Q2 2026 Decisive Dividend Corp Earnings Call

July 30, 2026

Speaker #1: Good morning, ladies and gentlemen, and welcome to the Decisive Dividend Corporation Q2 2026 results conference call. At this time, all lines are in listen-only mode.

Operator: Good morning, ladies and gentlemen, and welcome to the Decisive Dividend Corporation Q2 2026 results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, 30 July 2026. I would now like to turn the conference over to Jeff Schellenberg, Chief Executive Officer. Please go ahead.

Operator: [Break]

Speaker #1: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.

Speaker #1: This call is being recorded on Thursday, July 30, 2026. I would now like to turn the conference over to Jeff Shellenberg, Chief Executive Officer.

Speaker #1: Please go ahead.

Speaker #2: Thank you, operator. Hello and good morning, everyone. This is Jeff Shellenberg. I want to welcome everyone to our Q2, 2026 earnings conference call. Q2, 2026 marked an important quarter for Decisive as some significant initiatives were completed in support of both organic growth and growth by acquisition.

Jeff Schellenberg: Thank you, operator. Hello, good morning, everyone. This is Jeff Schellenberg. I want to welcome everyone to our Q2 2026 earnings conference call. Q2 2026 marked an important quarter for Decisive, as some significant initiatives were completed in support of both organic growth and growth by acquisition. These completed initiatives included an on-strategy acquisition in our highest returning industry vertical, a CAD 8 million private placement with a strategic investor, a CAD 25 million upsize in our credit facility, and a 6% increase in quarterly sales versus Q2 2025, driven by both organic growth and growth by acquisition. BeFire, which goes to market in Europe under the well-known historic brands, Jøtul and Bodart & Gonay, was acquired on 3 June 2026. BeFire designs and manufactures a broad range of European Ecodesign compliant wood burning stoves, fireplaces, and fireplace inserts in a vertically integrated facility in Belgium.

Speaker #2: These completed initiatives included an on-strategy acquisition in our highest-returning industry vertical, an $8 million private placement with the strategic investor, a $25 million upsize in our credit facility, and a 6% increase in quarterly sales versus Q2, 2025, driven by both organic growth and growth by acquisition.

Speaker #2: Beefire, which goes to market in Europe under the well-known historic brands JD and Bodart & Gonay, was acquired on June 3, 2026. Beefire designs and manufactures a broad range of European eco-design-compliant wood-burning stoves, fireplaces, and fireplace inserts in a vertically integrated facility in Belgium.

Speaker #2: This acquisition marked a major milestone for Decisive, as our first transaction in Europe—a strategically important move, as it helps diversify Decisive's revenue streams into non-North American markets, where trade uncertainty has created volatility.

Jeff Schellenberg: This acquisition marked a major milestone for Decisive as our first transaction in Europe, a strategically important move as it helps diversify Decisive's revenue streams into non-North American markets, where trade uncertainty has created volatility. The acquisition of BeFire complements the company's other hearth businesses, Blaze King and ACR, as each business within the vertical has unique brands representing products that access a varied range of market segments within their specific geographic markets. The opportunities to introduce the different brands, product designs, and capabilities within those brands across the geographies we operate in is a significant driver of future organic growth potential for these businesses and Decisive. The existing leader who built BeFire's group of businesses, Jean-Philippe Gosselin, is continuing to lead this business over the next three years.

Speaker #2: Further, the acquisition of Beefire complements the company's other hearth businesses, Blaze King and ACR, as each business within the vertical has unique brands representing products that access a varied range of market segments within their specific geographic markets.

Speaker #2: The opportunities to introduce the different brands, product designs, and capabilities within those brands across the geographies we operate in are a significant driver of future organic growth potential for these businesses and Decisive.

Speaker #2: The existing leader who built Beefire's group of businesses, Jean-Philippe Kousnard, is continuing to lead this business over the next three years. Jean-Philippe's ongoing leadership, combined with the existing expertise we already have in this segment, will help minimize post-transaction disruption, positioning us to immediately focus on pursuing cross-selling, geographic expansion, and new product development opportunities among the three hearth businesses.

Jeff Schellenberg: Jean-Philippe's ongoing leadership, combined with the existing expertise we already have in this segment, will help minimize post-transaction disruption, positioning us to immediately focus on pursuing cross-selling, geographic expansion, and new product development opportunities among the three hearth businesses, including a pellet stove product in development at BeFire. Our existing hearth industry leaders, Alan Murphy with Blaze King and Jason Searle with ACR, together with Chris Goodchild, our COO, have been working closely with Jean-Philippe to build an integration plan for this acquisition, including with respect to cross-selling opportunities for existing and new products each business produces within the network of dealers we have relationships with in the UK, Belgium, France, and North America.

Speaker #2: Including a pellet stove product in development at Beefire. Further, our existing hearth industry leaders, Alan Murphy with Blaze King and Jason Searle with ACR, together with Chris Goodchild, our COO, have been working closely with Jean-Philippe to build an integration plan for this acquisition, including with respect to cross-selling opportunities for existing and new products, each business produces, within the network of dealers we have relationships with in the UK, Belgium, France, and North America.

Speaker #2: The first cross-selling opportunities to be pursued are in the European and UK markets, given the similar regulatory environments and geographic proximity. And we look forward to updating our investors as initiatives in these areas progress.

Jeff Schellenberg: The first cross-selling opportunities to be pursued are in the European and UK markets, given the similar regulatory environments and geographic proximity. We look forward to updating our investors as initiatives in these areas progress. Another significant initiative completed in Q2 2026 was the private placement we completed with L6 in early April. Adding another anchor institutional investor with a long-term approach to investing, including holding an investor rights agreement that allows them to maintain their ownership interest in Decisive in the event of the completion of future capital raises, meant that we are able to complete the BeFire acquisition while maintaining significant balance sheet strength with our post-acquisition leverage ratio sitting at three times.

Speaker #2: Another significant initiative completed in Q2, 2026 was the private placement we completed private placement we completed with L6 in early April. Adding another anchor institutional investor with a long-term approach to investing, including holding an investor rights agreement that allows them to maintain their ownership interests in Decisive in the event of the completion of future capital raises, meant that we are able to complete the Beefire acquisition while maintaining significant balance sheet strength, with our post-acquisition leverage ratio sitting at 3 times.

Speaker #2: Further, following the announcement of the Beefire acquisition, we announced a $25 million upsizing of our credit facility with our banking syndicate, which provided us with $47.5 million in available capacity entering the second half of the year. This can be used to fund both organic growth opportunities and support our M&A program.

Jeff Schellenberg: Further, following the announcement of the Be Fire acquisition, we announced a CAD 25 million upsizing of our credit facility with our banking syndicate, which provided us with CAD 47.5 million in available capacity entering the second half of the year that we can use to fund both organic growth opportunities and support our M&A program. Doing a material acquisition while adding a new anchor investor and upsizing our credit facility are all foundational changes that will provide support for our growth journey as an organization in the future. We saw early returns from the acquisitions we've completed in the last four quarters in Q2 2026 as overall sales increased 6% in the quarter to CAD 38.5 million, compared to CAD 36.3 million in Q2 2025. Be Fire, along with Venger, which was added to the merchandising vertical in August 2025, contributed to this revenue growth.

Speaker #2: Doing a material acquisition while adding a new anchor investor and upsizing our credit facility are all foundational changes that will provide support for our growth journey as an organization in the future.

Speaker #2: We saw early returns from the acquisitions we've completed in the last four quarters. In Q2, 2026, as overall sales increased 6% in the quarter to $38.5 million, compared to $36.3 million in Q2, 2025.

Speaker #2: Beefire, along with Venture, which was added to the merchandising vertical in August 2025, contributed to this revenue growth. These contributions, combined with our organic growth in hearth, agriculture, and merchandising product sales, and stable wire parts sales, more than offset the oil and gas and commercial vehicle customer-specific softness that has been discussed over the past year.

Jeff Schellenberg: These contributions, combined with our organic growth in hearth, agriculture, and merchandising product sales, and stable wear part sales, more than offset the oil and gas and commercial vehicle customer-specific softness that has been discussed over the past year. I'll provide a little more detail on how each business vertical performed in the quarter relative to Q2 2025. The hearth businesses realized a 48% increase in sales compared to Q2 2025, with 60% of that increase a result of organic sales growth from Blaze King and ACR, and the remainder generated by Be Fire in its first month post-acquisition. The agriculture businesses, specifically Slimline's orchard and vineyard sprayer product and IHT, generated a 24% increase in sales relative to Q2 2025, based on continuing strong order activity at IHT, as well as increases in sprayer sales for Slimline.

Speaker #2: I'll provide a little more detail on how each business vertical performed in the quarter relative to Q2, 2025. The hearth businesses realized a 48% increase in sales compared to Q2, 2025, with 60% of that increase a result of organic sales growth from Blaze King and ACR, and the remainder generated by Beefire in its first month post-acquisition.

Speaker #2: The agriculture businesses, specifically Slimline's orchard and vineyard sprayer product and IHT, generated a 24% increase in sales relative to Q2, 2025, based on continuing strong order activity at IHT as well as increases in sprayer sales for Slimline.

Speaker #2: Merchandising product sales increased by 72% in the quarter compared to Q2, 2025, with about a quarter of the increase attributable to organic growth in sales while Venture contributed to the other half of the growth in this vertical, both on the back of ramped-up lead generation activity over the last couple months.

Jeff Schellenberg: Merchandising product sales increased by 72% in the quarter compared to Q2 2025, with about a quarter of the increase attributable to organic growth in sales, while Venger contributed to the other half of the growth in this vertical, both on the back of ramped-up lead generation activity over the last couple of months. Our group of wear parts businesses, Unicast, Procore, and Techbelt, generated consistent sales relative to Q2 2025 as demand for the wear parts these businesses produce remained resilient. Lastly, as we mentioned earlier, the industrial products businesses, which include Northside, Hawk, Capital I, and Slimline's evaporators, continue to be impacted by demand declines from certain commercial vehicle and oil and gas customers that began in H2 2025, although the impact has been less than originally expected.

Speaker #2: Our group of wire parts businesses—Unicast, Procore, and TechBelt—generated consistent sales relative to Q2 2025, as demand for the wire parts these businesses produce remained resilient.

Speaker #2: Lastly, and as we mentioned earlier, the industrial products businesses—which include Northside, Hawk, Capital I, and Slimline's evaporators—continued to be impacted by demand declines from certain commercial vehicle and oil and gas customers that began in the second half of 2025, although the impact has been less than originally expected.

Speaker #2: Having other businesses mitigate the impact of these declines, the way they have, reinforces the benefits of the diversified nature of the portfolio of businesses we own, and the differentiated products these businesses produce.

Jeff Schellenberg: Having other business mitigate the impact of these declines the way they have reinforces the benefits of the diversified nature of the portfolio of businesses we own and the differentiated products these businesses produce. Over the last few quarters, we've been making investments in leadership succession, sales teams, facility capacity, and organizational capability enhancements across our operating companies. Even with the increase in operating costs driven by these investments, the overall increase in sales translated to a 1% increase in adjusted EBITDA compared to Q2 2025. At the same time, we have made moves that should result in reduced operating costs in future periods, like the move of Procore into Northside and the enhanced cooperation between Capital I and Hawk. We are confident these deliberate decisions will strengthen the quality, resilience, and earnings power of our business, delivering long-term benefit as we move forward.

Speaker #2: Over the last few quarters, we've been making investments in leadership secession, sales teams, facility capacity, and organizational capability enhancements across our operating companies. Even with the increase in operating costs driven by these investments, the overall increase in sales translated to a 1% increase in adjusted EBITDA compared to Q2, 2025.

Speaker #2: At the same time, we have made moves that should result in reduced operating costs and future periods, like the move of Procore into Northside, and the enhanced cooperation between Capital I and Hawk.

Speaker #2: We are confident these deliberate decisions will strengthen the quality, resilience, and earnings power of our businesses, delivering long-term benefit as we move forward. In this quarter, we generated free cash flow less maintenance capex of $2.6 million, a 7% decrease relative to Q2 2025, due primarily to current income tax and operating premise lease payment increases.

Jeff Schellenberg: In this quarter, we generated free cash flow less maintenance CapEx of CAD 2.6 million, a 7% decrease relative to Q2 2025, due primarily to the current income tax and operating premise lease payment increases. As a result, and with the increased share count from the private placement and only one month of contribution from the BeFire acquisition, the trailing 12-month dividend payout ratio increased to 83% at the end of Q2 2026. As cash flow contributions from BeFire ramp up in the coming quarters, we expect this ratio to improve. In terms of our outlook for the remainder of 2026, we expect to benefit from the investments we are making in new products, sales capabilities, facility capacity, and productivity over the last number of quarters.

Speaker #2: As a result, and with the increased share count from the private placement and only one month of contribution from the Beefire acquisition, the trailing 12-month dividend payout ratio increased to 83% at the end of Q2 2026.

Speaker #2: As cash flow contributions from Beefire ramp up in the coming quarters, we expect this ratio to improve. In terms of our outlook for the remainder of 2026, we expect to benefit from the investments we are making in new products, sales capabilities, facility capacity, and productivity over the last number of quarters.

Speaker #2: Higher energy prices and uncertainty tend to drive strength in our hearth businesses, which provide a source of alternative low-cost, secure energy. And where we have new products poised to more meaningfully penetrate the market.

Jeff Schellenberg: Higher energy prices and uncertainty tend to drive strength in our hearth businesses, which provide a source of alternative low-cost, secure energy and where we have new products poised to more meaningfully penetrate the market. We are still awaiting EPA approval for the new North American hearth products that launched in Canada earlier this year. When received, these should provide meaningful tailwinds to Blaze King. However, timing of approvals remains uncertain as a result of ongoing organizational changes at the EPA. Overall, Q3 is off to a good start with consolidated backlogs and orders in July 2026 ahead of July 2025, and we are especially encouraged by the quoting and order activity within our agriculture and merchandising businesses.

Speaker #2: We are still awaiting EPA approval for the new North American hearth products that launched in Canada earlier this year. Once received, these should provide meaningful tailwinds to Blaze King.

Speaker #2: However, timing of approvals remains uncertain as a result of ongoing organizational changes at the EPA. Overall, Q3 is off to a good start with consolidated backlogs and orders in July 2026, ahead of July 2025, and we are especially encouraged by the quoting and order activity within our agriculture and merchandising businesses.

Speaker #2: However, we continue to face some ongoing certainty, uncertainty, especially in the near term, including the threat of new tariffs, the impact of Kuzma renegotiations, and global upheaval in different regions.

Jeff Schellenberg: However, we continue to face some ongoing uncertainty, especially in the near term, including the threat of new tariffs, the impact of CUSMA renegotiations, and global upheaval in different regions, resulting in some specific challenges in a few of our subsidiaries. For example, we are seeing softer order levels and backlog in our cast steel wear parts as we enter the quarter, which has a longer sales cycle due to the international supply chain we work in. As a result, discipline in cost control and efficiency will be critical in the upcoming quarter. We also continue to attract numerous acquisition opportunities as our buy, build, and hold model continues to resonate with exiting legacy-minded business owners who value our long-term approach. With that, I now open up the call for questions.

Speaker #2: Resulting in some specific challenges in a few of our subsidiaries. For example, we are seeing softer order levels and backlog in our Cast Steel wire parts as we enter the quarter, which has a longer sales cycle due to the international supply chain we work in.

Speaker #2: As a result, discipline and cost control and efficiency will be critical in the upcoming quarter. We also continue to attract numerous acquisition opportunities as our buy build and hold model continues to resonate with exiting legacy-minded business owners who value our long-term approach.

Speaker #2: With that, I now open up the call for questions.

Speaker #1: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star, followed by the number 1 on your touchdown phone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please leave the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Kyle McPhee of ATB Cormark. Please go ahead. Your line is open.

Speaker #1: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star, followed by the number 2.

Speaker #1: If you are using a speakerphone, please leave the handset before pressing any keys. One moment, please, for your first question. And your first question comes from Kyle McPhee of ATB Cormark.

Speaker #1: Please go ahead; your line is open.

Speaker #3: Hello, everyone. First one from me, you've been executing hiring and adding sales resources. It adds new expenses to support forward growth. So a temporary margin had been all else equal.

Kyle McPhee: Hello, everyone. First one from me. You've been executing hiring, adding sales resources. It adds new expenses to support forward growth, so a temporary margin had been all else equal. Are you now at the tail end of that investment phase, and we should now expect to see some favorable cost leverage going forward? Or is there more investment needed for capacity or sales resources?

Speaker #3: Are you now at the tail end of that investment phase, and should we now expect to see some favorable cost leverage going forward, or is there more investment needed for capacity or sales resources?

Speaker #2: Yeah, hey, Kyle. I think the real ramp-up is probably tailing off. I think we are still looking to invest in certain businesses, and for sales capacity improvement, just because we see great opportunity there.

Jeff Schellenberg: Yeah. Hey, Kyle. I think the real ramp-up is probably tailing off. I think we are still looking to invest in certain businesses and for sales capacity improvement, just because we see great opportunity there. I think that the real ramp-up is probably behind us. Like Jeff mentioned, we are working on the back end. These are small businesses that we buy that have small teams, and really as we turn into a growth phase for these businesses post-acquisition, we do need to add capability throughout their organization. We are making moves like we have with Procore moving into a joint facility with Northside, combining or increasing cooperation with Capital I and Hawk that are starting to yield results here that will provide an offset of some of those increases as well.

Speaker #2: But I think that the real ramp-up is probably behind us. And, like Jeff mentioned, we are working on the back end. These are small businesses that we buy, that have small teams, and really, as we turn into a growth phase for these businesses post-acquisition, we do need to add capability.

Speaker #2: Throughout their organization. But we are making moves, like we have with Procore, moving into a joint facility with Northside. Combining or increasing cooperation with Capital I and Hawk—these are starting to yield results here that will provide an offset to some of those increases as well.

Speaker #4: Yeah, and I guess I yeah.

Operator: Yeah.

Kyle McPhee: Go ahead.

Speaker #3: Go ahead.

Jeff Schellenberg: Yeah.

Kyle McPhee: Go ahead.

Speaker #4: Yeah, I was going to layer onto that. We had a sales capabilities and personnel broadly across the group. Made it's not just a single organization.

Jeff Schellenberg: Yeah, I was going to layer onto that. We added sales capabilities and personnel broadly across the group. It's not just a single organization, it's kind of across the group. I think, with the added personnel, I think what we'll be seeing more so is performance management. At this stage, we've added the capabilities. If they're delivering results, in the sales function, that's a critical element and there might be some turnover, but that would be a redeployment of existing investment more so than necessarily major new additional investment. I think that's a point I would make on that as well.

Speaker #4: It's kind of across the group. And I think with the added personnel, I think what we'll be seeing more so is performance management. At this stage, we've added the capabilities.

Speaker #4: If there's if they're delivering results, that's part in the sales function, that's a critical element. And there might be some turnover, as we but that would be a redeployment of existing investment more so than necessarily major new additional investment.

Speaker #4: So I think that's a point I would make on that as well.

Speaker #3: Got it, okay. And then second one from me, just on your Hearth platform — it was very impressive organic growth. I think when we back out the M&A, it was like high 20% range organic growth. What do you attribute that to?

Kyle McPhee: Got it. Okay. The second one for me, just on your hearth platform, it was very impressive organic growth. I think when we back out the M&A, it was high 20% range organic growth. What do you attribute that to? Is it a demand surge on the back of the inflationary energy price environment that's typically a tailwind for this platform? Or are you seeing maybe some early payoffs from your M&A cross-sell synergies and new product launches? Just give us your thoughts on that growth attribution for hearth.

Speaker #3: Is it a demand surge on the back of the inflationary energy price environment? That's typically a tailwind for this platform, or have you seen maybe some early payoff from your M&A cross-sales synergies and new product launches?

Speaker #3: Just give us your thoughts on that growth attribution for hearth.

Speaker #4: Yeah, I think I think what we saw, we had a really strong take-up up in our early buy program this year. We have a program just given the seasonality of that business, where we go to market with an incentive program designed to capture order activity.

Jeff Schellenberg: Yeah. I think what we saw, we had a really strong take-up in our early buy program this year. We have a program, just given the seasonality of that business, where we go to market with an incentive program designed to capture order activity that helps support manufacturing activity throughout what would traditionally be slower sales periods. I think the performance in that, especially in Canada, actually, for the North American business, was really strong. That, I think, drove some of that activity. I think we saw better performance at ACR as well. Yeah. Is it directly a result of war and energy prices? It's hard to draw a straight line between the two. We've done the correlation math around that. Higher energy prices and that type of uncertainty drives stronger revenue in that.

Speaker #4: That helps support manufacturing activity throughout what would traditionally be slower sales periods. And I think the performance in that, especially in Canada, actually, for the North American business, was really strong.

Speaker #4: So that, I think, drove some of that activity. I think we saw better performance at ACR as well. So I think just and so yeah, is it directly a result of war and energy prices?

Speaker #4: It's hard to draw a straight line between the two, but that definitely I mean, we've done the correlation math around that. Higher energy prices, and that type of uncertainty drives stronger revenue in that.

Speaker #4: So it has to be an element of the contribution. We saw there for sure.

Jeff Schellenberg: It has to be an element of the contribution we saw there for sure.

Speaker #3: Got it. Okay. I'll pass the line for now. Thank you.

Kyle McPhee: Got it. Okay, I'll pass along for now. Thank you.

Speaker #4: Thanks, Phil.

Jeff Schellenberg: Thanks, Scott.

Speaker #2: Thanks, Kyle.

Speaker #1: Thank you. And your next question comes from Russell Stanley of Beacon Securities. Please go ahead; your line is open.

Operator: Thank you. Your next question comes from Russell Stanley of Beacon Securities. Please go ahead. Your line is open.

Speaker #5: Good morning, and thank you for the questions. Maybe first on BFIRE and the integration. Understanding you're just closed it. You noted that the first priority is cross-selling.

Russell Stanley: Good morning, and thank you for the questions. Maybe first on Bfire and the integration. I understand you just disclosed it. You noted that the first priority is cross-selling in Europe and in the UK. I'm wondering if you can elaborate on the other growth opportunities in front of you and rank order them in terms of timing. Can they be pursued more or less in parallel with the initial cross-selling effort, or do you need to do them sequentially just to manage resources?

Speaker #5: And in Europe, in the UK, I'm wondering if you can elaborate on the other growth opportunities in front of you and rank order them in terms of timing.

Speaker #5: Can they be pursued more or less in parallel with the initial cross-selling effort, or do you need to do them sequentially just to manage resources?

Speaker #2: Yeah, as Chris Goodchild speaking here, so I'll take this question. I think it's a matter of prioritization. Obviously, we want to focus on levers that can have some immediate near-term impact.

Chris Goodchild: Yes. It's Chris Goodchild speaking here, so I'll take this question. I think it's a matter of prioritization. Obviously, we want to focus on levers that can have some immediate near-term impact. When you have a regulated product like we do, being able to cross-sell within regions that share those regulations help us accelerate those synergies. We're primarily focused on introducing products of ACR into Belgium and France markets that Bfire represent, and inversely, some of the Bfire products into the UK. In parallel, we are working on a product strategy and go-to-market strategy that would bring Bfire product over into the North American market. It will be a longer period of time. There is some product redesign that's required and revalidation and testing before we'd be able to introduce that.

Speaker #2: And when you have a regulated product like we do, being able to cross-sell within regions that share those regulations helps us accelerate those synergies.

Speaker #2: So we're primarily focused on introducing products of ACR into Belgium and France markets that BFIRE represent, and inversely, some of the BFIRE products into the UK.

Speaker #2: In parallel, we are working on a product strategy and go-to-market strategy that would bring the BFIRE product over into the North American market. But it will be a longer period of time—there is some product redesign that's required, and revalidation and testing before we would be able to introduce that.

Speaker #4: Yeah. And that's a really a function of a very different regulatory environment, including the test measures are totally different between North America and Europe, and that's what drives the required redesign.

Jeff Schellenberg: Yeah.

Jeff Schellenberg: That's really a function of a very different regulatory environment, including the test measures are totally different between North America and Europe, and that's what drives the required redesign.

Speaker #5: Got it. Thanks for that, Kyle. That's great. Maybe just a question just on the M&A strategy. BFIRE is your largest to date, I believe.

Russell Stanley: Got it. Thanks for that color. That's great. Maybe just a question just on the M&A strategy. Bfire is your largest to date, I believe. To what extent do the integration needs effectively sideline you perhaps from meaningfully sized acquisitions in the near term? Should we think about your bias perhaps being towards smaller tuck-ins, or could similarly sized targets still be pursued at this point?

Speaker #5: To what extent did the integration needs effectively sideline you perhaps from meaningfully sized acquisitions in the near term? Should we think about your bias perhaps being towards smaller tuck-ins, or similarly sized targets be still be pursued at this point?

Speaker #2: Yeah, no, Russell, it's a great question. I think what I would say about BFIRE is that the acquisition is the strongest entry into the industry, with our strongest performance in our portfolio from a returns perspective.

Chris Goodchild: No, Russ, it's a great question. I think what I would say about Be Fire is that acquisition is into the industry with our strongest performance in our portfolio from a returns perspective. We have good teams in place around that who have specific industry expertise, product expertise, and knowledge that are really instrumental in driving the execution around. And regulatory, I should say, very deep regulatory knowledge and expertise in those sectors as well. They're very hands-on with respect to the inner workings of deploying the resources to set ourselves up to execute on these cross-selling opportunities across these different markets. That's huge. We're supporting them and engaged in that. That does leave us with some additional capacity to take on more acquisitions. I would say, the acquisitions of the size of Be Fire more materially move the needle.

Speaker #2: So we have good teams. In place, around that, who have specific industry expertise, product expertise, and knowledge that are really instrumental in driving the execution around and regulatory, I should say, very deep regulatory knowledge and expertise in those sectors as well.

Speaker #2: So they're very hands-on with respect to the inner workings of deploying the resources to set ourselves up to execute on these cross-market cross-selling opportunities across these different markets.

Speaker #2: So that's huge. We're supporting them and engaged in that, but that does leave us with some additional capacity to take on more acquisitions. And I would say the acquisitions of the size of BFIRE are more materially move the needle.

Speaker #2: And it's yeah, it takes time for that to ramp into our payout ratios as an example, for sure. But I think the benefit over the medium term and then long term with respect to those larger-sized acquisitions is very meaningful.

Chris Goodchild: It takes time for that to ramp into our payout ratio as an example for sure. I think that the benefit over the medium term and then long term with respect to those larger size acquisitions is very meaningful. We continue to look at those sized opportunities. Then within the verticals, I think some of the smaller opportunities are more easily to generate through, I'll call it, non-competitive deal processes as well. As our business leaders in the different spaces traffic in the market and talk to competitors and suppliers and all those types of things, that's often where the source of non-broker-led processes comes from. Those tend to be a little bit smaller as well. Those can be really a good opportunity. We'll continue to look at them as well.

Speaker #2: So we continue to look at those sized opportunities. And then, within the verticals, I think that some of the smaller opportunities are more easily generated through, I'll call it, non-competitive deal processes as well.

Speaker #2: As our business leaders in the different spaces traffic in the market and talk to competitors and suppliers and all those types of things, that's often where the source of non-dealer, non-broker-led processes comes from.

Speaker #2: But those tend to be a little bit smaller as well. So those can be really a good opportunity. So we'll continue to look at them as well.

Speaker #2: So, I think what we're looking at is a mix of both types of deals that you described, but really all focused within the five industry verticals that we're operating in.

Chris Goodchild: I think what we're looking at is a mix of both types of deals that you described. Really all focused within the five industry verticals that we're operating in.

Speaker #5: Got it. Maybe if I can sneak in one more, just on the five verticals. You've been pretty consistent in talking to that. I'm wondering how much variation is there in terms of valuation expectations from targets within each vertical is one vertical categorically more expensive than the others.

Russell Stanley: Got it. Maybe if I can sneak in one more just on the five verticals. You've been pretty consistent in talking to that. I'm wondering how much variation is there in terms of valuation expectations from targets within each vertical? Is one vertical categorically more expensive than the others? Any color there would be great. Thank you.

Speaker #5: Any color there would be great. Thank you.

Speaker #2: Yeah, I think in recent,

Chris Goodchild: I think in recent activity, what we're seeing is probably stronger valuation or higher valuation expectations in the wear parts vertical, which you could develop a thesis around why that is pretty quickly. You have these recurring streams of revenue to typically pretty low CapEx businesses. We're seeing some stronger and more competitive valuation levels in that space that we're operating in. I think, yeah, it definitely does differ by vertical that we're seeing for sure across the different deals we're looking at.

Speaker #4: activity, what we're seeing is probably stronger valuation or higher valuation expectations in the where parts vertical, which you can develop a thesis around why that is pretty quickly.

Speaker #4: You have these reoccurring streams of revenue to typically pretty low capex businesses. So we're seeing some stronger and more competitive valuation levels in that space that we're operating in.

Speaker #4: I think as you look at if you're looking at lumpier, more project type of manufacturing businesses, like businesses producing products that are deployed in more lumpy kind of larger contracts sizes, you're seeing some softness in multiples.

Speaker #4: Right? So I think, yeah, it definitely does differ by vertical that we're seeing for sure across the different deals we're looking at.

Speaker #5: That's great, Kyle. I'll hop back in the Q. Thank you.

Russell Stanley: Thanks, great color. I'll hop back in the queue. Thank you.

Speaker #2: Thanks, Russell.

Chris Goodchild: Yeah, thanks, Ryan.

Speaker #1: Thank you. And your next question comes from Steve Hansen of Raymond James. Please go ahead. Your line is open.

Operator: Thank you. Your next question comes from Steve Hansen of Raymond James. Please go ahead, your line is open.

Speaker #6: Oh, yeah, good morning, guys. Thanks for the time. Jeff, I'm just wondering if you could just maybe dig into or provide a little additional color on some of that pressure you were seeing in the where parts and the extended supply chain and where that sort of deriving from.

Steve Hansen: Oh, yeah. Good morning, guys. Thanks for the time. Jeff, I was just wondering if you could just maybe dig into or provide a little additional color on some of that pressure you were seeing in the wear parts and the extended supply chain and where that's deriving from. Just curious to get a sense for how long that might last and where the ultimate source of the pressure is.

Speaker #6: I'm just curious to get a sense of how long that might last and where the ultimate source of the pressure is.

Speaker #2: Yeah. So I think just with some of the uncertainty as the market was waiting to see what would happen in July with Kuzma, there was definitely some pullback in complete or actual order activity.

Jeff Schellenberg: I think just with some of the uncertainty as the market was waiting to see what would happen in July with CUSMA, there was definitely some pullback in complete or actual order activity. There was a lot of quoting activity, customers were a little bit reticent to pull the trigger on the order. We've seen those orders start to come through now, Jeff mentioned that we do have a higher backlog at this point this year than we did last year. What we're expecting is a bit of softness in Q3 for that cast steel wear parts business, but are seeing some pretty good activity levels into Q4, just based on the long tail on those orders.

Speaker #2: There was a lot of quoting activity, but customers were a little bit reticent to pull the trigger on the order. We've seen those orders start to come through now, and Jeff mentioned that we do have a higher backlog at this point this year than we did last year.

Speaker #2: And so what we're expecting is a bit of softness in Q3 for that cast steel where parts business, but are seeing some pretty good activity levels into Q4 just based on the long tail on those orders.

Speaker #6: Okay, that's helpful. And just on the flip side, Egg was called out as sort of one of the stronger categories. I know IHT has been strong for a fair bit of time now, but I'm just curious if it extends beyond that into the other parts of the platform as well.

Steve Hansen: Okay. That's helpful. Just on the flip side, ag was called out as sort of one of the stronger categories. I know IHT's been strong for a fair bit of time now, just curious if it extends beyond that into the other parts of the platform as well.

Speaker #2: Yeah, I think we saw a fairly material ramp-up in sprayer sales in the quarter here. And that's on the back of some extended work by the team at Slumline to really build and expand and broaden our dealer relationship network.

Jeff Schellenberg: Yeah. I think we saw a fairly material ramp-up in sprayer sales in the quarter here, and that's on the back of some extended work by the team at Slimline to really build, expand, and broaden our dealer relationship network. We now have reestablished a presence in Georgia that had gone pretty quiet for a period of time, as well as in the California market. I think we've definitely strengthened our positioning in the California market, which has always been a source of weakness, which is the largest orchard and vineyard market in North America and the world. A huge market opportunity in that. There's very focused efforts on kind of improving our positioning in that market, and we're seeing some early wins there. That's really what's been driving.

Speaker #2: We now have re-established a presence in Georgia that had gone pretty quiet for a period of time, as well as in the California market.

Speaker #2: I think we've definitely strengthened our positioning in the California market, which has always been a source of weakness, which is the largest orchard and vineyard market in North America and the world.

Speaker #2: So, a huge market opportunity in that, and so there are very focused efforts on improving our positioning in that market. We're seeing some early wins there.

Speaker #2: And so that's really what's been driving, I think. I would say the Pacific Northwest market has continued to be a real challenge, which has been historically the biggest driver of activity for Slimline in the sprayer business.

Jeff Schellenberg: I think that I would say the Pacific Northwest market has continued to be a real challenge, which has been historically the biggest driver of activity for Slimline in the sprayer business. That's on the back of some oversupply in the apple market, some regulatory and trade related issues in the apple market as well. The slowdown, I would say, in deployment of some of the government support resources in BC that farmers have traditionally used to buy sprayer products in this market. A few factors that on there that impact that business, but really pleased with the progress in some of these markets that are really large orchard and vineyards markets, especially California. That's really important there.

Speaker #2: And that's on the back of some oversupply in the apple market, some regulatory and trade-related issues in the apple market as well. And the slowdown, I would say, in deployment of some of the government support resources in BC that farmers have traditionally used to buy sprayer products in this market.

Speaker #2: And so, there are a few factors that impact that business, but we're really pleased with the progress in some of these markets that are really large orchard and vineyard markets, especially California.

Speaker #2: That's really important there.

Speaker #6: That's very helpful. And just one last one if I may, is just around the energy business. I know there's been some challenges there. Do you think is it the absolute pricing backdrop, the volatility, in the pricing backdrop that's driving things?

Steve Hansen: That's very helpful. Just one last one, if I may, is just around the energy business. I know there's been some challenges there. Do you think it's the absolute pricing backdrop, the volatility in the pricing backdrop that's driving things? Is it a product shift that's happening? Energy prices have been elevated recently, and I know there's been a lot of volatility out there, but I'm just trying to get a sense for where the source of weakness is coming from in the energy spot patch, relative to your product set.

Speaker #6: Is it a product shift that's happening? Energy prices have been elevated recently, and I know it's been a lot of volatility out there, but I'm just trying to get a sense for where the source of weakness is coming from in the energy spot patch.

Speaker #6: Relative to your product set.

Speaker #2: Yeah, I mean, I think with that, the market we operate in is third-party manufacturing like machine product work. And there's a lot of I would say there's overcapacity in that market, which drives a high level of competitiveness.

Jeff Schellenberg: Yeah. I think with that, the market we operate in is third-party manufacturer, like machine product work. I would say there's overcapacity in that market, which drives a high level of competitiveness. It really is just kind of about spindle time, availability of that and what's the cost of that. People in a more capital-intensive space are bidding at rates to keep their machines turning and cash flow supporting the purchase of the assets that they've purchased, right? The competitive nature of that market is a major challenge.

Speaker #2: And really, it's just kind of about spindle time—about the availability of that and what the cost of that is. And people in the more capital-intensive space are bidding out rates to keep their machines turning.

Speaker #2: And cash flow supporting the purchase of the assets that they've purchased, right? So that's the competitive nature of that market is a major challenge.

Speaker #2: I think that's part of the vision around having capital and hawk work more closely together is that we do have a really highly differentiated, high gross margin product that faces less of that kind of competitive threat just from additional capacity with a proprietary product that drives some of our efforts in having those businesses work more closely together.

Jeff Schellenberg: I think that's part of the vision around having Capital I and Hawk work more closely together, is that we do have a really highly differentiated, high gross margin product that faces less of that kind of competitive threat, just from additional capacity with a proprietary product that drives some of our efforts in having those businesses work more closely together. I think that's a big part of it, is kind of the competitiveness and oversupply of the type of service that we offer. I think then there's customer specific stuff, right? Having a large group of customers, it really depends on the demand or take up for their product that drives some of the fluctuation in demand. We've seen some softness, especially from some of Hawk's largest customers who have really pulled back in their activity levels. That's the other.

Speaker #2: But I think that's a big part of it is kind of the competitiveness and oversupply of the type of service that we offer. And then I think then there's customer-specific stuff, right?

Speaker #2: So having a large group of customers, it really depends on the demand or take-up for their product. That drives some of the fluctuation in demand.

Speaker #2: And we've seen some softness, especially from some of Hawk's largest customers, who have really pulled back in their activity levels. And so that's the other—or moved manufacturing, like Jeff said.

Rick Torriero: Moved manufacturing, like Jeff said.

Speaker #6: Yeah, or moved to some of the other competitors. So a combination of those factors is what's driven some of the outcomes in that space.

Jeff Schellenberg: Yeah, moved to some of the other competitors. A combination of those factors is what's driven some of the outcomes in that space, in spite of what you would think with the backdrop of commodity prices would drive higher levels of activity.

Speaker #6: In spite of what you would think, with the backdrop of commodity prices, you would expect higher levels of activity. That's actually very helpful.

Steve Hansen: That's actually very helpful. Thanks, guys.

Speaker #6: Makes sense.

Speaker #2: Yeah. Thanks.

Jeff Schellenberg: Yeah.

Operator: Thank you.

Steve Hansen: Thanks.

Speaker #1: And your next question comes from Eurolink of Canaccord. Please go ahead. Your line is open.

Operator: Your next question comes from Yuriy Lynk of Canaccord. Please go ahead, your line is open.

Speaker #7: Good afternoon, guys.

Yuriy Lynk: Good afternoon, guys.

Speaker #2: Hey, Gary. Hearing.

Rick Torriero: Hey, Gary.

Jeff Schellenberg: Hey, Eireen.

Speaker #7: Hi. Just as I think about trying to model the back half of the year, you had a real strong fourth quarter in the component manufacturing segment.

Yuriy Lynk: Just as I think about trying to model H2, you had a real strong Q4 in the component manufacturing segment. I think there was some belting and mining orders in there. How do we think about the revenue comps in component manufacturing in H2?

Speaker #7: I think there was some belting and mining orders in there. How do we think about how do we think about the revenue comps in component manufacturing in the back half of the year?

Speaker #2: Yeah, there definitely was the impact of that large order that we highlighted in Q4, and then that carried into Q1. That was with the cast steel wear parts business.

Rick Torriero: Yeah, there definitely was the impact of that large order that we highlighted in Q4 and then that carried into Q1, that was with the cast steel wear parts business. That drove some really strong activity in component manufacturing. I think overall for the quarter, we're seeing improved finished product activity that should offset a lot of that. Like I mentioned, Unicast is seeing strong order flow, not a huge order like we saw with that particular order, but is seeing strong order flow for Q4 as well. Overall, I think we should be pretty comparable to what we saw last year, if not better.

Speaker #2: That drove some really strong activity in component manufacturing. I think overall for the quarter, we're seeing improved finished product activity that should offset a lot of that.

Speaker #2: And so, at this point, and like I mentioned, Unicast is seeing strong order flow—not a huge order like we saw with that particular order—but is seeing strong order flow for Q4 as well.

Speaker #2: So overall, I think we should be pretty comparable to what we were before.

Speaker #7: I think the other thing I would mention with respect to the industrial and even energy type of work that we were just talking about is we're also coming through a period of really challenging comps.

Jeff Schellenberg: I think the other thing I would mention with respect to the industrial and even energy type of work that we were just talking about is we're also coming through a period of really challenging comps. The H1 of that year for those products was really strong, right? As we move into a softer comparative period, relative results should see some strengthening around that, just given that factor also.

Speaker #7: The first half of that year for those products was really, really strong, right? So, as we move into a softer comparative period, the relative results should see some strengthening around that, just given that factor also.

Speaker #7: Yeah. Maybe the distribution between Q3 and Q4 won't be as pronounced as it was last year. Would that be a fair statement? While overall being kind of close to last year's back-half performance.

Yuriy Lynk: Yeah. Maybe the distribution between Q3 and Q4 won't be as pronounced as it was last year. Would that be a fair statement? While overall being kind of close to last year's H2 performance?

Speaker #2: Yeah, it'll depend on the timing of some of those approvals we talked about with the EPA as well. If we can get those into Q3, that allows those products to be sold right as heating season starts.

Rick Torriero: Yeah, it'll depend on timing of some of those approvals we talked about with EPA as well.

Yuriy Lynk: Yeah.

Rick Torriero: As to if we can get those into Q3, that allows those products to be sold kind of right as heating season starts. Those sales kind of start in August when we talk about heating season and ramp up through Q4. A lot of that will depend on the timing of those. Yeah.

Speaker #2: So those sales kind of start in August when we talk about heating season. And ramp up through the fourth quarter. So a lot of that will depend on the timing of those.

Speaker #2: But yeah, and I think I think if energy prices continue to remain as high as they are, especially in Europe, I think that it's been a very hot summer in Europe.

Jeff Schellenberg: I think if energy prices continue to remain as high as they are, especially in Europe, it's been a very hot summer in Europe. You don't see a lot of It's not a prime heating appliance buying season in that marketplace, but the continued strength of energy prices in that market could be a real tailwind for that business as well. If those prices remain in place, which signs seem to indicate they might, I think that's very supportive of something that's a bit hard to forecast right now, but traditionally has driven strong results out of those businesses. Now with our European exposure, it kind of amplifies our exposure to that as well.

Speaker #2: You don't see a lot of—it's not a prime heating appliance buying season in that marketplace, but the continued strength of energy prices in that market could be a real tailwind for that business as well.

Speaker #2: And so as if those prices remain in place, which signs seem to indicate they might, I think that's very supportive of something that's a bit hard to forecast right now, but traditionally has driven strong results out of those businesses.

Speaker #2: And now, with our European exposure, it kind of amplifies our exposure to that as well.

Speaker #7: Okay. Some of the efforts and expenses that you've noted about Salesforce and product development and stuff like that, how much of that is targeted to the segments—the industrial segments—that have been struggling a bit and trying to reposition those into different markets? Is a lot of it tied to that, or is this more tied to, say, the finished product segment?

Yuriy Lynk: Okay. Some of the efforts and expenses that you've noted about sales force and product development and stuff like that, how much of that is targeted to the industrial segments that have been struggling a bit and trying to reposition those into different markets? Is a lot of it tied to that, or is this more tied to, say, the finished product segment?

Speaker #2: Yeah, I would say it's kind of across the board. We've seen we've added additional there's been some additions that have been a result of some turnover and secession planning.

Jeff Schellenberg: Yeah, I would say it's kind of across the board. There's been some additions that have been a result of some turnover and succession planning. There's some additions that have been a result of looking to really enhance capability and bring in industry expertise. I would see more of that around in the finished goods area specifically. We've also been focused on adding resources in some of our component manufacturing businesses to ramp up pursuit of new contract work and things of that nature. It is very much across the board. I'm talking of the 12 operating businesses, we've added sales personnel in eight of them, right? Kind of across the board effort, very focused on driving sales growth. You see some of the decently strong, top Q3 ever in terms of our sales production in what typically is a softer seasonal quarter.

Speaker #2: There have been some additions as a result of looking to really enhance capability and bring in industry expertise. I would expect to see more of that, specifically around the finished goods area.

Speaker #2: But we've also been focused on adding resources in some of our component manufacturing businesses to ramp up new contract pursuit of new contract work and things of that nature.

Speaker #2: So it is very much across the board. I'm talking about the twelve operating businesses—we've added sales personnel in eight of them, right?

Speaker #2: So kind of across the board effort, very focused on driving sales growth. And you see some of the at pretty decently strong, it's kind of top three quarter ever in terms of our sales production in what typically is a softer seasonal quarter.

Speaker #2: So I think we're definitely seeing some results out of that, which, as they ramp up and stabilize and kind of get their feet underneath them, we hope to see even more benefit from that.

Jeff Schellenberg: I think we're definitely seeing some results out of that, which as they ramp up and stabilize and kind of get their feet underneath them, we hope to see even more benefit from them.

Speaker #7: Okay. Last one for Rick, just a clarification question. The three times leverage ratio that you're quoting in the MDNA, that's not a pro forma number, right?

Yuriy Lynk: Okay. Last one for Rick, just a clarification question. The 3x leverage ratio that you're quoting in the MD&A, that's not a pro forma number, right? Like if I pro forma Be Fire, I'm getting closer to 2.7, right?

Speaker #7: If I pro forma before, I'm getting closer to 2.7, right? That makes sense.

Rick Torriero: The leverage would include TTM pro forma Be Fire. The payout ratio does not, the leverage ratio does.

Speaker #2: The leverage would include pro forma, would include TTM pro forma, before. The payout ratio does not, but the leverage ratio does.

Speaker #7: Okay. Maybe we'll take that one offline. I'm not getting that number, but...

Yuriy Lynk: Okay. Maybe we'll take that one offline. I'm not getting that number, but-

Speaker #2: Okay.

Rick Torriero: Okay.

Speaker #7: Okay. Thanks, guys.

Yuriy Lynk: Okay. Thanks, guys.

Speaker #2: Thanks, Jerry. Thanks, Jerry.

Rick Torriero: Thanks, Gary.

Jeff Schellenberg: Thanks, Eireen.

Speaker #3: Thank you. And we do have a follow-up question from Kyle McPhee of ATB Cormac. Please go ahead. Your line is open.

Operator: Thank you. We do have a follow-up question from Kyle McPhee of ATB Cormark. Please go ahead, your line is open.

Speaker #4: Hello again. So, a couple of your platforms have been seeing revenue declines the last four quarters. Hawken, Northside—you already talked about Hawken, but on Northside, I think you're now through four quarters of declines that were originally customer-specific for Northside.

Kyle McPhee: Hello again. A couple of your platforms that have been seeing revenue declines the last four quarters, Hawk and Northside. You already talked about Hawk, but on Northside, I think you're now through four quarters of declines that were originally customer-specific for Northside. Is that headwind now all fully lapped and Northside should be back to stable footing in the go-forward quarters or maybe even into growth mode? Just give us some color on that, please.

Speaker #4: Is that headwind now fully lapped, and should Northside be back to stable footing in the go-forward quarters, or maybe even into growth mode?

Speaker #4: Give us some color on that, please.

Speaker #2: Yeah. So we did the lapping is a really good point, Kyle. That we really Northside had a very strong first two quarters of 2025 on the back of kind of ongoing strong demand in the heavy commercial vehicle space.

Jeff Schellenberg: Yeah. The lapping is a really good point, Kyle. Northside had a very strong first two quarters of 2025 on the back of ongoing strong demand in the heavy commercial vehicle space. That softened pretty significantly in Q3 of last year. Yes, we're in a period where we're lapping that. I think this sector seems to be where we're seeing a lot of impact from trade uncertainty with respect to demand for the vehicles, which obviously impacts the demand for the products and components that we supply for that space. It's customer-specific too. We're seeing some stronger demand from certain of our clients in that space. We're seeing some softer demand than we expected from certain clients in that space.

Speaker #2: That softened pretty significantly in Q3 of last year. So yes, we're in a period where we're lapping that. I think this sector, in particular, seems to be where we're seeing a lot of impact from trade uncertainty with respect to demand for the vehicles, which obviously impacts the demand for the products and components that we supply for that space.

Speaker #2: So it's customer-specific, too. We're seeing some stronger demand from certain clients in that space, and we're seeing some softer demand than we expected from other clients in that space.

Speaker #2: So I think the lapping point is key, but I also don't think that we're into significant growth mode at this point in time. Just because of some of those customer-specific factors related to economic volatility and uncertainty that's giving people pause around investing in equipment.

Jeff Schellenberg: I think the lapping point is key, but I also don't think that we're into significant growth mode at this point in time, just because of some of those customer-specific factors related to economic volatility and uncertainty that's giving people pause around investing in equipment. I think that's something we're seeing there. What I would also say is this period actually has coincided with a lot of operational activity there. We've consolidated our facility over this period of time. We're now moved in to our new consolidated facility, which is important. We were operating out of two separate spaces, there's going to be definitely cost benefit associated with that we're going to be able to start seeing. In addition, we are just now about to finalize.

Speaker #2: So I think that's something we're seeing there. What I would also say is this period of customer activity has coincided with a lot of operational activity there.

Speaker #2: We've consolidated our facility over this period of time. We've now moved into our new consolidated facility, which is important. We were operating out of two separate spaces.

Speaker #2: So there's going to be definitely cost benefit associated with that, that we're going to be able to start seeing. And in addition, we are just now about to finalize the move—it hasn't quite been completed yet, but we're in the throes of combining the Procore facility into the Northside facility—which will also, I think, really prove out the ability to enhance the efficiency of that manufacturing process and share resources as demand shifts between different parts of the plant there.

Jeff Schellenberg: The move hasn't quite been completed yet, but we're in the throes of combining the Procore facility into the Northside facility, which will also, I think, really prove out the ability to enhance the efficiency of that manufacturing process, share resources, as demand shifts between different parts of the plant there, and deploy some of the really strong operational expertise the Northside team has in operating processes to enhance efficiency there, while allowing the team there to really focus on driving sales, basically, rather than just having to manage an overall standalone shop. I think that's going to be really beneficial moving forward for those two combined businesses. Actually, we saw a really nice quarter from Procore as well, with some decent profitability coming out of their performance in Q2 too.

Speaker #2: And deploy some of the really strong operational expertise the Northside team has in operating processes to enhance efficiency there, while allowing the team there to really focus on driving sales, basically, rather than just kind of having to manage an overall standalone shop.

Speaker #2: So, I think that's going to be really beneficial, kind of moving forward, for those two combined businesses. And actually, we saw a really nice quarter from Procore as well, with some decent profitability coming out of their performance in Q2, too.

Speaker #2: So I think that's important. And I think this will increase their capacity as we make this move to produce more also. So yeah, I think yeah, I'll stop there.

Jeff Schellenberg: I think that's important, and I think this will increase their capacity as we make this move to produce more also. Yeah, I think I'll stop there. I think that would hopefully cover some of the points in your question there.

Speaker #2: I think that would hopefully cover some of the points in your question or comment. Yeah. And I would just add to Kyle, Northside is a really strong operational team, and the way they onboarded their new customer in 2025 kind of opened the eyes of other manufacturers as well.

Rick Torriero: Yeah. I would just add too, Kyle, Northside has a really strong operational team, and the way they onboarded their new customer in 2025 has opened the eyes of other manufacturers as well. They are pursuing work with other OEMs. It just takes time to land the contracts with these OEMs because they have very integrated supply chains. There is ongoing work to add more customers into that space because of the expertise that we've built there.

Speaker #2: And so they are pursuing work with other OEMs. It just takes time to land the contracts with these OEMs because they have very integrated supply chains but there is ongoing work to add more customers into that space because of the expertise that we've built there.

Speaker #4: Okay, all understood. Appreciate the color. That's it for me.

Kyle McPhee: Okay. All understood. Appreciate it, Kyle. That's it for me.

Speaker #2: Yeah. No problem, Kyle.

Rick Torriero: Yeah, no problem, Kyle.

Speaker #3: Thank you. And we also have a follow-up question from Steve Hansen of Framework James. Please go ahead. Your line is open.

Operator: Thank you. We also have a follow-up question from Steve Hansen of Raymond James. Please go ahead, your line is open.

Speaker #5: Oh, thanks, guys. Just a quick one. I just want to go back to the M&A pipeline. Jeff, you made a few comments earlier. Do you feel like there's an urgency to push ahead with deals in the current backdrop?

Steve Hansen: Thanks. Just a quick one. I just wanted to go back to the M&A pipeline. Jeff, you made a few comments earlier. Do you feel like there's an urgency to push ahead with deals in the current backdrop? My reference is just, of course, the USMCA and all the different volatility that's going on. I mean, do you feel like it's still a good environment to push forward under this current framework, or do you think it's better to wait into next year? How do you feel about the current opportunities and how quickly you can pull the trigger?

Speaker #5: My reference is just, of course, the USMCA and all the different volatility that's going on. I mean, do you feel like it's still a good environment to push forward under this current framework, or do you think it's better to wait until next year?

Speaker #5: How do you feel about the current opportunities and how quickly you can pull the trigger? Thanks.

Speaker #2: Yeah. Yeah. I think if you're looking to add additional cross-border exposure, it's a challenge of time, right? Do you know what your do you know what the environment looks like that you're buying into?

Jeff Schellenberg: Yeah. I think if you're looking to add additional cross-border exposure, it's a challenge of time, right? Do you know what the environment looks like that you're buying into? I think what we would look at, I've mentioned it before, and I'll reiterate the point here. I think where we would be focused on buying is in a Canadian domestic type of supply environment, where we're doing work within the country. I think there's good opportunities there, still at attractive value levels. I think opportunities in the US in our spaces where we can actually add manufacturing capacity or customer relationships in the US is important for us as well, because that can help maybe offset the risk of tariffs for us if we're buying a US-based supplier. Then non-US and non-North American opportunities are probably like a Be Fire that increases our exposure outside of this marketplace.

Speaker #2: So, I think for what we would look at—I kind of mentioned it before, and I'll reiterate the point here—I think where we would be focused on buying is in a Canadian, in a Canadian domestic-type of supply environment, where we're doing work within the country.

Speaker #2: I think there's good opportunities there. It's still an attractive value levels. I think opportunities in the US in our spaces where we can actually add manufacturing capacity or customer relationships in the US is important for us as well because that can help maybe offset the risk of tariffs for us if we're buying a US-based supplier.

Speaker #2: And then on your non-US and non-North American opportunities as well, like Abfire, that increases our exposure outside of this marketplace. So those would be—if I think about kind of the things that we're working on from an M&A perspective—they carry those types of characteristics, which to me means we should press forward, because I think it reduces our, or it doesn't introduce additional, exposure to trade uncertainty.

Jeff Schellenberg: those would be, if I think about the things that we're working on from an M&A perspective, they carry those types of characteristics, which to me means we should press forward, because I think it reduces or it doesn't introduce additional exposure to trade uncertainty. Which I think at this point in time, yeah, it causes a bit of concern if you were going to step into something that had significant cross-border revenue profile.

Speaker #2: Which I think, at this point in time, causes a bit of concern if you were going to step into something that had a significant cross-border revenue profile.

Speaker #5: That's actually super helpful. Appreciate it.

Steve Hansen: That's actually super helpful. Appreciate it.

Speaker #2: Yeah.

Jeff Schellenberg: Yeah.

Speaker #3: Thank you again. If you would like to ask a question, please press star, followed by the number one on your telephone. There are no further questions at this time.

Operator: Thank you again. If you would like to ask a question, please press star followed by the number 1 on your telephone pad. There are no further questions at this time. I would now like to turn the call back over to Jeff Schellenberg for closing comments.

Speaker #3: I would now like to turn the call back over to Jeff Schellenberg for closing comments.

Speaker #2: Yes. Thank you all for attending our Q2 2026 conference call. We continue to believe that decisive business model grounded in the acquisition of profitable, low capital intensity manufacturing businesses who produce low obsolescence products distributed through channels that support reoccurring revenue at disciplined valuation levels.

Jeff Schellenberg: Yes. Thank you all for attending our Q2 2026 conference call. We continue to believe that Decisive's business model, grounded in the acquisition of profitable, low capital intensity manufacturing businesses who produce low obsolescence products distributed through channels that support reoccurring revenue at disciplined valuation levels, supports long-term stewardship and positions the company well for sustained growth and yield performance. We look forward to updating you on our progress continuing into the next quarter and beyond. Thank you very much.

Speaker #2: Supports long-term stewardship and positions the company well for sustained growth and yield performance. We look forward to updating you on our progress as we continue into the next quarter and beyond.

Speaker #2: So thank you very much.

Operator: Ladies and gentlemen, this concludes today's conference. We thank you for participating and ask to please disconnect your lines.

Q2 2026 Decisive Dividend Corp Earnings Call

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