Q2 2026 Titan America SA Earnings Call

July 28, 2026

Speaker #2: Good afternoon, and thank you for joining us. I am Chloe, your conference call operator. Welcome to Titan America's second quarter 2026 conference call. All participants will be in listen-only mode, and the conference is being recorded.

Speaker #2: Later, you will have the opportunity to ask questions. During the question-and-answer session, to register to ask a question at any time, please press star 1 on your telephone keypad.

Speaker #2: I would now like to turn the call over to Michael Bennett, Vice President of Investor Relations.

Speaker #3: Thank you, and good afternoon to everyone on the line. Thank you for joining us for Titan America’s second quarter 2026 conference call. I am joined by Bill Zarcolis, President and Chief Executive Officer, and Larry Wilt, Chief Financial Officer.

Speaker #3: Before we begin, I would like to remind you that earlier this afternoon we released Titan America's second quarter 2026 results, which are available on our website, at ir.titanamerica.com, along with today's accompanying slide presentation.

Speaker #3: This call is being recorded, and a replay will be made available on our investor relations website. During the call, we will present both IFRS and non-IFRS financial measures.

Durham statements on today's call may be deemed to be for looking statements. Such statements can be identified by terms such as expect believe intend anticipate and may among others or by the use of the future tense.

You should not place undue reliance on forward-looking statements.

actual results May differ materially from those 4 looking statements and we do not undertake any obligation to update any 4 looking statements, we make today

For more information about factors that may cause actual results to differ materially from forward-looking statements,

Please refer to the press release we issued today, as well as the risks and uncertainties described in our SEC filings.

I would now like to turn the call over to Bill. Please go ahead.

Thank you, Michael. Good afternoon, and thanks for joining the Titan America second quarter 2026 financial results call.

I would like to begin on slide 4 by highlighting a few key messages.

Earlier today, we announced our second quarter 2026 financial results.

Titan America delivered a solid performance, despite continued headwinds in residential, with second quarter revenue increasing by 9.6% compared to the same period last year.

And adjusted to be done at 1.3% higher.

Amid Atlantic region, delivered strong year-over-year growth in both revenue and adjusted debt during the second quarter.

We capitalized on robust project activity in the region, particularly from private, non-residential, and public infrastructure investments, to drive significant volume growth compared to the prior year.

Kai ready, mix concrete pricing contributed positively to results.

In the second quarter, a Florida segment. Delivered solid results on robust demand from infrastructure and private nor residential construction markets.

Residential construction activity remains subdued, with project delays and softer demand impacting the region, while pricing across several product lines is relatively softer year-over-year.

Scheduled extended maintenance shutdowns at both our Cement and Aggregates operations at our Peso plant resulted in longer outages than in the prior year.

Negatively impacting Florida's second quarter results.

Also as foreshadowed in our previous results, call in the second quarter. A Florida business was impacted by substantial delays in our cement inputs, due to disruptions in overseas ports, and shipping.

We believe these disruptions were temporary in nature, and we expect the logistics conditions to normalize as we move through the second half of the year.

Let's now turn to slide 5 to update your keystone.

During the second quarter, we completed the acquisition of the Keystone cement company.

This acquisition marks an important milestone in the execution of our long-term growth strategy.

Working closely together with Keystone's experienced and highly knowledgeable colleagues to ensure a smooth and effective integration.

The Keystone acquisition. Expansa Geographic, reach in the markets of Pennsylvania. Ohio, Delaware and Maryland.

Combined with our existing asset base.

Keystone strengthens, our vertically integrated footprint in this attractive region.

and enhancing our ability to serve customers.

Capture operational rates synergies.

And capitalize on the strong, long-term secular growth trends supporting these markets.

Looking ahead.

We are targeting annual run-rate synergies from the Keystone acquisition of at least $30 million by 2029.

We believe that targeted synergies will substantially improve the operating margins of the acquired assets.

We expect synergy realization to build over the three-year period rather than phase in evenly.

with the largest contribution coming in Year 3, as our operational, commercial, and logistics initiatives take full effect.

He soon. Brings together an exceptional team, a strong brand and a respected reputation built over a century long history.

We are excited about the opportunities ahead and look forward to sharing more about our expectations for this asset.

Let's move now to slide 6.

To briefly discuss data centers.

one of the growth levels. We, in our Mid-Atlantic markets,

Virginia is the world's data center capital, with an estimated 30% share in the global hyperscale market.

Titan America is capitalizing on the data center investment growth and participating in more than 50% of the data centers currently under construction in our serviceable market area.

In 2026, Titan America participates in 77 data centers.

Out of 148 currently under construction in Virginia,

It is estimated that an additional 250 data centers are currently in the pre-construction phase in the state.

Titan America is partnering with leading contractors operators, and hyperscalers, to Value, engineer Solutions, and create additional products and services to meet their evolving demands.

The investments in data centers act as the multiplier for the demand of construction materials, as they usually lead to substantial follow-on investments in power, generation infrastructure and commercial construction.

Turning out to slide 7.

To discuss an investment which enhances Titan America's position in the growing market for supplemental cementitious materials.

Titan America, its subsidiary Separation Technologies, or ST, entered into an agreement to develop a first-of-its-kind fly ash recycling plant at the Brunner Island Steam Electric Station in Pennsylvania.

With this new plant, we are recovering fly ash directly from landfills.

Solving the challenges associated with the retirement of coal-fired power plants.

The newly announced plans will bolster the separation technologies that exist in the fly ash beneficiation facility.

And we have an annual capacity to handle 600,000 tons of landfill material.

It is slated to produce and sell approximately 400,000 tons of concrete-grade fly ash per year.

Complimenting the product mix of the newly acquired Keystone plant.

And creating a one-stop shop of fly ash, cement, and aggregates for our customers in Pennsylvania and Ohio.

We expect to invest approximately 30 million dollars in this plant, which is already under construction. And if we expect it to be fully operational in the third quarter of next year,

SE is a recognized leader, in Flyers beneficiation with over 30 million, tons of Flyers sold under the proage brand since 1995.

Titan America is highly regarded for its quality low-carbon fly ash, which allows for better control of concrete mixtures, greater reliability, improved consistency, and superior, predictable in-place concrete properties.

This initiative represents a compelling opportunity for Titan America, as it aligns with our long-term growth strategy.

I will now turn it over to Larry who will provide the breakdown of our second quarter Financial results and business segment performance.

Larry.

Thank you, Bill and good afternoon everyone. Starting on slide 8, let me share an overview of our second quarter 2026 financial highlights.

Our second quarter results, reflect the resilience of our platform with strengthen the Mid-Atlantic more than offsetting headwinds in Florida, which absorb the impacts of an extended scheduled maintenance outage that our principal cement and aggregate plant.

As well as the temporary import logistics challenges resulting from port disruptions in the Mediterranean.

Despite the challenges, we were pleased to deliver year-over-year growth in revenue, adjusted EBITDA, and operating cash flow in Q2 at the consolidated level.

As indicated on the left-hand side of the slide, in the second quarter, we delivered revenue of $471 million, an increase of 9.6% compared to $429 million in the second quarter of 2025, of which Keystone contributed $20 million.

Adjusted EBITDA for the quarter was $101 million, compared to $99 million in the prior year quarter, an increase of 1.3%.

Our second quarter adjusted EBITDA margin was 21.4%, compared to 23.2% in the second quarter of 2025, a decrease of approximately 180 basis points, reflecting the costs associated with the extended Pennsuco outage.

On a year-to-date basis, our adjusted EBITDA margin was 21.1%, compared to 21.8% in the first half of 2025.

Net income for the quarter was $43 million, compared to $51 million in the prior year quarter, with earnings per share of $0.23 compared to $0.28 in the second quarter of 2025.

Approximately $0.03 of that $0.05 decline was attributable to the Keystone-related items, including transaction costs and a one-time tax charge associated with the post-acquisition reorganization of the Keystone entities.

As shown on the right-hand side of the slide.

Operating cash flow for the first half of 2026 was $137 million, compared to $108 million in H1 2025, reflecting working capital discipline and lower tax payments.

For the same period, free cash flow was $50 million compared to $26 million in the prior year, driven by improvements in operating cash flow and a modest increase in CapEx investments.

And finally, after accounting for the impacts of the Keystone acquisition, our leverage ratio at the end of Q2 was 1.37 times trailing 12 months adjusted EBITDA, up from 0.64 times at the beginning of the year.

Even with that increase, we remain at a low absolute level of leverage, with strong financial flexibility.

Turning to slide 9. Let me walk you through our Q2 sales volume performance by product line. Our sales volume performance reflects strong commercial execution in a challenging market.

The Met volumes, including external sales and internal consumption, increased 10% year-over-year.

And the benefits of continued demand for heavy building materials and infrastructure, as well as private non-residential construction applications.

But I'd like for like basis excluding Keystone or cement volumes, were roughly flat, held back by the impact of import supply chain disruptions in the quarter.

Total aggregate volumes were lower by 1.3% in the quarter, compared to Q2 2025.

Growth in external aggregate sales volumes was offset by a decline in internal consumption in Florida, attributable in part to the temporary effects of the scheduled maintenance activities at Pennsuco.

% year-over-year.

While the Mid-Atlantic generated strong growth in non-residential applications, our Florida volumes were impacted by project delays.

Concrete block volumes increased by 8.3% compared to the second quarter of 2025, driven by strong alignment with top regional players.

Starting to slide 10.

External pricing was varied.

Primarily reflecting, both Geographic and product mix.

We maintained strong pricing discipline in a challenging environment, demonstrating the value of our differentiated product portfolio.

On a year-over-year basis cement price and declined. 1.5% would like for like improvements in the Mid-Atlantic offset by softness in Florida.

The decline in aggregate pricing resulted from diverse dynamics and product mix demand across regional markets in Florida.

Why was ask pricing flat year over year, while ready-mixed concrete pricing increased 4.4% when compared to Q2 2025, driven partly by Focus participation in high-growth, high-value market segments?

Concrete block pricing declined 2.6% year-over-year, reflecting channel and customer mix.

Turning to slides 11 and 12, let me walk you through our second quarter business segment performance.

Starting with the Mid-Atlantic on slide 11. Our team delivered strong financial results through Focus, participation and infrastructure and non-residential construction activity, which more than compensated for continued softness and residential demand.

Mid-Atlantic external revenue was $24 million in the second quarter, an increase of 27% compared to $18.8 million in the second quarter of 2025.

The increase was driven by approximately $20 million of revenue from Keystone.

double-digit growth in Ready, Mix Concrete revenues and strength in our Legacy cement operations.

Ready. Mixed concrete was the primary organic revenue growth driver, with strong data center and commercial construction demand.

Higher unit selling prices and the benefit of new portable plant capacity are supporting increased participation in high-value applications.

Adjusted ibida. For the segment was 53 million compared to 41 million in the prior year quarter, and increase of 30% reflecting, the benefits of favorable project mix.

Improved pricing and cost discipline, which together more than offset higher raw material and energy costs and the impacts of import disruptions.

Segment, adjusted IBA de margin improved to 24.7% from 24.1% in the prior year quarter.

On a year-to-date basis, Mid-Atlantic external revenue was $359 million, an increase of 16.7% compared to $308 million in the prior year period. Segment Adjusted IBA was $65 million, compared to $52 million in Q2 2025, an increase of 27%.

debit margin improved to 18.2% from 16.7% in the first half of 2025,

According to Florida, on slide 12, our quarterly results reflect the impact of temporary headwinds from the extended Pennsuco outage and import disruptions I mentioned earlier.

Florida's external Revenue was 257 million in the second quarter. A decrease of 1.6% compared to 261 million in the second quarter of 2025.

As lower ready-mix concrete volumes and lower aggregates and concrete block pricing were partially offset by higher concrete block volumes and external aggregate volumes.

Adjusted EBITDA for the Florida segment was $51 million compared to $62 million in the prior year quarter, with an adjusted EBITDA margin of 19.7% in the second quarter compared to 23.8% in the second quarter of 2025. That decline was driven primarily by the Pennsuco cement and aggregate outages and import supply chain disruptions, and the added cost of temporarily sourcing cement and aggregates from third parties during the period.

Honey, year-to-date, Florida's external revenue was $510 million compared to $514 million in the prior year period, and segment adjusted IBA was $123 million compared to $133 million in the prior year period.

Adjusted even down, margin was 24.2%, compared to 25.9% in the first half of 2025.

Now, turning to our balance sheet and cash flows on Slide 13.

As of June 30, 2026, we had $36 million of cash and cash equivalents, and a total debt of $574 million.

For a total net debt position of $538 million.

That represents a leverage ratio of 1.37 times for the trailing 12 months, adjusted, compared to 0.64 times at the beginning of the year.

With respect to Keystone, the acquisition was funded with a combination of cash on hand and a new term loan issued in April 2026, with a maturity date of February 2031.

Our balance sheet, combined with strong cash generation and disciplined capital allocation, provides strategic flexibility to support growth and invest in operating efficiencies while maintaining our commitment to returning capital to shareholders and navigating evolving market conditions.

Slide 14 shows our capital expenditure profile for the first half of 2026.

Net capital expenditures were approximately $87 million for the first half of 2026.

And remained focused on our previously communicated strategic objectives.

Increasing our domestic cement and agrees capacity, improving the efficiency of our Logistics Network and further enhancing our strong positions and select Downstream channels to Market.

As the Keystone integration progresses, we expect to make further capacity investments to deliver operational, commercial, and logistic synergies as we incorporate the Eastern assets into our Mid-Atlantic network.

With respect to shareholder returns, earlier today our Board of Directors approved a new issue: a premium distribution of $0.04 per share, payable on October 9, 2026, to shareholders of record as of October 1, 2026. With that, I'll turn it back to Bill for his closing remarks.

Thanks, Larry. Let me say that, in conclusion, despite the short-term challenges that we face from the disruption of our cement imports,

An extended maintenance outage at our Pennsuco plant, we delivered solid performance in the second quarter with year-over-year growth in both revenue and adjusted EBITDA.

Our teams executed well, and the underlying fundamentals of our key markets remain attractive.

Let's turn now to our 2026 outlook on Slide 15.

Following the completion of our acquisition of Kingstown Cement in the second quarter.

And given our current visibility into the balance of the year,

We have updated our full-year 2026 guidance.

We now expect high single-digit revenue growth for the full year 2026 as compared to 2025.

We also expect a modest decline in our adjusted DBA margin for the year, which reflects the lower starting contribution from Keystone.

Our updated outlook reflects our confidence in our ability to capitalize on the underlying demand growth trends.

More specifically, in infrastructure and private non-residential across our markets.

The successful integration of Keystone and our ability to continue executing successfully on our strategic growth and cost productivity initiatives.

Before we open the call for questions, I want to express once again my sincere gratitude to our Titan America team members.

It is the hard work and continued dedication to safety, operational excellence, and the success of our customers.

And the communities we operate in—that's what makes a company great.

With that, I will hand the court over to the operator for the Q&A session. Operator.

Thank you. We will now begin the question and answer session. If you'd like to ask a question, press star 1 on your keypad. To leave the queue at any time, press star 2.

Once again, that is star 1 to ask a question.

From Anthony Pet Pinari with Citi, your line is open.

Uh, good afternoon.

Um, can you talk a little bit more about cement pricing? And, you know, you saw some softness in Florida but you talked about like-for-like improvements in the Mid-Atlantic. I'm just wondering what factors maybe caused the softness in Florida, you know? And I wonder if you could talk a little bit also about price and costs for those. It seems like we're seeing, you know, higher costs for fuel or electricity. Just wondering if you can give any additional color on pricing in the two regions.

Uh, we see price and trends more, uh, robust in the, uh, Mid-Atlantic regions, uh, with, um, uh, growth we witness from the demand in. Um, um,

Commercial non-residential, uh, applications, data centers, infrastructure, and the rest.

In, uh, Florida, we—we have resilient prices, broadly stable prices. You know, we don't—we were not successful so far in increasing the prices, but it's been resilient. The main headwind that we face is the softness in the residential sector.

And, uh, especially for us in this, uh, second quarter of the year. As you heard from from Larry and myself, we had the scheduled extended shutdowns, uh, which of course led to some, uh, reduced production. But also, we had the logistics disruption in Mediterranean ports, who led to um, which led to delays in arrival of shipments of imported cement.

stockouts, which led us to, um, uh,

Seek third party supply in order to meet the customer needs. So overall this quarter was um, uh, a challenge in Florida. Especially so it's not really lending itself for conclusions on, uh, price and Dynamics. What I can say for sure is that, uh, um, the price in Dynamics remain, uh, stable, um, and um, uh, we see more Dynamic pricing in growing regions and especially, uh, growing applications and reduce especially in the Mid-Atlantic

Now, in relation to price over cost, there have been inflationary pressures from fuel, energy, and raw material costs overall. But we've been very successful in relation to the self-help, the operational excellence initiatives that we have applied. So, broadly, as you can see, our margins in Mid-Atlantic improved.

Our margins in, in, in Florida, when we look at the first half, which includes the, the maintenance Shadows is slightly down, but this taking into account both the extended shutdowns. Also the disruptions in, uh, uh, imported cement, which were costly as you heard. So, overall, we manage well, uh, price of a cost and our margins.

Got it, got it. That's very helpful and then just 1 follow up the the pennsuco outage and the supply chain issues. And the import issues has that uh, is that a headwind in July or, or 3Q or, or have those issues basically been resolved and then, um, maybe just an add-on. I mean, they're uh, been discussions around in uh, tariffs on imported Canadian cement. Uh, is that at all impactful to the Mid-Atlantic Market or, or maybe not really

Speaker #1: exactly how the tariffs applied to the Canadian product coming into the Northeast US will affect our markets quite yet. So we'll take a wait and see on that one.

Speaker #1: On the maintenance outage in Florida in particular, there were two things going on. One had to do with a cement outage and the other was aggregates, so combined two.

Speaker #1: It was a scheduled outage. It happened to be by its complexity a longer duration than one that would typically be there. That's behind us from Q2.

Speaker #1: When you look forward, as you know, each of the outages have the a second semester element to it, much shorter in duration, typically a week give or take.

Speaker #1: That's still ahead of us, but that's normal. In that case, nothing different than the normal. Activities in that case. So when you look at the impacts combined, I think we said it in the prepared comments, 7 million overall in these direct impacts is what we see.

Speaker #1: We didn't call out per se some of the energy headwinds in Florida, but energy headwinds in Florida were more significant. They were in Mid-Atlantic partly because of the way we consume diesel fuel in the aggregates facility there.

Speaker #1: It has a heavier impact there than it would in the Mid-Atlantic. For us.

Speaker #4: Okay. That's very helpful. I'll turn it over.

Speaker #1: Thanks, Tony.

Speaker #3: We'll move next to Phil Ng with Jefferies. Your line is open.

Speaker #5: Hey guys. Just a few cleanup questions. Larry, on the 7 million dollar impact, on the scheduled maintenance outage piece, that looks like it's largely behind you in 3Q.

Speaker #5: Any lingering impact we should be mindful of on the imports from the Mediterranean dynamic? That's going to hit in 3Q?

Speaker #1: Yep. Look, I think it depends on activities in different geographies. Phil, so we don't currently have any visibility to something that's more disruptive than what's in our past.

Speaker #1: As we see it today, that's not going to be a disruption going forward. Sea freight rates are higher, as you know, spot rates are higher.

Speaker #1: I think we've talked about this in the first quarter call that we had. So that could be some sea freight rate issues that come into the second half of the year that a bit higher than they were a year ago.

Speaker #1: In relation to the shutdown, Phil, the first part of the question, it was a scheduled shutdown, so there's no lingering effects into the second half.

Speaker #5: And then Larry, I think your import for cement prices in the last quarter, you mentioned there is some hedge dynamic where your prices don't really move.

Speaker #5: So I mean, which I think you're alluding to on freight, sea rates. Does that pick up a bit in the back half too in terms of your import costs?

Speaker #1: Yeah. We had well, import costs, we're contracted for the year, so roughly it's slightly higher not so meaningful higher than a year ago. Phil on the cement itself, on the sea freight rates, what we saw in the last call was that we had contracted through really the second first half of the year, as we enter into the second half of the year, we've covered some of those with existing contracts.

Speaker #1: But there are still some that are exposed that we will contract later in the year as the year progresses.

Speaker #5: Okay. Super. And then your guidance, you mentioned that margins were going to be down a little bit. On the earlier basis, Larry, any chance to give us a little more color in terms of the magnitude?

Speaker #5: We're talking about 150 basis points, 50 basis points in terms of the contraction. Any more color would be helpful.

Speaker #1: Phil, in addition to that, as Bill, you can say it's going to be between 25 to 50 basis points, essentially.

Speaker #5: Okay.

Speaker #1: The impact of the, you know, of the Keystone integration at the starting, let's say, margins of the facility.

Speaker #5: Okay. Well, that's actually quite good. So that implicitly implies a nice step up in the back half. Any color that you're comfortable sharing what's driving some of the improvement?

Speaker #5: Certainly that 7 million headwind goes away, but any other things you want to call out for that big step up in the back half?

Speaker #1: Look, I think as we look at the ready-mix business that we've got, in particular drives some of the cement volumes of aggregate pull through.

Speaker #1: We see better times ahead for that in Florida in the second half of the year based on the order book that we have. Now, when it comes Phil, we've got to realize that we worked in a different outside environment.

Speaker #1: Weather can have an impact on all the things that you're aware of for Q3 and Q4 can come into play. But as we see it now, we feel good about what we see in terms of the order book.

Speaker #5: Okay. And just one follow-up to that. Your guide for the full year for Keystone, is there any adjustments that we need to be mindful in terms of step up, in terms of the inventory?

Speaker #5: Did you see that hit already in 2Q, or is that going to kick in 3Q, or it's not meaningful?

Speaker #1: Yeah, it already hit in Q2, Phil. And it's not that meaningful. It doesn't have that level of inventory. It's not like an aggregate facility with tons and tons and tons later on the ground that you have to deal with.

Speaker #1: So it was small, and it.

Speaker #5: Okay. Thank you. Helpful.

Speaker #1: Thanks, Phil.

Speaker #3: We'll move next to Chad Dillard with Bernstein. Your line is open.

Speaker #6: Hi. Good evening, everyone.

Speaker #1: Hi, Chad.

Speaker #6: So hey. So my questions on your guidance change for revenues going from low single digit to high single digits, and then also the modest step down in EBITDA.

Speaker #6: And I was hoping you could parse out what the changes were on the organic side, versus what's coming from the impact of including Keystone.

Speaker #1: You know, we've updated the guidance to cover the full business here, Chad. It is for us, you know, Keystone is integrated into the Mid-Atlantic as a whole.

Speaker #1: We talked about the synergies that we expect to get as we combine that with the existing fly-ish business, our ready-mix business up in Northern Virginia, the business at Essex, obviously, on the import side where the two can back each other up to some degree.

Speaker #1: So we don't break it out in that sense, but I think it's fair to say that we wouldn't have adjusted our guidance before for the existing legacy business.

Speaker #1: I think they would have generally remained unchanged.

Speaker #6: Okay. Great. That's helpful. And then just a second question, just sticking with Keystone, just trying to better understand the cadence of like a $30 million of synergies out through 2029.

Speaker #6: Should we be thinking about it on a linear basis? Then maybe we can talk about, you know, what are some of the low-hanging fruit that you can execute on as we go into '27?

Speaker #1: Yeah. I wouldn't say linear because some of them involve some capital investments. They're not huge capital investments, but they're important at the same time to some investments getting the alternative fuel capabilities increased compared to where they are today.

Speaker #1: It's good, but we can make it better. We have some raw materials synergies that we think we can improve there at the facility. The logistics operations, but fundamentally what we've been focused on in the last couple of months, we've only owned it, you know, three months today.

Speaker #1: But really what we're focused on there is making sure they're reliability, and the quality of the product is consistent with the rest of the Titan America product that we have.

Speaker #1: So getting the plant operating, this is more OPEX at this point than it is CAPEX, but we'll come to the point where we have to make some targeted CAPEX investments to do that.

Speaker #1: Those are best executed during a planned shutdown when you have the duration to do something like that. So we make incremental progress every month, but this is really about reliability throughput consistency and the ability to serve customers.

Speaker #6: Got it. Thanks. I'll pass it on.

Speaker #3: We'll move next to Brian Brophy with Stifel. Your line is open.

Speaker #7: Yeah. Thanks. Good afternoon. Appreciate you taking the question. I guess just following up on the Keystone synergies, point of clarification, are all of these cost synergies or do you have some revenue synergies in there as well?

Speaker #7: Thanks.

Speaker #1: There are Brian Highs, Bill, there are substantial revenue synergies that come from reliability, which allows us really to produce more out of the plant and therefore sales more.

Speaker #1: There are also commercial synergies in relation to logistics and network synergies across Pennsylvania, Ohio, and our existing Mid-Atlantic operations. On top of that, we have operational excellence synergies.

Speaker #1: Obviously, in relation to cost of raw materials, cost of operations, and on top of that, we're going to see synergies as we increase our sales of aggregates as we have mentioned in the past.

Speaker #1: There are substantial high-quality DOT quality aggregate reserves, and we intend to increase our sales into the market. This will happen gradually. That's where we gave a run rate of at least $30 million of synergies by 2029.

Speaker #7: Thanks. That's helpful. And just as a follow-up to that, you talked about almost $100 million of revenue that Keystone was previously generating. How should we think about where revenue could go as you improve plant capacity and utilization?

Speaker #7: Thanks.

Speaker #1: You know, we haven't given a guide on that one, Brian. I think let us come back to you in due time and give some more guidance on that as we come to understand the asset a little bit better.

Speaker #1: We can make some of the improvements that we described here as well.

Speaker #7: Okay. Appreciate it. Thank you. I'll pass it on.

Speaker #2: Brian, we promised that we're going to come back with more details later in the year.

Speaker #7: Understood. Appreciate it.

Speaker #2: Thank you.

Speaker #3: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Bill Zarcalis for any additional or closing remarks.

Speaker #2: Thank you, Chloe. We appreciate your help. And thank you all for your time today. We appreciate your interest in Titan America. We look forward to updating you on our progress on our third quarter call.

Speaker #2: Have a great rest of your day. Thank you all. Take care.

Operator 1: Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero and a member of our team will be happy to help you.

Operator 2: Good afternoon. Thank you for joining us. I am Chloe, your conference call operator. Welcome to Titan America's Q2 2026 Conference Call. All participants will be in a listen-only mode. The conference is being recorded. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star one on your telephone keypad. I would now like to turn the call over to Michael Bennett, Vice President of Investor Relations.

Operator: Good afternoon. Thank you for joining us. I am Chloe, your conference call operator. Welcome to Titan America's Q2 2026 Conference Call. All participants will be in a listen-only mode. The conference is being recorded. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star one on your telephone keypad. I would now like to turn the call over to Michael Bennett, Vice President of Investor Relations.

Michael Bennett: Thank you. Good afternoon to everyone on the line. Thank you for joining us for Titan America's Q2 2026 conference call. I am joined by Bill Zarkalis, President and Chief Executive Officer, and Larry Wilt, Chief Financial Officer. Before we begin, I would like to remind you that earlier this afternoon, we released Titan America's Q2 2026 results, which are available on our website at ir.titanamerica.com, along with today's accompanying slide presentation. This call is being recorded. A replay will be made available on our investor relations website. During the call, we will present both IFRS and non-IFRS financial measures. The most directly comparable IFRS measures and reconciliations for non-IFRS measures are available in today's press release and accompanying slides. Certain statements on today's call may be deemed to be forward-looking statements.

Michael Bennett: This call is being recorded. A replay will be made available on our investor relations website. During the call, we will present both IFRS and non-IFRS financial measures. The most directly comparable IFRS measures and reconciliations for non-IFRS measures are available in today's press release and accompanying slides. Certain statements on today's call may be deemed to be forward-looking statements.

Michael Bennett: Such statements can be identified by terms such as "expect," "believe," "intend," "anticipate," and "may," among others, or by the use of the future tense. You should not place undue reliance on forward-looking statements. Actual results may differ materially from those forward-looking statements. We do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as the risks and uncertainties described in our SEC filings. I would now like to turn the call over to Bill. Please go ahead.

Michael Bennett: For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as the risks and uncertainties described in our SEC filings. I would now like to turn the call over to Bill Zarkalis. Please go ahead.

Bill Zarkalis: Thank you, Michael. Good afternoon, and thanks for joining Titan America's Q2 2026 financial results call. I would like to begin on slide four by highlighting a few key messages. Earlier today, we announced our Q2 2026 financial results. Titan America delivered a solid performance despite continued headwinds in residential, with Q2 revenue increasing by 9.6% compared to the same period last year, and adjusted EBITDA at 1.3% higher. Our Mid-Atlantic region delivered strong year-over-year growth in both revenue and adjusted EBITDA during the Q2. We capitalized on robust project activity in the region, particularly from private, non-residential, and public infrastructure investments to drive significant volume growth compared to the prior year. High ready-mix concrete pricing contributed positively to results. In the Q2, our Florida segment delivered solid results on robust demand from infrastructure and private non-residential construction markets.

Bill Zarkalis: Our Mid-Atlantic region delivered strong year-over-year growth in both revenue and adjusted EBITDA during the Q2. We capitalized on robust project activity in the region, particularly from private, non-residential, and public infrastructure investments to drive significant volume growth compared to the prior year. High ready-mix concrete pricing contributed positively to results. In the Q2, our Florida segment delivered solid results on robust demand from infrastructure and private non-residential construction markets.

Bill Zarkalis: Residential construction activity remains subdued, with project delays and softer cement demand impacting the region, while pricing across several product lines was relatively softer year-over-year. Scheduled extended maintenance shutdowns at both our cement and aggregates operations at our Pennsuco plant resulted in longer outages than in the prior year, negatively impacting Florida's Q2 results. Also, as foreshadowed in our previous results call, in the Q2, our Florida business was impacted by substantial delays in our cement imports due to disruptions in overseas ports and shipping. We believe these disruptions were temporary in nature, and we expect the logistics conditions to normalize as we move through the H2 of the year. Let's now turn to slide five to update you on Keystone. During the Q2, we completed the acquisition of the Keystone Cement Company.

Bill Zarkalis: Also, as foreshadowed in our previous results call, in the Q2, our Florida business was impacted by substantial delays in our cement imports due to disruptions in overseas ports and shipping. We believe these disruptions were temporary in nature, and we expect the logistics conditions to normalize as we move through the H2 of the year. Let's now turn to slide five to update you on Keystone. During the Q2, we completed the acquisition of the Keystone Cement Company.

Bill Zarkalis: This acquisition marks an important milestone in the execution of our long-term growth strategy. Since closing, our integration team has been on-site, working closely together with Keystone's experienced and highly knowledgeable colleagues to ensure a smooth and effective integration. The Keystone acquisition expands our geographic reach in the markets of Pennsylvania, Ohio, Delaware, and Maryland. Combined with our existing asset base, Keystone strengthens our vertically integrated footprint in this attractive region, enhancing our ability to serve customers, capture operational run rate synergies, and capitalize on the strong long-term secular growth trends supporting these markets. Looking ahead, we are targeting annual run rate synergies from the Keystone acquisition of at least $30 million by 2029. We believe the targeted synergies will substantially improve the operating margins of the acquired assets.

Bill Zarkalis: Combined with our existing asset base, Keystone strengthens our vertically integrated footprint in this attractive region, enhancing our ability to serve customers, capture operational run rate synergies, and capitalize on the strong long-term secular growth trends supporting these markets. Looking ahead, we are targeting annual run rate synergies from the Keystone acquisition of at least $30 million by 2029. We believe the targeted synergies will substantially improve the operating margins of the acquired assets.

Bill Zarkalis: We expect synergy realization to build over the three-year period rather than phase in evenly, with the largest contribution coming in year three as our operational, commercial, and logistics initiatives take full effect. Keystone brings together an exceptional team, a strong brand, and a respected reputation built over its century-long history. We're excited about the opportunities ahead and look forward to sharing more about our expectations for this asset. Let's move now to slide six to briefly discuss data centers, one of the growth levers in our Mid-Atlantic markets. Virginia is the world's data center capital, with an estimated 30% share in the global hyperscale market. Titan America is capitalizing on the data center investment growth and participating in more than 50% of the data centers currently under construction in our serviceable market area.

Bill Zarkalis: Let's move now to slide six to briefly discuss data centers, one of the growth levers in our Mid-Atlantic markets. Virginia is the world's data center capital, with an estimated 30% share in the global hyperscale market. Titan America is capitalizing on the data center investment growth and participating in more than 50% of the data centers currently under construction in our serviceable market area.

Bill Zarkalis: In 2026, Titan America participates in 77 data centers out of 148 currently under construction in Virginia. It is estimated that an additional 250 data centers are currently in the pre-construction phase in the state. Titan America is partnering with leading contractors, operators, and hyperscalers to value-engineer solutions and create additional products and services to meet their evolving demands. The investments in data centers act as a multiplier for the demand of construction materials as they usually lead to substantial follow-on investments in power generation, infrastructure, and commercial construction. Turning now to slide seven to discuss an investment which enhances Titan America's position in the growing market for supplementary cementitious materials. Titan America subsidiary, Separation Technologies or ST, entered into an agreement to develop a first-of-its-kind fly ash recycling plant at the Brunner Island Steam Electric Station in Pennsylvania.

Bill Zarkalis: The investments in data centers act as a multiplier for the demand of construction materials as they usually lead to substantial follow-on investments in power generation, infrastructure, and commercial construction. Turning now to slide seven to discuss an investment which enhances Titan America's position in the growing market for supplementary cementitious materials. Titan America subsidiary, Separation Technologies or ST, entered into an agreement to develop a first-of-its-kind fly ash recycling plant at the Brunner Island Steam Electric Station in Pennsylvania.

Bill Zarkalis: With this new plant, we are recovering fly ash directly from landfills, which we view as a reliable source of supply for years to come, solving the challenges associated with the retirement of coal-fired power plants. The newly announced plant will bolt on the Separation Technologies existing fly ash beneficiation facility, and will have an annual capacity to handle 600,000 tons of landfill material. It is slated to produce and sell approximately 400,000 tons of concrete-grade fly ash per year, complementing the product mix of our newly acquired Keystone plant and creating a one-stop shop of fly ash, cement, and aggregates for our customers in Pennsylvania and Ohio. We expect to invest approximately $30 million in this plant, which is already under construction, and we expect it to be fully operational in the Q3 of next year.

Bill Zarkalis: It is slated to produce and sell approximately 400,000 tons of concrete-grade fly ash per year, complementing the product mix of our newly acquired Keystone plant and creating a one-stop shop of fly ash, cement, and aggregates for our customers in Pennsylvania and Ohio. We expect to invest approximately $30 million in this plant, which is already under construction, and we expect it to be fully operational in the Q3 of next year.

Bill Zarkalis: ST is a recognized leader in fly ash beneficiation, with over 30 million tons of fly ash sold under the ProAsh brand since 1995. ProAsh is Titan America's high-quality, low carbon fly ash that allows for better control of concrete mixtures, greater reliability, improved consistency, and superior predictable in-place concrete properties. This initiative represents a compelling opportunity for Titan America as it aligns with our long-term growth strategy. I will now turn it over to Larry, who will provide a breakdown of our Q2 financial results and business segment performance. Larry?

Larry Wilt: Thank you, Bill, and good afternoon, everyone. Starting on slide eight, let me share an overview of our Q2 2026 financial highlights. Our Q2 results reflect the resilience of our platform with strength in the Mid-Atlantic, more than offsetting headwinds in Florida, which absorbed the impacts on an extended scheduled maintenance outage at our Pennsuco Cement and Aggregate plant, as well as the temporary import logistics challenges resulting from port disruptions in the Mediterranean. Despite the challenges, we were pleased to deliver year-over-year growth in revenue, adjusted EBITDA, and operating cash flow in Q2 at the consolidated level. As indicated on the left-hand side of the slide, in the Q2, we delivered revenue of $471 million, an increase of 9.6% compared to $429 million in the Q2 2025, of which Keystone contributed $20 million.

Larry Wilt: Despite the challenges, we were pleased to deliver year-over-year growth in revenue, adjusted EBITDA, and operating cash flow in Q2 at the consolidated level. As indicated on the left-hand side of the slide, in the Q2, we delivered revenue of $471 million, an increase of 9.6% compared to $429 million in the Q2 2025, of which Keystone contributed $20 million.

Larry Wilt: Adjusted EBITDA for the quarter was $101 million compared to $99 million in the prior year quarter, an increase of 1.3%. Our Q2 adjusted EBITDA margin was 21.4% compared to 23.2% in Q2 2025, a decrease of approximately 180 basis points, reflecting the costs associated with the extended Pennsuco outage. On a year-to-date basis, our adjusted EBITDA margin was 21.1% compared to 21.8% in H1 2025. Net income for the quarter was $43 million compared to $51 million in the prior year quarter, with earnings per share of $0.23 compared to $0.28 in Q2 2025. Approximately $0.03 of that $0.05 decline was attributable to the Keystone related items, including transaction costs and a one-time tax charge associated with the post-acquisition reorganization of the Keystone entities.

Larry Wilt: Net income for the quarter was $43 million compared to $51 million in the prior year quarter, with earnings per share of $0.23 compared to $0.28 in Q2 2025. Approximately $0.03 of that $0.05 decline was attributable to the Keystone related items, including transaction costs and a one-time tax charge associated with the post-acquisition reorganization of the Keystone entities.

Larry Wilt: As shown on the right-hand side of the slide, operating cash flow for H1 2026 was $137 million compared to $108 million in H1 2025, reflecting working capital discipline and lower tax payments. For the same period, free cash flow was $50 million compared to $26 million in the prior year, driven by improvements in operating cash flow and a modest increase in CapEx investments. Finally, after accounting for the impacts of the Keystone acquisition, our leverage ratio at the end of Q2 was 1.37 times trailing 12 months adjusted EBITDA, up from 0.64 times at the beginning of the year. Even with that increase, we remain at a low absolute level of leverage with strong financial flexibility. Turning to slide nine, let me walk you through our Q2 sales volume performance by product line.

Larry Wilt: Finally, after accounting for the impacts of the Keystone acquisition, our leverage ratio at the end of Q2 was 1.37 times trailing 12 months adjusted EBITDA, up from 0.64 times at the beginning of the year. Even with that increase, we remain at a low absolute level of leverage with strong financial flexibility. Turning to slide nine, let me walk you through our Q2 sales volume performance by product line.

Larry Wilt: Our sales volume performance reflects the strong commercial execution in a challenging market. Cement volumes, including external sales and internal consumption, increased 10% year-over-year. This includes Keystone's initial contribution and the benefits of continued demand for heavy building materials in infrastructure and private non-residential construction applications. On a like-for-like basis, excluding Keystone, our cement volumes were roughly flat, held back by the impact of import supply chain disruptions in the quarter. Total aggregate volumes were lower by 1.3% in the quarter when compared to Q2 2025.

Larry Wilt: On a like-for-like basis, excluding Keystone, our cement volumes were roughly flat, held back by the impact of import supply chain disruptions in the quarter. Total aggregate volumes were lower by 1.3% in the quarter when compared to Q2 2025.

Larry Wilt: Growth in external aggregate sales volumes was offset by a decline in internal consumption in Florida, attributable in part to the temporary effects of the scheduled maintenance activities at Pennsuco. Total fly ash volumes were up approximately 12% on a low base compared to the prior year quarter, while ready-mix concrete volumes increased 2.6% year-over-year, with Mid-Atlantic generating strong growth in non-residential applications while Florida volumes were impacted by project delays. Concrete block volumes increased 8.3% compared to Q2 2025, driven by strong alignment with top regional players. Turning to slide 10, external pricing was varied, primarily reflecting both geographic and product mix. We maintained strong pricing discipline in a challenging environment, demonstrating the value of our differentiated product portfolio. On a year-over-year basis, cement pricing declined 1.5%, with like-for-like improvements in the Mid-Atlantic offset by softness in Florida.

Larry Wilt: Concrete block volumes increased 8.3% compared to Q2 2025, driven by strong alignment with top regional players. Turning to slide 10, external pricing was varied, primarily reflecting both geographic and product mix. We maintained strong pricing discipline in a challenging environment, demonstrating the value of our differentiated product portfolio. On a year-over-year basis, cement pricing declined 1.5%, with like-for-like improvements in the Mid-Atlantic offset by softness in Florida.

Larry Wilt: A decline in aggregate pricing resulted from diverse dynamics and product mix demand across regional markets in Florida. fly ash pricing was flat year-over-year, while ready-mix concrete pricing increased 4.4% when compared to Q2 2025, driven partly by focused participation in high growth, high value market segments. concrete block pricing declined 2.6% year-over-year, reflecting channel and customer mix. Turning to slides 11 and 12, let me walk you through our Q2 business segment performance. Starting with the Mid-Atlantic on slide 11, our team delivered strong financial results through focused participation in infrastructure and non-residential construction activity, which more than compensated for continued softness in residential demand. Mid-Atlantic external revenue was $214 million in Q2, an increase of 27% compared to $168 million in Q2 2025.

Larry Wilt: Turning to slides 11 and 12, let me walk you through our Q2 business segment performance. Starting with the Mid-Atlantic on slide 11, our team delivered strong financial results through focused participation in infrastructure and non-residential construction activity, which more than compensated for continued softness in residential demand. Mid-Atlantic external revenue was $214 million in Q2, an increase of 27% compared to $168 million in Q2 2025.

Larry Wilt: The increase was driven by approximately $20 million of revenue from Keystone, double-digit growth in ready-mix concrete revenues, and strength in our legacy cement operations. ready-mix concrete was the primary organic revenue growth driver with strong data center and commercial construction demand, higher unit selling prices, and the benefit of new portable plant capacity supporting increased participation in high value applications. Adjusted EBITDA for the segment was $53 million compared to $41 million in the prior year Q, an increase of 30%, reflecting the benefits of favorable project mix, improved pricing, and cost discipline, which together more than offset higher raw material and energy costs and the impacts of import disruptions. Segment adjusted EBITDA margin improved to 24.7% from 24.1% in the prior year Q.

Larry Wilt: Adjusted EBITDA for the segment was $53 million compared to $41 million in the prior year Q, an increase of 30%, reflecting the benefits of favorable project mix, improved pricing, and cost discipline, which together more than offset higher raw material and energy costs and the impacts of import disruptions. Segment adjusted EBITDA margin improved to 24.7% from 24.1% in the prior year Q.

Larry Wilt: On a year-to-date basis, Mid-Atlantic external revenue was $359 million, an increase of 16.7% compared to $308 million in the prior year period, and segment adjusted EBITDA was $65 million compared to $52 million in Q2 2025, an increase of 27%. Segment adjusted EBITDA margin improved to 18.2% from 16.7% in H1 2025. Turning to Florida on slide 12, our quarterly results reflect the impact of temporary headwinds from the extended Pensacola outage and import disruptions I mentioned earlier. Florida's external revenue was $257 million in Q2, a decrease of 1.6% compared to $261 million in Q2 2025, as lower ready-mix concrete volumes and lower aggregates and concrete block pricing was partially offset by higher concrete block volumes and external aggregate volumes.

Larry Wilt: Turning to Florida on slide 12, our quarterly results reflect the impact of temporary headwinds from the extended Pensacola outage and import disruptions I mentioned earlier. Florida's external revenue was $257 million in Q2, a decrease of 1.6% compared to $261 million in Q2 2025, as lower ready-mix concrete volumes and lower aggregates and concrete block pricing was partially offset by higher concrete block volumes and external aggregate volumes.

Larry Wilt: Adjusted EBITDA for the Florida segment was $51 million compared to $62 million in the prior year Q with adjusted EBITDA margin of 19.7% in Q2 compared to 23.8% in Q2 2025. That decline was driven primarily by the Pensacola cement and aggregate outages and import supply chain disruptions, and the added cost of temporarily sourcing cement and aggregates from third parties during the period. Aggregated together, we estimate the total impact of the short-term headwinds had an adverse direct impact of approximately $7 million in Q2. On a year-to-date basis, Florida's external revenue was $510 million compared to $514 million in the prior year period, and segment adjusted EBITDA was $123 million compared to $133 million in the prior year period. Adjusted EBITDA margin was 24.2% compared to 25.9% in H1 2025.

Larry Wilt: Aggregated together, we estimate the total impact of the short-term headwinds had an adverse direct impact of approximately $7 million in Q2. On a year-to-date basis, Florida's external revenue was $510 million compared to $514 million in the prior year period, and segment adjusted EBITDA was $123 million compared to $133 million in the prior year period. Adjusted EBITDA margin was 24.2% compared to 25.9% in H1 2025.

Larry Wilt: Now turning to our balance sheet and cash flows on slide 13. As of June 30, 2026, we had $36 million of cash and cash equivalents and a total debt of $574 million for a total net debt position of $538 million. That represents a leverage ratio of 1.37 times trailing 12 months adjusted EBITDA compared to 0.64 times at the beginning of the year. With respect to Keystone, the acquisition was funded with a combination of cash on hand and a new term loan issued in April 2026, with a maturity date of February 2031. Our balance sheet, combined with strong cash generation and disciplined capital allocation, provides strategic flexibility to support growth and invest in operating efficiencies while maintaining our commitment to returning capital to shareholders and navigate evolving market conditions. Slide 14 shows our CapEx profile for H1 2026.

Larry Wilt: Our balance sheet, combined with strong cash generation and disciplined capital allocation, provides strategic flexibility to support growth and invest in operating efficiencies while maintaining our commitment to returning capital to shareholders and navigate evolving market conditions. Slide 14 shows our CapEx profile for H1 2026.

Larry Wilt: Net CapEx were approximately $87 million for H1 2026, and remain focused on our previously communicated strategic objectives, increasing our domestic cement and aggregates capacity, improving the efficiency of our logistics network, and further enhancing our strong positions in select downstream channels to market. As the Keystone integration progresses, we expect to make further CapEx investments to deliver operational, commercial, and logistics synergies as we incorporate the Keystone assets into our Mid-Atlantic network. With respect to shareholder returns, earlier today, our board of directors approved a distribution of issue premium of $0.04 per share, payable on 9 October 2026, to shareholders of record as of 1 October 2026. With that, I'll turn it back to Bill for his closing remarks.

Larry Wilt: As the Keystone integration progresses, we expect to make further CapEx investments to deliver operational, commercial, and logistics synergies as we incorporate the Keystone assets into our Mid-Atlantic network. With respect to shareholder returns, earlier today, our board of directors approved a distribution of issue premium of $0.04 per share, payable on 9 October 2026, to shareholders of record as of 1 October 2026. With that, I'll turn it back to Bill for his closing remarks.

Bill Zarkalis: Thanks, Larry. Let me say that in conclusion, despite the short-term challenges that we face from the disruption of our cement inputs and the extended maintenance outage at our Pennsuco plant, we delivered a solid performance in Q2, with year-over-year growth in both revenue and adjusted EBITDA. Our teams executed well, and the underlying fundamentals of our key markets remain attractive. Let's turn now to our 2026 outlook on slide 15. Following the completion of our acquisition of Keystone Cement in Q2, and given our current visibility into the balance of the year, we have updated our full year 2026 guidance. We now expect high single-digit revenue growth for the full year 2026 as compared to 2025. We also expect a modest decline in our adjusted EBITDA margin for the year, which reflects the lower starting contribution from Keystone.

Bill Zarkalis: Let's turn now to our 2026 outlook on slide 15. Following the completion of our acquisition of Keystone Cement in Q2, and given our current visibility into the balance of the year, we have updated our full year 2026 guidance. We now expect high single-digit revenue growth for the full year 2026 as compared to 2025. We also expect a modest decline in our adjusted EBITDA margin for the year, which reflects the lower starting contribution from Keystone.

Bill Zarkalis: Our updated outlook reflects our confidence in our ability to capitalize on the underlying demand growth trends, more specifically in infrastructure and private non-residential across our markets, the successful integration of Keystone, and our ability to continue executing successfully on our strategic growth and cost productivity initiatives. Before we open the call for questions, I want to express once again my sincere gratitude to our Titan America team members. It is the hard work and continued dedication to safety, operational excellence, the success of our customers, and the communities we operate in that makes our company great. With that, I'll turn the call over to the operator for the Q&A session. Operator?

Bill Zarkalis: Before we open the call for questions, I want to express once again my sincere gratitude to our Titan America team members. It is the hard work and continued dedication to safety, operational excellence, the success of our customers, and the communities we operate in that makes our company great. With that, I'll turn the call over to the operator for the Q&A session. Operator?

Operator 2: Thank you. We will now begin the question and answer session. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. We'll take our first question from Anthony Pettinari with Citi. Your line is open.

Operator: Thank you. We will now begin the question and answer session. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. We'll take our first question from Anthony Pettinari with Citi. Your line is open.

Anthony Pettinari: Good afternoon. Bill, can you talk a little bit more about cement pricing? You saw some softness in Florida, but you talked about like-for-like improvements in Mid-Atlantic. I'm just wondering what factors maybe caused the softness in Florida. I wonder if you could talk a little bit also about price costs, because it seems like we're seeing higher costs for fuel, electricity. Just wondering if you can give any additional color on pricing in the two regions.

Bill Zarkalis: We see pricing trends more robust in the Mid-Atlantic regions, with growth we witnessed from the demand in commercial non-residential applications, data centers, infrastructure, and the rest. In Florida, we have resilience price, broadly stable prices. We were not successful so far in increasing the prices, but it's been resilient. The main headwind that we face is the softness in the residential sector, and especially for us in this Q2 of the year, as you heard from Larry and myself, we had the scheduled extended shutdowns, which of course, led to some reduced production. Also we had the logistics disruption in Mediterranean ports, which led to delays in arrival of shipments of imported cement, stock outs, which led us to seek third-party supply in order to meet the customer needs.

Bill Zarkalis: The main headwind that we face is the softness in the residential sector, and especially for us in this Q2 of the year, as you heard from Larry and myself, we had the scheduled extended shutdowns, which of course, led to some reduced production. Also we had the logistics disruption in Mediterranean ports, which led to delays in arrival of shipments of imported cement, stock outs, which led us to seek third-party supply in order to meet the customer needs.

Bill Zarkalis: Overall, this quarter was a challenge in Florida especially, so it's not really lending itself for conclusions on pricing dynamics. What I can say for sure is that pricing dynamics remain stable, and we see more dynamic pricing in growing regions and especially growing applications and regions, especially in the Mid-Atlantic. Now, in relation to price over cost, there have been inflationary pressures from fuel, energy, and raw material costs overall. We've been very successful in relation to the self-help, the operational excellence initiatives that we have applied. Broadly, as you can see, our margins in Mid-Atlantic improved. Our margins in Florida, when we look at the H1, which includes the maintenance shutdowns, is slightly down. This taking into account both the extended shutdowns, also the disruptions in imported cement, which were costly, as you heard.

Bill Zarkalis: Now, in relation to price over cost, there have been inflationary pressures from fuel, energy, and raw material costs overall. We've been very successful in relation to the self-help, the operational excellence initiatives that we have applied. Broadly, as you can see, our margins in Mid-Atlantic improved. Our margins in Florida, when we look at the H1, which includes the maintenance shutdowns, is slightly down. This taking into account both the extended shutdowns, also the disruptions in imported cement, which were costly, as you heard. Overall, we manage well price over cost and our margins.

Bill Zarkalis: overall, we manage well price over cost and our margins.

Anthony Pettinari: Got it. That's very helpful. Just one follow-up. The Pennsuco outage and the supply chain issues and the import issues, is that a headwind in July or Q3, or have those issues basically been resolved? Maybe just an add-on. There have been discussions around tariffs on imported Canadian cement. Is that at all impactful to the Mid-Atlantic market or maybe not really?

Larry Wilt: Yeah. I think, Anthony, Larry, taking the last one, we'll see how that plays out. I don't think that we have clear line of sight to exactly how the tariffs applied to the Canadian product coming into the Northeast US will affect our markets quite yet. We'll take a wait and see on that one. On the maintenance outage, in Florida in particular, there were two things going on. One had to do with a cement outage and the other was aggregate. Combined two, it was a scheduled outage. It happened to be, by its complexity, a longer duration than one that would typically be there. That's behind us from Q2. When you look forward, as you know, each of the outages have a second semester element to it, much shorter in duration, typically a week, give or take.

Larry Wilt: Combined two, it was a scheduled outage. It happened to be, by its complexity, a longer duration than one that would typically be there. That's behind us from Q2. When you look forward, as you know, each of the outages have a second semester element to it, much shorter in duration, typically a week, give or take.

Larry Wilt: That's still ahead of us, but that's normal in that case. Nothing different than the normal activities, in that case. When you look at the impacts combined, I think we said it in the prepared comments, $7 million overall in these direct impacts is what we see. We didn't call out, per se, some of the energy headwinds in Florida. Energy headwinds in Florida were more significant than they were in Mid-Atlantic, partly because of the way we consume diesel fuel within the aggregates facility there. It has a heavier impact there than it would in the Mid-Atlantic for us.

Anthony Pettinari: Okay. That's very helpful. I'll turn it over.

Bill Zarkalis: Thanks, Tony.

Operator 2: We'll move next to Phil Ng with Jefferies. Your line is open.

Operator: We'll move next to Phil Ng with Jefferies. Your line is open.

Phil Ng: Hey, guys. Just a few cleanup questions. Larry, on the $7 million impact, on the scheduled maintenance outage piece, that looks like it's largely behind you in Q3. Any lingering impact we should be mindful of on the imports from the Mediterranean dynamic that's going to hit in Q3?

Philip Ng: Hey, guys. Just a few cleanup questions. Larry, on the $7 million impact, on the scheduled maintenance outage piece, that looks like it's largely behind you in Q3. Any lingering impact we should be mindful of on the imports from the Mediterranean dynamic that's going to hit in Q3?

Larry Wilt: Yep. Look, I think it depends on activities in different geographies, Phil. We don't currently have any visibility to something that's more disruptive than what's in our past. As we see it today, that's not going to be a disruption going forward. Sea freight rates are higher. As you know, spot rates are higher. I think we've talked about this in the Q1 call that we had. That could be some sea freight rate issues that come into the H2 of the year that a bit higher than they were a year ago.

Phil Ng: Got you.

Philip Ng: Got you.

Bill Zarkalis: In relation to the shutdown, Phil, the first part of the question, it was a scheduled shutdown, so there's no lingering effects into the H2.

Phil Ng: Larry, I think your import for cement prices in the last quarter, you mentioned there was some hedge dynamic where your prices don't really move. Which I think you're alluding to on freight sea rates. Does that pick up a bit in the H2, too, in terms of your import costs?

Philip Ng: Larry, I think your import for cement prices in the last quarter, you mentioned there was some hedge dynamic where your prices don't really move. Which I think you're alluding to on freight sea rates. Does that pick up a bit in the H2, too, in terms of your import costs?

Larry Wilt: Yeah. Import costs, we're contracted for the year. Roughly it's slightly higher, not so meaningful higher than a year ago, Phil.

Phil Ng: Okay

Philip Ng: Okay

Larry Wilt: on the cement itself. On the sea freight rates.

Phil Ng: Okay

Philip Ng: Okay

Larry Wilt: What we said on the last call was that we had contracted through really the H1. As we enter into the H2, we've covered some of those with existing contracts, but there are still some that are exposed that we will contract later in the year as the year progresses.

Phil Ng: Okay, super. Your guidance. You mentioned that margins were going to be down a little bit on a year-over-year basis. Larry, any chance you give us a little more color in terms of the magnitude? We're talking about 150 basis points, 50 basis points in terms of the contraction? Any more color would be helpful.

Philip Ng: Okay, super. Your guidance. You mentioned that margins were going to be down a little bit on a year-over-year basis. Larry, any chance you give us a little more color in terms of the magnitude? We're talking about 150 basis points, 50 basis points in terms of the contraction? Any more color would be helpful.

Bill Zarkalis: Phil, in addition to that is Bill. You can say it's going to be between 25 to 50 basis points, essentially.

Phil Ng: Okay.

Philip Ng: Okay.

Bill Zarkalis: The impact of the Keystone integration at the starting, let's say, margins of the facility.

Phil Ng: Okay. Well, that's actually quite good. That implicitly implies a nice step-up in the H2. Any color that you're comfortable sharing what's driving some of the improvement? Certainly that $70 million headwind goes away, any other things you want to call out for that big step-up in the H2?

Philip Ng: Okay. Well, that's actually quite good. That implicitly implies a nice step-up in the H2. Any color that you're comfortable sharing what's driving some of the improvement? Certainly that $70 million headwind goes away, any other things you want to call out for that big step-up in the H2?

Larry Wilt: Look, I think as we look at the ready-mix business that we've got, in particular, it drives some of the cement volumes, the aggregate pull-through. We see better times ahead for that in Florida in the H2 of the year based on the order book that we have. Now, when it comes, Phil, we've got to realize that we work in a different outside environment. Weather can have an impact. All the things that you're aware of for Q3 and Q4 can come into play, as we see it now, we feel good about what we see in terms of the order book.

Phil Ng: Okay. Just one follow-up to that. Your guide for the full year for Keystone, is there any adjustments that we need to be mindful in terms of the step-up in terms of the inventory? Did you see that hit already in Q2, or is that going to kick in Q3, or it's not meaningful?

Philip Ng: Okay. Just one follow-up to that. Your guide for the full year for Keystone, is there any adjustments that we need to be mindful in terms of the step-up in terms of the inventory? Did you see that hit already in Q2, or is that going to kick in Q3, or it's not meaningful?

Larry Wilt: Yeah, it already hit in Q2, Phil. It's not that meaningful. It doesn't have vast level of inventory. It's not like an aggregate facility with tons and tons and tons laid around the ground that you have to deal with, so it was small.

Phil Ng: Okay. Thank you. Helpful.

Philip Ng: Okay. Thank you. Helpful.

Larry Wilt: Thanks, Phil.

Operator 2: We'll move next to Chad Dillard with Bernstein. Your line is open.

Operator: We'll move next to Chad Dillard with Bernstein. Your line is open.

Chad Dillard: Hi, good evening, everyone.

Larry Wilt: Hi, Chad.

Chad Dillard: Hey. My question's on your guidance change for revenues going from low single digits to high single digits, and then also the modest step-down in EBITDA. I was hoping you could parse out what the changes were on the organic side versus what's coming from the impact of including Keystone.

Larry Wilt: We've updated the guidance to cover the full business here, Chad Dillard. For us, Keystone Cement Company is integrated into the Mid-Atlantic. As a whole, we talked about the synergies that we expect to get as we combine that with the existing fly ash business, our ready-mix concrete business up in Northern Virginia, the business at Essex Cement, obviously on the import side, where the two can back each other up to some degree. We don't break it out in that sense, but I think it's fair to say that we wouldn't have adjusted our guidance before for the existing legacy business. I think that would've generally remained unchanged.

Chad Dillard: Okay, great. That's helpful. Just second question, just sticking with Keystone Cement Company. Just trying to better understand the cadence of the $30 million of synergies out through 2029. Should we be thinking about it on a linear basis? Maybe you can talk about what are some of the low-hanging fruit that you can execute on as we go into 2027?

Larry Wilt: Yeah. I wouldn't say linear, because some of them involve some CapEx investments. They're not huge CapEx investments, but they're important at the same time. Some investments getting the alternative fuel capabilities increased compared to where they are today. It's good, but we can make it better. We have some raw material synergies that we think we can improve there at the facility. The logistics operations. Fundamentally, what we've been focused on in the last couple of months, we've only owned it 3 months today. Really what we're focused on there is making sure their reliability and the quality of the product is consistent with the rest of the Titan America product that we have. Getting the plant operating.

Larry Wilt: Fundamentally, what we've been focused on in the last couple of months, we've only owned it 3 months today. Really what we're focused on there is making sure their reliability and the quality of the product is consistent with the rest of the Titan America product that we have. Getting the plant operating.

Larry Wilt: Now, this is more OpEx at this point than it is CapEx, but we'll come to the point where we have to make some targeted CapEx investments to do that. Those are best executed during a planned shutdown when you have the duration to do something like that. We make incremental progress every month, but this is really about reliability, throughput, consistency, and the ability to serve customers.

Chad Dillard: Got it. Thanks. I'll pass it on.

Operator 2: We'll move next to Brian Brophy with Stifel. Your line is open.

Operator: We'll move next to Brian Brophy with Stifel. Your line is open.

Brian Brophy: Yeah, thanks. Good afternoon. Appreciate you taking the question. I guess just following up on the Keystone synergies, point of clarification, are all of these cost synergies, or do you have some revenue synergies in there as well? Thanks.

Bill Zarkalis: Brian. Hi, it's Bill. There are substantial revenue synergies that come from reliability, which allows us really to produce more out of the plant and therefore sells more. There are also commercial synergies in relation to logistics and network synergies across Pennsylvania, Ohio, and our existing Mid-Atlantic operations. On top of that, we have operational excellence synergies, obviously in relation to cost of raw materials, cost of operations. On top of that, we're going to see synergies as we increase our sales of aggregates. As we have mentioned in the past, there are substantial high quality, DOT quality aggregate reserves, and we intend to increase our sales into the market. This will happen gradually. That's where we gave a run rate of at least $30 million of synergies by 2029.

Bill Zarkalis: On top of that, we're going to see synergies as we increase our sales of aggregates. As we have mentioned in the past, there are substantial high quality, DOT quality aggregate reserves, and we intend to increase our sales into the market. This will happen gradually. That's where we gave a run rate of at least $30 million of synergies by 2029.

Brian Brophy: Thanks. That's helpful. Just as a follow-up to that, you talked about almost $100 million of revenue that Keystone was previously generating. How should we think about where revenue could go as you improve plant capacity and utilization? Thanks.

Larry Wilt: We haven't given a guide on that one, Brian. I think let us come back to you in due time and give some more guidance on that as we come to understand the asset a little bit better and make some of the improvements that we described here as well.

Brian Brophy: Okay. Appreciate it. Thank you. I'll pass it on.

Bill Zarkalis: Brian, we promise that we're going to come back with more details later in the year.

Brian Brophy: Understood. Appreciate it.

Larry Wilt: Thank you.

Operator 2: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Bill Zarkalis for any additional or closing remarks.

Operator: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Bill Zarkalis for any additional or closing remarks.

Bill Zarkalis: Thank you, Chloe. I appreciate your help. Thank you all for your time today. We appreciate your interest in Titan America. We look forward to updating you on our progress on our Q3 call. Have a great rest of your day. Thank you all. Take care.

Operator 2: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Q2 2026 Titan America SA Earnings Call

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