Q4 2025 North American Construction Group Ltd Earnings Call

March 12, 2026

Speaker #2: Following management's prepared remarks, there will be an opportunity for analysts and shareholders and bondholders to ask questions. The media may monitor this call in listen-only mode.

Speaker #2: They are free to 4, the headline EBITDA number Certain material factors or of 78 million dollars was significantly impacted by a 13 million dollar retroactive life-to-date adjustment for the Fargo project, which we'll discuss on the next slide.

Speaker #2: quote any member of management, but they are asked not to quote remarks from any other participant without that participant's permission. The company wishes to confirm that today's comments contain forward-looking information and that actual results could differ materially from a conclusion, forecast, or projection contained in that forward-looking information.

Operator: The company wishes to confirm that today's comments contain forward-looking information and that actual results could differ materially from a conclusion, forecast, or projection contained in that forward-looking information. Certain material factors or assumptions were applied in drawing conclusions or in making forecasts or projections that are reflected in the forward-looking information.

Operator: Additional information about those material factors is contained in the company's most recent management's discussion and analysis, which is available on SEDAR and EDGAR, as well as the company's website at nacg.ca. I will now turn the conference over to Jason Veenstra, CFO. Please go ahead.

Jason Veenstra: Thanks, Joanna, and good morning, everyone. We've shortened the deck this quarter, and I'll start off with brief commentary on the financials and pass the call to Barry for his operational and forward-looking remarks. Starting on slide four, the headline EBITDA number of CAD 78 million was significantly impacted by a $13 million retroactive life-to-date adjustment for the Fargo project, which we'll discuss on the next slide. Australia revenue for the quarter of AUD 176 million was a Q4 record for the region, despite the wet weather. The oil sands region also posted solid top-line numbers for the quarter.

Speaker #2: Australia revenue for the quarter of 176 million dollars was a Q4 record for the region, despite the wet weather. And the oil sands region also posted solid top-line numbers for the quarter.

Speaker #2: In looking at the 344 million dollars of combined revenue and when factoring out the volatility of Fargo in the quarter, we are trending in a positive way and on our way to the 1.6 billion dollar midpoint for 2026, which will be another company record.

Jason Veenstra: In looking at the CAD 344 million of combined revenue, and when factoring out the volatility of Fargo in the quarter, we are trending in a positive way and on our way to the CAD 1.6 billion midpoint for 2026, which will be another company record. When looking at the CAD 1.5 billion generated in 2025 of combined revenue, we can see that Australia and Canada are up on a combined net basis 10%, with Australia up an impressive 17% and Canada up a modest 4%. When looking at our employee exposure hours, we can see that the 6.3 million hours in 2024 was eclipsed in 2025 by a correlated 15% and reached 7.1 million hours, representing a steadily growing workforce of 3,300 employees.

Speaker #2: When looking at the $1.5 billion generated in 2025 of combined revenue, we can see that Australia and Canada are up on a combined net basis 10%, with Australia up an impressive 17% and Canada up a modest 4%.

Speaker #2: When looking at our employee exposure hours, we can see that the 6.3 million hours in 2024 was eclipsed in 2025 by a correlated 15% and reached 7.1 million hours.

Speaker #2: Representing a steadily growing workforce of 3,300 employees. These metrics showcase the baseload momentum we're currently experiencing and give us the historical context and confidence in the 2026 outlook, which Barry will close our prepared remarks with.

Jason Veenstra: These metrics showcase the base load momentum we're currently experiencing and give us the historical context and confidence in the 2026 outlook, which Barry will close our prepared remarks with. Moving to slide 5. I've already touched on the revenue momentum, but will add that 2025 Q4 was impacted by the strategic divestiture we made of our ultra-class fleet, which was effective 1 December 2025. Regarding gross profit, we were impacted by two significant factors in the quarter, with the Fargo cost adjustment being the major factor. Based on an updated full project forecast, the Fargo team increased the estimated cost to complete of the structures, railroads, and aqueducts. On a gross basis, the increase to cost was approximately $50 million, and on a net basis to us was a $13 million life-to-date adjustment, given the late stage the project is at.

Speaker #2: Moving to slide 5, I've already touched on the revenue momentum, but we'll add that 2025 Q4 was impacted by the strategic divestiture we made of our ultra-class fleet, which was effective December 1, 2025.

Speaker #2: Regarding gross profit, we are impacted by two significant factors in the quarter, with the Fargo cost adjustment being the major factor. Based on an updated full project forecast, the Fargo team increased the estimated cost to complete of the structures, railroads, and aqueducts.

Jason Veenstra: Based on an updated full project forecast, the Fargo team increased the estimated cost to complete of the structures, railroads, and aqueducts. On a gross basis, the increase to cost was approximately $50 million, and on a net basis to us was a $13 million life-to-date adjustment, given the late stage the project is at.

Speaker #2: On a gross basis, the increase to cost was approximately 50 million dollars. And on a net basis to us, was a 13 million dollar life-to-date adjustment, given the late stage, the project is at.

Speaker #2: With approximately 85% of the project complete, management is confident in the updated cost estimate and is looking forward to completing the project here in 2026 at the forecasted level.

Jason Veenstra: With approximately 85% of the project complete, management is confident in the updated cost estimate and is looking forward to completing the project year in 2026 at the forecasted level. The second impact in the quarter was the above-average rainfall in very late Q4 in Queensland and the financial effect it had on the results, primarily at the Carmichael Mine. Excluding these isolated items, gross profit of approximately 15% is a reasonable run rate metric of where our combined business is currently operating and consistent with the more routine Q3 2025. Moving to slide 6. Q4 EBITDA and EBIT were down from their 2024 comparables, as already discussed, with the 23% EBITDA margin being approximately 7% lower than the run rate metric of around 30% based on the two factors mentioned.

Speaker #2: The second impact in the quarter was the above-average rainfall in the very late Q4 in Queensland, and the financial effect it had on the results primarily at the Carmichael Mine.

Speaker #2: Excluding these isolated items, gross profit of approximately 15% is a reasonable run rate metric of where our combined business is currently operating, and consistent with the more routine third quarter of 2025.

Speaker #2: Moving to slide 6, Q4 EBITDA and EBIT were down from their 2024 comparables as already discussed, with the 23% EBITDA margin being approximately 7% lower than the run rate metric of around 30% based on the two factors mentioned.

Jason Veenstra: Included in EBITDA is direct general administrative expenses of CAD 15 million in the quarter and equivalent to 4.9% of reported revenue. Going from EBITDA to EBIT, we expensed depreciation equivalent to 18% of combined revenue, which is higher than the 14% to 16% run rate of the business based on the unique conditions in the quarter. Adjusted earnings per share was a loss for the quarter of CAD 0.14 and reflects the EBIT generated by the business net of interest and taxes. The average cash interest rates for Q4 remained consistent at 6.4%. Moving to slide 7, I'll briefly summarize our cash flow. Net cash provided by operations prior to working capital of CAD 56 million was generated by the business, reflecting EBITDA performance net of cash interest.

Speaker #2: Included in EBITDA is direct general administrative expenses of $15 million in the quarter, equivalent to 4.9% of reported revenue. Going from EBITDA to EBIT, we expense depreciation equivalent to 18% of combined revenue, which is higher than the 14% to 16% run rate of the business based on the unique conditions in the quarter.

Speaker #2: Adjusted earnings per share was a loss for the quarter of 14 cents and reflects the EBIT generated by the business net of interest and taxes.

Speaker #2: The average cash interest rate for Q4 remained consistent at 6.4%. Moving to slide 7, I'll briefly summarize our cash flow. Net cash provided by operations prior to working capital of 56 million dollars was generated by the business, reflecting EBITDA performance net of cash interest.

Jason Veenstra: Free cash flow of CAD 57 million was a highlight for the quarter based on EBITDA generation and disciplined sustaining capital maintenance. The CAD 57 million in Q4 and CAD 46 million in Q3 combined to CAD 103 million of free cash flow generated in the second half of 2025. Moving to slide 8, net debt levels ended the quarter at CAD 878 million, a decrease of CAD 26 million in the quarter as free cash flow generation was used to pay down debt, but was also used on growth capital, share purchases, and dividends. Net debt and senior secured debt leverage ended at 2.4 times and 1.4 times, respectively.

Speaker #2: Free cash flow of $57 million was a highlight for the quarter, based on EBITDA generation and disciplined sustaining capital maintenance. The $57 million in Q4 and $46 million in Q3 compiled to $103 million of free cash flow generated in the second half of 2025.

Speaker #2: Moving to slide 8, net debt levels ended the quarter at 878 million dollars, a decrease of 26 million dollars in the quarter as free cash flow generation was used to pay down debt, but was also used on growth capital, share purchases, and dividends.

Speaker #2: Net debt and senior secured debt leverage ended at 2.4 times and 1.4 times respectively. As mentioned last quarter, senior unsecured debt or high-yield debt now accounts for approximately 40% of our overall net debt and we've been pleased with the demand for that source of financing as it provides the ability to confidently grow our Australian and infrastructure businesses.

Jason Veenstra: As mentioned last quarter, senior unsecured debt or high-yield debt now accounts for approximately 40% of our overall net debt, and we've been pleased with the demand for that source of financing as it provides the ability to confidently grow our Australian and infrastructure businesses. As shown on the slide, the CAD 422 million of cash liquidity, up from CAD 334 million at the end of September, has positioned us for success. We expect to pay out the convertible debentures at the end of the month with this capacity, which will bring the credit facility net of cash up to around 15% of our overall debt. With those comments on the financials, I'll pass the call to Barry.

Speaker #2: As shown on the slide, the $422 million of cash liquidity, up from $334 million at the end of September, has positioned us for success.

Speaker #2: We expect to pay out the convertible debentures at the end of the month with this capacity, which will bring the credit facility net of cash up to around 15% of our overall debt.

Speaker #2: With those comments on the financials, I'll pass the call to Barry.

Barry Palmer: Thanks, Jason, and good morning, everyone. This is my first earnings call as President and CEO, and after 44 years with North American Construction Group, my focus is on execution and operating discipline. I'll start with some remarks on slide 10 regarding our previously announced acquisition of Iron Mine Contracting, or for short, IMC. We expect that transaction to close early in Q2 2026, subject to customary closing conditions, including approval by the Australian Competition and Consumer Commission. Strategically, IMC is a strong fit. Their culture, core values, and maintenance capabilities align well with their existing platform in Australia and across the globe. IMC brings roughly 120 heavy assets and about CAD 1 billion of contractual backlog, which increases our overall backlog by roughly 30% and Australian backlog by roughly 35%.

Speaker #1: Thanks, Jason, and good morning, everyone. This is my first earnings call as president and CEO, and after 44 years with North American Construction Group, my focus is on execution and operating discipline.

Speaker #1: I'll start with some remarks on slide 10 regarding our previously announced acquisition of Iron Mine Contracting, or for short, IMC. We expect that transaction to close early in the second quarter of 2026, subject to customary closing conditions including approval by the Australian Competition and Consumer Commission.

Speaker #1: Strategically, IMC is a strong fit. Their culture, core values, and maintenance capabilities align well with their existing platform in Australia, and across the globe.

Speaker #1: IMC brings roughly 120 heavy assets, yeah, 120 heavy assets and about 1 billion of contractual backlog, which increases our overall backlog by roughly 30% and Australian backlog by roughly 35%.

Barry Palmer: Most importantly, IMC and MacKellar together will create a national tier one contractor platform in Australia, capable of executing large comprehensive scopes in both Eastern and Western Australia. This also accelerates our objective to expand lower capital unit rate work across Australia, where in times of geopolitical restrictions, the Western world is increasingly looking for critical mineral supply. Having overseen our operations in Australia over the last two years, I'm incredibly excited about our opportunities on the continent and what it will mean to North American Construction Group overall. Before walking through the next couple slides, I want to separate two things. First, our 2026 operational priorities, which are the actions we are focused on executing this year. Second, the structural growth drivers that expand our earnings power over time.

Speaker #1: Most importantly, IMC and McKellar together will create a national tier-one contractor platform in Australia capable of executing large comprehensive scopes in both Eastern and Western Australia.

Speaker #1: This also accelerates our objective to expand lower capital unit rate work across Australia where in times of geopolitical restrictions, the Western world is increasingly looking for critical mineral supply.

Speaker #1: Having overseen our operations in Australia, over the last two years, I'm incredibly excited about our opportunities on the continent and what it will mean to North American Construction Group overall.

Speaker #1: Before walking through the next couple of slides, I want to separate two things. First, our 2026 operational priorities which are the actions we are focused on executing this year.

Speaker #1: Second, the structural growth drivers that expand our earnings power over time. Moving to slide 11, my operational priorities. As new CEO, our straightforward. Operational and aimed at sustainable growth that compounds long-term shareholder value.

Barry Palmer: Moving to slide 11, my operational priorities as new CEO are straightforward, operational, and aimed at sustainable growth that compounds long-term shareholder value. First and always, safety. Everybody gets home safe everywhere we operate. Second, in Australia, we're further optimizing our workforce mix based on the improvements we have already implemented in the second half of 2025, driving even stronger consistency, productivity, and execution. Third, after the major growth in Queensland over the last two years, we will review and optimize operating costs while fully maintaining customer requirements. Fourth, we'll integrate and commission the expanded IMC fleet following the transaction close in Western Australia to support growth and scale. Fifth, we will deliver the successful completion of Fargo Moorhead Diversion Project, reinforcing our civil execution credentials. Lastly, we will continue improving mechanical availability and reliability in the oil sands through right-sizing the fleet, disciplined maintenance, and operating fundamentals.

Speaker #1: First, an hour's safety. Everybody gets home safe, everywhere we operate. Second, in Australia, we're further optimizing our workforce mix based on the improvements we have already implemented in the second half of 2025, driving even stronger consistency, productivity, and execution.

Speaker #1: Third, after the major growth in Queensland over the last two years, we will review and optimize operating costs while fully maintaining customer requirements. Fourth, we'll integrate and commission the expanded IMC fleet following the transaction, closing Western Australia to support growth and scale.

Barry Palmer: Fourth, we'll integrate and commission the expanded IMC fleet following the transaction close in Western Australia to support growth and scale. Fifth, we will deliver the successful completion of Fargo Moorhead Diversion Project, reinforcing our civil execution credentials. Lastly, we will continue improving mechanical availability and reliability in the oil sands through right-sizing the fleet, disciplined maintenance, and operating fundamentals.

Speaker #1: Fifth, we will deliver the successful completion of Fargo Moorhead diversion project reinforcing our civil execution credentials. Lastly, we'll continue improving mechanical availability and reliability in the oil sands through right-sizing the fleet, discipline maintenance, and operating fundamentals.

Barry Palmer: Moving to slide 12, with that operational focus in mind, the next slide, step back and look at the bigger picture, the structural growth drivers we have put in place over the past several years that'll translate into visible traction in the back half of 2026 and beyond. At a high level, first, scaling into tier one contractor platform in Australia. Second, expanding mining services across Canada and the US. Third, securing infrastructure awards across North America. Diversified in scope, these are building blocks for an even stronger and more resilient operating profile and a deeper pipeline of opportunities across end markets. Let's dive into the first one. On slide 13, Australia is our primary growth engine. We are operating across 18 sites with favorable, consistent operating conditions that support year-round equipment utilization.

Speaker #1: With moving to slide 12, with that operational focus in mind, the next slide step back and look at the bigger picture, the structural growth drivers, we put in place over the past several years that'll translate into visible traction in the back half of 2026 and beyond.

Speaker #1: At a high level, first, scaling into tier-one contractor platform in Australia. Second, expanding mining services across Canada and the US. And third, securing infrastructure awards across North America.

Speaker #1: Diversified in scope, these are building blocks for an even stronger and more resilient operating profile, and a deeper pipeline of opportunities across end markets.

Speaker #1: Let's dive into the first one. On slide 13, Australia's is our primary growth engine. We are operating across 18 sites with favorable consistent operating conditions that support year-round equipment utilization.

Barry Palmer: Our platform is diversified across key commodities, including gold, coal, iron ore, lithium, copper, and mining-related infrastructure. With IMC, we will expand to a national tier one scale, and we become even better positioned in Western Australia, particularly in rare earth and critical minerals. Whereas Australia is increasingly a strategic hub for the West critical mineral supply chains. Moving to slide 14. In North American infrastructure, we are seeing nation-building projects across Canada and the US now advancing from announcement to the bid stage and into execution. Fargo Moorhead is a key proof point that sets us up to win more work. Our earthwork scopes, representing approximately $600 million in total project volume for the company, have been completed as planned. The execution record strengthens our credibility and expands the set of opportunities we are able to pursue.

Speaker #1: Our platform is diversified across key commodities, including gold, coal, iron ore, lithium, copper, and mining-related infrastructure. With IMC, we will expand to a national tier-one scale and we become even better positioned in Western Australia, particularly in rare earth and critical minerals, where Australia is increasingly a strategic hub for the West's critical mineral supply chains.

Speaker #1: Moving to slide 14, in North America, North American infrastructure, we are seeing nation-building projects across Canada and the US now advancing from announcement to the bid stage and into execution.

Speaker #1: Fargo Moorhead is a key proof point that sets us up to win more work. Our Earthworks scopes representing approximately 600 million in total project volume for the company have been completed as planned.

Speaker #1: The execution record strengthens our credibility and expands the set of opportunities we are able to pursue. We're looking at tracking a strong pipeline across Northern Canadian infrastructure, defense-related scopes, and critical mineral infrastructure work with our partner Nuna, and mass civil earthworks and opportunities in the US as a subcontractor.

Barry Palmer: We're tracking a strong pipeline across northern Canadian infrastructure, defense-related scopes, and critical mineral infrastructure work with our partner, Nuna, and mass civil earthworks and opportunities in the US as a subcontractor. We're focused on winning work where we have a clear competitive advantage, such as mine site civil scopes and subcontracted earthwork roles on large programs. Moving to slide 15. Mining services remain a core strength of North American, built on decades of operating experience and a large specialized fleet. We operate across a broad geography from north of the Arctic Circle to the heart of Texas, and our track record, safety culture, and equipment base support expansion, and mining activity grows across this continent.

Speaker #1: We're focused on winning work where we have a clear competitive advantage such as mine site civil scopes and subcontracted Earthwork roles, on large programs.

Speaker #1: Moving to slide 15, mining services remain a core strength of North American built on decades of operating experience and a large specialized fleet. We operate across a broad geography from north of the Arctic Circle to the heart of Texas.

Speaker #1: And our track record, safety, culture, and equipment base support expansion and mining activity grows across this continent. We see tailwinds from increased focus on critical minerals and energy infrastructure and a reduction in regulatory hurdles and we intend to earn that work by executing our fundamentals of safe operations, high equipment availability, and discipline maintenance.

Barry Palmer: We see tailwinds from increased focus on critical minerals and energy infrastructure and a reduction in regulatory hurdles, and we intend to earn that work by executing our fundamentals of safe operations, high equipment availability, and disciplined maintenance. Moving on to slide 16, let me start with how we see execution priorities and strategic growth drivers translate to our financials. We enter the year with strong visibility supported by our contractual backlog and bidding activity. Currently, our backlog is approximately CAD 3.9 billion, with CAD 1.2 billion already secured for 2026. Beyond that backlog, we are tracking a total bid pipeline of approximately CAD 12.6 billion, including roughly CAD 4.6 billion currently in active tender and procurement processes. Taken together, this provides strong visibility into the year ahead and supports our expectation for another year of growth for NACG.

Speaker #1: Moving on to slide 16, let me start with how I see execution priorities and strategic growth drivers translate to our financials. We enter the year with strong visibility supported by our contractual backlog and bidding activity. Currently, our backlog is approximately $3.9 billion, with $1.2 billion already secured for 2026.

Speaker #1: Beyond that backlog, we are tracking a total bid pipeline of approximately $12.6 billion, including roughly $4.6 billion currently in active tender and procurement processes.

Speaker #1: Taken together, this provides strong visibility into the year ahead and supports our expectation for another year of growth for NACG. At the midpoint, we expect combined revenue of $1.6 billion, adjusted EBITDA of $400 million, and free cash flow of $120 million.

Barry Palmer: At the midpoint, we expect combined revenue of CAD 1.6 billion, adjusted EBITDA of CAD 400 million, and free cash flow of CAD 120 million. An important point on the cadence for our adjusted EBITDA, our outlook reflects a stable first half performance broadly in line with the current Q4 run rate, excluding the Fargo impacts, with meaningful improvements expected in the second half of 2026 as IMC synergies and opportunities are realized. New acquired equipment is commissioned and seasonal activity strengthens. Historically, from 2022 to 2025, second half revenues consistently exceeded the first half, averaging approximately 20% higher contribution. This profile is consistent with how our business typically builds through the year. We also ended 2025 with strong momentum and free cash flow, included CAD 57 million in Q4 2025, which supports our confidence entering 2026.

Speaker #1: And an important point on the cadence for our adjusted EBITDA, our outlook reflects a stable first half performance broadly in line with the current Q4 run rate excluding the Fargo impacts with meaningful improvements expected in the second half of 2026 as IMC synergies and opportunities are realized.

Speaker #1: New acquired equipment is commissioned and seasonal activity strengthens. Historically, from 2022 to 2025, second half revenues consistently exceeded the first half averaging approximately 20% higher contribution so this profile is consistent with how our business typically builds through the year.

Speaker #1: We also ended 2025 with strong momentum, and free cash flow included $57 million in Q4 2025, which supports our confidence entering 2026. That ends the Q4 presentation, and we would be happy to take any questions you have.

Barry Palmer: That ends the Q4 presentation, and we would be happy to take any questions you have. I'll now turn it back over to the operator.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two, and if you are using a speakerphone, please lift the handset before pressing any keys. The first question comes from Adam Thalhimer at Thompson Davis & Co. Please go ahead.

Speaker #1: I'll now turn it back over to the operator.

Speaker #2: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone.

Speaker #2: You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two.

Speaker #2: And if you are using a speakerphone, please flip the handset before pressing any keys. The first question comes from Adam Thalheimer at Thomson Davis.

Adam Thalhimer: Hey, good morning, guys, and welcome to the call, Barry.

Barry Palmer: Morning. Thanks, Adam.

Adam Thalhimer: Can you provide a little bit more color? The total bid pipeline's up CAD 12.6 billion, and I think this is a new metric, this CAD 4.6 billion in active tender value. What's in that kinda geographically, and when could that come into backlog?

Speaker #2: Please go ahead.

Speaker #3: Hey, good morning, guys. And welcome to the call, Barry.

Speaker #4: Good morning. Thanks, Adam. Can you provide a little bit more color? The total bid pipeline's up 12.6 billion. And I think this is a new metric, this 4.6 billion in active tender value.

Barry Palmer: It's kinda spread all over the place. It involves some of the defense spending. It involves some of the water projects in the US. It's some mining projects that are out there. It's kinda scattered all over there. It's roughly 40 projects within that number.

Speaker #4: What's in that, kind of geographically, and when could that come into backlog?

Speaker #3: It's kind of spread all over the place. It involves some of the defense spending. It involves some of the water projects in the US.

Speaker #3: There are some mining projects that are out there. It's kind of scattered all over. There are roughly 40 projects within that number.

Adam Thalhimer: Well, a couple questions. Is there any risk to additional costs, and are those embedded in the 2026 guidance at all? Then can you remind us, I think that there's a tail of income from this project once the construction is complete. Just can you comment on that?

Speaker #4: Okay. And as it relates to the Fargo job, is there any risk well, a couple of questions. Is there any risk to additional costs?

Speaker #4: And are those embedded in the 2026 guidance at all? And then can you remind us I think that there's a tail of income from this project once the construction is complete.

Barry Palmer: Yeah, I can take that one, Adam. Yeah, we don't see a lot of risk in the remaining 15% of the project. This was a very detailed update done by the project team, and it's a limited amount that's left. We see limited risk. Of the CAD 400 million of EBITDA for this year, only about CAD 5 million is contemplated from Fargo at these reduced margins. You know, with the life-to-date adjustment that was made, that assumes that margin carries through to completion. That's kind of the risk profile. What was the second part of the question?

Speaker #4: Just can you comment on that?

Speaker #3: Yeah, I can take that one, Adam. Yeah, we don't see a lot of risk in the remaining 15% of the project. This was a very detailed update done by the project team.

Speaker #3: And it's a limited amount that's left. So we see limited risk. Of the $400 million of EBITDA for this year, only about 5 is contemplated from Fargo at these reduced margins.

Speaker #3: With a light to-date adjustment that was made, that assumes that margin carries through to completion, so that's kind of the risk profile. And what was the second part of the question?

Adam Thalhimer: Oh, the second question was just, I think that there's a.

Barry Palmer: Oh, right. Yeah.

Adam Thalhimer: recurring revenue from that project

Barry Palmer: Correct.

Adam Thalhimer: going forward.

Barry Palmer: Yeah. It's not a meaningful number, Adam. It's so we do own 15% of the special purpose vehicle that will do the operate and maintain portion of the contract, but it's not a meaningful contributor moving forward. It's not worth modeling out, I would say.

Speaker #4: The second question was just, I think that there's a...

Speaker #3: Oh, right. Yes, there is a.

Speaker #4: Considering revenue from that project.

Speaker #3: Correct.

Speaker #4: Going forward.

Speaker #3: Yeah, it's going down. It's not a meaningful number, Adam. So we do own 15% of the special purpose vehicle that will do the operate and maintain portion of the contract.

Speaker #3: But it's not a meaningful contributor moving forward. And so it's not worth modeling out, I would say.

Adam Thalhimer: Okay. Last one for me. Can you comment on the strategic review in the oil sands and what the outlook is for margins there this year?

Speaker #4: Okay. And last one for me. Can you comment on the strategic review and the oil sands and what the outlook is for margins there this year?

Barry Palmer: Yeah, look, I mean, we see the oil sands as still a very strong market. You know, there's lots of activity. I mean, I've been in conversation with senior management in the oil sands, and they're telling us they're focused on throughput this year and there's opportunity for us. We see a lot of good things there. I think you know, as far as the margin improvement goes, that's on us. I think you know, we put more of our gear to work and the availability of our equipment increases and our projects will just improve on margin. I think it's there's great opportunities not only for additional revenue, but margin improvements as well.

Speaker #3: Yeah, look, I mean, we see the oil sands as still a very strong market. There's lots of activity. I mean, I've been in conversation with senior management in the oil sands and they're telling us they're focused on throughput this year.

Speaker #3: And there's opportunity for us, so we see a lot of good things there. I think as far as the margin improvement goes, that's on us.

Speaker #3: I think we put more of our gear to work and the availability of our equipment increases and our projects will just improve on margin.

Speaker #3: I think there are great opportunities not only for additional revenue, but margin improvements as well.

Adam Thalhimer: All right. Thanks, guys.

Barry Palmer: Thanks, Adam.

Operator: Thank you. The next question comes from Joseph Ligor at Roth Capital. Please go ahead.

Speaker #4: All right. Thanks, guys.

Speaker #3: Thanks, Adam.

Joseph Ligor: Hey, Jason and Barry. Thanks for taking my questions. So my main questions could be around IMC. I think the original timeline expectation was to close by late Q1, and now that's pushed to Q2. But I think the original guide hasn't changed. Is there something that's kind of come up to offset whatever was lost from IMC being delayed? Or should we expect, you know, that once it closes, you'll give updated guidance? Like, how should we think about that? And then can you talk a little bit about why it shifted from Q1 to Q2?

Joseph Reagor: Hey, Jason and Barry. Thanks for taking my questions. So my main questions could be around IMC. I think the original timeline expectation was to close by late Q1, and now that's pushed to Q2. But I think the original guide hasn't changed. Is there something that's kind of come up to offset whatever was lost from IMC being delayed? Or should we expect, you know, that once it closes, you'll give updated guidance? Like, how should we think about that? And then can you talk a little bit about why it shifted from Q1 to Q2?

Speaker #2: Thank you. The next question comes from Joseph Rigor at World Capital. Please go ahead.

Speaker #5: Hey, Jason and Barry. Thanks for taking my questions. So my main questions could be around IMC. I think the original timeline expectation was to close by late Q1.

Speaker #5: And now that's pushed to Q2. But I think the original guide hasn't changed is there's something that's kind of come up to offset whatever was lost from IMC being delayed or should we expect that once it closes, you'll give updated guidance?

Barry Palmer: Yeah. Joe, I can take that one. It's purely this ACCC process, a regulatory review and is taking a little longer than we had thought. It's. We're being told there's no risk there. It's just getting through the administrative process. You know, and with regards to the second question, probably two parts to that. One, Q1 is a lighter quarter for IMC, so it wasn't a big part of our guide. And two, the shareholder agreement does allow for retroactive earnings back to January 1, so it doesn't require us to update you know. Should this close in the normal course in early Q2, which we expect, it's of the same impact as what we issued in December when we announced it.

Speaker #5: How should we think about that? And then can you talk a little bit about why it shifted from Q1 to Q2?

Speaker #3: Yeah, Joe, I can take that one. It's purely this ACCC process. A regulatory review and is taking a little longer than we had thought.

Speaker #3: We're being told there's no risk there—it's just getting through the administrative process. And with regards to the second question, probably two parts to that.

Speaker #3: One, Q1 is a lighter quarter for IMC, so it wasn't a big part of our guide. And two, the shareholder agreement does allow for retroactive earnings back to January 1.

Speaker #3: So it doesn't require us to update should this close in the normal course. In early Q2, which we expect, it's of the same impact as what we issued in December when we announced it.

Joseph Ligor: Okay. On that, retroactive item, if you close in Q2, would there be like a catch-up in Q2, and Q1 would be a little lighter from a modeling standpoint? Or would-

Joseph Reagor: Okay. On that, retroactive item, if you close in Q2, would there be like a catch-up in Q2, and Q1 would be a little lighter from a modeling standpoint? Or would-

Speaker #5: Okay. And on that retroactive item, if you closed in Q2, would there be a catch-up in Q2 and Q1 would be a little lighter from a modeling standpoint?

Barry Palmer: No.

Joseph Ligor: Okay.

Joseph Reagor: Okay.

Barry Palmer: No, we expect to allocate that to Q1 because that's when the economic activity would have happened. That's our expectation.

Speaker #5: Or would?

Speaker #3: No. No, we expect to allocate that to Q1 because that's when the economic activity would have happened. So that's our expectation.

Joseph Ligor: Okay. Thanks for the color on that. I'll turn it over.

Joseph Reagor: Okay. Thanks for the color on that. I'll turn it over.

Barry Palmer: Thanks.

Adam Thalhimer: Thanks, Joe.

Jason Veenstra: Thanks, Joe.

Operator: Thank you. The next question comes from Sabahat Iqbal from Raymond James. Please go ahead.

Speaker #5: Okay, thanks for the color on that. I'll turn it over.

Speaker #3: Thanks. Thanks, Joe.

Sabahat Iqbal: Hey, good morning, guys.

Sean Jack: Hey, good morning, guys.

Speaker #2: Thank you. The next question comes from Sean Jack from Raymond James. Please go ahead.

Barry Palmer: Morning.

Sabahat Iqbal: First, just have a clarification question. I see that the EBITDA guidance for 2026 remains the same, but I'm not seeing kind of in this quarter's materials like details on growth capital, EPS, et cetera. I'm just wondering, was this specifically left out? You know, have any expectations changed since the press release in late December, or was it just, you know, not addressed?

Sean Jack: First, just have a clarification question. I see that the EBITDA guidance for 2026 remains the same, but I'm not seeing kind of in this quarter's materials like details on growth capital, EPS, et cetera. I'm just wondering, was this specifically left out? You know, have any expectations changed since the press release in late December, or was it just, you know, not addressed?

Speaker #4: Hey, good morning, guys.

Speaker #3: Good morning, Sean.

Speaker #4: First, just have a clarification question. I see that the EBITDA guidance for 2026 remains the same. But I'm not seeing kind of in this quarter's materials details on growth capital EPS, etc.

Speaker #4: Just wondering, was this specifically left out? Have any expectations changed since the press release in late December? Or was it just not addressed?

Barry Palmer: Yeah, I can take that one, Sean. It's intentional. We have, you know, with the changes that happened in the quarter here, you know, you'll see, as was mentioned on even the bid pipeline, we've changed our approach on a few topics. One of those is just guidance metrics that we are issuing. We're gonna stick to the three that we think are the most important to shareholders, which are top line, operational margin, which is EBITDA margin, and free cash flow. We think that's a more simplistic approach to really stick to those three. But just to answer the question, nothing has changed as far as the December metrics.

Speaker #3: Yeah, I can take that one, Sean. It's intentional. We have with the changes that happened in the quarter here, you'll see as was mentioned on even the bid pipeline, we've changed our approach on a few topics.

Speaker #3: And one of those is just guidance metrics that we are issuing. We're going to stick to the three that we think are the most important to shareholders, which are top-line, operational margin—which is EBITDA margin—and then ultimately what shareholders care most about is free cash flow.

Speaker #3: And so we think that's a more simplistic approach to really stick to those three. But just to answer the question, nothing has changed as far as the December metrics.

Barry Palmer: It's just for the kind of public-facing guidance, we're gonna stick with three just to kind of simplify the messaging and not get too caught up in, you know, trying to reconcile details. There still is a healthy amount of growth capital allocated for IMC so they can hit their growth targets for Q2, Q3, and Q4. About half of free cash flow, I would say, this year will be directed to growth, and then the rest is dividends and debt paydown.

Speaker #3: It's just for the kind of public-facing guidance we're going to stick with three, just to kind of simplify the messaging and not get too caught up in trying to reconcile details.

Speaker #3: So there still is a healthy amount of growth capital allocated for IMC. So they can hit their growth targets for Q2, Q3, and Q4.

Speaker #3: So about half of free cash flow, I would say, this year will be directed to growth. And then the rest is dividends, and debt paydown.

Sabahat Iqbal: Okay. Perfect. That's the context. Just thinking about the operational focus on Australian workforce and cost reduction, do you mind kind of giving any sort of goalposts on how much you expect to save from these initiatives? Do you guys have a plan set out? Any color would be great.

Sean Jack: Okay. Perfect. That's the context. Just thinking about the operational focus on Australian workforce and cost reduction, do you mind kind of giving any sort of goalposts on how much you expect to save from these initiatives? Do you guys have a plan set out? Any color would be great.

Speaker #4: Okay. Perfect. That's good context. And then just thinking about the operational focus, on Australian workforce and cost reduction, do you mind kind of giving any sort of goalposts on how much you expect to save from these initiatives?

Barry Palmer: Yeah. Yeah, we do. I mean, it's. We're looking for about a 3 to 5% savings there. I mean, there's on that workforce. I mean, it's been talked about. It's, you know, reducing subcontractors. Look, we started that. We engaged in that in Q3 of last year. It's a process. It doesn't happen overnight. A lot of the projects that had kicked off, you know, they took larger numbers of people to get started, so we're slowly weaning that down and rightsizing the manpower number and insourcing more of that manpower requirement as opposed to subcontractors that, you know, hired mercenaries that helped us through a tough time, I guess, just to get started.

Speaker #4: Do you guys have a plan set out? Any color would be great.

Speaker #3: Yeah, yeah, we do. I mean, we're looking for about a 3 to 5 percent savings there. I mean, on that workforce—it's been talked about.

Speaker #3: It's reducing subcontractors and look, we started that we engaged in that in Q3 of last year. And it's a process. It doesn't happen overnight.

Speaker #3: A lot of the projects that it kicked off, they took larger numbers of people to get started. So we're slowly weaning that down, and right-sizing the manpower number and insourcing more of that manpower requirement as opposed to subcontractors—that hired mercenaries that helped us through a tough time, I guess, just to get started.

Sabahat Iqbal: Okay, perfect. Last one, if I may. Just thinking about the bid pipeline, you know, across all these geographies. Wondering if you guys can comment on margins directionally. Should we be expecting improvements kinda embedded there?

Sean Jack: Okay, perfect. Last one, if I may. Just thinking about the bid pipeline, you know, across all these geographies. Wondering if you guys can comment on margins directionally. Should we be expecting improvements kinda embedded there?

Speaker #4: Okay. Perfect. Last one, if I may. Just thinking about the bid pipeline, across all these geographies, wondering if you guys can comment on margins directionally.

Barry Palmer: Yeah. I mean, it's a tough question. You know, it comes down to it. The margins vary by geography, obviously. I mean, there's a lot of great opportunities in Australia that seem to generate higher margins. You know, and as you get into the infrastructure jobs or when I say infrastructure, I'm meaning just large earthworks operations. It's, you know, a very competitive market. So I would say we'll get you know, we'll bid these jobs and at a margin that we're comfortable with and that we know we can execute on. It's hard to say where that ends up, but we do see improved margins just through operational efficiencies and improvement in our equipment.

Speaker #4: Should we be expecting improvements kind of embedded there?

Speaker #3: Yeah, I mean, it's a tough question. It comes down to the margins—vary by geography, obviously. I mean, there's a lot of great opportunities in Australia that seem to generate higher margins.

Speaker #3: And as you get into the infrastructure jobs or when I say infrastructure, I'm meaning just large earthworks operations. It's a very competitive market. So I would say we'll get we'll bid these jobs and at a margin that we're comfortable with.

Speaker #3: And that we know we can execute on. And so it's hard to say where that ends up. But we do see improved margins just through operational efficiencies and improvement in our equipment.

Sabahat Iqbal: Okay, perfect. That's all from me, guys. Appreciate it.

Sean Jack: Okay, perfect. That's all from me, guys. Appreciate it.

Barry Palmer: Thanks, Sean. Thanks.

Operator: Thank you. The next question comes from Tim Monachello from ATB Capital Markets. Please go ahead. Tim, please unmute your line.

Speaker #4: Okay. Perfect. That's all from me, guys. I appreciate it.

Speaker #3: Thanks, Sean. Thanks.

Speaker #2: Thank you. The next question comes from Tim Monocello from ATB Cormorant Capital Markets. Please go ahead. Tim, please unmute your line.

Tim Monachello: Apologies. I was muted. Thanks for taking my questions. Just given the operational issues that have happened with Fargo and cost changes and whatnot throughout the year, and the fact that they were outside the scope of NOA's operational breadth, I guess, on those projects. Looking at how, you know, your strategic plan to move into more of these infrastructure projects, which will probably be consortiums, how do you think about the risk profile of those, of that strategy? Do you think that you know, how do you manage these things that are outside of your operational scope and the impacts that they can have to your earnings as you go forward?

Speaker #4: Apologies. That was needed. Thanks for taking my questions. Just given the operational issues that have happened with Fargo and cost, changes and whatnot throughout the year, and the fact that they were outside the scope of NOA's operational breadth, I guess, on those projects, and then looking at how your strategic plan to move into more of these infrastructure projects which will probably be consortiums, how do you think about the risk profile of those of that strategy?

Speaker #4: And do you think that how do you manage these things that are outside of your operational scope and the impacts that they can have to your earnings as you go forward and have more exposure?

Barry Palmer: Yeah.

Tim Monachello: have more exposure?

Barry Palmer: It's a great question, Tim, and I'm sure that a lot of people wanna know that. Look, you know, we learned some valuable lessons on the Fargo project. You know, our expertise is in the earthwork side of the business, and it certainly isn't in structures, aqueducts, and concrete. To that point, you know, I mean, you know, I guess, for lack of a better term, we trusted our partners. You know, they know their business as well. You know, we didn't have much line of sight into that.

Speaker #3: Yeah, it's a great question, Tim, and I'm sure that a lot of people want to know that. And look, we learned some valuable lessons on the Fargo project.

Speaker #3: And our expertise is in the earthwork side of the business, and it certainly isn't in structures and aqueducts and concrete. And to that point, I mean, I guess, for lack of a better term, we trusted our partners.

Barry Palmer: Going forward, I can guarantee you this, you know, with the lessons learned, unless we take on a project, unless we're in total control of it, you know, where we know all of the risks, we own all the risks, we sign up for that, we likely wouldn't go down that path other than to say that we will look more to on projects like that where there's other major players with scopes that do not match our skill set, we will look to simply sub the work, sign up for a subcontract where we have terms and conditions in that subcontract that we're fully aware of, that we're fully on board with, and we go forward that way. That's our focus on the infrastructure side of it, is it.

Speaker #3: They know their business as well. So we didn't have much line of sight into that. But going forward, I can guarantee you this is with the lessons learned, unless we take on a project, unless we're in total control of it, where we know all of the risks, we own all the risks, we sign up for that, we likely wouldn't go down that path other than to say that we will on projects like that where there's other major players with scopes that do not match our skill set.

Speaker #3: We will look to simply sub the work, sign up for a subcontract where we have terms and conditions in that subcontract that we're fully aware of, that we're fully on board with.

Barry Palmer: If it's not a project that fits us well and we're suited for it, we will simply look to sub the earthworks that we're suited for.

Speaker #3: And we go forward that way. So that's our focus on the infrastructure side of it, is that if it's not a project that fits us well and we're suited for it, we will simply look to sub the earthworks that we're suited for.

Tim Monachello: Got it. Specific to Fargo, given these retroactive reforecasting, so that have happened throughout the year, is that project gonna be cash generative overall?

Speaker #4: Got it. And specific to Fargo, given these retroactive re-forecastings that have happened throughout the year, is that project going to be cash generative overall?

Barry Palmer: Yes. Yeah, it still is. You know, that's sort of the disappointing part of the narrative here, is that it still is a profitable project. It's just, it started off at a higher margin and then these retroactive hits, three of them now that we've taken, have been really hard on current quarter earnings. It's definitely free cash flow positive, and you know, still a success story overall. It just clearly had a massive impact, especially on this quarter.

Speaker #3: Yes. Yeah. It still is that's sort of the disappointing part of the narrative here is that it still is a profitable project. It's just it started off at a higher margin and then these retroactive hits three of them now that we've taken have been really hard on current quarter earnings.

Speaker #3: But it's definitely free cash flow positive. And still a success story overall. It just clearly had a massive impact, especially on this quarter.

Tim Monachello: That project wraps up here in 2026. I believe that the consortium's carrying some cash balances. What do you expect in terms of distributions to NOA when the project nears finalization? Is that included in your free cash flow guidance?

Speaker #4: Does that project wrap up here in 2026? I believe that the consortium's carrying some cash balances. What do you expect in terms of distributions to NOA when the project nears finalization?

Barry Palmer: It's a good question. It's not included in our free cash flow guide. I would say to your comment, Tim, that the cash injection at the end will be modest in 2027. We get paid out a kinda fixed margin monthly. What would be left is the final margin that exceeds that. That number has shrunk. It's still, you know, if I had to guess a number, it'd be in the kinda CAD 10 million range at the end of the project in 2027. Not the significant kind of cash injection that we originally planned for, but it's still cash flow positive.

Speaker #4: And is that including your free cash flow guidance?

Speaker #3: It's a good question. It's not included in our free cash flow guide. I would say to your comment, Tim, that the cash injection at the end will be modest in 2027.

Speaker #3: We get paid out a kind of fixed margin monthly. And so what would be left is the final margin that exceeds that. And so that number has shrunk.

Speaker #3: It's still if I had to guess a number, it'd be in the kind of $10 million range at the end of the project in 2027.

Speaker #3: So, not the significant kind of cash injection that we had originally planned for, but it's still cash flow positive.

Tim Monachello: Okay. Switching gears. When you look at the Canadian fleet and opportunities you're looking at globally, can you just talk a little bit about where your utilization stands, the fleet that may be underutilized and the opportunities to redeploy that? I guess the strategy around optimizing that fleet, whether that be transfers to Australia or other infrastructure or, you know, civil or, sorry, mining projects in Canada or the US or dispositions in 2026.

Speaker #4: Okay. Switching gears. When you look at the Canadian fleet, and opportunities you're looking at globally, can you just talk a little bit about where you're utilization stands, the fleet that may be underutilized and the opportunities to redeploy that?

Speaker #4: And I guess the strategy around optimizing that fleet, whether that be transfers to Australia or other infrastructure or, sorry, mining projects in Canada or the US.

Barry Palmer: Yeah. It's a good question. I mean, look, we're in the middle of rightsizing our fleet and identifying what we need to run successfully in the oil sands, where we still meet all of the client demands and opportunities that we see coming out there. With the remainder of that fleet, I mean, we're looking at Australia. If there's an opportunity to place it in Australia, particularly in the West, where they execute more unit rate style work. The problem with some of that stuff in Australia is, when you get on these big sites with the blue chip operators, you know, when you put equipment on their site, they demand it being fairly new or new or recently new.

Speaker #4: Or dispositions in '26.

Speaker #3: Yeah, it's a good question. I mean, look, we're in the middle of right-sizing our fleet and identifying what we need to run successfully in the oil sands, where we still meet all of our client demands and opportunities that we see coming out there.

Speaker #3: With the remainder of that fleet, I mean, we're looking at Australia if there's an opportunity to place it in Australia particularly in the west where they execute more unit-rate style work.

Speaker #3: The problem with some of that stuff in Australia is when you get on these big sites with the blue-chip operators, when you put equipment on their site, they demand it being fairly new or new.

Barry Palmer: It makes it a little tougher to put some of our fleet in there. But there's lots of opportunity on the unit rate side of the business where it doesn't matter as long as the equipment runs well, it performs well. That's in our wheelhouse, and we can do that. Again, in order to do that, it's gotta make economic sense on both sides of the pond. You know, whether it's IMC or MacKellar or in the East, it still has to make economic sense for them. We're looking at that, you know, in detail, and there's certainly opportunities to do that.

Speaker #3: Or recently new. And so it makes it a little tougher to put some of our fleet in there. But there's lots of opportunity on the unit-rate side of the business, where it doesn't matter.

Speaker #3: As long as the equipment runs well, it performs well—that's in our wheelhouse. And we can do that. But again, in order to do that, it's got to make economic sense on both sides of the pond.

Speaker #3: Whether it's IMC or McCallor in the east, it still has to make economic sense for them. So we're looking at that in detail. And there's certainly opportunities to do that.

Tim Monachello: You haven't made any definitive decisions on equipment transfers or dispositions out of Canada as yet?

Speaker #4: So they haven't made any definitive decisions on equipment transfers or dispositions out of Canada as yet?

Barry Palmer: No. There's been inquiries obviously from IMC because, you know, there's a lot of growth opportunities and like I said, they're more focused on unit rate style jobs. We've isolated a fleet right now. We're just doing the costing on it and getting shipping prices and looking at the economic viability of doing that.

Speaker #3: No. No. There's been inquiries, obviously, from IMC because there's a lot of growth opportunities. And like I said, they're more focused on unit-rate style jobs.

Speaker #3: We've isolated a fleet right now. We're just doing the costing on it and getting shipping prices. And looking at the economic viability of doing that.

Tim Monachello: Commodity prices have been really strong across the board in 2026, both on the energy side and on sort of the precious metal side. Are you seeing increased opportunity across your business as a result?

Speaker #4: Commodity prices have been really strong across the board in '26, both on the energy side and on the precious metals side. Are you seeing increased opportunity across your business as a result?

Barry Palmer: Oh, absolutely. In different commodities. I mean, we've got some in the bid pipeline, I mean, some we've already bid, you know, and even in uranium, for instance, in Saskatchewan and like I said, you know, Australia is our oyster. I mean, there's so much opportunity down there. It's picking and choosing which we wanna chase after.

Speaker #3: Oh, absolutely. Absolutely. In different commodities, I mean, we've got some in the bid pipeline. I mean, some we've already bid. And even in uranium, for instance, in Saskatchewan and like I said, Australia's our oyster.

Speaker #3: I mean, there's so much opportunity down there. It's picking and choosing which we want to chase after. I mean, there is a limit to capital, right?

Tim Monachello: When you look at the guidance-

Barry Palmer: I mean, there is a limit to capital, right? There is a limit to capital, and so you can't go after everything that's out there. We're being strategic when we chase after stuff.

Speaker #3: There is a limit to capital and so you can't go after everything that's out there. So we're being strategic when we chase after stuff.

Tim Monachello: I'm glad you mentioned that because that was my next question, when you look at the guidance for the year, CapEx is not included in there, but assuming free cash flow has at least the maintenance portion in there, what's the range on, I guess, the EBITDA range? What does that imply in terms of expectations for the year? If you end up winning some of these awards across the, you know, really sort of diversified opportunities that you've aligned, what could be the range on CapEx that's required for growth?

Speaker #4: I'm glad you mentioned that because that was my next question was when you look at the guidance for the year, capital's not included in there, but assuming free cash flow has at least the maintenance portion in there.

Speaker #4: What's the range on, I guess, the EBIT range? What does that imply in terms of expectations for the year? And if you end up winning some of these awards, across really sort of diversified opportunities that the EBIT aligned, what could be the range on CapEx that's required?

Barry Palmer: Yeah. It's a complex question, right, Tim? The guidance doesn't include any material wins that would require significant growth CapEx. That's that. If we do win some of these active tenders that Barry's talked about, it seems to me with the mine site civil work, generally growth CapEx is one for one with the top line revenue that's generated, and then the margins are kind of specific to the job. Yeah, as we come up with opportunities, and I would say it's annual revenue, it's not full contract revenue. You know, we're looking at three to five year type opportunities, so that's kind of the growth CapEx that would be required.

Speaker #4: For growth.

Speaker #3: Yeah, it's a complex question, right, Tim? But the guidance doesn't include any material wins that would require significant growth CapEx, so that's that. If we do win some of these active tenders that Barry's talked about, it seems to me, with the mindset, civil work—generally, growth CapEx is one-for-one with the top-line revenue that's generated.

Speaker #3: And then the margins are kind of specific to the job. So, yeah, as we come up with opportunities—and I would say it's annual revenue.

Speaker #3: It's not full contract revenue. We're looking at three- to five-year type opportunities, and so that's kind of the growth CapEx that would be required.

Barry Palmer: With some of the unit rate work in Western Australia, that methodology doesn't work either because it comes with a lot more revenue without the fleet, the direct fleet utilization required, and a lot more labor. Yeah, it really depends on the actual job.

Speaker #3: But with some of the unit-rate work in Western Australia, that methodology doesn't work either, because it comes with a lot more revenue with the fleet, the direct fleet utilization required, and a lot more labor.

Tim Monachello: Got it. I guess the second part was just the guidance range for the year on the EBITDA. What does the bottom end contemplate relative to the top end?

Speaker #3: So yeah, it really depends on the actual job.

Speaker #4: Got it. And then I guess the second part was just the guidance range for the year on the EBITDA. What's the bottom end contemplate relative to the top end?

Barry Palmer: Yeah. Again, I know people hate hearing about it, but really the range in our business is weather dependent. You know, if you know, the midpoint is assuming a pretty conservative, you know, worse than average kind of situation, if weather even is worse than that, then we're talking about the lower end. If we get great operating conditions, we can exceed the top end. Weather does impact utilization, especially at certain sites. That's really why the range is there, for 2026.

Speaker #3: Yeah. Again, I know people hate hearing about it, but really the range in our business is weather dependent. If the midpoint is assuming a pretty conservative worse-than-average kind of situation, if weather even is worse than that, then we're talking about the lower end.

Speaker #3: And if we get great operating conditions, we can exceed the top end. So weather does impact utilization of especially at certain sites. And so that's really why the range is there.

Tim Monachello: Got it. Last one for me. I guess you're from a strategic standpoint, free cash flow generation and a true deleveraging is, I think, something that investors are really interested in seeing here. You're also facing a really robust opportunity set.How are you thinking about, I guess, the ranges on how much you're willing to go out and spend and where? Yeah, how do you manage the balance sheet in a growth environment, I guess, is sort of a more succinct way to think about it.

Speaker #3: For 2026.

Speaker #4: Got it. And then the last one for me, I guess your from a strategic standpoint, free cash flow generation and true de-leveraging is, I think, something that investors are really interested in seeing here.

Tim Monachello: How are you thinking about, I guess, the ranges on how much you're willing to go out and spend and where? Yeah, how do you manage the balance sheet in a growth environment, I guess, is sort of a more succinct way to think about it.

Speaker #4: But you're also facing a really robust opportunity set. So, how are you thinking about, I guess, the ranges on how much you're willing to go out and spend, and where? How do you manage the balance sheet and the growth environment? I guess that's a more succinct way to think about it.

Barry Palmer: Well, I think a simple way to answer that question, Tim, is, you know, opportunities need to be on balance, net improvement or deleverage. Right now we're at a 2.4x. We would only look at opportunities that, with, you know, next twelve months EBITDA, would bring that number down. That's a key criteria for us. You are correct. It's something we're focused on. We're still committed to our medium-term target of 2.0x. We expect to get there with the free cash flow we can generate over the next two years, probably by the end of 2027. The longer-term goal that our board would like to see is 1.5x. We, you know, we see it, we agree with it.

Speaker #3: Well, I think a simple way to answer that question, Tim, is opportunities need to be on balance—a net improvement to our de-leverage. So right now, we're at 2.4 times. We would only look at opportunities that, with next 12 months' EBITDA, would bring that number down.

Speaker #3: And so that's a key criteria for us. And you are correct. It's something we're focused on. We're still committed to our medium-term target of 2.0 times we expect to get there.

Speaker #3: With the free cash flow we can generate over the next two years—probably by the end of 2027—and then the longer-term goal that our board would like to see is 1.5 times.

Barry Palmer: We've funded all this growth 100% with debt, so it's been well spent dollars, but it's been all debt funded. But I hope that answers the question. These opportunities are financiable. You know, we have very good banking relationships in both Australia and Canada, and so it's not that we can't do it's just we need to make sure that our balance sheet stays in the low 2x multiple from a net debt leverage.

Speaker #3: So we see it. We agree with it. We've funded all this growth 100% with debt. So it's been well-spent dollars, but it's been all debt-funded.

Speaker #3: So I hope that answers the question. These opportunities are financeable. We have very good banking relationships in both Australia and Canada. And so it's not that we can't do it.

Maxim Sytchev: Got it. That's really helpful and I appreciate all your time.

Speaker #3: It's just we need to make sure that our balance sheet stays in the low two times multiple. From a net debt leverage.

Operator: Thank you. The next question comes from Yuri Lynk from Canaccord Genuity. Please go ahead.

Speaker #4: Got it. That's really helpful. I appreciate it. I'll turn it back.

Yuri Lynk: Well, after that barrage of questions, I'm quite proud to say I still have one of my own.

Speaker #1: Thank you. The next question comes from Yuri Link from Canada Continuity. Please go ahead.

Barry Palmer: Morning, Yuri.

Speaker #4: Well, after that barrage of questions, I'm quite proud to say I still have one of my own.

Yuri Lynk: Good morning, guys. Yeah, just maybe a little more detail on your plan to get into infrastructure projects. You know, a cynic could say, you know, you've got one of these projects and it hasn't performed as you wanted it to. What can you say about the contract structure of that job in particular, vis-a-vis whether it's a lump sum turnkey or some kind of reimbursable? And more importantly, are you seeing any shift in contract structure on some of the stuff that's up for bid? Because there's been, you know, a pretty broad shift in the industry towards more collaborative, more equitable type of contracts. I'm just wondering if the niche that you play in is kinda seeing the same thing.

Speaker #3: Morning.

Speaker #4: Good morning, guys. Yeah, just maybe a little more detail on your plan to get into infrastructure projects. A cynic could say you've got one of these projects and it hasn't performed as you wanted it to.

Speaker #4: What can you say about the contract structure of that job in particular, vis-à-vis whether it's a lump-sum turnkey or some kind of reimbursable? And more importantly, are you seeing any shift in contract structure on some of the stuff that's up for bid?

Speaker #4: Because there's been a pretty broad shift in the industry towards more collaborative, more equitable type of contracts. And I'm just wondering if the niche that you play in is kind of seeing the same thing.

Barry Palmer: Yeah. I mean, you know, looking at Fargo, again, you know, were we somewhat naive? Maybe. Look, we fashion ourselves as the earthworks experts. Just on that note, I feel, you know, like I said in my shareholder letter, I'm very proud of the team, how they've executed that work. It's gone as planned. It's not without hiccups. I mean, understanding that if there's a delay on structures, that actually impacts earthworks and moves it around, you know, which costs money. So there's some of that. You know, it's our first endeavor into the P3 side of the industry. Like I said earlier, we learned some valuable lessons. You know, what we're chasing after in the infrastructure space beyond that is stuff that's more suited for us.

Speaker #3: Yeah. I mean, looking at Fargo, again, were we somewhat naive? Maybe. Look, we fashion ourselves as the Earthworks experts. And just on that note, I feel like I said in my shareholder letter, I'm very proud of the team, how they've executed that work.

Speaker #3: It's gone as planned. It's not without hiccups. I mean, understanding that if there's a delay on structures, that actually impacts Earthworks and moves it around, which costs money.

Speaker #3: So there's some of that. But it's our first endeavor into the P3 side of the industry. And like I said earlier, we learned some valuable lessons.

Barry Palmer: You know, there's a lot of big players out there that are used to these types of contracts. We've made some calls already on two larger projects where we're trying to team with them to the point where when I say team, where we're being considered as a subcontractor option for them, and which would obviously come with a contract that's got terms and conditions in there that we would have to agree to. I mean, that puts us in a lot better light as far as knowing the risk, understanding the risk, and executing towards that. You know, there's other projects where it's earthwork centric, where we can be the GC and we can sub out smaller portions of the work.

Speaker #3: And what we're chasing after in the infrastructure space beyond that is stuff that's more suited for us. There's a lot of big players out there that are used to these types of contracts.

Speaker #3: And we would look, I mean, we've made some calls already on two larger projects where we're trying to team with them to the point where, when I say team, we're being considered as a subcontractor option for them.

Speaker #3: And which would obviously come with a contract that's got terms and conditions in there that we would have to agree to. So, I mean, that puts us in a lot better light as far as knowing the risk, understanding the risk, and executing towards that.

Barry Palmer: If the lion's share of the work is earthworks, you know, we can take on those jobs and if the smaller portions are, they involve concrete structures or whatever, we can sub that work out. I mean, we're looking at a few of those right now. I think that's pretty much what I would say on that side of it, Yuri.

Speaker #3: And there are other projects where it's Earthworks-centric, where we can be the GC and sub out smaller portions of the work if the lion's share of the work is Earthworks.

Speaker #3: We can take on them jobs and if the smaller portions are they involve concrete structures or whatever, we can sub that work out. I mean, we're looking at a few of those right now.

Yuri Lynk: You're trying to more insulate yourself by positioning yourself in the consortium a little differently, and the overall contract structures are still, you know, all about pushing that risk down to the subcontractors, would you say? It's not clear if you're seeing any change there in overall structure.

Speaker #3: So, I think that's pretty much what I would say on that side of it, Yuri.

Speaker #4: So, you're trying to more insulate yourself by positioning yourself in the consortium a little differently, and the overall contract structures are still all about pushing that risk down to the subcontractors, would you say?

Barry Palmer: No, that's a fair comment. That would sum it up very well.

Yuri Lynk: Okay. Okay, that's all I had, guys. Thanks very much.

Speaker #4: Or it's not clear if you're seeing any change there in overall structure?

Barry Palmer: I appreciate it, Yuri. Thanks.

Speaker #3: No, no. That's a fair comment. That would sum it up very well.

Operator: Thank you. Ladies and gentlemen, as a reminder, if you have any questions, please press star one now. Next question comes from Maxim Sytchev from National Bank Capital Markets. Please go ahead.

Speaker #4: Okay. Okay. That's all I had, guys. Thanks very much.

Speaker #3: Thanks. Appreciate it, Yuri. Thanks.

Speaker #1: Thank you, ladies and gentlemen. As a reminder, if you have any questions, please press star one now. The next question comes from Maxim Sachev from National Bank Capital Markets.

Maxim Sytchev: Hi. Good morning, gentlemen. When we look at Canada and some of the nation-building stuff which is sort of floating around, I mean, I presume we shouldn't assume any contribution, even if you are successful on some of the bid packages on these things in 2026. The contribution at the earliest would be 2027 and beyond. Is that a fair statement?

Speaker #1: Please go ahead.

Speaker #5: Hi. Good morning, gentlemen. When we look at Canada and some of the nation-building stuff, which is sort of floating around, I mean, I presume we shouldn't assume any contribution, even if you are successful on some of the bid packages on these things.

Barry Palmer: That's a fair statement for sure, Maxim.

Maxim Sytchev: Okay. In terms of, maybe, can you provide a bit of a blueprint in terms of where you guys are on sort of inventory integration, ERP implementation, et cetera, post the IMC closing, and just to make sure that, yeah, everything's sort of like above board when it comes to inventory management on a going forward basis. Thank you.

Speaker #5: In 2026, the contribution at the earliest would be 2027 and beyond. Is that a fair statement?

Speaker #3: That's a fair statement, for sure, Max.

Speaker #5: Okay. And then in terms of maybe can you provide a bit of a blueprint in terms of where you guys are on sort of inventory, integration, ERP implementation, etc., etc.?

Speaker #5: Post the IMC closing, and just to make sure that, yeah, everything is sort of above board when it comes to inventory management on a going-forward basis.

Barry Palmer: Yeah. We don't see a lot of integration risk with the IMC acquisition. They're a very well-run organization and we're ready. With this regulatory approval, it's given us a little more time just to get really ready for day one. But as far as integration risk goes, Max, there's not really much there. You know, they'll manage their own inventories, their own fleet. You know, we have some ideas on integrating with our subsidiary. They are Western Plant Hire. They're right, they're neighbors, so there'll be a little bit of integration there, but not a lot of headline risk there.

Speaker #5: Thank you.

Speaker #3: Yeah. We don't see a lot of integration risk with the IMC acquisition. They're a very well-run organization and we're ready with this regulatory approval.

Speaker #3: It's given us a little more time just to get really ready for day one. But as far as integration risk goes, Max, there's not really much there.

Speaker #3: They'll manage their own inventories, their own fleet. We have some ideas on integrating with our subsidiary there, Western Plant Hire. They're right, they're neighbors.

Maxim Sytchev: Okay. Then, especially, I guess over the last 24 months, labor has been a bit of an issue in Australia. Can you maybe comment around, you know, the trends on sort of inflation there and how that's being managed? Thank you.

Speaker #3: So there'll be a little bit of integration there, but not a lot of headline risk there.

Speaker #5: Okay. And then especially, I guess, over the last 24 months, labor has been a bit of an issue in Australia. Can you maybe comment around the trends on sort of inflation there and how that's being managed?

Barry Palmer: Yeah. I think Barry touched on it. It's you know it comes down to just effective recruiting and I think we've seen you know a trend in the right direction. Yeah, it's one thing that you know Barry highlighted as a top priority and is a key focus of us. We'll be providing a further update at you know as part of the Q1 close.

Speaker #5: Thank you.

Speaker #3: Yeah. I think Barry touched on it. It comes down to just effective recruiting. And I think we've seen a trend in the right direction.

Speaker #3: And yeah, it's one thing that Barry highlighted as a top priority, and is a key focus for us. We'll be providing a further update as part of the Q1 close.

Maxim Sytchev: Okay, perfect. Just one quick one. In relation to Fargo, correct me if I'm wrong, but all the equipment that was bought for the project that was structured into an SPV. I presume there's gonna be some sort of, I mean, I realize that you said that the cash out is not gonna be sort of massive, but is there anything on the equipment side we should be keeping in mind? Thanks.

Speaker #5: Okay, perfect. And then just one quick one. In relation to Fargo, correct me if I'm wrong, but all the equipment that was bought for that project—that was structured into an SPV, right?

Speaker #5: And so I presume there's going to be some sort of I mean, I realize that you said that the cash-out is not going to be sort of massive.

Barry Palmer: Yeah. Again, similar to the equity injection at the end or outflow, it won't be massive. I know it will be disposed. You're exactly right. It was. Equipment was bought especially for that project and will be disposed of by that project. It's not gonna be a big number. It would be all contained within that closeout at the end of the project. Even though the project will, you know, be complete this year, financial closeout requires a bunch of certification. That probably is 2027.

Speaker #5: But is there anything on the equipment side which we should be keeping in mind? Thanks.

Speaker #3: Yeah, again, similar to the equity injection at the end or outflow, it won't be massive. I know it will be disposed. You're exactly right.

Speaker #3: It was equipment was bought, especially for that project, and will be disposed of by that project. But it's not going to be a big number.

Speaker #3: And it will be all contained within that closeout at the end of the project. And even though the project will be complete this year, financial closeout requires a bunch of certification.

Maxim Sytchev: Okay. Okay, that's it. Thank you so much, gentlemen.

Barry Palmer: Thanks, Max.

Speaker #3: So that probably is 2027.

Operator: Thank you. We have no further questions. I will turn the call back over to Barry Palmer for closing comments.

Speaker #5: Okay. Okay. That's it. Thank you so much, gentlemen.

Barry Palmer: Thanks, Joanna. Thanks again, everyone, for joining us today. We look forward to providing the next update upon closing of the Q1 results.

Speaker #3: Thanks, man.

Speaker #4: Thanks, Max.

Speaker #1: Thank you. We have no further questions. I will turn the call back over to Barry Palmer for closing comments.

Speaker #3: Thanks, Joanna. And thanks again, everyone, for joining us today. We look forward to providing the next update upon closing of the first quarter results.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

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