly, you know, we've been positioned our company for better days. We've expanded into a new vertical within the economy.

Uh, we're positioned to capitalize once the economy starts growing, that's for sure.

Carsten: Somewhat offsetting this growth was seven $7 million decline in fuel surcharge revenue on lower diesel fuel prices.

Carsten: Collectively revenue from our existing business units, excluding acquisitions and fuel surcharge increased slightly year over year rent.

Carsten: Revenue per working day in the quarter averaged out at $8 6 million.

Carsten: Best month in the quarter in terms of revenue was the month of June.

Carsten: Where we generated almost $200 million worth of revenue or $9 4 million of revenue per working day, largely from adding the financial results of KOL group.

Carsten: So we finished the second quarter with solid results as we head into Q3, which in terms of seasonality over the past couple of years has typically been our strongest quarter of the year.

Carsten: We generated <unk> of $76 6 million, a decrease of $9 1 million compared to the prior year. However, most of this decrease was associated with the impact of foreign exchange.

Carsten: Excluding the impact of foreign exchange gains and losses on us dollar denominated debt held within our corporate.

Carsten: Segment, a term we've now called Hawaii BDA adjusted was $83 8 million down slightly by 818.

Carsten: Compared to last year.

Carsten: We experienced lower <unk> from our existing business units and higher corporate costs as we expanded our team in anticipation of future growth somewhat offsetting these declines was $6 7 million of incremental <unk> from acquisitions.

Carsten: Operating margin on acquisitions was 12, 7% due to the non asset based nature of the operations and from how <unk> accounting standards require us to recognize revenue on a gross basis.

Carsten: <unk> adjusted as a percentage of consolidated revenues was 15, 5% down from 17, 3% due to cost escalation foreign exchange losses experienced at the segment level competitive pricing conditions and a reduction in higher margin specialized business.

Carsten: Despite lower operating margins generated by our recent acquisitions, they still generate free cash in terms of cash we continue to generate strong free cash in excess of our needs as evidenced by the $77 8 million of net cash generated from operating activities in the quarter.

Carsten: Now, let's take a look at how we performed by segment.

Carsten: First our largest segment revenues in the <unk> segment were just over $200 million.

Carsten: An increase of $11 3 million from last year due to the $11 $8 million of incremental revenue from acquisitions being somewhat offset by a $3 $2 million decline in fuel surcharge revenue.

Carsten: Revenue from our existing business units, excluding acquisitions and fuel surcharge increased by $2 7 million due to steady customer demand and from some market share gains.

Carsten: <unk> was $35 7 million down slightly by $1 8 million last year. This decline was due to the combination of both competitive pricing and cost pressures, which resulted in lower OE BDA at our existing business units, which somewhat was offset by $2 5 million of incremental <unk> from acquisition.

Carsten: <unk>.

Carsten: Operating margin decreased by 2% to 17, 8%, primarily due to the tight market conditions, whereby additional cost pressures could not could not be passed along through customer rate increases.

Carsten: Our second largest segment is our <unk> segment revenues in the <unk> segment were $173 6 million up $22 7 million or 15% from last year acquisitions added $24 3 million of incremental revenue, reflecting the one month of results from container World and one month from KOL group.

Carsten: KOL groups Canadian operations, which was somewhat offset by a slight $3 $4 million decline in fuel surcharge revenue.

Carsten: Revenues from our existing business units, excluding acquisitions and fuel surcharge increased modestly by $1 8 million and was mainly due to certain project work associated with an oil processing facility in Alaska that led to higher revenues and non trucking.

Carsten: <unk> was $31 9 million up $2 9 million or 10% from the prior year with acquisitions, adding $3 2 million of incremental <unk>, while our business units, excluding acquisitions generated relatively consistent results compared to last year.

Carsten: Operating margins decreased by 0.8% to 18, 4%, primarily due to the acquisitions and the resulting change in our revenue mix.

Carsten: KOL group as a non asset based business that generates free cash, but at a lower margin.

Carsten: Excluding the impact of acquisitions operating margins would have been 19, 2%, which is virtually flat compared to prior year's results. So our existing business units, excluding acquisitions did a great job in protecting margin.

Carsten: Moving to our F&I segment revenues were $105 5 million down $4 1 million or three 7% due.

Carsten: Due to a lack of large capital projects being sanctioned and cat and Canada.

Speaker Change: <unk> was $31 9 million up $2 9 million or 10% from the prior year with acquisitions, adding $3 2 million of incremental all IBD eight while our business units, excluding acquisitions generated relatively consistent results compared to last year.

Carsten: Press commodity prices and wildfires that negatively impacted our customers' drilling and production plans.

Carsten: These factors led to a decline in revenue from our production services and drilling related services business units.

Carsten: We also marketed certain customers due to pricing as we will not compromise the safety of our people are put expensive equipment to work at unprofitable rates.

Speaker Change: Operating margins decreased by 0.8% to 18, 4%, primarily due to the acquisitions and the resulting change in our revenue mix.

Carsten: Fuel surcharge also decreased by $1 2 million compared to the prior year.

Speaker Change: KOL group as a non asset based business that generates free cash, but at a lower margin.

Carsten: Somewhat offsetting these declines were revenue gains made by our specialized services business units tied to infrastructure and mining.

Speaker Change: Excluding the impact of acquisitions operating margins would have been 19, 2%, which is virtually flat compared to prior year's results. So our existing business units, excluding acquisitions did a great job in protecting margin.

Carsten: As Canadian dewatering experienced greater demand for their services.

Carsten: EBITDA was $20 6 million down $2 9 million from prior year as our production services business units experienced a decrease.

Speaker Change: Moving to our <unk> segment revenues were $105 5 million down $4 1 million or three 7%.

Carsten: <unk> due to a reduction in facility maintenance and turnaround projects.

Carsten: The specialized services business units experienced a decrease in OE BDA, mainly due to lower demand for civil construction services at Smith contractors well while.

Speaker Change: Due to a lack of large capital projects being sanctioned and cat and Canada.

Speaker Change: Depressed commodity prices and wildfires that negatively impacted our customers' drilling and production plans.

Carsten: While our drilling related services business units recognized a decline due to lower customer demand.

Speaker Change: These factors led to a decline in revenue from our production services and drilling related services business units.

Carsten: Operating margins decreased by one 9% to 19, 5%, which was mainly due to a reduction in higher margin business.

Speaker Change: We also de marketed certain customers due to pricing as we will not compromise the safety of our people are put expensive equipment to work had unprofitable rates.

Carsten: Within our non asset based <unk> segment revenues were $64 1 million up nicely by $17 2 million or <unk> 36, 7%.

Speaker Change: Fuel surcharge also decreased by $1 2 million compared to the prior year.

Carsten: From last year as KOL groups U S operations added $16 5 million of incremental revenue in the month of June.

Speaker Change: Somewhat offsetting these declines were revenue gains made by our specialized services business units tied to infrastructure and mining as Canadian dewatering experienced greater demand for their services.

Holistic also experienced slightly higher revenues compared to last year.

Speaker Change: <unk> was $20 6 million down $2 9 million from prior year as our production services business units experienced a decrease in <unk> due to a reduction in facility maintenance and turnaround projects.

Carsten: <unk> was $1 2 million of zero point $4 million from the prior year with KOL groups U S operations, adding 1 million of incremental <unk>, while <unk> holistic results were impacted by a zero point $5 million negative variance in foreign exchange.

Speaker Change: Especially I services business units experienced a decrease in OE BDA, mainly due to lower demand for civil construction services at Smith contractors, well, while our drilling related services business units recognized a decline due to lower customer demand.

Carsten: Operating margin on a net revenue basis was 23%, which was slightly higher than last year due to higher margins experienced at coal USA.

Speaker Change: Operating margins decreased by one 9% to 19, 5%, which was mainly due to a reduction in higher margin business.

Carsten: Now moving to the balance sheet.

Carsten: July the 10th we announced the closing of a $400 million private placement debt transaction.

Speaker Change: Within our non asset U S. Based <unk> segment revenues were $64 1 million up nicely by $17 2 million or <unk> 36, 7%.

Carsten: There was strong demand from the bond markets and the offering was significantly over subscribed mainly due to our disciplined approach to acquisitions or larger real estate portfolio and our ability to generate free cash through all business cycles.

Speaker Change: From last year as KOL groups U S operations added $16 5 million of incremental revenue in the month of June.

Speaker Change: Holistic also experienced slightly higher revenues compared to last year.

Carsten: These 12 year long term notes match, our long term investment strategy and once again provides us with a well structured balance sheet for the next decade.

Speaker Change: <unk> was $1 2 million of zero point $4 million from the prior year with KOL groups U S operations, adding 1 million of incremental or IBD, while holistic holistic results were impacted by a zero point $5 million negative variance in foreign exchange.

Carsten: We use some of these funds to prepay approximately $237 million of private notes that were set to mature in October of 2026 and $207 million of amounts that were drawn on our bank credit facilities, which was mainly.

Carsten: Drag from funds that we use to acquire the KOL group.

Speaker Change: Operating margin on a net revenue basis was 23%, which was slightly higher than last year due to higher margins experienced at cold USA.

Carsten: Today, we now have over $80 million of cash on hand, a derivative with a cash value of close to $30 million and access to $525 million of Undrawn Bank lines, and we continue to generate free cash.

Speaker Change: Now moving to the balance sheet.

Speaker Change: On July 10th we announced the closing of a $400 million private placement debt transaction there.

Carsten: The blended interest rate on our new private placement debt going forward is now approximately six 1% per annum.

Speaker Change: There was strong demand from the bond markets and the offering was significantly over subscribed mainly due to our disciplined approach to acquisitions or larger real estate portfolio and our ability to generate free cash through all business cycles.

Carsten: In terms of our debt covenants total net debt to operating cash flow would have been $2 57 to one had the July debt refinancing and repayments occurred in the month of June.

Speaker Change: These 12 year long term notes match, our long term investment strategy and once again provides us with a well structured balance sheet for the next decade.

Carsten: In summary, our balance sheet is well structured with long term financing, we have ample short term liquidity and debt covenant ratios that are acceptable and within management's comfort range, allowing us to be opportunistic going forward when the right opportunities come along.

Speaker Change: We use some of these funds to prepay approximately $237 million of private notes that were set to mature in October of 2026 and $207 million of amounts that were drawn on our bank credit facilities, which was mainly.

Carsten: So with that Murray I will pass the conference back to you Hey, Thanks Carl.

Speaker Change: The drive from the funds that we used to acquire the KOL group.

Murray: Well done again, just before the Q&A session.

Speaker Change: Today, we now have over $80 million of cash on hand, a derivative with a cash value of close to $30 million and access to $525 million of Undrawn Bank lines, and we continue to generate free cash.

Murray: I am going to provide some thoughts on how the balance of 25 is looking now I'm now going to refer to this as guidance because there are so many unknowns today, but.

Murray: But let me start with a few of the issues that I watch really closely and intently.

Speaker Change: The blended interest rate on our new private placement debt going forward is now approximately six 1% per annum.

Murray: Number one and this is what I would tell all of our people.

Murray: There is no reason to worry doesn't help anything just tighten up.

Speaker Change: In terms of our debt covenants total net debt to operating cash flow would have been $2 57 to one had the July debt refinancing and the repayments occurred in the month of June.

Murray: And why because the Canadian economy is not in a bad display pace place. It just happens that any significant growth is sometimes somewhere into the future.

Speaker Change: In summary, our balance sheet is well structured with long term financing, we have ample short term liquidity and debt covenant ratios that are acceptable and within management's comfort range, allowing us to be opportunistic going forward when the right opportunities come along so.

Murray: Now I know there are Canadian politicians that are of the view that Canada is an economic superpower.

Murray: But from my perspective. This is at odds with the current low growth economic statistics or what we see in terms of freight demand.

Speaker Change: So with that Murray I will pass the conference back to you Hey, Thanks Carl.

Murray: If however, they can lead candidate into a high growth economy.

Murray: Well done again, just before the Q&A session.

Murray: Clearly Mullen group our employees our shareholders like so many others would be a major beneficiary.

Speaker Change: I'm going to provide some thoughts on how the balance of 25 is looking now I'm now going to refer to this as guidance because there are so many unknowns today.

Murray: And I want to emphasize many Canadians would benefit.

Murray: Canada becomes a high growth economy.

Speaker Change: But let me start with a few of the issues that I watch really closely and intently.

Murray: Yeah.

Murray: And we'd like most businesses don't believe the nation building projects should be delayed by endless talks.

Speaker Change: Number one and this is what I would tell all of our people.

Speaker Change: There's no reason to worry doesn't help anything just tighten up.

Murray: Action is what is required for the main issue of course is that in Canada. These types of economic decisions are often debated for years by those with different views and agendas.

Speaker Change: And why because the Canadian economy is not in a bad splay pace place. It just happens that any significant growth is sometimes somewhere into the future.

Murray: In the meantime.

Murray: Other countries capitalizes, we debate.

Speaker Change: Now I know there are Canadian politicians that are of the view that Canada is an economic superpower.

Murray: Number two.

Murray: Technology and the rapid ascent of AI are deflationary tools, but we need to be mindful I don't know high alert as to how AI will change the economy.

Speaker Change: But from my perspective. This is at odds with the current low growth economic statistics or what we see in terms of freight demand is however that he can lead candidate into a high growth economy, clearly Mullen group our employees our shareholders like so many others would be a major beneficiary.

Murray: Everyone knows that AI is powerful.

Murray: Question left unanswered at this moment is can AI actually improve.

Murray: Our own financial performance, we're not sure.

Speaker Change: No and I want to emphasize many Canadians would benefit if Canada becomes a high growth economy.

Murray: Number three.

Murray: Al will countries and economies adapt to the new protectionist policies being spearheaded by the United States. There is a massive change occurring in terms of trade no longer will the low cost nations provider automatically win market share.

Speaker Change: And we'd like most businesses don't believe the nation building projects should be delayed by endless talks.

Speaker Change: Action is what is required for the main issue of course is that in Canada. These types of economic decisions are often debated for years by those with different views and agendas.

Murray: By local appears to be the new theme.

Murray: Number four.

Murray: And this one is.

Murray: It's really specific to the trucking industry.

Speaker Change: In the meantime.

Murray: This is will for labor laws and safety standards established by the governments be applied equally to all carriers.

Speaker Change: Other countries capitalizes, we debate.

Speaker Change: Number two.

Speaker Change: Technology and the rapid ascent of AI are deflationary tools, but we need to be mindful I don't know high alert as to how AI will change the economy.

Murray: Or will they continue to turn a blind eye to what is really happening.

Murray: There is no doubt that shippers are more than willing to take advantage of this in equity as they chase the lowest rate competition is not equal or fair when the rules are not applied consistently.

Speaker Change: Everyone knows that AI is powerful.

Speaker Change: Western left unanswered at this moment is can AI actually improve.

Murray: Now with these issues front and center.

Speaker Change: Our own financial performance, we're not sure.

Murray: We still have a job to do to ensure that shareholders are compensated investing in our company Here's a summary of what shareholders can expect firstly.

Speaker Change: Number three.

Speaker Change: How will countries and economies adapt to the new protectionist policies being spearheaded by the United States. There is a massive change occurring in terms of trade no longer will the low cost nations provider automatically win market share.

Murray: The investments we've made in acquisitions over the last year, they're going to drive revenue growth for at least the next year.

Murray: Few in our industry can make such a bold statement secondly.

Speaker Change: By local appears to be the new theme.

Murray: We took every prudent step we could to ensure the balance sheet is well structured for the next decade take risk off the table was our guiding principle.

Speaker Change: Number four.

Speaker Change: And this one is.

Speaker Change: It's really specific to the trucking industry.

Murray: Third our current focus is margins regardless of market dynamics today were working on protecting margins and as soon as economic growth returns, we will pivot to improving margins.

Speaker Change: This is will the labor laws and safety standards established by the governments be applied equally to all carriers.

Speaker Change: Or will they continue to turn a blind eye to what is really happening.

Murray: Margins over market share is how we believe shareholders ultimately win.

Speaker Change: There is no doubt that shippers are more than willing to take advantage of this in equity as they chase the lowest rate competition is not equal or fair.

Murray: These three initiatives.

Murray: Our design to ensure that the dividend covered by so many of our loyal shareholders is safe and sound and that we remain in excellent companies company for employees to apply their skills.

Speaker Change: When the rules are not applied consistently.

Speaker Change: Now with these issues front and center.

Speaker Change: We still have a job to do to ensure that shareholders are compensated investing in our company Here's a summary of what shareholders can expect firstly.

Murray: Over the course of three decades, we have wisely invested in shareholder's capital and business opportunities within the ever changing logistics and supply chain nothing ever stays the same.

Speaker Change: The investments we've made in acquisitions over the last year, they're going to drive revenue growth for at least the next year fueled our industry can make such a bold statement secondly.

Murray: To date, we have a portfolio of companies on our network that are first class.

Speaker Change: We took every prudent step we could to ensure the balance sheet is well structured for the next decade take risk off the table was our guiding principle.

Murray: We have a network that is virtually impossible to replicate.

Speaker Change: In this current market. So I will now turn that all the call over to the <unk>.

Speaker Change: Third our current focus is margins regardless of market dynamics today were working on protecting margins and as soon as economic growth returns, we will pivot to improving margins.

Speaker Change: Q&A session operator, please open the lines. Thank you.

Speaker Change: Certainly we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request.

Speaker Change: Margins over market share was how we believe shareholders ultimately win.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing any key.

Speaker Change: These three initiatives.

Speaker Change: Are designed to ensure that the dividend covered by so many of our loyal shareholders is safe and sound and that we remain in excellent companies company for employees to apply their skills.

Speaker Change: To withdraw your question. Please press Star then two.

Speaker Change: Our first question is from David Ocampo with Cormack Securities. Please go ahead.

David Ocampo: Hi, Thanks for taking my questions Good morning Mary.

Speaker Change: Over the course of three decades, we've wisely invested shareholder's capital and business opportunities within the ever changing logistics and supply chain nothing ever stays the same.

Speaker Change: Good morning.

Speaker Change: I guess when it comes to the supply demand imbalance, it's been going on for quite a bit of time here and you talked about some.

Speaker Change: Health initiatives that could change that equation.

Speaker Change: Today, we have a portfolio of companies that are network that are first class. We have a network that is virtually impossible to replicate.

Speaker Change: Curious what you.

Speaker Change: What's going to cause more ship to a balance.

Speaker Change: Conditions or is it going to be an increase in demand or supply exiting the market because I think.

Speaker Change: In this current market. So I'll now turn that all the call over to the Q&A session. Operator. Please open the lines. Thank you.

Speaker Change: You highlighted that some of your competitors are still in survival mode right now.

Speaker Change: Yes.

Speaker Change: Certainly.

Speaker Change: I think David Thats the real.

Speaker Change: I will begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any key.

Speaker Change: Pandora's box here, we know that.

Speaker Change: Demand.

Would be a major help.

Speaker Change: Uh huh.

Speaker Change: Because currently nobody is adding supply currently.

Speaker Change: To withdraw your question. Please press Star then two.

Speaker Change: But in saying that I would tell you that supply has been stubborn and has not really exited the market.

David Ocampo: Our first question is from David Ocampo with Cormack Securities. Please go ahead.

Speaker Change: Thanks for taking my questions good morning Mary.

Speaker Change: Even though it's ultra competitive, but you got to remember those small.

Speaker Change: Good morning.

Speaker Change: So the small carriers don't have the same cost structures within them layered into bigger companies.

Speaker Change: I guess when it comes to the supply demand imbalance has been going on quite a bit of time here and you talked about some.

Speaker Change: By government policies and rules and regulations.

Speaker Change: Some health initiatives that could.

Speaker Change: And trying to do what's fair for people. So we have a different cost structure. If you were trying to run a professional business than a very large portion of the.

Speaker Change: Change that equation.

Speaker Change: Curious what you what's going to cause more ship to help balance our more balanced conditions is it going to be an increase in demand or supply exiting the market because I think you.

Speaker Change: Of the market and I know that.

Speaker Change: You highlighted that some of your competitors are still in survival mode right now.

Speaker Change: That's been referred to as driver, Inc, or whatever those are small independent entrepreneurs and I'll tell you their toughest nails, so we need to see demand increase.

Speaker Change: Yeah.

Speaker Change: I think David Thats the real.

Speaker Change: Pandora's box here, we know that.

Speaker Change: It appears.

Speaker Change: Demand.

Speaker Change: If I listen to the politicians and we do I mean, and if you believe what they're saying.

Speaker Change: Would be a major health.

Speaker Change: Because currently nobody is adding supply currently.

Speaker Change: Then.

Speaker Change: I think demand is going to improve.

Speaker Change: I think we saw a decent June did we know of course, when we did it again.

Speaker Change: But in saying that I would tell you that the supply has been stubborn and has not really exited the market.

Speaker Change: Not just because we did acquisitions, but.

Speaker Change: June was what was the best month of our important for sure.

Speaker Change: Even though it's ultra competitive, but you've got to remember those small.

Speaker Change: <unk>.

Speaker Change: Although small carriers don't have the same cost structures within them layered into bigger companies.

Speaker Change: Got you.

Speaker Change: In the absence of lets just say that.

Speaker Change: By government policies and rules and regulations.

Speaker Change: Demand doesn't improve.

Speaker Change: We wanted to but if it doesn't we still have to watch the cost <unk> and that's what we're focused on here just in case.

Speaker Change: And trying to do what's fair for people. So we have a different cost structure. If you were trying to run a professional business than a very large portion of the.

Speaker Change: It doesn't we want it to happen, we're watching intently David but.

Speaker Change: Of the market and I know that.

Speaker Change: From what I've seen in the last little bit I havent seen a whole bunch.

Speaker Change: It's been referred to as driver, Inc, or whatever those are small independent entrepreneurs and I'll tell you their toughest nails, so we need to see demand increase.

Speaker Change: But hey.

Speaker Change: Hi.

Speaker Change: The government.

Speaker Change: We're spending money.

Speaker Change: Got to help demand.

Speaker Change: It appears.

Speaker Change: Eventually I think that is.

Speaker Change: I listen to the politicians and we do I mean, and if you believe what they are saying.

Speaker Change: That's our thesis.

Speaker Change: Yes.

Speaker Change: And then.

Speaker Change: With you on that one it's just a matter of time until that happens I think that.

Speaker Change: I think demand is going to improve.

Speaker Change: I think we saw a decent June did we know of course, when we did it again.

Speaker Change: And here's the here's what I've said is that as we can lease heel of our industry right now youre seeing it across the board.

Speaker Change: Not just because we did acquisitions, but June was what was the best month of our quarter for sure.

Speaker Change: It's saying is that the issue is pricing and.

Speaker Change: <unk>.

Speaker Change: No.

Speaker Change: But you know we.

Speaker Change: It's not going to be like this forever, but it's like this for now.

Speaker Change: In the AD so, let's just say that.

Speaker Change: Customers.

Speaker Change: Demand doesn't improve.

Speaker Change: They have the leverage right now.

Speaker Change: We wanted to but if it doesn't we still have to watch the costs right team and that's what we're focused on here just in case.

Speaker Change: Okay that makes sense and then just the last one for me if I turn the call over there you guys had been operating coal now for the last few months and just given all the.

Speaker Change: It doesn't we want it to happen, we're watching intently David but.

Speaker Change: Sorry, one more around trade and up one month and we only bought it in June.

Speaker Change: From what I've seen in the last little bit I Havent seen a whole bunch of.

Speaker Change: On coal right.

Speaker Change: But hey.

Speaker Change: We thought we were going to have it for a quarter, but.

Speaker Change: The government.

Speaker Change: They're spending money.

Speaker Change: Unfortunately, as we go to sign the deal Mr. Lucky passed on the night before so that delay the deal and then the competition Bureau that we did not count on the competition Bureau with want to oversee this transaction when we didn't have any customers business before but they chose to delay it for.

Speaker Change: It's got to help demand.

Speaker Change: <unk>.

Speaker Change: Eventually I think.

Speaker Change: That's our thesis.

Speaker Change: Yes, I tend to agree with you on that one it's just a matter of time until that happens so I think that and here's the here's what I've said is that as we can.

Speaker Change: Please heal of our industry right now youre seeing it across the board everybody's saying it.

Speaker Change: And extended period of time I think it took at least six weeks did it not team and then it just delayed everything so we only had called for one month.

Speaker Change: Is that the issue is pricing and.

Speaker Change: You know, it's not going to be like this forever, but it's like this for now.

Speaker Change: Alright.

Speaker Change: That's all that shows up in our numbers is one one point.

Speaker Change: Customers.

Speaker Change: They have the leverage right now.

Speaker Change: Truthful, we were kind of counting on having that done.

Speaker Change: Yes that makes sense and then just the last one for me before I turn the call over there you guys had been operating coal now for a while.

Speaker Change: For the whole quarter, but.

Speaker Change: Out of our out of our hands, but it's done now.

Speaker Change: <unk>.

Speaker Change: Two months and just given all the.

Speaker Change: We're already well on our way to make sure that we.

Speaker Change: I'm, sorry, one more around trade.

Speaker Change: When my monthly we only bought it in June.

Speaker Change: Put a good structure in place and get the teams focused on.

Speaker Change: On coal right.

Speaker Change: We thought we were going to have it for a quarter, but.

Speaker Change: What we have to do as a public company.

Speaker Change: I guess you are wrapping up.

Speaker Change: Unfortunately, as we go to sign the deal Mr. Lucky passed on the night before so that delayed the deal and then the competition Bureau that we did not count on the competition Bureau would want to oversee this transaction when we didn't have any customers business before but they chose to delay it for.

Speaker Change: Montana now would that under your portfolio.

Speaker Change: Just curious how that business is performing just given all the trade uncertainty.

Speaker Change: Versus your initial expectations when you contemplated the acquisition and maybe how that compares to previous year performance.

Richard: Richard Yes.

Speaker Change: So David.

Speaker Change: And extended period of time I think it took at least six weeks did at 19 and then it just delayed everything so we only had called for one month.

Speaker Change: Richard Malone, Richard Maloney, guys. So when we bought the organization as we articulated in our press release, we were of the view and this holds back for many years to actually trade.

Speaker Change: Right.

Speaker Change: That's all that shows up in our numbers is one one point.

Speaker Change: It's not an easy thing to do and there's a lot of complexities to trade in certain rules of engagement needs to be done and as.

Speaker Change: Truthful, we were kind of counting on having that done for the whole quarter, but.

Speaker Change: Out of our out of our hands, but it's done now and.

Speaker Change: As we were going down the road buying coal.

Speaker Change: Things got a little more complicated as we all know and as we've seen first look one month as we reported in the like you say another half a month or so into it as well, what we're seeing and where.

Speaker Change: We're already well on our way to make sure that we put.

Speaker Change: But a good structure in place and get the teams focused on.

Speaker Change: What we have to do as a public company.

Speaker Change: On the customer side Theres still the activity and the work that they do is still kind of on the fairway as we thought it would be theres going to be complexities to this the rules are changing regularly and shippers need people with this expertise and we're <unk>.

Speaker Change: Yes, I guess youre wrapping up.

Speaker Change: Now with that under your portfolio.

Speaker Change: Just curious how that business is performing just given all the trade uncertainty.

Speaker Change: Versus your initial expectations when you contemplated the acquisition and maybe how that compares to previous year performance rich.

Speaker Change: Early innings, but we're pleased with what we got on the certainly on the customer side, and we will be continuing to work with them to improve our operating results.

Richard: Richard Yes.

David: So David.

David: Richard Malone, Richard Maloney, guys. So when we bought the organization as we articulated in our press release, we were of the view and this holds back for many years to actually trade.

Speaker Change: I think that I think that when we talk with.

Speaker Change: The leaders of the custom side of that business, they're swamped because the rules are so complex and they're changing in front. They are trying to help and provide.

David: It's not an easy thing to do and there's a lot of complexities to trade in certain rules of engagement needs to be done and as and as we were going down the road buying coal.

Speaker Change: Consulting services and support days due to to their customers. So.

David: Things got a little more complicated as we all know and as we've seen first look one month as we reported in the like you say another half a month or so into it as well, we're seeing and where.

Speaker Change: Their results have not disappointed from what we had anticipated correct.

Speaker Change: Yes.

Speaker Change: Agree with that.

Speaker Change: Sure.

Speaker Change: Okay, that's perfect and thanks.

David: On the customer side Theres still the activity and the work that they do is still kind of on the fairway as we thought it would be theres going to be complexities to this the rules are changing regularly and shippers need people with this expertise and were.

Speaker Change: Thanks, everyone.

Speaker Change: Got it.

Speaker Change: The next question is from Kamran Derksen with National Bank Financial. Please go ahead.

Kamran Derksen: Hey, Thanks, good morning.

Kamran Derksen: I Wonder if I can just maybe follow up on the on the KOL group.

David: Early innings, but we're pleased with what we got on the certainly on the customer side and we'll be continuing to work with them to improve our operating results.

Kamran Derksen: Just looking at the contribution in the one month that you owned it I guess top line $32 million kind of run rate that for a full year you would get to a full year revenue number which is yield.

David: I think that when we talk with.

Kamran Derksen: Higher than what you've kind of indicated when you.

David: The leaders of the custom side of that business.

Kamran Derksen: Close the business and put out the press release, but obviously, there's seasonality to the business I'm. Just wondering if you could maybe talk a little bit about the seasonality in kind of the run rate revenue that we're seeing right now and how that compares to what you would put in the press release, the kind of $300 million back when you announced the deal.

David: They're swamped because the rules are so complex and they are changing and they are trying to help and provide.

David: Consulting services and support.

David: <unk>.

David: To their customers so.

David: The results have not disappointed from what we had anticipated correct.

Kamran Derksen: Well.

Kamran Derksen: It's difficult to get the seasonality of it right now spot on Cameron because we've only had really in our group for a month.

David: I would agree with that yes.

David: Okay, that's perfect and thanks.

David: Thanks, everyone.

Kamran Derksen:

Speaker Change: The next question is from Kamran Derksen with National Bank Financial. Please go ahead.

Kamran Derksen: But.

Kamran Derksen: I'd tell you were pleasantly surprised by the revenue side that they've been able to generate that the team. So.

Kamran Derksen: Yeah. Thanks, good morning.

Kamran Derksen: <unk> been busy Thats and Thats.

Speaker Change: Wonder if I can just maybe follow up on the on the KOL group.

Speaker Change: Looking at the contribution in the one month that you owned it I guess top line $32 million kind of run rate that for a full year you would get to a full year revenue number which is yield.

Kamran Derksen: That's what we hear in our channel checks from other customers brokerage too is that <unk> been pleased with.

Kamran Derksen: With the revenue side.

Kamran Derksen: And so.

Speaker Change: Higher than what you've kind of indicated when you.

Kamran Derksen: It's probably more likely now that it is going to beat that original $300 million of.

Speaker Change: Close the business and put out the press release, but obviously, there's seasonality to the business I'm. Just wondering if you could maybe talk a little bit about about the seasonality in kind of the run rate revenue that we're seeing right now and how that compares to what you would put in the press release said that kind of $300 million back when you announced the deal.

Kamran Derksen: Our guidance that we had on revenue side Red cars.

Speaker Change: I don't know, we don't know yet Cameron whether the first six months of this since the start of the years is indicative of the whole thing. We're just cautioning, but we're just telling me what they did in the first six months and that's in a economy that wasn't growing so I think you can.

Speaker Change: Well.

Speaker Change: It's difficult to get the seasonality of it right now spot on Cameron because we've only had really in our group for a month.

Speaker Change: Probably surmise, they're probably going to do better than what we had originally thought.

Speaker Change:

Speaker Change: Okay.

Speaker Change: But.

Speaker Change: That's fair enough.

Speaker Change: I'd tell you were pleasantly surprised by the revenue side that they've been able to generate that the team. So.

Speaker Change: Yes.

Speaker Change: Maybe just a second question just on I guess, the kind of the financial targets you had put out going.

Speaker Change: They've been busy that's and that's.

Speaker Change: Going back to I guess late last year, and then kind of reiterated earlier this year.

Speaker Change: That's what we hear in our channel checks from other customers brokerage too is that <unk> been pleased with the.

I guess, how are you feeling about that.

Speaker Change: The EBITDA sort of target that you had there $350 million some of that was predicated on on acquisition and maybe the KOL group as you mentioned didn't close quite as soon as you were hoping for so just any commentary on how you're feeling about those original 2025 financial targets for <unk>.

Speaker Change: With the revenue side.

Speaker Change: And so.

Speaker Change: It's probably more likely now, but it's going to beat that original $300 million of.

Speaker Change: Of guidance that we had on revenue side Red cars.

Speaker Change: For the company.

Speaker Change: I don't know, we don't know yet Cameron whether the first six months of this since the start of the years is indicative of the whole thing. We're just cautioning, but we're just telling me what they did in the first six months and that's in a economy that wasn't growing so I think you can.

Speaker Change: Yes.

Speaker Change: A question that we had.

Speaker Change: Actually anticipated right Carson.

Speaker Change: I think our general is this look.

Speaker Change: On a run rate, we feel really really confident of what we had originally set on a 12 month run rate, but we are getting 12 months old.

Speaker Change: Probably surmise, they're probably going to do better than what we had originally thought.

Speaker Change: Full of coal this year. So I think we're okay on the revenue side, we might be a little bit behind because as I said we are.

Speaker Change: Okay.

Speaker Change: That's fair enough.

Speaker Change: And all the.

Speaker Change: Maybe just a second question just on I guess, the kind of the financial targets you had put out you know.

Speaker Change: Coal wasn't done on time for this year, but on a full 12 your.

Speaker Change: Forward looking basis I think.

Speaker Change: Going back to I guess late last year, and then kind of reiterated earlier this year.

Speaker Change: We're still pretty comfortable with it with what.

Speaker Change: What we had originally articulated we.

Speaker Change: I guess, how are you feeling about the you know the.

Speaker Change: The EBITDA sort of target that you had there $350 million some of that was predicated on on acquisition and maybe the KOL group as you mentioned didn't close quite as soon as you were hoping for so just any commentary on how you're feeling about those original 2025 financial targets for.

Speaker Change: The general economy continues to do okay.

Speaker Change: What we don't see count is.

Speaker Change: We just don't see any pricing leverage so you've got to really be focused on cost to date to make sure you maintain those margins that is a.

Speaker Change: For the company.

Speaker Change: Yes.

Speaker Change: That's a message that we take to every one of our business units now.

Speaker Change: A question that we had.

Speaker Change: Actually anticipated right Carson.

Speaker Change: And I said to you our business units I think they have done a pretty good job but.

Speaker Change: I think our general is this look on.

Speaker Change: On a run rate, we feel really really confident of what we had originally set on a 12 month run rate, but we are getting 12 months ago.

Speaker Change: It's evident that the.

Speaker Change: The job is not done we have some work to do and probably we will get some corporate costs down now because there.

Speaker Change: Full of coal this year. So I think we're all Canada revenue side, we might be a little bit behind because as I said we are.

Speaker Change: I mean, we were we have a lot of lawyers and a lot of people on our payroll here the last little bit to get this very complex that you have done.

Speaker Change: So.

Speaker Change: And all of the.

Speaker Change: Those are hopefully those are onetime costs I'd reiterate that to the corporate team all day long.

Speaker Change: Coal wasn't done on time for this year, but on a full 12 your.

Speaker Change: But.

Speaker Change: Forward looking basis I think.

Speaker Change: I think on the run on a 12 month run rate I think we are.

Speaker Change: We're still pretty comfortable with it with the what we had originally articulated we.

Speaker Change: Really good shape.

Speaker Change: Okay.

Speaker Change: The general economy continues to do.

Speaker Change: But I think there's still a chance we could meet it.

Speaker Change: I can't say, we're going to need it today.

Speaker Change: What we don't see count is as we just don't see any pricing leverage so you've got to really be focused on cost to date to make sure you maintain those margins that is a.

Speaker Change: Because we lost.

Speaker Change: A couple of months a good chunk of the time that we had originally planned but.

Speaker Change: The thesis is still intact, we've got it.

Speaker Change: That's a message that we take to every one of our business units now.

Got a much bigger business, we're in and the right vertical.

Speaker Change: And I said to you our business units I think they've done a pretty good job but.

Speaker Change: And.

Speaker Change: They're going to do fine.

Speaker Change: It's evident that.

Speaker Change: Okay. No that's very helpful. I'll pass the line thanks very much.

Speaker Change: The jobs are done we have some work to do and probably we will get some corporate costs down analysis there.

The next question is from Kevin Chiang with CIBC. Please go ahead.

Speaker Change: We have a lot of lawyers and a lot of people on our payroll here the last little bit to get this very complex the yield.

Speaker Change: Sure.

Kevin Chiang: Hey, good morning, everybody.

Speaker Change: Yes.

Speaker Change: So.

Speaker Change: You mentioned.

Speaker Change: Those are hopefully those are onetime costs I'd reiterate that to the corporate team all day long.

Speaker Change: Maybe some optimism just given some of the initiatives from the current.

Speaker Change: But.

Speaker Change: I think on the run on a 12 month run rate I think we are.

Speaker Change: The Canadian government to accelerate.

Speaker Change: Really good shape.

Speaker Change: Some of these energy resource projects, which will obviously benefit the broader Canadian economy, and yourselves as well.

Speaker Change: Okay.

Speaker Change: But I think there's still a chance we could beat it but.

Speaker Change: I can't say, we're going to need it today.

Speaker Change: When you look at what's in the pipeline of whats being discussed.

Speaker Change: Because we lost.

Speaker Change: One is there anything that you think you need to add to the portfolio. If you want to be.

Speaker Change: A couple of months so a good chunk of the time that we had originally planned but.

Speaker Change: More competitive in.

Speaker Change: The thesis is still intact, we've got it.

Speaker Change: Onboarding that revenue stream.

Speaker Change: Got a much bigger business, we're in and the right vertical.

Speaker Change: Or.

Speaker Change: Have any of your customers or clients have they started talking about potentially.

Speaker Change: And.

Speaker Change: Theyre going to Dupont.

Speaker Change: I guess, securing contractors or anything along those lines, even if it's early days too.

Speaker Change: Okay. No that's very helpful. I'll pass along thanks very much.

Speaker Change: To ensure they secure enough capacity if they do if these projects do move forward with some of these projects move forward.

Kevin Chiang: The next question is from Kevin Chiang with CIBC. Please go ahead.

Speaker Change: Yes.

Kevin Chiang: Hey, good morning, everybody.

Speaker Change: Yeah.

Speaker Change: Ah.

Speaker Change: Yes.

Speaker Change: You mentioned.

Speaker Change: Boy, that's a loaded question.

Speaker Change: Maybe some optimism just given some of the initiatives from the current.

Speaker Change: Kevin, but let me try and break that into this number one is we don't really need to add too much more to our portfolio, we really like where we're positioned what we would need to do give us ramp up capacity, which is.

Speaker Change: Canadian government to accelerate some of these energy resource projects, which will obviously benefit the broader Canadian economy, and yourselves as well just when you look at what's in the pipeline of whats being discussed.

Speaker Change: Invested capital and assets to if these projects do go was the plan and then you would have to add people because we're not sitting here with people or with.

Speaker Change: One is there anything that you think you need to add to the portfolio. If you want to be.

Speaker Change: More competitive than.

Speaker Change: And onboarding that revenue stream.

Speaker Change: Or.

Speaker Change: Have any of your customers or clients that have they started talking about potentially you know.

Speaker Change: The assets.

Speaker Change: If it ramps up is as they say.

Speaker Change: I guess, securing contractors or anything along those lines, even if it's early days too.

Speaker Change: Got.

Speaker Change: The words the politicians are articulating our.

Speaker Change: To ensure they secure enough capacity or if they do if these projects do move forward with some of these projects move forward.

Speaker Change: Really good words, but theyre not investable words.

Speaker Change: When we get them when we get the discussions I would say this theres more discussion from our customers.

Speaker Change:

Speaker Change: Boy, that's a loaded question.

Speaker Change: Sure.

Speaker Change: You know, Kevin, but let me try and break that into this number one is we don't really need to add too much more to our portfolio, we really like where we're positioned what we would need to do give us ramp up capacity, which is.

Speaker Change: The floor price checking.

Speaker Change: They are asking for bids.

Speaker Change: We haven't had that effort.

Speaker Change: So a long time so.

Speaker Change: But there is we.

Speaker Change: We got to move from debate.

Speaker Change: Two action and.

Speaker Change: That's up to the government.

Invested capital.

Speaker Change: First nations and RPT.

Speaker Change: Assets to if these projects do go was the plan and then you would have to add people because we're not sitting here with people or with.

Speaker Change: Right.

Speaker Change: That makes sense and obviously I was hoping you want very early innings, yet and so we're going to pivot and if those if those projects go.

Speaker Change: Our shareholders and our company would be a major beneficiary of that for sure.

Speaker Change: The assets.

Speaker Change: If it ramps up is as they say.

Speaker Change: We're not factoring any of that into anything we've told you or our numbers.

Speaker Change: But the words the politicians are articulating our.

Speaker Change: That would be all internal rock.

Speaker Change: Really there are good words, but theyre not investable words.

Speaker Change: And that's your highest margin.

Speaker Change: When we get the you get the discussions I would say this theres more discussion from our customers.

Speaker Change: Business, if you get it.

Speaker Change: Right now it seems like very incremental to you.

Speaker Change: Maybe just a comment you made on the coal deal, maybe taking a little bit longer to close and maybe the competition Bureau, taking a closer look.

Speaker Change: Before price checking.

Speaker Change: They are asking for bids.

Speaker Change: All right.

Speaker Change: Haven't had that effort.

Speaker Change: You know a long time so.

Speaker Change: More so than you anticipated because you didn't have a.

Speaker Change: But there's a we've got to move from debate.

Speaker Change: Competing business I'm not exactly sure to your point, what why would have taken.

Speaker Change: Two actually.

Speaker Change:

Speaker Change: So long but.

Speaker Change: That's up to the government.

Speaker Change: How is the the oversight from the competition Bureau changed at all and how does that impact how you think about your own M&A pipeline like maybe potential targets that you thought would be easier to cross.

Speaker Change: First nations and RPT.

Speaker Change: Right.

Speaker Change: That makes sense and obviously I was hoping you want very early innings, yet I'm sorry go on Pip and if those if those projects go.

Speaker Change: The line here, maybe they were taking a little bit longer or maybe the government is saying.

Speaker Change: Our shareholders and our company would be a major beneficiary of a for sure.

Speaker Change: There is a level of market concentration that they are uncomfortable with.

Speaker Change: And we're not factoring any of that into anything we've told you or our numbers.

Speaker Change:

Speaker Change: We're not sure on that.

Speaker Change: That would be all internal growth.

Speaker Change: Well first of all we're not sure why they had to.

Speaker Change: And that's your highest margin.

Joanna: Go to the long form competition review Joanna.

Speaker Change: Business, if you get it.

Speaker Change: Right now it seems like they're incremental to you.

Speaker Change: Kevin.

Speaker Change: What we were told us that they had some new.

Speaker Change: Maybe just a comment you made on the cole deal, maybe taking a little bit longer to close and maybe the competition Bureau, taking a closer look.

Speaker Change: People that joined our team and they were using our file as an education and training.

Speaker Change: More so than you anticipate because you didn't have a.

Speaker Change: And that's why they had changed the timeline to dot com platform.

Speaker Change: Competing business I'm not exactly sure to your point, what why would have taken.

Speaker Change: That's what we were told.

Speaker Change: So long but.

Speaker Change: Has the the the oversight from the competition Bureau changed at all and has that impacted how you think about your own M&A pipeline like maybe potential targets that you thought it would be easier to cross the line here, maybe they're taking a little bit longer or maybe the government is saying.

Speaker Change: I suspect that's crop.

Speaker Change: I'll be honest with you.

Speaker Change: Because.

Speaker Change: At the end of the day the Canadian government.

Speaker Change: Through post office through pure later.

Speaker Change: Acquire the largest customs brokerage company in Canada called Livingston Alright.

Speaker Change: There is a level of market concentration that they are uncomfortable with.

Speaker Change: I suspect they didn't want to have two separate rules.

Speaker Change:

Speaker Change: We're not sure on that.

Speaker Change: Because that one was put under scrutiny by the competition Bureau, but.

Speaker Change: <unk>.

Speaker Change: Well first of all we're not sure why they had to.

Speaker Change: We knew it was going to happen because the Canadian government approved the biggest wanted to go to the Canadian government.

Joanna: Go to the long form competition review Joanna.

Speaker Change: Hi, Kevin.

Speaker Change: So that's our biggest competitor so right.

Speaker Change: What we were told us that they had some new.

Speaker Change: Sure.

Speaker Change: People that doing their team and they were using our file as an education and training.

Speaker Change: I'll just leave it at that I think I've said my piece.

Speaker Change: I appreciate that candid response, thanks, maybe just a quick one here you called out wildfires and NSC smooth.

Speaker Change: Why.

Speaker Change: They had changed the timeline to icon.

Speaker Change: Smoking.

Speaker Change: Flat.

Speaker Change: In northern Manitoba, that's slightly lower working on obviously, we've had unfortunate wildfires in that in that provinces. Just wondering when those issues. When those natural disasters occur is that revenue that gets shifted or was that revenue. That's generally lost and you won't have to wait till the next I guess next year to kind of.

Speaker Change: That's what we were told.

Speaker Change: Suspect that's crop.

Speaker Change: Be honest with you.

Speaker Change: Because.

Speaker Change: At the end of the day the Canadian government.

Speaker Change: True post office through pure later.

Speaker Change: Acquired the largest customs brokerage company in Canada called Livingston right.

Speaker Change: We start some of that civil work just wondering.

Speaker Change: Based on your own experience and is that something that might get shifted later this year or is that just something we have to look forward in 2026, I think that it just pushes it out.

Speaker Change: I suspect they didn't want to have two separate rules.

Speaker Change: Because that one was put under scrutiny by the competition Bureau, but.

Speaker Change: With you when we know they couldnt start the projects that they had going but it wasn't just small it was <unk> you had to evacuate most of that goes northern facilities.

Speaker Change: We knew it was going to happen because the Canadian government approved the biggest wanted to go to the Canadian government.

Speaker Change: So that's our biggest competitor so right.

Speaker Change: We had some additional costs that are built into that we're not.

Speaker Change: <unk>.

Speaker Change: I'll just leave it at that I think I've said in my piece.

Speaker Change: These are things that you do look after people and those were additional costs to make sure that they werent in harm's way on that but.

Speaker Change: I appreciate the candid response, maybe just a quick one here you know you called out wildfires and NSC smooth.

Speaker Change: That cost us.

Speaker Change: For the most part most of the wildfires are over now.

Speaker Change: Smoking.

Speaker Change: In northern Manitoba, that's slightly lower working obviously, we've had unfortunate wildfires in that in that provinces. Just wondering when those issues. When those natural disasters occur is that revenue that gets shifted or was that revenue. That's generally lost and you won't have to wait till the next I guess next year to kind of.

Speaker Change: I suspect those projects still have to go.

Speaker Change: And they will just push them out by quarter.

Speaker Change: Quarter on quarter.

Speaker Change: And have you I think and yes that was kind of in a lot of it is just kind of freight related to like garden lines that are going into northern Manitoba, but they also all our foodstuffs and everything so that got delayed until they got pushed till the rolling week or into the next quarter.

Speaker Change: We start some of that civil work just wondering.

Speaker Change: Based on your own experience and is that something that might get shifted later this year or is that just something we have to look forward in 2026.

Speaker Change: Typically just getting pushed I think things just.

Speaker Change: Pushes out a bit.

Speaker Change: Think that it just pushes it out okay honest with you we know they couldnt start the projects that they had going but it wasn't just small it was <unk>.

Speaker Change: Those kind of things and.

Speaker Change: So we don't think anything structurally has happened at <unk> and <unk>.

Speaker Change: Evacuate most of that goes northern facilities.

Speaker Change: We understand why and our business units did a good job of making sure that there are people who are protected.

Speaker Change: We had some additional costs that are built into that when we're not.

Speaker Change: And the assets I think they did a good job on that.

Speaker Change: This is just things that you do you look after people and those were additional costs to make sure that they werent in harm's way on that but.

Speaker Change: Northern Manitoba right Awesome, we lost some business up in.

Speaker Change: That cost us.

Speaker Change: Northern Alberta also in British Columbia, and Saskatchewan. So it was kind of in the north really an anomaly in terms of that.

Speaker Change: For the most part most of the wildfires are over now.

Speaker Change: I suspect those projects still have to go.

Speaker Change: In the South we got too much water.

Speaker Change: And they will just push them out.

Speaker Change: That staffing our Canadian Dewatering group, but those those things.

Speaker Change: Quarter.

Speaker Change: Order in a half year I think that was kind of in a lot of it is just kind of freight related to like garden lines that are going into northern Manitoba, but they also all of the foodstuffs and everything so that got delayed until they got pushed till the railroad week or into the next quarter or so.

Speaker Change: Kind of always happen, but we're not making a big deal out of the Cup. We're just highlighting is that hey, it didn't it didn't help us I can tell you that.

Speaker Change: No I appreciate that just yes, that's great color and Thats.

Speaker Change: <unk> typically just getting pushed.

Speaker Change: Think things just.

Speaker Change: That's good to hear that the revenue probably shows up in a quarter and a half or two years.

Speaker Change: Pushes out a bit.

Speaker Change: Those kind of things and.

Speaker Change: That's it for me best of luck as you go through the back half of 2025 here. Thanks for taking my questions. Thanks, guys I appreciate it.

Speaker Change: So we don't think anything structurally has happened.

Speaker Change: And our guard winding it just.

Speaker Change: We understand why and our business units did a good job of making sure that there are people who are protected.

Speaker Change: The next question is from Conor Gupta with Scotiabank. Please go ahead.

Speaker Change: And the assets I think they did a good job on that.

Conor Gupta: Thanks, Anthony good morning team.

Speaker Change: Yeah that makes northern Manitoba right Awesome, we lost some business up in northern.

Conor Gupta: And then just maybe you wanted to kind of follow up on the Kohl's first.

Conor Gupta: You talked about how.

Speaker Change: Northern Alberta also in British Columbia, and Saskatchewan. So it was kind of in the north really an anomaly in terms of that.

Conor Gupta: These guys are pretty busy on the custom side and maybe the attack.

Conor Gupta: Perhaps a little bit ahead of what you said previously on the revenue outlook for this company.

Speaker Change: And in the South we got too much water.

Speaker Change: Thats, helping our Canadian Dewatering group, but those those things.

Conor Gupta: Yeah.

Conor Gupta: Back to the tariff on.

Speaker Change: I don't always happen, but we're not making a big deal out of the Cup. We're just highlighting is that hey, it didn't it didn't help us I can tell you that.

Conor Gupta: That's going on right now and like nobody knows what's going to happen next.

Conor Gupta: How do you think these guys.

Conor Gupta: And maybe any sort of volatility in the business I mean is it a business right now that they have seen because of these tariffs.

Speaker Change: No I appreciate that I know it just yes, that's great color and that's that's good to hear that the revenue probably shows up in a quarter and a half or two years.

Conor Gupta: Noisy and some of that business might go away are they sticking up to that how should we think about sort of the long term.

Speaker Change: That's it for me best of luck as you get through the back half of 2025 year. Thanks for taking my questions. Thanks, Scott I appreciate it.

Conor Gupta: Yeah.

Conor Gupta:

Speaker Change: The next question is from Conor Gupta with Scotiabank. Please go ahead.

Conor Gupta: That is the unknown, but I think and this is how we're looking at it Conor.

Speaker Change: Thanks, everybody their money million team.

Conor Gupta: I don't know how anybody else looks at it our team at coal doesn't really know how it's going to pick up the phone.

Speaker Change: Just maybe you wanted to kind of follow up on the Kohl's first.

Speaker Change: You talked about how.

Conor Gupta: Bid projects, they do whatever so theyre just reactionary to the market, but how do we think it strategically.

Speaker Change: These guys are pretty busy on the custom side and maybe the appetite perhaps.

Speaker Change: Perhaps a little bit to add to what he said previously on the revenue outlook for this company.

Conor Gupta: We're not afraid of the tariff issues, we know what's going to change and we think once there is clarity the market adjusts.

Speaker Change: With respect to the tariff on.

Conor Gupta: How does that adjust and let the market the market's going to going to change the way it wants to change, but there is no way that trade is going to stop it might shift.

Speaker Change: That's going on right now and like nobody knows what's going to happen next.

Speaker Change: How do you think these guys.

Speaker Change: And maybe any sort of volatility in the business I mean, I guess it's.

Conor Gupta:

Speaker Change: It's been a business right now that they have seen because of these tariffs be super noisy and you know some of that business might go away or the stickiness to that.

Conor Gupta: I don't see that happening so the good news about our core businesses Theyre not just north American freight they do international freight as well right. So.

Speaker Change: About sort of the long term.

Speaker Change: Yes.

Conor Gupta: We think they are well positioned to.

Speaker Change:

Speaker Change: That is the unknown, but I think.

Conor Gupta: They're going to get the top line, because we got a heck of a team over there on the top line.

Speaker Change: This is how we're looking at it Conor I don't know how anybody else looks at it you know on our team at coal doesn't really know how it's going to pick up the phone they bid projects. They do whatever so theyre just reactionary to the market, but how do we think it strategically.

Conor Gupta: One thing that's happened in the freight business is ultra competitive so they have to work on the cost side and make sure that they are aligning their cost with the revenue, but they're busy on the revenue side on moving freight.

Speaker Change: We're not afraid of the tariff issues, we know what's going to change and we think once there is clarity the market adjusts.

Conor Gupta: And.

Conor Gupta: Customers have just gone away from planning to reacting.

Conor Gupta: I think once you get the <unk>.

Speaker Change: How does it adjust and let the market the market's going to go to.

Conor Gupta: Once we get some clarity I wouldn't be surprised to see some capital to start moving again I know, we've I know we've cut back on capital.

Speaker Change: Change the way it wants to change, but there is no way that trade is going to stop it might shift.

Conor Gupta: Park I mean, we.

Conor Gupta: We said, we got to wait and see what happens.

Speaker Change:

Conor Gupta: So we cut back on capital so if everybody cuts back on capital investment.

Speaker Change: I don't see that happening so the good news about our core businesses Theyre not just north American freight they do international freight as well so.

Conor Gupta: That's just a sign of uncertainty and we just have too much uncertainty right now, but that's not going to last forever I don't suspect.

Speaker Change: We think they are well positioned to.

Conor Gupta: Okay, that's fair.

Conor Gupta: With respect to <unk>.

Speaker Change: They're going to get the top line, because we got a heck of a team over there on the top line.

Conor Gupta: <unk> Kim.

Conor Gupta: Question on EBITDA run rate wise, youre, hitting probably the $2 50, Mark I would think but with respect to hitting the guidance potentially this year, what would you need like do you need like on the M&A because maybe that's how you accelerate or do you do you anticipate any.

Speaker Change: The one thing Thats happened in the freight business is ultra competitive so they have to work on the cost side.

Speaker Change: And make sure that they are aligning their cost with the revenue, but they're busy on the revenue side.

Speaker Change: Moving break.

Speaker Change: And.

Speaker Change: Customers have just gone away from planning to reacting.

Conor Gupta: Any significant rebound in what up your organic businesses that might potentially be help you hit the peak.

Speaker Change: I think once you get the.

Speaker Change: Once we get some clarity I wouldn't be surprised to see some capital start moving again I know I know we've cut back on capital.

Conor Gupta: Demand for the full year.

Conor Gupta: I'm not personally expecting any significant rebound I think steady.

Speaker Change: Park I mean, we we.

Speaker Change: We got to wait and see what happens.

Conor Gupta: Steady is going to be the rule of the day.

Speaker Change: So we cut back on capital so if everybody cuts back on capital investment.

Conor Gupta: And.

Conor Gupta: Under that.

Speaker Change: It's just a sign of uncertainty and we just have too much uncertainty right now, but that's not going to last forever I don't suspect.

Conor Gupta: We've got our work to do to make sure that we just are managing the margin and we will be will be highly focused on that.

Speaker Change: Okay, that's fair.

Conor Gupta: <unk>.

Conor Gupta: Conor over this next door and the rest of the year with our business units, which of course I think that's our that's what we're focused on here, we've already taken care of the growth.

Kamran Derksen: With respect to guidance that Kim.

Kamran Derksen: Question on EBITDA run rate wise, youre, hitting probably the $2 50 Mark.

Conor Gupta: That's what I'm trying to articulate to assure we already taken care growth, we've already taken care of the balance sheet now we just want to focus 100% of our efforts on taking care of the margin on behalf of our share our shareholders and improve that for them, but we've taken all of the risk off the table and we've got growth. So we just have to work on margin that's that's not too bad.

Kamran Derksen: Good thing but.

Kamran Derksen: Back to hitting the guidance potentially this year, what would you need like do you need like the M&A because maybe that's how you accelerate or do you do you anticipate any any significant rebound in what up your organic businesses.

Kamran Derksen: That might potentially be help you hit the 50 mark for the full year.

Conor Gupta: And I would say for the balance of.

Conor Gupta: 2025 on our <unk>.

Kamran Derksen: I'm not personally expecting any significant rebound I think steady steady is going to be the rule of the day.

Conor Gupta: Even if.

Conor Gupta: We get approval on some of these nation building projects.

Conor Gupta: We're not going to see the benefit of that and the demand from it until 2026 and beyond.

Kamran Derksen: And.

Kamran Derksen: Under that.

Conor Gupta: It doesn't happen to us.

Kamran Derksen: We've got our work to do to make sure that we just are managing the margin and we will be will be highly focused on that.

Conor Gupta:

Conor Gupta: We don't get approval and then next week, we start generating revenue from it.

Conor Gupta: So there will be a delay.

Kamran Derksen: Conor over this next door and the rest of the year with our business units, which of course I think that's our that's what we're focused on here, we've already taken care of the growth.

Conor Gupta: And.

Conor Gupta: And we're cautiously optimistic that we can get some of these done.

Conor Gupta: Connor.

Conor Gupta: I'll leave you with this the the consumer part of the economy.

Kamran Derksen: That's what I'm trying to articulate in short we've already taken care of growth, we've already taken care of the balance sheet.

Conor Gupta: Has turned altra competitive and the consumers are very very cost conscious debate.

Kamran Derksen: Now, we just want to focus 100% of our efforts on taking care of the margin on behalf of our share our shareholders and improve that for them, but we've taken all the risk off the table and we've got growth. So we just have to work on margin that's that's not too bad.

Conor Gupta: We know you just have to go to the parking lots and Youll see the malls are busy in Walmart and Costco is busy and winners as busy dollar Remo, but thats the <unk>.

Conor Gupta: The consumer side of the economy, and that's very very competitive.

Kamran Derksen: And I would say for the balance of 2025.

Conor Gupta: Where you have high margin.

Kamran Derksen: Even if we.

Conor Gupta: Is when you have capital going to work and you have projects that happened.

Kamran Derksen: We get approval on some of these nation building projects. Those are we're not going to see the benefit of that.

Conor Gupta: That's when demand, that's where we need demand to increase I don't need more business going to winners are dollar around how they made it but we don't need that we want to see.

Kamran Derksen: And the demand from it until 2026 and beyond.

Kamran Derksen: It doesn't happen to us.

Kamran Derksen: We don't get approval and then next week, we start generating revenue from it.

Conor Gupta: These what we call shovel ready projects our nation building projects. What are you do you want to call them you get that going those are high margin for our organization great jobs for Canadians a lot of people would benefit.

Kamran Derksen: So there will be a delay.

Kamran Derksen: And.

Kamran Derksen: And we're cautiously optimistic that we can get some of these done.

Kamran Derksen: Connor.

Connor: I'll leave you with this.

Conor Gupta: And I think the governments are going to need it to be honest with you because they need tax revenues and that only comes from wealth tax revenues don't come from.

Connor: The consumer part of the economy.

Connor: Has turned altra competitive and the consumers are very very cost conscious debate.

Conor Gupta: Modest jobs. So we're optimistic that it's going to come but we just don't know the timing.

Connor: We know you just have to go to the parking lots and Youll see the malls are busy in Walmart and Costco is busy and winners as busy all around them, but that's the.

Conor Gupta: Right.

Conor Gupta: Fair comment sure and last one but quite dental.

Connor: The consumer side of the economy, and that's very very competitive.

Conor Gupta: The seasonality.

Conor Gupta: We look at in the back half.

Connor: Where you have high margin.

Conor Gupta: First half has kind of trended relatively in line if I, if I exclude that FX noise in the USD cash you had.

Connor: Is when you have capital going to work and you have projects that happen.

Connor: That's when demand that's what we need demand to increase I don't need more business going to winners are dollar realm. They made it but we don't need that we want to see.

Conor Gupta: The back half it sounds like.

Conor Gupta: Given where the coal three months to come.

Conor Gupta: Contribution and maybe flattish environment.

Conor Gupta: We did not expect.

Speaker Change: These what we call shovel ready projects our nation building projects. What are you do you want to call them, you'll get that going those are high margin for our organization great jobs for Canadians a lot of people would benefit.

Conor Gupta: Up to be slightly better than the second half of last year.

Conor Gupta: Is there any role for the F&I segment here in the second half that could swing the needle in one direction.

Conor Gupta: Not unless we see.

Speaker Change: And I think the governments are going to need it to be honest with you because they need tax revenues and that only comes from wealth tax revenues don't come from.

Conor Gupta: <unk>.

Not unless we see drilling activity improve that's high margin business it has stabilized.

Speaker Change: Modest jobs. So we're optimistic that it's going to come but we just don't know the timing.

Most of that activity would happen if you get.

Conor Gupta: If we get natural gas projects approved and that would improve drilling.

Speaker Change: Right.

Conor Gupta: So I think it will be similar to last year I don't know if its going to.

Speaker Change: It's a fair comment sure and last one but quite dental.

Speaker Change: The seasonality.

Conor Gupta: Not predicting we're not putting capital to work because its growth.

Speaker Change: We look at the back half.

Speaker Change: First half has kind of trended relatively in line if I, if I exclude that FX noise in the USD cash you had.

Conor Gupta: But I think it'll be relatively stable to last year, that's our best analysis at the moment.

Conor Gupta: Car.

Speaker Change: The back half it sounds like.

Conor Gupta: Another way you could look at it on arc is looking at our revenue per day and kind of projecting that out.

Speaker Change: Given where the coal three months to come.

Speaker Change: Contribution and maybe flattish environment.

Conor Gupta: And over the next couple of quarters.

Speaker Change: We do not expect second half to be slightly better than the second half of last year.

Conor Gupta: You can kind of see within our MD&A and our documents, what we disclose as to as to where we're sitting at now and.

Speaker Change: Any goal for the F&I segment here in the second half that could swing the needle in one direction.

Conor Gupta: That probably gets you a reasonable indication of what that back half might look like.

Speaker Change: Not unless we see.

Conor Gupta: All things being equal.

Speaker Change: <unk>.

Speaker Change: Unless we see drilling activity improve that's high margin business it has stabilized.

Conor Gupta: Okay, that's great.

Conor Gupta: Just for for all the listeners that would mean that I think that we bumped up to.

Speaker Change: Most of that activity would happen if you get.

Conor Gupta: Revenue per day, and we think that's approaching the $10 million per.

Speaker Change: If we get natural gas projects approved and that would improve drilling.

Conor Gupta: Per day is it not yet in June we were at nine four.

Speaker Change: So I think it'll be similar to last year I don't know if its going to.

Conor Gupta: So so that's that would include coal's results.

Speaker Change: Not predicting we're not putting capital to work because its growth.

Conor Gupta: Yeah.

Conor Gupta: So.

Speaker Change: But I think it'll be relatively stable to last year, that's our best analysis at the moment.

Conor Gupta: Many of US take how many revenue per day as to how many days you got that are revenue producing days.

Conor Gupta: You can see some pretty will be we'll be just fine on the topline.

Speaker Change: Car.

Speaker Change: Another way you could look at it on arc is looking at our revenue per day.

Conor Gupta: And then it's just a matter of.

Speaker Change: Kind of projecting that out.

Conor Gupta: Making sure that we.

Speaker Change: You know over the next couple of quarters.

Conor Gupta: Really watch the costs I think.

Speaker Change: You can kind of see within our MD&A and our documents, what we disclose as to as to where we're sitting at now and.

Conor Gupta: Conor that's the main thing that every everybody I'm talking to in our industry you got to watch costs very carefully.

Conor Gupta: <unk>.

Speaker Change: That probably gets you a reasonable indication of what that back half might look like.

Speaker Change: That's what we're focused on.

Speaker Change: Yes, no that's great. Thanks for the time appreciate it.

Speaker Change: All things being equal.

Speaker Change: And that's.

Yang: The next question is from <unk> Yang with Desjardin. Please go ahead.

Speaker Change: For all the listeners that would mean that I think that we bumped up to.

Speaker Change: Revenue per day, and we think thats approaching the $10 million per.

Yang: Hey, good morning, Maria and good morning, the Mullen theme.

Speaker Change: Per day is not yet in June we were at nine four.

Yang:

Speaker Change: Yes, Murray we've seen some positive news flow in the recent months if you looked at the potential for new pipelines. The ring of fire railway in Ontario, but also the passing of the Bill is C. Five watts.

Speaker Change: So so that's that would include cold results.

Speaker Change: So.

Speaker Change: Many of US take how many revenue per day as to how many days you got that are revenue producing days.

Speaker Change: You can see some pretty will be we'll be just fine on the topline.

Speaker Change: Curious to know more about how do you get to prepare.

Speaker Change: For this potential uptick in there what do you foresee in terms of potential in terms of a timeline and the.

Speaker Change: And then it's just a matter of.

Speaker Change: Making sure that we.

Speaker Change: Really what's the cost I think.

Speaker Change: That's the main thing that everybody I'm talking to in our industry you got to watch costs very carefully.

Speaker Change: The potential demand that could impact Mullen down the road.

Speaker Change: And.

Speaker Change: Boy.

Speaker Change: That's what we're focused on.

Speaker Change: I would tell you we sit we sit waiting patiently for words to turn into action.

Speaker Change: Yes, no that's great. Thanks for the time appreciate it.

Speaker Change:

Speaker Change: I would tell you theres been way more.

Speaker Change: The next question is from Ben <unk> with Desjardin. Please go ahead.

Speaker Change: Positive meetings and.

Ben: Hey, good morning, Mary and good morning, the Mullen theme.

Speaker Change: Questions from our customers coming our way.

Speaker Change: About okay, what have what about this what about that.

Speaker Change: Yes Murray.

Speaker Change: We've seen some positive news flow in the recent months if you looked at the potential for new pipelines the ring of fire railway in Ontario, but also the passing of the Bill is C. Five.

Speaker Change: That never happened.

Speaker Change: For quite some time, so there is lots of.

Speaker Change: There's lots of chatter about it than one but I haven't seen anybody until we actually know for sure that we can get this done than private capital will go to work.

Speaker Change: Curious to know more about how do you get to prepare.

Speaker Change: For this potential uptick in what what do you foresee a in terms of a potential in terms of a timeline and the.

Speaker Change: I Hope these nation building projects arent just social programs.

Speaker Change: And socially funded.

Speaker Change: Potential demand that could impact molding down the road.

Speaker Change: I'd love to be able to see that the private money has come back in and that is a real sign that there's confidence that.

Speaker Change: Boy.

Speaker Change: I would tell you we sit we.

Speaker Change: We sit waiting patiently for words to turn into action.

Speaker Change: It makes business sense nation building.

Speaker Change: I don't know how to address it any different than that as to whether these are going to be publicly funded.

Speaker Change: I would tell you theres been way more.

Speaker Change: Positive meetings and.

Speaker Change: Nation building projects or privately funded.

Speaker Change: Questions from our customers coming our way.

Speaker Change: I just hope they go.

Speaker Change: Okay.

Speaker Change: Well, if I can add it's Richard.

Speaker Change: What if what about this what about that that never happened.

Speaker Change: To the extent there is any new pipeline activity, we have pipeline, but we are heavily involved with any large transmission pipeline that goes, but we will be well situated any drilling activity in northern BC and northwest in the Montney.

Speaker Change: For quite some time, so there is lots of.

Speaker Change: There's lots of chatter about it than what but I haven't seen anybody until we actually know for sure that we can get this done than private capital will go to work.

Speaker Change: We are well situated to support all aspects of the drilling activity.

Speaker Change: And we can.

Speaker Change: I Hope these nation building projects arent just social programs.

Speaker Change: We can support that and to the extent there is mining activity in Ontario, We heard we went into.

Speaker Change: And socially funded.

Speaker Change: Antoine Northern Northern Ontario, Canadian Dewatering, and Grimsby and Garden Lawn and Garden line, there were well situated darrin in northern BC with bought <unk> so to the extent these.

Speaker Change: I'd love to be able to see that the price.

Speaker Change: Private money has come back in and that is a real sign that there's confidence that.

Speaker Change: It makes business sense nation building.

Speaker Change: These things become a reality, we are well situated there we will ramp it up accordingly, so I think than what it is.

Speaker Change: I don't know how to address it any different than that as to whether these are going to be publicly funded.

Speaker Change: It is optimistic but not the timeline, we just can't put a PMA on it yet.

Speaker Change: Nation building projects or privately funded.

Speaker Change: I just hope they go.

Speaker Change: Okay, Okay, that's great color gentlemen.

Speaker Change: Minimum up I can add it's Richard.

Speaker Change: Moving to the.

Speaker Change: To the extent there is any new pipeline activity, we have pipeline, but we are heavily involved with any large transmission pipeline that goes we will be well situated any drilling activity in northern BC and northwest in the Montney.

Speaker Change: As some of the spirits, we've seen some reports that Canadian provinces boycotts of U S. Spirits have caused the drop in all spirits sales in Canada I was just curious whether you've seen some impact on container world in the quarter. So far this year.

Speaker Change: We're well situated to support all aspects of the drilling activity.

Speaker Change: We can.

Speaker Change: Going to support that and to the extent there is mining activity in Ontario, you heard we went into.

Speaker Change: Oh, yes spot on.

Speaker Change: Yes.

Speaker Change: We did not plan on them getting hit by do not you can't bring in liquor from the U S that was a big part of.

Speaker Change: Antoine Northern Northern Ontario, Canadian Dewatering, and Grimsby and Garden Lawn and Garden line that we are well situated there and in northern BC with bought <unk>. So to the extent these things become a reality we are well situated there we will ramp it up accordingly, so I think it's been what it is.

Speaker Change: Why we missed on the revenue side with our continuum World group, so that market's got to adjust.

Speaker Change:

Speaker Change: In terms of in terms of that I don't think its going to be.

Speaker Change: It is optimistic but not the timeline, we just can't put a PMA on it yet.

Speaker Change: It's just a one quarter thing Bill I think because I think the consumers either going to adapt to something else or we've already seen.

Speaker Change: Okay. Okay.

Speaker Change: Great color gentlemen.

Speaker Change:

Speaker Change: Moving to the.

Speaker Change: Some change in that like for example in Alberta the liqueurs.

Speaker Change: There is some the spirits, we've seen some reports that Canadian provinces boycotts of U S. Spirits have caused the drop in all spirits sales in Canada I was just curious whether you've seen some impact at container world in the quarter. So far this year.

Speaker Change: U S is coming back U S liquor and wine and spirits, that's now back on the shelves again.

Speaker Change: It's up to consumers, whether they want to buy U S liquids I don't I don't know what this whole prohibition thing that the Canadian government comes up with or the governments.

Speaker Change: Yes spot on.

Speaker Change: So why they have to do that.

Speaker Change: Yes container World, we did not plan on them getting hit by do not you can't bring in liquor from the U S that was a big part of.

Speaker Change: Consumers, if they want to them.

Speaker Change: They'll buy it if they don't they're going to buy something else.

Speaker Change: Rather than politicians say, what you cannot you can't buy that's why I call prohibition.

Kevin Chiang: Okay, that's great and last one for me Carson when we look at the leverage it's been sequentially up a bit.

Speaker Change: That's why we missed on the revenue side with our continuum World group, So that market's got to adjust.

Speaker Change:

Speaker Change: In terms of in terms of that I don't think its going to be.

Kevin Chiang: Lately above your target any thoughts on your capital allocation priority.

Speaker Change: It's just a one quarter thing Bill I think because I think the consumers either going to adapt to something else or we've already seen.

Kevin Chiang: For the balance of the year now that you have closed your notes offering.

Speaker Change: <unk>.

Kevin Chiang: Yes, I would say that.

Speaker Change: Some change in that like for example in Alberta the liquors.

Kevin Chiang: Our current run rate is two five to seven which is slightly above our targeted two five but.

Speaker Change: As coming back U S liquor and wine and spirits.

Speaker Change: <unk> now back on the shelves again.

Kevin Chiang: The reality of it is as we've got.

Speaker Change: It's up to consumers, whether they want to buy U S liquids I don't I don't know what this whole prohibition thing that the Canadian government comes up with or the governments.

Kevin Chiang: We've got some debentures that then we're going to deal that includes the debenture that includes the debentures.

Kevin Chiang: Sitting in on the debt number right now.

Speaker Change: Why do they have to do that.

Kevin Chiang: But.

Kevin Chiang: If you factor the debentures out of that equation now you're down to about two point to three.

Speaker Change: It's up to the consumer so if they want to.

Speaker Change: By up they'll buy it if they don't they're going to buy something else.

Speaker Change: Other than politicians say, what you cannot you can't buy that's why I call. It prohibition.

Kevin Chiang: Which is well within our comfort range. So so I would say that you know.

Speaker Change: Yeah.

Speaker Change: Okay, that's great and last one for me Carson when we look at the leverage it's been sequentially up a bit slightly above your target any thoughts on your capital allocation priority for the balance of the year now that you have closed your notes offering.

Kevin Chiang: By the end of the year will be even.

Kevin Chiang: Leverage less than we are today.

Speaker Change: I think the other thing that I'd highlight too Ben was that look we're.

Speaker Change: Those leverages also.

Speaker Change: We're leaving us with about $100 million of cash to go either grow business or give it back to shareholders in a different way.

Speaker Change: Yeah I E.

Speaker Change: Yes, I would say that.

Speaker Change: Binary debentures.

Speaker Change: Our current run rate is two five to seven which is slightly above our targeted two five but the.

Speaker Change: Well, whatever we decide to do that's up to the board but.

Speaker Change: We're situated pretty good yes, I love it it's all long term its all fixed risk off the table just run the business now for the next 10 12 years.

Speaker Change: Reality of it is as we've got.

Speaker Change: <unk> got some debentures that are that we're going to deal that includes the debenture that includes the debentures thats sitting in on the debt number right now but.

Speaker Change: We've got lots of Optionality been won.

Speaker Change: Yes.

Speaker Change: Sitting by end of year, we'll have over $100 million of cash on the balance sheet.

Speaker Change: If you factor the debentures.

Speaker Change: That equation now you're down to about two to three.

Speaker Change: You can either grow the business and your debt Covenant comes down or you lowered the debt number and the debt covenant comes down so.

Speaker Change: Which is well within our comfort range. So.

Speaker Change: I would say that.

Speaker Change: It'll all depend on how the market plays out and what the board decides with with respect to allocating that capital.

Speaker Change: By the end of the year will be even.

Speaker Change: Leverage less than we are today.

Speaker Change: I think the other thing that I'd highlight too Ben was that look we're.

Speaker Change: Okay, great color. Thank you very much for the time.

Speaker Change: Those leverages also.

Speaker Change: Hi, Mark.

Speaker Change: Our leaving us with about $100 million of cash to go either grow business or give it back to shareholders in a different way.

Speaker Change: The next question is from Walter Spackman with RBC capital markets. Please go ahead.

Speaker Change: Yes I E.

James: Hey, this is James because ours, along I'm on for Walter This Martin good morning.

Speaker Change: <unk> debentures.

Speaker Change: Whatever we decide to do that's up to the board but.

Speaker Change: Good morning.

Speaker Change: Yes, I just wanted to ask on the June you mentioned it was your best month in the quarter I thought that was a pretty impressive just given all the data that we look at kind of pointing to a really tough June.

Speaker Change: We're situated pretty good yes, I love it it's all long term its all fixed risk off the table just run the business now for the next 10 to 12 years.

Speaker Change: Got lots of Optionality been won.

Speaker Change: And particularly with some RBC cardholder data and two P.

Speaker Change: Sitting by end of year, we will have over $100 million of cash on the balance sheet.

Speaker Change: PMI data that were brought up you're not so.

Speaker Change: So can you just give us some color on what drove that was that share gain any subsidiaries that were particularly strong and any color you can give us on.

Speaker Change: You can either grow the business and your debt Covenant comes down or you lowered the debt number and the debt covenant comes down so.

Speaker Change: Q3 is trending within the Dod that backdrop.

Speaker Change: It'll all depend on how the market plays out and what the board decides with with respect to allocating that capital.

Well I think the.

Speaker Change: One that was particularly strong that we highlighted was.

Speaker Change: Okay, great color. Thank you very much for the time.

Speaker Change: Was Canadian dewatering, they were strong because of they opened a new terminal in our facility.

Pam: Thanks Pam.

Speaker Change: The next question is from Walter <unk> with RBC capital markets. Please go ahead.

Speaker Change: <unk> facility in.

Speaker Change: And Hum Northwest, Ontario.

James: Hey, this is James because ours, along I'm on for Walter This Martin good morning.

Speaker Change: Let's call that mining country, yes.

Speaker Change: We also had a pretty strong performance for a moment and trucking group that.

Pam: Good morning, good morning, yes.

Pam: Yes, I just wanted to ask on the June you mentioned it was your best month in the quarter I thought that was a pretty impressive just given all the data that we look at kind of pointing to a really tough June.

Speaker Change: Worked on our capital project.

Speaker Change: And so unfortunately.

Speaker Change: Unfortunately that capital project.

Speaker Change: Was.

Speaker Change: Going to Alaska, not into Canada, but they were.

Pam: And particularly with some RBC cardholder data and some PMI data that we're looking at.

Speaker Change: As an example, when capital projects goal man do we do well yeah. So this economy is okay.

Pam: So can you just give us some color on what drove that was that semi share gain and he subsidiaries that were particularly strong and you know any color you can give us on how.

Speaker Change: In terms of the.

Speaker Change: The consumer side of the economy, it's still kind of going along okay, but there is no there.

Pam: Q3 is trending with another that that backdrop.

Speaker Change: No high performance side on capital investment that might be coming that's what we're that's what we're highlighting the people is it just be patient. We think it's it's got a turn.

Pam: Well I think.

Pam: One that was particularly strong we highlighted was.

Pam: It was Canadian dewatering, they were strong because of they opened a new terminal in <unk>.

Speaker Change: And when that turns the consumer part will be just fine very competitive, but just fine, but most of our margin improvement will come.

Pam: Facility in.

Pam: And Hum Northwest, Ontario, just let's call it mining country, yes.

Speaker Change: Because of capital when capital goes to work, that's when you make higher margin.

Pam: We also had a pretty strong performance for our mall and trucking group that.

Pam: Worked on our capital project.

Speaker Change: I think the impact that we saw in June as well too as <unk>.

Pam: And so unfortunately.

Pam: Unfortunately that capital project.

Pam: Was.

Speaker Change: Started to come back and stabilize and that's <unk>.

Pam: Going to Alaska not into Canada, but.

Speaker Change: Probably a function of people getting back into the communities in the northern parts of the provinces and that's.

Pam: That's an example, when capital projects goal men do we do well yeah. So this economy is okay.

Speaker Change: Driving a little bit more lane density is.

Speaker Change:

Pam: In terms of the.

Speaker Change: As those fires and stuff.

Pam: The consumer side of the economy, it's still kind of going along okay, but there is no there.

Speaker Change: Started to.

Speaker Change: It started to.

Pam: No high performance side on capital investment that might be coming that's what we're that's what we're highlighting the people is it just be patient. We think it's it's got a turn.

Speaker Change: Subside.

Speaker Change:

Speaker Change: We had issues with respect to.

Speaker Change: Getting into town. So you know youre changing lanes and rerouting trucks and those sorts of things and some communities that are just in.

Pam: And when that turns the consumer part will be just fine very competitive, but just fine, but most of our margin improvement will come.

Speaker Change: The order evacuated so I think that volume started to started to come back in the month of June.

Pam: Because of capital when capital goes to work, that's when you make higher margin.

Speaker Change: I appreciate the color there.

Speaker Change: And then another question I mean, a presentation to the Manitoba negotiation, a few months back and.

Pam: I think that we saw in June as well too as LTE.

Speaker Change: Some of them in my conversations with those.

Pam: <unk>.

Speaker Change: The truckers and the audience so rounded driver Inc.

Pam: Started to come back and stabilize and that's <unk>.

Speaker Change: Helping me to compete for truckers like yourself.

Pam: Probably a function of people getting back into the communities in the northern parts of the provinces.

Speaker Change: All of the rules.

Speaker Change: So do you have any update there with regard to getting this issue.

Pam: <unk>.

Pam: Driving a little bit more lane density is.

Speaker Change: Any color you can share with your conversations with regulators or officials.

Pam:

Pam: As those fires and stuff.

Speaker Change: Could potentially help.

Speaker Change: Fix this issue going forward.

Pam: Started to.

Pam: It started to.

Speaker Change: Forward.

Pam: Subside.

Speaker Change: Well.

Pam:

Speaker Change: Good good comment and now you know why that is why a number four issue that I watch indefinitely.

Pam: We had issues with respect to getting in town. So you know youre changing lanes.

Speaker Change: Because it is a drag on.

Pam: And rerouting trucks, and those sorts of things and some communities that just.

Speaker Change: Not just our results it's a drag on.

Pam: <unk>.

Speaker Change: Our people.

Pam: I think that volume started to started to come back in the month of June.

Speaker Change: Because if.

Speaker Change: If we.

Speaker Change: If the rules arent equal then it's very difficult on our people because we're not competitive so.

Pam: I appreciate the color there.

Pam: And then another question I mean, a presentation to the Manitoba Trucking Association, a few months back and.

Speaker Change: I don't personally spent any time talking to the regulators about this because I'm wasting my time.

Pam: Some of them in my conversations with the either the truckers and the audience. So rounded driver Inc.

Speaker Change: They know what the issues are it's time for them to do their job.

Speaker Change: It made to compete for truckers like yourself.

Speaker Change: And Thats fair for all Canadians.

Pam: With all the rules.

Pam: So do you have any update there with regard to getting this issue.

Speaker Change: Including the people that are being taken advantage of by driver Inc. Model I'll leave it at that.

Pam: Any color you can share with your conversations with regulators or officials.

Speaker Change: Alright, I appreciate it I'll turn the line over thank you.

Pam: Who could potentially help.

Pam: Because of this issue going.

Pam: Going forward.

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

Pam: Well.

Pam: Good good comment and now you know why that is why a number four issue that I watch intensely.

Tim James: Next question is from Tim James with TD Colin. Please go ahead.

Pam: It is a drag on.

Tim James: Thanks, very much really appreciate the time here I'll try and keep it quick.

Pam: Not just our results it's a drag on.

Tim James: Just wanted to circle back or train frame the performance of the legacy business here as you think about the year.

Pam: Our people because.

Pam: We.

Pam: If the rules arent equal then it's very difficult on our people because we're not competitive so.

Tim James: If we exclude KOL group and the two 1 billion closing and the FX impact that you called out.

Pam: I don't personally spent any time talking to regulators about this because I'm wasting my time.

Tim James: An adjustment in Q2, if we exclude those items the rest of the business. The Mullen group business is it tracking towards that.

Pam: They know what the issues are it's time for them to do their job.

Tim James: Original.

Pam: And that's fair for all Canadians.

Tim James: 350, obviously, it's some component of that but that original EBITDA guide for 2025.

Pam: Including the people that are being taken advantage of by driver Inc. Model I'll leave it at that.

Tim James: No.

Pam: Alright, I appreciate it I'll turn the line over thank you.

Tim James: You back out coal, we're not tracking to $3 50, correct right.

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

Tim James: <unk>.

Tim James: And last year, we were at 333 33, 30, So we said to get to $3 50, we needed to do acquisitions, we did the acquisitions, but the timings off.

Speaker Change: Next question is from Tim James with TD Colin. Please go ahead.

Tim James: Thanks, very much really appreciate the time here I'll try and keep it quick.

Tim James: No.

Tim James: Just wanted to circle back or try and frame the performance of the legacy business here as you think about the year, if we exclude KOL group and the two 1 billion closing and the FX impact that you called out as an adjustment in Q2, if we exclude those items the rest.

Tim James: What we would have been probably not too far off but then the trailer of trade issues accelerated this year and.

Tim James: All the drama that's gone with that so we're probably behind on the $333 25 for on our same store sales, but I honestly think that's just timing.

Tim James: The business the Mullen group business is it tracking towards that original.

Tim James: Tim.

Tim James: These are events that are outside your control and they they just push it out but in our core businesses are doing as we've disclosed they're holding their own.

Tim James: 350, obviously, some component of that but that original EBITDA guide for 2025.

Tim James: Revenues flat margins down a little bit because of the cost.

Tim James: No.

Tim James: If you back out coal, we're not tracking to $3 50, correct right.

Tim James: Cost pressures, but really most of the noise that we had in the quarter was all corporate stuff.

Tim James: <unk>.

Tim James: Our balance sheet.

Tim James: And last year, we were at 333 33 30.

Tim James: Related with Argos, holding a large U S. What do we hold I think we hold 100 and something million dollars U S dollars yes.

Tim James: So we said to get to $3 50, we needed to do acquisitions, we did the acquisitions, but the timing is off.

Tim James: That's what got US now the good news is it also.

Tim James: No.

Tim James: The Canadian dollar went up in value is that our U S debt.

Tim James: What we would have been probably not too far off but then the trailer of trade issues accelerated this year and.

Tim James: <unk> went down by a similar amount. So one was one was income statement and one was balance sheet.

Tim James: All of the drama that's gone what that so were probably behind on the $333 25 for on our same store sales.

Tim James: But that's why we just took that noise out but on a same store sales were probably behind flat or a little bit to last year and mostly that is due to tariff and trade talk and just kind of uncertainty.

Tim James: I honestly think that's just timing.

Tim James: Tim.

Tim James: These are events that are outside your control.

Speaker Change: Okay. That's actually helpful answer too much in my poorly worded question, because you did answer what I was looking for it slightly.

Tim James: They just push it out but in our core businesses are doing as we've disclosed they're holding their own.

Tim James: They're not our revenues flat margins down a little bit because of the low cost pressures, but really most of the noise that we had in the quarter was all corporate stuff.

Speaker Change: Second and final question, just going back to Cole group.

Speaker Change: We're asked about it earlier there was a reference to the customs business can you just remind us how much of a core group of approximately the revenue is from the custom business.

Tim James: Balance sheet related with our Ros holding a large U S. What are we hold I think we hold 100 and something million dollars U S dollars, yes, that's what that's what got US now the good news is it also.

Speaker Change: They were about a 60 40 split.

Speaker Change: Yes, it was.

Speaker Change: It's somewhere between a third 60 40 somewhere in there.

Tim James: The Canadian dollar went up in value is that our U S debt.

Speaker Change: In that ballpark, yes.

Speaker Change: Yeah.

Tim James: Went down by a similar amount. So one was one was income statement and one was the balance sheet.

As a private company they've bundled everything together in a bucket in our world.

Tim James: But that's why we just took that noise out but on a same store sales were probably behind flat or a little bit to last year and mostly that is due to tariff and trade talk and just kind of uncertainty.

Speaker Change: Of which by the way.

Speaker Change: We've got a corporate executive is kind of sitting right across from me Joanna Scott, that's really going to be spearheading that initiative.

Speaker Change: Is it.

Tim James: Okay. That's actually helpful answer to my to my poorly worded question because you did answer what I was looking forward statement.

Speaker Change: We're going to we're going to.

Speaker Change: Fine tune them so that.

Speaker Change: They report customs and freight brokerage is separate separate buckets.

Tim James: Second and final question, just going back to Cole group.

Speaker Change: And we're going to get them focused theyre going to go from a private company.

Tim James: We're asked about it earlier there was a reference to the customs business can you just remind us how much of a core group of approximately the revenue is from the custom business.

Speaker Change: Were they.

Speaker Change: They could run up the way they wanted to that's up to the previous owner.

Speaker Change: Under us, we're a public company and we measure everything.

Tim James: They were about a 60 40 split.

Speaker Change: And that's.

Speaker Change: That's going to be Joanne is going to hit that initiative up and she's already chosen.

Tim James: Yes.

Tim James: It's somewhere between a third and 64 more in there.

Speaker Change: A new leader to join with her to help with that initiative and Richard Maloney is working with the gentleman in the U S to accelerate on the customer side that is our primary focus we want to focus on customs because ups.

Tim James: In that ballpark, yes.

Tim James: Yeah.

Tim James: As a private company they've bundled everything together in a bucket in our world.

Tim James: Of which by the way.

Tim James: We've got a corporate executive is kind of sitting right across from me Joanna Scott, that's really going to be spearheading that initiative.

Speaker Change: That's the margin business the freight forwarding business, that's a that's a tough business right now.

Speaker Change: Everybody that reports just freight forwarding.

Tim James: Is it.

Tim James: We're going to we're going to.

Speaker Change: That's not a great business, we will have to.

Tim James: Fine tune them so that.

Speaker Change: We got our work to do on that side, but it's I'd say, it's about a third to a little bit more.

Tim James: They report customs and freight brokerage is separate separate buckets.

Speaker Change: As customers.

Speaker Change: But thats.

Tim James: And we're going to get them focused theyre going to go from a private company.

Speaker Change: On the margin side.

Speaker Change: Flip that rock yeah, yeah.

Tim James: Were they.

Tim James: They could run up the way they wanted to that's up to the previous owner.

Speaker Change: Yeah, exactly maybe two thirds.

Speaker Change: On the top side, so you know where our focus will be.

Speaker Change: Under us, we're a public company and we measure everything.

Speaker Change: His role the custom side.

Tim James: And that's.

Speaker Change: That's very helpful. Thank you.

Speaker Change: That's going to be Joanne is going to hit that initiative up and she's already chosen.

Speaker Change: Thank you.

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

Speaker Change: A new leader to join with her to help with that initiative and Richard Maloney is working with the gentleman in the U S to accelerate on the customers. So that's our primary focus we want to focus on customs because thats.

Speaker Change: Nothing.

Speaker Change: Of.

Speaker Change: For me folks thanks, very much for joining us enjoy the rest of your summer.

Speaker Change: As I said, we've got lots of work to do on the margin side, where 100% focused on the senior team. Thank you very much for joining US we'll talk to you.

Speaker Change: That's the margin business the freight forwarding business, that's a tough that's a tough business right now.

Speaker Change: Everybody that reports just freight forwarding.

Speaker Change: In the fall.

Speaker Change: This brings to close today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.

Speaker Change: That's not a great business, we will have to.

Speaker Change: We've got our work to do on that side, but it's I'd say, it's about a third to a little bit more.

Speaker Change: As customers.

Speaker Change: But thats.

Speaker Change: On the margin side.

Speaker Change: Flip that Ralph Yes, yes, yes.

Speaker Change: Yeah, exactly maybe two thirds.

Speaker Change: On the top side, so you'll know where our focus will be.

Speaker Change: His role the custom side.

Speaker Change: Okay.

Speaker Change: That's very helpful. Thank you.

Speaker Change: Thank you.

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

Speaker Change: Nothing.

Speaker Change: Of.

Speaker Change: For me folks thanks, very much for joining us enjoy the rest of your summer.

Speaker Change: As I said, we've got lots of work to do on the margin side, where 100% focused on the senior team. Thank you very much for joining US we'll talk to you.

Speaker Change: In the fall.

Speaker Change: This brings to close today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.