Murray Kenneth Mullen: Well, welcome everyone to Mullen Group's Quarterly Conference Call. This morning, we released our second quarter interim report. it is a nice 60 page document full of detailed numbers and analysis. Prepared by our team headed up by Carson Urlacher and Nik Woodworth. So this document contains updated information is available on SEDAR plus and on our website www.mullengroup.com. So I will remind everyone this morning that today's presentation and commentary contain forward looking statements and they are based upon current expectations and are subject to a number of risks and uncertainty as such actual results may differ materially. Further information identifying the risks, uncertainties and assumptions can be found in the disclosure documents. With me this morning, I am joined here in Okotoks by the majority of the senior executive team. Richard J. Maloney is out traveling this morning, so he is not available. I have Carson Urlacher, our Senior Financial Officer. Joanna Kathryn Scott, who is our Senior Corporate Officer and Lee Hellier, who is our Senior Commercial Officer. For today's call, we will follow a similar format as the last few conference calls, all in an effort to make sure that this call is as meaningful and productive for everyone as possible. All prepared remarks by Carson and myself can be found in the second quarter interim report, the financial report and the press release documents. Which were released earlier this morning. We have nothing further to add, so we will head straight to the Q&A session. As I suspect that you will have some interesting questions. Now not only was last quarter 1 of the very best ever for our organization, it appears there are several major projects. that all have a significant logistics component to them. These are actively being contemplated at this time. This bodes very well for the economy and I think it bodes very well for our organization. So I see some of you have already joined the queue. But before I hand it back to the operator, let me just summarize and give you a few opening Let's start with the discussion on the state of the Canadian economy. From what the data tells us and what it told us, the demand for freight and related services suggest the economy is doing reasonably well. Not robust by any stretch but there was just enough economic activity to keep with the markets in balance. And just tighten up that we were able to pass through those credit fuel surcharges that our customers just really they push back, but we were able to pass them through. And you saw that was a pretty big number last quarter. But because these surcharges were so high, it just was not feasible to pass through general price increases. Our customers can only tolerate so much at 1 time. They will come another day when we can negotiate higher general rates. But that was not last quarter. This will happen if and I reiterate if the economy can continue to expand. When it does, we will push through higher rates. Until then, and this is basically what we are doing today is that we will focus on high grading the freight we handle. demarketing low-paying freights. This in itself helps drive margin improvement. Moving on to the S&I segment. Results were okay. But they really were not up last quarter over last year. But this did not bother me too much because there is a lot of momentum building in terms of major capital projects that will fuel this segment to higher revenues and margins in future years. So all good for now. Enough said, operator, would you please open the lines?
Operator: Certainly. We will now begin the question and answer session. Our first question is from Konark Gupta with Scotiabank. Please go ahead.
Konark Gupta: Thanks, operator. Good morning, Murray and team. Great results, of course, and glad to hear you are calling off the fair recession here for 3 years. Maybe just first 1 for me. On the second quarter, yeah, I mean, the second quarter was first quarter where we saw a huge volatility in the fuel price in a long time. And we are still seeing some of that volatility continue into July at this point. June was a little bit better. What have you seen from your business perspective? I mean, you have a very different slide portfolio. Some parts of the business might do well in this environment. Some may not do as well. What have you noticed? How the fuel price or surcharges impacted demand or pricing discussions in different parts of your business?
Murray Kenneth Mullen: I cannot quantify exactly how it is impacted demand. I think that will play itself out over the next bit. Konark, to be honest with you. What we have seen thus far is that it really does not help spur demand. It just reshifts where the demand goes to. So I think basically it hurts the general consumer economy because much of their disposable income has to go to energy related. But I guess maybe that is the reason why the S&I and our Oilfield Services business looks so productive because obviously the world needs more energy if you are going to keep prices in line. So I think that is the beauty of our diversified portfolio. I would suspect the general economy will continue to do okay. But not super good. there is just not enough there is just not enough impetus for a huge increase. So but anything to do with capital projects and what the building in these others, I think they will we are probably in the right space in terms of that So the markets are pretty much in balance from our perspective, but not growing. I do not see it. The growth opportunity is if it is anywhere it is related to capital projects as I said they are required to address this high energy cost environment that we are putting in now. Part of it is risk. there is no doubt the war, and part of it is driven by just increased demand for energy all over the world.
Konark Gupta: Understood. Thanks. And on your CapEx budget, I guess, you guys are increasing it by $50 million And that happens this year, but sounds like that will support your volume or demand growth in 2027. Where is that CapEx incremental CapEx going? And is that in anticipation of some of the contracts that you were bidding on, like Alaska LNG or even a new pipeline that is being contemplated between Alberta and Ontario or something else?
Murray Kenneth Mullen: Yeah. I think the majority of it, Lee Hellier. Lee is on top of this file as much as anybody is that the majority of it that we are allocating is for major projects. And the reason is let's just assume that all the projects that are being planned that some of them start to go Well, the industry short of capital equipment, particularly let's take the Alaska LNG project. There is no capacity in the system right now to be able to execute on that project. Excess capacity in the trucking. So it has to be new at additional assets And we said, look, just to make sure we can execute that contract, we got to make sure we had the equipment So I asked Lee to take a look at it and make sure that we could make sure we were prepared and lo and behold the Class 8 truck market got very tight. So Lee, just want to comment on that, how much it is changed and why we had to move quickly on that front. Yes, Konark, it is Lee. You know, certainly, the classic truck market tightened very, very quickly. A lot of discussion around pre buys for 2027, of course, with the new emissions change coming. So it is our full intention to fully deploy the 85 that we had initially budgeted for. And then to Murray's point, the $50 million directed more towards nation building projects, whether that is here in Canada, or as he stated, possibly the Alaska LNG project. Order board did tighten and as Murray said, we wanted to make sure that we are in a good position that when those projects hit the ground running, that we are in a position to hit the ground running with it. So if you wait, we were fearful that the trucks would not be here in time. So we are in a good position. Konark, these projects are extremely large. Lots of bees involved with them. By that, I mean billions. And but they are extremely complex. there is lots of parties at the table and lots of things. So there is been nothing formally announced, but we are we have to make a call Do we get prepared for them or do we sit and not be prepared? If you are not prepared and it comes your way, cannot execute. So we are taking a measured approach to this. And that is on the assumption that we think they are going to go. The world needs energy. So that is our thesis. And I think the majority of our shareholders will buy that will buy into that strategy that we have employed here. We are going to make sure we are prepared so we can say to the customer we can do it. Do not worry we got you covered. We can execute when it goes. Konark, I will just add that they have been spec so that they can be deployed across many of our business units, not just any 1 in particular. So we make sure that to, if 1 project does or does not go, we can redeploy. Yeah, we have hedged our bets on that to make sure that it is not up all in. We have got options but primarily we are getting ready for the Alaska LNG project. And then if that goes, we are ready. If it does not go, we will redeploy in the rest of our business. that is a good hedge in my book.
Konark Gupta: That makes sense. Thanks. That does it. And back in the queue. Thank you.
Operator: Thank you. The next question is from Benoit Poirier with Desjardins Securities. Please go ahead.
Benoit Poirier: Hey, good morning, gentlemen, and congratulations for the quarter. Just to come back on the previous question about the million dollars increase in CapEx and those nation-building projects? Could you maybe, Murray, give us more color about the timing and the potential revenue contribution that could be coming from this increase in CapEx that we see. The timing is we are deploying the capital, it will be later this year, right?
Murray Kenneth Mullen: The trucks come in. that is correct. So what we had to do already, you had to get ahead to get the build slots So we are we are committing the capital this year any of the revenue that will be generated and what I think what we will do is we will wait to see if we get the contract. If we do, we will press release that and we will say, here's the quantum and here's what we have signed and whatever. So it is premature to talk about how much we are going to do and whatever. All I can tell you is folks, shareholders, investors, we are planning and that is I think we should that is what we are doing. So as soon as we know Benoit, we will press release that out and say, here's what we have signed. Either we got it or we did not get it. If we did not get it, we will redeploy those assets and the rest of our business and that will be our 2027 CapEx.
Benoit Poirier: Okay. And looking at the margin Density, de marketing, lower margin freight, but also cost recovery efforts. So is it fair to believe that this is a sustainable margin going forward for LTL or could we even see greater benefits and more upside from the LTL segment?
Murray Kenneth Mullen: Yes, that is a good comment. Benoit is that, yes, LTL, I think we hit pretty good stride last quarter. And that is a function of as we say, really it is 3 things. Think our business units are generally doing a great job on the cost side. We did get full cost recovery on fuel surcharge that was that helped bring the margin up. And then the third is there is just enough freight in the system, Benoit, that we do not have to take some of that other low paying freight to fill the trucks. We are de marketing because it costs it is just not adding any value. So even though revenues really did not go that much higher the quality of the revenue improved and that is what helped drive our margin improvement. Now if you get any growth in the Canadian economy, any, as the market has tightened that will give us the go sign to maybe raise some prices. Already seeing that happen in The United States. We have not quite seen that happen up here in Canada yet. But hopefully, that happens, but that will probably be a 2027 situation. I do not think that is going to happen later this year. there is too many there is too many headwinds with trade issues and with people just not investing the capital in the general economy at this moment. So it is in pretty good balance. So I think we can maintain that margin. that is our expectation for the balance of the year.
Benoit Poirier: Okay. And maybe last 1 for me in terms of M&A you mentioned some words in the press release around the to look at the tuck-ins and confidence that you could close some by the end of the year. So could you maybe provide some details about the size of those tuck-ins that you are looking at these days the business segments also that you are looking at and whether valuation is still reasonable given seller expectation in the more favorable trucking market? Thanks.
Murray Kenneth Mullen: Yes, I think on the expectation side, it is kind of a tale of 2 worlds here. Clearly, every seller wants to get the best price and every buyer wants to get the lowest price. I mean, that is the game that is played. it is kind of a tale of 2 worlds here. Eastern Canada, it is a little bit better Benoit, but it has improved substantially. So expectations are still reasonable, And truthfully there is a lot of people of our peers that have got their balance sheet stretched, so they are not we will take a look whether we think that those business units fit into our network where we can find synergy. Those are the really the only ones that we are really contemplating at this time. Because we do not think the economy is strong enough to justify just getting a bigger entity. Where we might kind of stretch out is in the S&I segment because we expect that in future years that there could be a lot of activity that what we are telegraphing. So we will continue to look on the S&I side that will give us you got to invest for the next cycle, not for the next week or quarter. So we will be if we do them, that we are optimistic about the future for S&I. The rest of it, it is got to be tuck-in so we can find synergy. Without synergy, we are really not that interested.
Benoit Poirier: Okay. that is great color. Thank you very much.
Murray Kenneth Mullen: I cannot give you the size and which ones we are looking at. But I can tell you we are looking at a number that we do a lot of smaller ones that just are real tuck ins. Joanna, you are working on a number of files on those.
Joanna Kathryn Scott: Those individually or not really that significant. But when you layer them in, I expect it is going to help our margin.
Murray Kenneth Mullen: And that is what I got to keep telling everybody. that is what we are focused on. We are not really focused on the top line. We are focused on how do we improve the margin and we have got to make some smart business decisions on that, put capital to work, so we can get our margin up. We are not comfortable with even though we had a good quarter, of course, we are still focused on how do we keep getting that margin going up. Absolutely. And that is our primary focus, Benoit. Not so much the top line, how do we drive great acquisitions to improve our margin. that is our focus.
Benoit Poirier: that is great. Keep it up. Thank you.
Operator: Thank you. The next question is from Kevin Chiang with CIBC. Please go ahead.
Kevin Chiang: Good morning, Good morning, Murray and team. Thanks for taking my questions this morning. Not to beat a dead horse, again, I will reiterate the congrats on the good quarter here. Maybe if I on the back of Benoit's question on LT margins, just over 20% in Q2, If I look back, even before the pandemic, when you started to disclosing this as a stand alone segment, I think the only other time we saw margins as high, ex-SUS, was back in 2022 when we are kind of a year into, you know, that freight up cycle. It feels like we are in the early innings of this current freight upcycle. You know what mean? Looking at that trend, seemed like you are able to expand margins, let's call it, 200-points, you know, as we kind of work through these the innings of that ballgame. Is there any reason why we should not be able to think of Mullen doing something similar just at a higher base? Like, could this not be a let's say, a low 20s or maybe low to even mid-20 EBITDA margin segment just given where we are starting from here at 20.2% in Q2?
Murray Kenneth Mullen: Carson, I think I think that Kevin is sitting in some of our executive meetings where we talk about that. that is our goal. So I thought the room was bugged. I thought the room was bugging me. You know, I would say to you, this is the-- that is that is a topic that we talk about around our senior executive table. The market is just getting tightened up. That will help support that thesis to get back up 20, and are we doing the right things to get us to 20 of course, I think it is-- we are pretty close on saying we should be able to just meet those targets, right.
Carson Urlacher: Yes, for sure. I would say that you have done your homework, Kevin, when you look back the last 10 years, once we start getting into that 20% margin range on LTL, it is that is kind of a top end that we would have seen over our last decade. I would say that we budgeted at the beginning of the year to come in around 17% for fiscal 26. And I would say that we are we are ahead of that. And I think kind of the trend that we saw in Q2 is kind of consistent into early innings of what we have seen in July so far. Nothing's really changed from that perspective. So I would say that by the end of the year, we are looking at being able to beat what we originally budgeted for back in January.
Murray Kenneth Mullen: Once again, not so much because there is huge growth, Kevin, just that we are we have got all the business units focused take the business that is higher valued freight, higher margin that is how we are going to drive margin. Less lower margin, a little bit higher margin does not mean that we are really increasing the revenue significantly Once again, focus on margin and our business units we are high fiving them. We are saying folks, not only do they listen, they actually executed. And I would once we start that trend, they do not want to go back either. Joe? They want to see high margin because we reward our business units based upon performance and I can tell you they are liking the new performance as much as we are at corporate. So I do not know why we would not keep working towards that. So some of it is gonna be market driven. But a lot of it is going to be because we make some good business decisions.
Kevin Chiang: that is very helpful color. And just my second question, again, maybe following up on some of the previous questions on your M&A pipeline and the increased capital spend here or capital that you have budgeted for. Like if I think back to last year, you divested of your hydro or maybe a little bit more than a year ago. You divested of your hydrovac business, and I think the narrative was you just could not get scale there. So better to redeploy capital into areas that you have a competitive moat or advantage. When you think of, like you said, you are preparing for the next cycle, is it spending capital on areas that you currently already have a strong position in? Is it is it looking at services you do not have a great position in and thinking that the next cycle might give you the opportunity to maybe deepen that expertise. Just trying to get a sense is this doing more of what you do already, or is it part of a maybe, a product or service expansion plan here just given the optimism around a lot of these nation building projects?
Murray Kenneth Mullen: Yes, Yeah, I would say I think our primary focus, we are open to look at everything. When we look if the margins are correct and if we can get the appropriate returns on it. But the best way and our primary focus is building on those verticals that we are already in. So if we can get stronger, bigger, gain market share put new capital to work in those verticals that we have already got a position in, we know them, that is probably the easiest path towards not only growth but higher margin. That will be our primary focus on that. In terms of the CapEx, look, it is really going to be focused on the first is probably going to be pipeline business. Because you have got to build the infrastructure. Before we build the business behind it. So you have got to build the highway before you go put the cars on them. Pipelines. that is all you are doing is you are building the highway for the oil and gas business and that is got to go. So our first objective and the first leg of this uptick is pipelines. We have got to be prepared and what we are seeing in the pipeline business around the world is they have to build new pipelines. And it does not matter whether it is in Alaska, whether it is in Canada, whether it is in The Middle East, in The United States, there is there is going to be a build out of infrastructure over the next bit. that is the first leg of this. And we have got to have the capital for that. And then we will redeploy that capital once the pipelines are built into filling the lines and that is the thesis. So we think we are in a good long term trend here. it is not a 1 and done. Pipeline is a 1 and done. But not the behind to fill the pipelines is not 1 and done. That is where your sustainable business comes in. Long term.
Carson Urlacher: Our diversity as well We do not want to participate in large capital project just on 1 phase of it. Look to be able to participate in every phase of those large capital projects, right from the construction of them to delivering LTL freight to the support staff need to build it. And then like Murray's point, after you get it built, that requires drilling activity. So we can move those assets around quite nicely and that is kind of why we diversified our business model the way we have.
Kevin Chiang: that is super helpful. Thank you for taking my questions. And again, congrats on the good quarter Thank you.
Operator: The next question is from Cameron Doerksen with National Bank. Please go ahead.
Cameron Doerksen: Yes, good morning. I guess, certainly very strong Q2. It sounds like the trends you saw in June have continued into July. So pretty optimistic outlook for the back half of the year. I guess, what is your level of confidence that the original sort of EBITDA guidance that you put out at the beginning of the year, $365 million that you are going to be able to exceed that.
Murray Kenneth Mullen: It sort of sounds like you are trending towards that. Well, I think if you extrapolate from the second quarter, you could probably buy into that thesis. But for us the way that we manage the business and we articulate it, we come out at the first of the year and say, here's what we think, the year is shaping up to look like. And so far it looks like we were pretty close to our thesis and it looks like it is maybe gaining a little momentum because we did say that our numbers that we said early in the year did not including any nation building projects. To the extent that they start to accelerate Cameron, then yes, it is it is a reasonable conclusion to say that we will do better than what we originally published. But look, so far a lot of talk And but I have not seen all the action But the talk is getting louder, and it looks like it is getting closer. So I suspect that the majority of the real momentum that is building is going to carry into 2027. You know what, and we will build our budgets and talk to everybody in October and November timeframe as we get through this quarter to make sure that trend that we started to see happen in the second quarter is maintainable. Lots of moving parts as you know in this economy, But let's make sure that the trend is well entrenched before we get too ahead of ourselves.
Cameron Doerksen: Okay, that is fair enough. Maybe second question just on the Logistics and Warehousing segment it seems to me that maybe that is the segment that would be more positively impacted by some of the regulatory enforcement actions that we are seeing across Canada, which presumably would help pricing. Have you seen any, I guess, evidence that pricing in some of the sort-of truckload businesses are starting to improve? And I guess maybe has your level of confidence increased from the last quarter that we are going to see some pricing improvement there just due to some of this enforcement action?
Murray Kenneth Mullen: I would say that it is so there is different markets. And I cannot just lump it all together, but let's just start with The U.S. The enforcement action in The United States is very aggressive. that is tightened The U.S. market dramatically And you have seen all those reports and you have seen what the public companies are articulating. You have seen a lot of the headlines come out of there. There has been some enforcement in Canada, but not to the same degree as the United States. Period. The Ontario market, Quebec market, it is a little-- it is okay, but it has not tightened enough. And so not much has happened on Ontario. Back West, out here where we have a very strong platform, we are seeing it tighten a little bit more because there is more capital going to work out here. And that is tightening the market a little bit quicker. And we have a pretty sizable market share in Western Canada Cross border, when you are doing cross border actually U.S. rules apply. So that market is tight for drivers because not all Canadian drivers can go to the U.S. and so that is tightened across border market. And that is helped And some of our logistics and warehousing particularly back West is doing better. Back East, it is okay. But it really has not changed a whole bunch yet. Cameron.
Cameron Doerksen: Okay. No, that is helpful. I will pass the line. Thanks very much.
Murray Kenneth Mullen: Thank you. Appreciate it.
Operator: The next question is from Walter Spracklin with RBC Capital Markets. Please go ahead.
Walter Spracklin: Yes, thanks very much. Good morning, everyone. I just want to go back to large project investment. I understand you cannot give us dollar values, but maybe can you give us timing on what are-- are any of them formal RFPs that have announcement dates associated with them and what they are. I know you mentioned Alaska. You know, as mentioned, Alberta data center. Is that is that is that something you are you are bidding on? Or is that just something that you know, if there is services required and those are it is not part of a formal bid. Just curious how that how that is all going to be-- how your outlook is on each 1 of those.
Murray Kenneth Mullen: Yeah. So a lot of-- there is a lot in that. That you just spoke about, and we were on top of it every day. Look, even this month of July, there were 2 announcements already. that pipeline activities are going. And those were in the $1 billion ranges and it is starting to happen already and we are involved in those projects. The elephant in the room is the Alaska LNG project. We are at the final table. We think we are in an excellent position. We have done everything we can. We know that we are 1 of the very few that can do that project. In conjunction with our partner up in Alaska. To be able to execute. But that is a very complex file and it is hung up in the Alaska legislature right now. I have no idea how that is going to play out. But typical of most political situations is kinda kick the can down the road. They do, you know, those kind of things. So not going as fast as what we would anticipated. The issue that is happening is longer they delay that 1, the more it gets closer that we in Canada are getting close to some of the major projects that are on the books in Canada. So those could be doubling up Nothing formalized, but I can tell you we know our market position. We know the teams we have got. And we are 1 of the very few that has the balance sheet to be able to have all the capital committed So we can save the client, we can look after you. So we are doing everything we can to make sure our business units were chosen and we could execute to a high level. So nothing formal. As soon as anything is formalized we will press release it.
Walter Spracklin: Okay. When I look at your Until then Walter, your guess is as good as our guess. Okay. When I look at your plan, when you published it originally, you had Q1 results that were in line with kind of that plan. Would say Q2 now is coming ahead of that plan and you are giving us an outlook now saying that, look, things are looking better in the back half than they did when you made your plan. I know you are keeping your guidance intact. But I think expectations are that I think if you look forward to analysts, estimates for, you know, tomorrow, they are gonna be somewhat higher than your what you would originally planned. What my question is, you know, to the extent that people do not get ahead of their skis, I think what you would you would said is that your revenue your revenue guide of $2.3 billion to $2.4 billion is less about growth and more about better business. So maybe that does not go much higher because you are replacing perhaps or de marketing some of the lower quality business with some better quality business. But if you are doing that, then you know, your EBITDA must be going higher. And just trying to get a sense of, as you look forward on a more optimistic scenario than you did when you first wrote your plan, you know, is this $20 million higher? Yeah. Again, it is something that we do not want to-- do not want to get expectations too high and just wanted to get properly sized when we look at how you are trending for the back half of the year.
Murray Kenneth Mullen: I cannot give you the number because it is I can tell you we are on it looks positive. But, you know, like I said, I think we will certainly we are on target. It looks like the trend is looking more positive. But it really is dependent upon these projects, Walter. If the projects come then yes, clearly we are going to be above what the plan was. Because we did not include in the plans the projects.
Walter Spracklin: there is some Right. But I am talking excluding the projects.
Murray Kenneth Mullen: So the 2.3 the projects, I do not think any growth and we have kind of slowed M&A over the last bit. You know, last quarter, we did maybe 1 or 2 little insignificant little things. But generally, all we did is evaluate opportunities, less. So the growth from acquisitions is nearly over, Carson.
Carson Urlacher: Yeah.
Murray Kenneth Mullen: So do not count on significant revenue growth unless a big project's coming. If a big project is coming, that is incremental and those are very high margin. And acquisitions, we have not done any for a little bit. So Q3 revenue growth will slow. But our margins, we are focused 100% on margin. So reasonable to assume that we are going to continue to focus on maintaining that margin. And if all goes as planned, we expect to improve the margin. So but it is all focused on margin. Margin is cash. that is what and then I think what we are telegraphing to our investors is that look, there is opportunity for us to put cash to work both internal growth which will be high margin and acquisitions as we find the right fits. Nothing's really changed with us, Walter. We continue to stick with our game plan. And away it goes, but I can tell you the opportunities in Western Canada with some of these big projects where the capital is going we are probably as well positioned as anybody.
Walter Spracklin: Makes sense. Okay. Congrats on a great quarter. Thanks, guys.
Murray Kenneth Mullen: Thank you very much. Appreciate it.
Operator: The next question is from Trevor Reynolds with Acumen Capital. Please go ahead.
Trevor: Trevor.
Murray Kenneth Mullen: Hey, guys.
Trevor: Good morning. Most of my stuff has been answered, but just on the S&I side of things, can you guys touch on kind of where you are positioned to get to in S&I relative to kind of where you have been at peak historically? Just with the demarketing and everything you have done over the past number of years?
Murray Kenneth Mullen: Well, that is a tough question.
Carson Urlacher: Yes, I give them all the tough questions. There you go. So, yes, back in our peak, we would be up and around that $900 million revenue mark for the S&I annually for the S&I segment. You know, we are budgeting $450 million for 2026, which is a nice little increase that we have seen over the past 5 years. The trend is definitely more positive than it has been over the last decade. We do not see it as a headwind as we would have 5 years ago. I would say it is more of a tailwind now, but I am apprehensive to say that we would get back to $900 million anytime soon. You are going to need a lot of these nation building projects to take off And further M&A. and further M&A to get back those levels for sure. But the trend is definitely more of a tailwind now than a headwind for sure.
Murray Kenneth Mullen: What I can say, Trevor and I will add to that is that is what we used to do. And it looks like the opportunities are building back towards the way we used to be. And not because of pie in the sky. It looks like the capital is coming back in into these projects. And capital implies growth means we have got to be prepared. That will be both on internal CapEx that we have already started and we can get back to where we were but we probably have to do some M&A to get back up to that $900 million on an annual basis. But it is on our radar that I would say when we sit around our senior team and we talk to the board, that is our objective that is a goal but we got a lot of got a lot of stuff to do to get back to that. But it is a good goal to set. Why not? We have done it before. Just give us the opportunity I tell you we will be in as good a position as anybody to get back.
Trevor: Great. And then, just on Alaska, and your investment in 100 trucks there, does that satisfy basically what you think your requirement is to participate in that, or will there be further investments if, you know, if you guys get the deal?
Murray Kenneth Mullen: It depends on the size of the award. And we think the-- we have taken the first initial step to make sure we could meet the minimum threshold. But it depends on the actual size of the award when the when the formal bid comes out. But it could be significantly higher. Depends on the size of the bid. We have kind of just pegged it at middle of the ground. So we can we can execute But we will not sign a contract. I have told the team, we will not sign a contract unless I know and comfortable that we can execute to a high level. Otherwise it is not worth it. So we have picked the middle of the road on this. And we will leave it up to the customer to tell us how much they want to give us. that is up to them.
Trevor: Got it. And then in terms of the kind of the overall dollar value of the Alaska project, what does the staging and the transport of the pipe kind of represent in your view? Of that overall.
Murray Kenneth Mullen: Of that project is somewhere between oh, boy. it is between $250 million and $500 million, and that is total. And remember, we have got a partner. So a partnership means 50-50. So it is somewhere between over a 2-year period, somewhere between US$250 million and US$500 million that is a pretty big range, but all you can do is position yourself to be chosen by the customer. But it is up to the customer how they want to how they are going to allocate it. But the minimum we will do if that project goes is around $250 million that is the minimum.
Trevor: Great. And then just on Alaska being included with U. S. 3PL, is that just for simplification of accounting, I am guessing?
Carson Urlacher: No, I think the rationale behind that Trevor, is that we want to keep U. S.-based business in The U. S. 3PL segment. So whether we kind of rebrand that a little bit because right now, we call it asset light Obviously, the Alaska LNG project would not be asset light. But I think our main focus and our original thought is U. S.-based business stays in The U. S. 3PL segment.
Murray Kenneth Mullen: Correct.
Trevor: That answers my questions. Thanks, guys.
Murray Kenneth Mullen: Thank you.
Operator: Thank you. The next question is from Tim James with TD Cowen. Please go ahead.
Tim James: Thanks very much. Good morning, everyone. First question is returning to LTL and I think you as much as said that, that business is running ahead of budget for the year. And then we were talking about kind of the margin potential. Looking beyond 2026, what whatever we end up wherever you end up for 20% in terms of EBITDA margin, would it be unreasonable to assume that there is more upside then to that number as the economy improves? You know, major projects pick up that I assume kind of incrementally help LTL? So we do not want to sort of take 2026, and if this, you know, replicates your historically high margin for LTL, say, okay. that is it. Is it reasonable to assume there is more upside beyond that, or are there some headwinds maybe that will prevent that from happening?
Murray Kenneth Mullen: I 100% agree with that thesis. Is to the extent that the Canadian economy grows from its current level, we will continue to have the opportunity to grow expansion both through execution and through pricing leverage. So you get any pricing leverage whatsoever Tim, I would tell you the margin goes up. And it would go up So we have got excellent, excellent companies. We continue to build out and help them with their capacity on facilities, Lee, to make sure that they can they can handle increased business as smaller competitors have a difficult time keeping up with us because we have such a coverage And honestly our business units are just really working hard on technology front. Those are tough to replicate. Yes, others can drive a truck but boy it is technology, process improvement, making sure you are going to get the right facilities, that gives you a really good And then if you get pricing leverage on top, easy to see how margin can go up. Okay, that is helpful.
Tim James: My second question, Murray, I am just interested you have shown here an incremental confidence that nation building projects are going to move forward. Is that additional confidence a function of something that is surprising you? Or is it really just the fact that the government is taking the necessary steps, the steps they said they would? Time is passing, and they are doing what they said? Or is it because you have been surprised by something?
Murray Kenneth Mullen: Well, I think I am pleasantly surprised that from what we are seeing from our elected officials, and their approach to some very complex issues. To get major projects done. So we are taking we have higher level confidence today than we did at the start of the year. there is These are complex files, and they have not been all acted upon yet. But it sure feels like the powers that be, the elected officials understand that to access the world markets or what Canada has a competitive advantage in, which is energy raw materials, minerals, metals, critical minerals. You have to have the infrastructure to be able to get to the world market. And whether that is bigger ports or whether that is pipelines, LNG facilities, new oil sands plants, that all has to be built to access the markets. The markets there Tim you know it as well as I do. Everybody knows the market is begging for Canadian what we have. Get it done, get it to market and Canadians will benefit from that demand. So I think the thesis is correct. But this is Canada. It takes a while to get things approved. You have got a lot of people at the table who all want a piece of the action. That may be the biggest thing that is holding up the projects right now. Who gets what of the project?
Tim James: Okay, that is very helpful.
Murray Kenneth Mullen: Thanks. We are not on those files. I can just it looks more positive than in the first half of the year.
Tim James: Great. Thank you.
Murray Kenneth Mullen: Operator, I think that is it.
Operator: Certainly. I would like to hand the call back over to you, Murray, for any closing remarks.
Murray Kenneth Mullen: Thanks, folks, for joining us. I hope we addressed a number of the issues there and questions that you had. Really good interactive discussion and hopefully that gave everybody a good playbook to go from for the back half of the year. We are 100% focused here as a senior team. Our business units are well positioned. And we are giving them a little bit more capital and we are telling them stay on your game plan: margin first, growth second. Take care. Thank you very much. Enjoy your summer.