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Operator: Thank you for standing by. This is the conference operator. Welcome to the Mullen Group Limited Year-End and Fourth Quarter Earnings Conference Call and Webcast. [Operator Instructions] the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Murray K. Mullen, Chair, Senior Executive Officer and President. Please go ahead.
Murray Mullen: Thank you. Welcome, everyone, to the year-end 2025 conference call. Now this morning, we released our results for 2025, along with the annual financial review and audited financial statements, which is a nice 120-page condensed document that's full of detailed numbers and analysis prepared by our team headed up by Carson Urlacher and Nik Woodworth. So we also uploaded the annual information form. It's a 60-page detailed document relating to Mullen Group. Now these documents contain updated information and are available on SEDAR+ and on our website, www.mullen-group.com. So this morning, I'm going to remind everyone that today's presentation and commentary contain forward-looking statements that are based upon current expectations and are subject to a number of risks and uncertainties. And as such, actual results may differ materially. Further information identifying the risks, uncertainties and assumptions can be found in the disclosure documents. This morning, I'm joined here in Okotoks with the entire senior executive team. I've got Richard Maloney, who is the Senior Operating Officer; Carson Urlacher, Senior Financial Officer; and Joanna Scott, who's our Senior Corporate Officer; and my name is Murray Mullen, I'm the senior Executive Officer. On today's call, I'm going to change things up in an effort to make this call as relevant to you as possible. We are going to head straight to the Q&A session because there's nothing new that we can add about 2025 that you haven't already heard, we haven't discussed or we haven't disclosed. So why repeat what we pre-released on January 19, 2026. Nothing has changed. 2025 was challenging across all four segments, no growth, basically -- which basically meant pricing came under pressure. So what did we do? Well, our business units had no choice but to tighten up. A measure that mitigated the downward pressures that we felt in the market. And at corporate, we completed two acquisitions. The net result was record revenues. And when the economy rebounds, when Canada and the U.S. come together again as friends and business partners and when Canada finally lives up to the nation building commitments, we will achieve record earnings. Okay, enough about '25. Some of you have joined the queue, and I don't want to keep anybody waiting. And besides, I do not like to waste people's time, especially this morning. So operator, let's open the Q&A session, please.
Operator: [Operator Instructions] The first question comes from Cameron Doerksen with National Bank Financial.
Cameron Doerksen: I guess I wanted to ask about the industry dynamics. One of the things you've kind of highlighted both in your 2026 outlook a few weeks ago, but also today is some industry capacity tightening. I wonder if you could talk a little bit more about what you're actually seeing out there in the market? Are you seeing some actual tangible evidence of this happening with the increased enforcement and maybe some financial difficulties with other players? Just any color you can provide on what you're seeing in the marketplace?
Murray Mullen: Yes. Cameron, when we were preparing for this meeting, we thought that might be the question. One of the questions that would come from the analyst community is what is really happening out on the ground today -- and we highlighted that these things have to happen for supply and demand fundamentals to change. So January is really difficult to provide a full measure on, Cameron. First of all, you're coming out of the starting the year and everybody is on a diet of spending diet after spending everything in December. And so January is always a difficult month to judge. Secondly, you had some nasty weather back east that really impacted a lot of business. And so not a good judge. But I don't think we've seen anything up north that would tell us that capacity has tightened in a meaningful way. And we're waiting to see what will happen later. I think March is more of a telling quarter, Cameron, to be honest with you. January is a difficult, difficult month. February is a short month. We would need to see some meaningful recovery in demand in March. I think everybody is saying the same thing. Now let me just pivot for a second because we were down with our holistic folks down in the U.S. and it's a different story down there, Cameron, than up in Canada. There's no doubt capacity is tightening in the U.S. And there's no doubt that they have a stronger demand fundamentals. So we've heard evidence already that there's been some quite a significant change in the spot market pricing, not on contract pricing yet, but on spot market pricing down in the U.S. I haven't seen that in Canada yet. Hopefully, that helps.
Cameron Doerksen: No, that does. I'm just wondering about maybe on the pricing front in Canada. I mean, obviously, still under pressure in fourth quarter, and it sounds like you're not seeing any major change yet. But I mean, I guess, any conversations you're having with some of your customers about what their expectation is for pricing in 2026? I mean, does it feel like it's potentially going to get better? Or are we at this point, sort of thinking that's going to be more flattish?
Murray Mullen: Cameron, I honestly think that everybody is still kind of like the gear and the headlight scenario. We just don't know what to do because there's no clarity. So I'm concerned about that. We can't get anything from our customers. Yes, everybody is just sitting and waiting. We're waiting for something to happen rather than making things happen in this country, and I can understand why. I think everybody knows the -- all the dynamics that are going on. We don't have to beat that one to death. But I can say to you in discussions with our peers and with our customers and whatever, there's more optimism that's going to change. And maybe that's hope by midyear that, that changes. But for right now, it hasn't changed yet. Everybody is still sitting on their hands. So that's in Canada. It is significantly different down in the U.S. market. And of course, most of the data that you -- that we all look at, all of this comes from the U.S. market, all the and everything. But up here, it's still pretty loose up in Canada, Cameron.
Operator: [Operator Instructions] The next question comes from Konark Gupta with Scotiabank.
Konark Gupta: You mentioned, Murray, about the capacity situation in Canada and U.S. I mean, I understand, obviously, U.S. had moved a little bit faster maybe because they also saw the big surgence in capacity over the last few years. So it's a bigger peak and a deeper trough in that sense. But for Canada, like the driving situation seems like the government is trying to address that. I don't know how far they got there. But what's really the stick point in Canada on the capacity side? I mean, like did we not increase capacity so much that we don't have to decrease a lot? Or is it something else?
Murray Mullen: I would think that the U.S. system is it's more geared toward animalistic instincts. I mean they -- if you're not surviving, there's been a lot more bankruptcies down in the U.S. than there has been in Canada. Now I mean, it's a bigger market. So you would expect that there would be more bankruptcies and more consolidation. But it's happening quite regularly and quite frequently in the U.S. that tightening the capacity just because it has been very, very competitive. And there have been a lot of failures down in the U.S. that tightens capacity. At the same time, they're addressing the English proficiency test and some other things that we're not doing -- we're not going to do that in Canada. That's not the way we do it. So I suspect the capacity won't tighten quite as fast in Canada as it will in the U.S. That's my expectation. But you need capacity to tighten to get rates up, Konark. That's just the reality. So is capacity going to tighten because we have a really strong economic growth in Canada? I don't think your firm or any firm that I've seen is predicting huge economic and growth in Canada in 2026. So is it going to tighten on the supply side? We've seen some failure. Not many, but a few, but not like you got in the state. -- they come in and see us and they talk to us when they get into trouble. But we haven't seen enough. I think that capacity -- we need to see a lot of tightening. And if we're waiting for the federal government and the governments to tighten the capacity, I'm not holding my breath on that. from that. But it's going to tighten this year. There's no doubt about it. I can't predict exactly when, but it is going to tighten because it is tough as nails out there on a lot of our competitors.
Konark Gupta: Makes sense. And then on your 2026 outlook that you guys put out last month, I just want to understand how you're parsing out the top line growth drivers there. So I mean, I think you're assuming about, call it, 10% top line growth, give or take, in '26, and I think a good chunk of that, maybe 400 basis points or so is coming from the acquisitions that you have done last year, right? So the remainder, about 6 points of growth this year. Is it more dependent on new M&A or it's a market recovery that you're betting on?
Murray Mullen: Well, Carson, I think, yes. It's -- we've got to do some M&A and on that note, we've already started with that. There's no -- Cameron or Konark, we've said for the last little bit, the only viable way to grow when the economy is not growing until capacity tightens as you got to do acquisitions, which we did last year, I suspect we'll have to do some more in 2026. And guess what, we put the balance sheet in a really good position, Carson, to make sure that we could grow at the corporate level, even though the economy is not giving us anything. And we did a couple already this year. Carson?
Carson Urlacher: Yes, we did. And both of those being in the S&I segment, whereas we were not aggressive with doing acquisitions in the S&I segment in 2025. I think with respect to the guide that we came out with, Konark, that was really based on same-store sales. And if you kind of go division by division or segment by segment, LTLs, we're projecting relatively flat year 2026 versus 2025. Logistics and warehousing is going to be up, and that's really due to the timing of when we acquired Cole and the Cole Group. Specialized, we're showing a little bit of growth going into 2026 versus 2025 for a couple of reasons. You'll see there's a lot of CapEx that we put into that segment in the latter part of 2025 with our Envolve Energy Group to increase the capacity of our disposal facility. In 2026, we're projecting that there's going to be some additional turnaround work that was nonexistent in 2025 that producers basically pushed off our Canadian Dewatering group within the S&I segment, we're also positive with them on mining projects and the like that going into 2026. So those are types of the differences that we're seeing our U.S. 3PL segment, obviously, some growth in there as well, too. And that, again, is due to the timing of the acquisition of Coles. So most of it is growth that we're not seeing from new acquisitions. We've done a couple. We've done some tuck-ins that we -- in verticals that we like with fluid management with our Thrive group and a nice tuck-in in an area that we see is conducive to greater drilling activity going forward.
Murray Mullen: On Thrive, I think investors and shareholders will recall that we we're an investor in thrive. And we completed the rest of that transaction with Brian, Eric and rest of the team and the shareholder group, and they joined our group. So we're now 100% owner of that business. And then in the water management business, primarily tied to some industrial but to the oil and gas sector.
Carson Urlacher: More upstream related.
Murray Mullen: Yes. So we really like -- these folks did a fantastic job of growing that business. That was one of our better private investments that we've ever done. just a great team. In fact, on that note, Brian is going to join our corporate team, and he's going to head up all of our water and fluid initiatives that we've got going on because that is a vertical that we think is investable and has good fundamentals to it. So we want to accelerate our investments in that sector. So we welcome the Thrive team, and we welcome Brian head up those initiatives on behalf of our organization. He's a pure -- he's an entrepreneur because he built it from nothing. So we like -- he joined us, so we're really happy with that. And if you look back at last year, we said, okay, you got to -- the segments that we have, we held our own in LTL. I think we'll hold our own again this year in LTL. L&W acquisitions drove that growth. U.S. 3PL acquisitions drove that growth. In the S&I segment, we didn't do any acquisitions. And guess what? It was tough as nails and it was down. Well, this year, we've already done two acquisitions in S&I. So we know that acquisitions is the way to position for the future. The key to acquisitions is it backfills revenue, as I said. It gives us revenue growth, but you're positioning for the future when it does tighten, when it does turn, when capital nation building projects go to working capital. That's when our shareholders will really benefit and they'll see the wisdom of why we did the acquisitions that we did. So that's coming, but you've got to get ahead of the curve, and we have. And thankfully, we have the balance sheet to do it. So we'll continue to do really thoughtful acquisitions this year, and that will drive our growth. And our business units that we've got our existing 42 up to 44 now. They will be out there, and they're going to grind it out. The -- we're in contact with them all the time. They know what the game plan is for this year until the market gives us a little bit of a better lift. Until then, you just got to grind it out, Konark.
Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Mullen for any closing remarks. Please go ahead.
Murray Mullen: Okay. Thanks, folks for joining us. It was a quick meeting today. But as I said, everybody is -- we've debated the issues for too long. Everybody knows what's going on. We're 100% focused on what we have to do this year, and we look forward to chatting with everybody and giving an update in April as to how the first quarter worked out and how the rest of the year does. Until then, thank you very much for joining us.
Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.