Operator: Thank you for standing by, and welcome to the Mattr Third Quarter 2025 Results Webcast and Conference Call. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Meghan MacEachern, Vice President, Investor Relations, External Communications. Please go ahead.

Meghan MacEachern: Good morning. Before we begin this morning's conference call, I would like to take a moment to remind all listeners that today's call includes forward-looking statements that involve estimates, judgments, risks, and uncertainties that may cause actual results to differ materially from those projected. The complete text of Mattr's statement on forward-looking information is included in Section 4.0 of the third quarter 2025 earnings press release in the MD&A that is available on SEDAR+ and on the company's website at mattr.com. For those joining via webcast, you may follow the visual presentation that accompanies this call. I'll now turn it over to Mattr's President and CEO, Mike Reeves.

Michael Reeves: Good morning, and thank you for attending our third-quarter conference call. Today, Meghan and I are joined by our Senior Vice President of Finance and CFO, Tom Holloway. Q3 was the first full quarter following the conclusion of Mattr's 4-year fundamental transformation, which included the divestiture of 9 businesses, the reshaping of our North American production footprint, and the onboarding of our recently acquired AmerCable business. With these complex strategic activities now complete, the organization is focused on leveraging its high-value portfolio of critical infrastructure products to enable progressively greater free cash generation and profit expansion. During the quarter, Mattr delivered year-over-year revenue growth of 39% and adjusted EBITDA growth of 16%, primarily driven by the addition of AmerCable to our Connection Technologies segment. The company also continued to benefit from strong demand in Composite Technologies, with the segment delivering further progress on key technology development and operational efficiency initiatives during the quarter. Our teams remain nimble, resilient, and cost-conscious in the face of a challenging near-term business environment, and we continue to focus on those variables we can control. Across Mattr, we are consistently prioritizing those actions and investments necessary to enable sustained technical differentiation, production flexibility, and progressively greater operational efficiency. Near-term business performance is likely to be impacted by continued economic weakness in certain key geographies, which we anticipate will incrementally moderate customer buying behavior during the seasonally slow year-end period, particularly in the Canadian, European automotive, and energy extraction markets. As a consequence, we anticipate a typical fourth-quarter lowering of revenue, and adjusted EBITDA will be more pronounced than normal, representing a low point for the year. Consistent with our historical approach to balance sheet management, the company expects to primarily allocate capital to debt repayment in the near term. Tom will have some further comments on capital allocation later. Turning to review the performance of each segment during the recently completed quarter. Connection Technologies delivered year-over-year revenue and adjusted EBITDA growth of 105% and 62%, respectively. Wire and cable revenue moved modestly higher sequentially, with relatively stable AmerCable revenue enhanced by increased Shawflex sales, which set a new quarterly revenue record, accelerating delivery of backlog from its recently relocated manufacturing site and offering an early demonstration of the new location's productive output and efficiency potential. Wire and cable margins moved sequentially lower on a less favorable revenue mix, primarily the result of reduced sales into Canadian mining and global oilfield applications, partially offset by higher sales into data center and utility applications. In early Q3, U.S. tariffs were introduced, which directly impacted the primary copper supply chain at both Shawflex and AmerCable. Moving quickly and creatively, Mattr's wire and cable team rapidly converted this supply chain from tariff to non-tariff sources. Although this conversion led to less favorable payment terms and an associated increase in working capital during the quarter, it avoided tens of millions of dollars in annualized tariff expense. Revenue from the segment's DSG-Canusa business was relatively flat sequentially. The business experienced sequential margin compression, driven primarily by higher freight and tariff expenses as the finished goods inventory proactively built prior to the relocation of the business's North American manufacturing footprint near exhaustion, and output from the new Ohio site required supplementation with internationally produced products. While tariff and economic impacts remain a near-term concern for the segment, our talented teams have demonstrated their ability to mitigate external effects with speed and agility. Our commercial teams continue to offset slowing Canadian mining and industrial and global oilfield activity by successfully capturing additional sales in utility, data center, and international mining markets. In parallel, we continue to closely watch for incremental copper-related tariff announcements, which could impact our business. The company expects fourth quarter revenue and adjusted EBITDA within the segment will move sequentially lower as stronger DSG-Canusa performance, driven by rising production from the Ohio site, is more than offset by significantly lower demand for wire and cable in the Canadian industrial stock and project sectors. These sectors have been hit particularly hard by the contraction of Canada's economy, with broadly lower industrial activity compounded by an aggressive inventory reduction drive from distributors serving the sectors. We anticipate Canadian industrial demand will remain similar to fourth quarter levels for several quarters. Looking past the near-term disruption of tariff-induced headwinds, we maintain our constructive long-term outlook for electrification-driven demand across the segment and are pleased with the progress of our strategic actions intended to improve operational efficiency and enhance exposure to utility, nuclear, global mining, data center, and broader U.S. industrial end markets. Turning to Composite Technologies. The segment's third-quarter revenue and adjusted EBITDA decreased by 4% and 2%, respectively, year-over-year. Flexpipe revenue and adjusted EBITDA moved lower sequentially as underlying oilfield activity levels continued to decline in the face of a depressed oil price. Mostly offsetting this weakness, Flexpipe continued to drive customer adoption of new technology with larger diameter products nearing 50% of North American revenue generation during Q3. This continued share gain enabled Flexpipe to limit year-over-year North American revenue contraction to 3% despite a reduction in well completion activity of 16% during the same period. Productivity expansion from Flexpipe's new Texas site remains on schedule, and the business continues to anticipate the release of additional larger diameter products around the year-end, expanding Flexpipe's addressable market by 50% or more over time. Xerxes's revenue in the third quarter was modestly lower sequentially as lower-than-planned production from new and newly refurbished manufacturing sites during Q2 impacted the volume of tanks available for Q3 shipment. These production constraints continue to improve as workforce proficiency across the Xerxes network rises, with Q3 total tank production rising by over 10% compared to the prior quarter. Customer demand for Xerxe's market-leading solutions remains high, with orders for products serving retail fuel, data center, fire suppression, and broader infrastructure markets exceeding revenue generation throughout the first 3 quarters of the year. At the end of Q3, the Xerxes order backlog stood at a new record high. During the third quarter, Mattr acquired an intermediary, which had historically facilitated the supply of metallic components to the segment. This acquisition secures a multi-decade exclusive supply agreement with the ultimate manufacturer, significantly reducing costs, lowering tariff exposure, enhancing supply chain control, and lowering business risk. The transaction involved minimal integration or onboarding activity and is expected to deliver an after-tax internal rate of return significantly above the company's 20% target. We anticipate segment revenue and adjusted EBITDA will move sequentially lower in the fourth quarter as unfavorable oil prices prevail and the normal holiday season slowing of U.S. onshore activity reduces the shipment of FlexPipe products, while the onset of winter season ground conditions will lower the number of Xerxes tank shipments approaching year-end. Looking beyond the fourth quarter, we believe the Composite Technologies segment is positioned to outperform its markets in the coming years as efficiency and increasing output from its newly established and upgraded Xerxess' facilities, combined with the introduction of new Flexpipe technology, are expected to create significant growth opportunities for the segment in the mid and long term. Tom will now walk us through some additional financial details.

Thomas Holloway: Thanks, Mike. Third quarter's revenue from continuing operations was $314.9 million, 39% higher than the third quarter of 2024, while adjusted EBITDA from continuing operations was $34 million, a 16% increase from the comparative period in the prior year, primarily attributed to the inclusion of AmerCable results in 2025. The Connection Technologies segment delivered a new third-quarter revenue record of $184.2 million, which was 105% higher than the third quarter of 2024, with segment adjusted EBITDA being $7.5 million higher than the prior year. Both outcomes are primarily driven by Amer Cable's results being included within the segment's reported numbers. Despite the higher segment revenue, the sales mix in Amer Cable was less favorable sequentially, and elevated freight and tariff-related costs in the DSG-Canusa business impacted profitability. Composite Technologies segment revenue was $130.7 million, a 4% decrease compared to the third quarter of 2024, while adjusted EBITDA only decreased by 2% over the same time period. This decrease in revenue was primarily attributable to year-over-year declines in North American oilfield well completions, which were partially offset by FlexPipe's larger-diameter technology sales gains. Segment adjusted EBITDA in Q3 2024 included $1.5 million of MEO-related costs that were not present in the current year. Turning to cash flow. Cash provided by operating activities from continuing operations in the third quarter was $6 million. This was heavily impacted by an increased investment in working capital due to a significant shift in the copper supply chain within our wire and cable businesses to mitigate tariff impacts, which resulted in shorter supplier payment terms. This unfavorable change in the working capital cycle was more than offset by the tariff savings achieved. Cash used in investing activities in the third quarter was $33.1 million, which included capital spending on property, plant, and equipment of $14.6 million and the $22.5 million business acquisition discussed previously, partially offset by a receipt of a modest working capital settlement related to the AmerCable acquisition. During the quarter, cash provided from financing activities was $13.2 million, primarily driven by $21.7 million of net borrowings on the company's credit facility, largely related to funding the acquisition. Cash outflows also included the repurchase of 445,000 shares under the company's normal course issuer bid and lease liability payments. At quarter end, the company's net debt to adjusted EBITDA ratio was 3.9x or 2.8x if lease liabilities are excluded. This reflects the impact of higher working capital tied to tariff mitigation, modest borrowings to fund the small Q3 acquisition, and a sequentially lower trailing 12-month adjusted EBITDA. We remain committed to returning to a normal course ratio of 2x or below, and we'll be prioritizing debt reduction in the near term to ensure maximum future balance sheet flexibility. While we anticipate pausing activity under our share repurchase program in the short term, this does not represent a change in long-term strategy. Capital expenditures recognized in the quarter were $14.3 million, with $14.6 million of cash deployed, including $7.8 million of cash outflow tied to capital expenditures previously accrued. Q3 capital expenditures included $10.8 million related to growth projects, primarily associated with new product readiness and production equipment intended to increase manufacturing capability and efficiency within both segments. Full year 2025 capital spending expectations have been revised down to $50 million to $60 million from our previously communicated range of $60 million to $70 million. This is driven by spending reductions and efficiencies and does not represent costs that will move into 2026. We anticipate that 2026 capital spending will be within the company's previously communicated normal run rate range of $40 million to $50 million. I will now turn it back over to Mike.

Michael Reeves: Thank you, Tom. Over the last 3.5 years, we have fundamentally enhanced our ability to efficiently develop and deliver highly differentiated critical infrastructure products from an optimized footprint. Across the matter organization, we are tightly focused on accelerating workforce proficiency and operational efficiency to enable margin and cash flow enhancement. In parallel, we continue to exercise tight spending control, adjusting our cost base as needed to appropriately reflect activity levels. As previously noted, given our current view of likely market conditions and customer demand, we expect our reported business performance in the fourth quarter will be below the third quarter of 2025. Our outlook for 2026 remains cautious, given the impact of ongoing macroeconomic and geopolitical uncertainties experienced during the second half of 2025 and the potential future impact such factors may have on certain markets the company serves. The company remains optimistic regarding the benefits of recent investments to develop new technology, enhance manufacturing capability, improve operating efficiency, and acquire AmerCable. We also remain optimistic that robust near-term demand for the company's products in U.S. infrastructure applications, including fueling network renewal, water management, data center construction, utility expansion, and mining, will persist for an extended period of time. In parallel, the company is experiencing significant declines in demand for wire and cable in the Canadian industrial and mining sectors. Expects depressed commodity prices to weigh on oilfield sector activity for the foreseeable future, and cannot yet determine the potential for direct tariffs on Canadian-made wire and cable products sold into the U.S. utility market. Consequently, the company will not be providing an outlook for the full year 2026 at this time, but anticipates providing such an outlook when it reports Q4 2025 results. Despite the near-term turbulence associated with macroeconomic and geopolitical uncertainty, we retain high conviction that our differentiated technologies, which support increased generation, movement, and use of electrical power and the ongoing transition to composite materials and fuel and water management applications, provide Mattr with substantial long-term growth and profit expansion opportunities. I'll now turn the call over to the operator and open it up for any questions you may have for me, Tom, or Meghan.

Operator: Certainly. And our first question comes from the line of Tim Monachello from ATB Capital Markets.

Tim Monachello: I just want to try to calibrate the level of change in the outlook across business lines. It sounds like you're taking a more conservative stance around capital allocation, and the outlook has probably become weaken relative to where you thought it was in the last cycle. So, maybe can you talk a little bit about under-absorption trends across the 4 facilities when you expect to hit normalized capacity in each one? And then I guess, the range of growth trajectories that you think you might achieve in each business line in 2026?

Michael Reeves: Yes. I'll certainly address some of that. Obviously, we've been clear that we'll speak more about '26 when we report Q4 results. I think we need a little more time to see how certain things will unfold, but I'll speak more about what those items are. More specifically, in the new facilities, very happy with the progress of the Flexpipe facility in the Dallas area; the Xerxes facility in South Carolina is continuing to ramp up. And the Shawflex facility that relocated within Toronto allowed that business to deliver a new record revenue quarter in Q3. So those 3 sites either are already at or will absolutely be at a normalized level of production as we roll into the first half of 2026. Where we've had more challenges here recently has been the DSG facility in Ohio, which is a relocation of production activity from Canada into the U.S. We faced a number of challenges there, which I spoke about on the last earnings call. And those challenges persisted in the first part of Q3, which led to that facility falling below our expected production output levels and required us to import products made in our German and Chinese facilities to meet North American demand at levels that were above our expectations for the quarter. So we did incur some incremental freight logistics and tariff expenses associated with plugging that gap. The production in that facility has ramped substantially as we go through the tail end of Q3 and into early Q4. It has already surpassed the productive output of the Canadian facility that it replaced. So we are well on the way to being back on track for that facility, and I would expect that we will be at a normalized level of production there in the first half of '26 as originally anticipated. So some short-term pain, but not something that I expect will linger for an extended period of time. I think when we talk about our outlook, really the one thing that has meaningfully changed from our last earnings call to today is the effect of the Canadian economic slowdown on industrial demand for wire and cable in Canada. We have seen that the demand level has dropped quite substantially from the middle of Q3 to today. And I think it's likely to stay at a relatively low level throughout Q4 and probably well into 2026. The underlying industrial demand has absolutely lowered. And our distribution partners are, as you would expect, working hard to reduce their inventories, which further compounds the challenge. So what you'll see from us in the wire and cable space is cost reduction actions that have effectively already been taken and an aggressive reallocation of resources to drive incremental growth of sales of wire and cable products into U.S. utility, data center, and other applications as we attempt to overcome the shortfall in Canadian industrial demand. So I know that doesn't give you everything you've asked for, but hopefully, it gives you enough.

Tim Monachello: And understanding that it's probably difficult from your perspective to have a view on '26, but Q1 is not too far away. There are some seasonal factors that are impacting Q4 on a sequential basis and probably overshadowing some of the absorption improvement that you might see in Q4. So, when you think about margins in Q1 and seasonal trends and filling up those facilities, is it a reasonable expectation to think that margins should improve sequentially in Q4?

Michael Reeves: I think there is a wildcard in there that I cannot tell you the answer to right now, and that is the potential levying of tariffs on Shawflex Canadian-made wire and cable shipped into the U.S. As you may recall, there was an expectation that the U.S. government would make further announcements on its copper-related tariffs on the 28th of October. That date has signed on. There have been no announcements, although that could well be due to the government shutdown. So we are waiting to see if there's something announced there and if that something impacts us. So with that one caveat, we normally see similar degrees of seasonal impact in Q4 and Q1. The businesses that are seasonally affected are largely in the composites business, where ground conditions tend to be a factor in both quarters. So I would say I don't see macro conditions or seasonality being materially different from Q4 to Q1. There are some upside opportunities. There is this tariff thing that we're waiting to see how that settles. And at this point, I think that's about all I can tell you.

Tim Monachello: I guess the one segment where you might see some upside for seasonality would be Flexpipe, just given the exhaust in Q4?

Michael Reeves: Certainly, the potential. I think we also need to see where oil prices move to. They sit in the high 50s today, with some potential that they could move lower. So that obviously is an effect that we need to be thoughtful around. Right now, I would expect activity levels would follow a normal seasonal track, which means we're slower as we go into the holiday season, and then we start to see activity move up as we roll into, let's say, the second half of January. So we'll have to see how the customers respond to oil prices. I doubt there will be a material movement provided oil price stays where it is now.

Tim Monachello: And just on Canadian industrial demand for wire and cable, is that isolated to like lower-margin stock products? Or are you seeing that across some of the higher-margin product lines as well?

Michael Reeves: We've seen it across the industrial sector. So projects and stock products have been impacted very similarly. Obviously, we don't have perfect insight into other suppliers in that space, but we can tell by quoted lead times that I think everybody working in that space is seeing exactly the same effect.

Operator: And our next question comes from the line of Ian Gillies from Stifel.

Ian Gillies: Can you talk a little bit about the margin dynamics in Connection Technologies and Composite Technologies sequentially? Just revenue is reasonably flat, and margins are down. Is it solely due to product mix? Or is there product price inflation? I'm just trying to reconcile that.

Thomas Holloway: Yes. So I mean, I think I'll take the first stab at that. Are you asking Q2 to Q3, Ian? Or are you asking Q3?

Ian Gillies: Yes. Yes, specifically Q2 to Q3.

Thomas Holloway: Yes. I mean I think if we look at Connection Technologies, we had let the market know that we thought AmerCable's margins would be down quarter-over-quarter given the mix, and that played out about how we expected. We saw some good data center orders, which are great. They fill the pipeline, and it's good business, but it's slightly lower margin than some of the oil field or mining activity that we see in that business from time to time. So that played out about how we expected. I think the big wildcard here and the big impact was the DSG business, the Ohio facility. And in Mike's prepared comments and mine, we talked about the fact that because of production struggles in that facility, we have to augment it with German and China production from our other facilities, get that across to North America to meet customer demand, which is great. But the cost of doing that is that we had expedited freight costs and tariffs on those products to get them over here at a much higher level than we anticipated. That we do not anticipate persisting, which is why you will likely see DHT margins move up in Q4. But that's the biggest dynamic that was playing out in that particular Connection Technology space.

Ian Gillies: And then stepping back, looking at the balance sheet, do you feel the need to pursue asset sales or any other discrete financing to plug the balance sheet? Or do you think you can work your way through this?

Thomas Holloway: No. I mean, we feel very confident with our ability to plug our way through this. I mean, our secured net debt covenant ratios are well within range. Obviously, you see the interest coverage ratio getting a little tighter as you get EBITDA shrinking a little, but we feel very confident in our ability to manage through this. The capital allocation pause on the NCIB is really more of let's really focus on that ratio and get it down so that we can be more aggressive in the future with allocating capital in other areas. As I said in my remarks, that is not a long-term change. That is something we're just doing in the short term to make sure that this market dynamic that is causing the macros and therefore, our results to be impacted, doesn't create further issues. So just trying to get in front of that. But we don't see any significant issues or concerns. No asset sales would be required there.

Operator: And our next question comes from the line of Arthur Negorny from RBC.

Arthur Nagorny: I just want to touch on the large-diameter pipes within Flexpipe. I guess that's now at 50% in North America, as you mentioned. I know you've previously outlined that as being the target. But now that we're here, is there any indication that you can get that number maybe above 50%?

Michael Reeves: Yes, absolutely. I think the market continues to evolve. Customers generally are migrating to larger and larger products. And I think what started out three years ago as that business representing about half of our revenue as a potential is now, I think, considerably greater than that. So as we roll forward, I think we would expect that we can continue to grow share with the current large diameter products, and they will likely move to north of 50% of our revenue generation in North America. And then, of course, we will be supplementing that with additional large-diameter variants that we introduced early in the new year, which will open up a substantial new market opportunity that we would expect to grow into over a period of years. So while the underlying market for Flexpipe in North America has obviously been challenging conditions, 16% year-over-year decline in well completion activity, the business has performed extremely well. Our revenue is just barely down year-over-year, entirely due to the success of the sales team capturing incremental share, deploying new technology, which will be enhanced as we roll into 2026. So I think in almost any market environment, Flexpipe is going to be an outperforming business as we roll forward. And if we can see some stabilization of underlying activity levels, then obviously, the business can start to deliver some meaningful growth.

Arthur Nagorny: On Xerxes, I guess, last quarter, you disclosed that you, I guess, had a backlog going into mid-2026. Just curious where that stands now? And separately, could you maybe touch on how demand is trending with data center customers specifically?

Thomas Holloway: Yes. So over the last 12 months, Xerxes has added approximately $100 million to its backlog. The backlog at the end of Q3 stood at an all-time record and represented somewhere north of six months, somewhere a little south of nine months of forward revenue. So the business is facing sustained and growing demand, which we believe will persist for many years to come. Hence, our very strong focus is on enhancing productive output. As I mentioned in the prepared remarks, productive output rose by more than 10% from Q2 to Q3. Obviously, Q4 will be a little slower because of the ground conditions. It limits some of the shipments that we'll see. But the business will exit this year with a productive capacity that is materially above the level that it entered this year, which sets us up for that business to have some strength in 2026 and beyond. Data center demand continues to be very robust. We're able to take incrementally more orders as our very large molding for the tanks that data centers require continues to expand, and that's mostly in the Blythewood facility in South Carolina. So I think Berks is all in all positioned to have good performance as we roll forward. We're still working on operational efficiency. While we've got a new site and a fully refurbished site, we still have 4 sites that have existed for nearly 40 years, with limited investment until recent years. So the opportunities to extract incremental efficiency and production output from those sites are still there, and the teams will be incrementally extracting that as we roll through the next several quarters.

Arthur Nagorny: And then on AmerCable, I know you shared a little bit of color there. It sounds like things are progressing more or less as expected. Would you say that acquisition is still on track with the guidance that you previously laid out, I guess, specifically on the adjusted EBITDA front?

Michael Reeves: Yes, great question. I would say, Arthur, that AmerCable has performed extremely well despite the market challenges in some of the end markets; they've replaced those orders with other orders as we talk about the data center piece. And for the full year, we expect them to perform at or above their initial expectations that we had communicated to the market. So very, very pleased with the execution and the integration process and onboarding process, which is effectively complete at this point.

Arthur Nagorny: And then the last one for me. Is there any way that you can help us with the direct tariff impact, what that looked like across the business this quarter? And maybe what the outlook for that is going forward, given some of the mitigating actions that you've undertaken?

Thomas Holloway: Yes. I think last quarter, we had signaled that we expect it to be roughly $1 million to $2 million per quarter per segment. That's generally in line with our expectations going forward. As I talked about the DSG dynamic going on, there were a little more tariffs in the third quarter than we anticipated. And so there might be a little uptick in that. So if you were to say $1 million to $2 million in the Composites business per quarter, I think that's in the right range. If you were to say maybe on the upper end, closer to that 2 number for the fourth quarter in the Connections segment, and then getting back to normalized, probably 1% to 2% going forward after that. But that's how we see it. And obviously, we're trying to bring that down as much as we can, but that's effectively what we expect.

Michael Reeves: Yes. The other element that's worth noting here is that with the announcement of tariffs on certain copper products that were issued in early August, had we not rewired our supply chain following that announcement, I think we would have been facing an annualized tariff cost on our copper supply chain that could easily have been $50 million a year. So very, very proud of the teams within Shawflex and AmerCable that worked within a matter of weeks to rewire that supply chain. Obviously, we're carrying a little extra net working capital as a consequence of some less favorable payment terms, but that's a small price to pay to avoid up to $50 million of annual tariff costs. So I'd say, broadly speaking, we're doing a very good job of mitigating the direct effects of tariff announcements on the company. Where we are struggling is customer effects from tariffs and knock-on economic impacts, particularly in the Canadian industrial market right now.

Operator: And our next question comes from the line of Michael Tupholme from TD Cowen.

Michael Tupholme: Tom, can you talk about how we should be thinking about changes in noncash working capital in the fourth quarter, as well as any initial thoughts around the 2026 full year for that?

Thomas Holloway: Yes. So, as Mike was just referring to the copper supply chain piece, we did see the third quarter move negatively, almost entirely because of that. And that negative working capital piece was really just that. So our previously discussed trajectory for Q4 should be intact, where Q4 is an unwind quarter. We should see working capital move favorably. Our DSOs are in a good place. We're working to get inventories down, and our DPOs are in a pretty good place. So I would expect the fourth quarter to be a release of working capital as we had signaled before. As we go into next year, our general trend over the course of the quarters is that the first quarter is our worst working capital quarter as we invest working capital for future quarters' orders. The second quarter is trending a little bit better than that. And then the third and fourth quarters generally are more of an unwind quarter this year, being the exception because of that copper supply chain. And just to say, that supply chain has now been adjusted, so we don't anticipate significant moves unfavorably because of that. What we're hopeful about is not committing to this yet, but what we're hopeful to be able to do is actually improve those payment terms and make that a little better over time.

Michael Tupholme: And then some of the commentary around the balance sheet and leverage and pausing buybacks, focusing on debt repayment. How should we be thinking about the evolution of the leverage ratio here, and when you would expect to be getting back within your target range, and then sort of freeing up capital to be deployed to other alternative uses?

Thomas Holloway: Yes. I think if you look at what's happened in '25, I mean, we've had a couple of down quarters as you're noting here, that's what's really impacted our ratios. So the business is still generating good, healthy working capital and cash flows, other than that. As we go into '26, again, as Mike touched on in his commentary, we see the impact of '25 moving into '26. And so we're, therefore, being cautious with the way we're managing the balance sheet. I would tell you that the seasonality in the first quarter will mean the first quarter is a lower quarter over the course of 2026, which is normal. That's what happens in our business every year. So, as you look at our use of cash during that period, we want to put as much as possible into reducing that debt. That's the reason for that change. I think from a trajectory, depending on where the fourth and the first quarter end, you could see that ratio tick up just slightly because of the EBITDA numbers and then start to decline as we move through the course of 2026. Given what we know from the macros now, it's going to take us most, if not all, of '26 to get back to a 2x ratio, and it could take us slightly longer depending how these tariffs impact our customer behaviors and those sorts of things. But as I said previously, we don't see any need to do anything drastic here. We're just taking precautionary measures to make sure we're being proactive, getting that interest down, getting that debt down to ratios that we're comfortable with.

Michael Tupholme: And then just the last one. I don't know if I missed this earlier, but the small acquisition you did, which sounds like it was really to help on the tariff side of things and supply perspective. But can you maybe quickly speak about that, unless you've already covered that, and I can go back and review that. But secondly, like there is mention about the possibility of sort of future acquisitions and being opportunistic? And how do we think about that and when you would have appetite and be potentially looking at something further on the M&A side?

Michael Reeves: Yes. Maybe I'll address the acquisition, and I'll pass to Tom to talk about the future. We have historically purchased metallic components to support the composites business. We don't use a huge volume of them in the big scheme of things, but they are an important component of the supply chain for both Flexpipe and Subsea. We made a number of changes in our supply chain over the course of the last 18 months to lower our reliance on Chinese origin products and migrate that reliance to other lower tariff, lower cost environments. In that process, we were working with an intermediary, which was very helpful. But now as we start to see particularly Flexpipe larger diameter products come to market and the expected consumption of these metallic components rise, we felt it was a good moment to take advantage of an opportunity to acquire the intermediary, simplify the supply chain, enhance our margins, lower the tariff costs that we will have to pay going forward and take some risk out of that. So that's the decision we made midyear, relatively modest acquisition, but one that was strategically important for the Composites segment and will pay back very healthily over the course of the next two, three, four years. So feeling good about that decision. Tom, do you want to speak about M&A?

Thomas Holloway: Yes. On the M&A front, obviously, with pausing the buybacks and putting money into debt, you shouldn't expect us to be active in the M&A space other than filling our pipeline, which we will continue to do because obviously, it takes years to do that sometimes we get good deals on the table. But I would not expect to see anything in '26. Again, we're always opportunistic and looking for things. But from a balance sheet perspective, we really want to get that ratio down and get back into a comfortable level before we are really active again. So likely a pause in '26, again, filling the pipeline, but not doing a deal and closing anything unless something changes materially in the market. I do think you should expect us to try to be active again as we get into '27. Again, things have to go right, but our ratio should be getting into a range at that point where we'd be comfortable looking at something and again, expanding this business.

Operator: And our next question comes from the line of Zachary Evershed from National Bank Capital Markets.

Zachary Evershed: So just continuing on the question about the small acquisition there. Internalizing a supplier obviously comes with a little bit of margin accretion. Do you think that will be noticeable on the P&L?

Michael Reeves: I do. But I think it will take until we are working our way through 2026 before we start to see the full benefits of that. Obviously, there's certain inventory already in our system that predates the acquisition. But as we draw that down and start to see full advantage of the acquisition, we should see it in both Xerxes and Flexpipe margins. And obviously, as Flexpipe becomes an increasingly bigger consumer of these metallic components with larger and larger diameter products and as that revenue stream starts to ramp up, we will see incremental benefit from the acquisition. So maybe low single-digit EBITDA millions of incremental margin in 2026, perhaps a little better than that, but probably in that range. And I think we can get into double digits as we roll into '27.

Zachary Evershed: And then, since we're talking about the larger diameter Flexpipe products, can you speak to your most recent expectations for the sequencing of sales for the addition of those additional large diameter products and the higher [indiscernible] Flexpipe products?

Thomas Holloway: Yes. So I think the likely growth path for the new products that we will introduce right around the end of the year is probably going to follow a similar curve to that, that we experienced with the 5-inch and 6-inch products, which were released somewhere in that '21, '22 time frame. So I think we would expect that revenue is, let's say, $10 million or perhaps a little less in 2026, but ramping quite aggressively from there as we roll forward. Obviously, there's substantial demand in the market. We believe that we are well positioned to take that. Obviously, you have to ramp up production. And in many cases, customers will want to try it once and evaluate performance before they try it for a second time. So there will be a gradual roll into the revenue contribution from this one. But nonetheless, the products, I think, are going to prove themselves to be very robust. I think customer pool will be significant. And in 12 months or 18 months from now, we will find that these new products make up a material percentage of the revenue of the business.

Zachary Evershed: And then on Xerxes with a two- to three-quarter backlog, why do ground conditions for installation limit your output? Couldn't you be working with customers on terms around taking ownership so you can just be cranking out tanks during the off-season as well?

Michael Reeves: We did. So the physical installation of tanks, obviously, is impacted by the ground conditions. We produce at full capacity all year long because we, quite frankly, are still not in a position to meet 100% of our customers' demand. So there is no incentive to back away from production at any point in the year. Tanks that we produce during periods where customers can't physically install them will, in most cases, get invoiced upon completion and then will be stored on our own land until the customers can take them. There is a number of accessories that are billed to customers when tanks are shipped to their final installation location. We don't get to charge for those items until we physically ship them. So if you go back and look historically at the revenue of Xerxes and how it was really very seasonal, it is far less seasonal today because we've managed to migrate most of our customers to a bill upon completion agreement. But there's some seasonality because not every customer has agreed to allow a bill upon completion. And if we don't ship a tank, we don't get the bill for the accessories. So that's why you see some modest but still noticeable seasonality in that business.

Zachary Evershed: And then, I guess if we set the potential for incremental tariffs aside, do you think you're being overly negative in your outlook here?

Michael Reeves: Try not to be overly negative. I think we are trying to be realistic, given what we have seen unfold over the last 2 quarters. It takes time for tariffs to work their way through supply chains and all the way to customers, and ultimately have an effect on customer behavior. And we are seeing now the effect of tariffs that were implemented in the first half of the year on the Canadian industrial market. We've seen Canadian economic activity slow, actually turn negative in Q2. And we are seeing the effects on the industrial infrastructure in Canada. So that is the biggest area where I am cautious looking into 2025. There's some element of the slowing in industrial demand in Q4 that is related to distributors lowering their inventories. How long it will take them to get to a point where their inventories are in balance is not yet clear. Whether we will see any positive impact from the recently announced Canadian federal budget and the investments into capital projects is also not yet clear. If we see federal dollars start to stimulate industrial activity at some point in 2026, then obviously, that would pose an upside opportunity. If we see something approaching a return to balance in the oilfield markets and we see oilfield pricing move up, that would present an upside opportunity. I'd say while there are these macro elements that obviously we are keeping a close eye on and are not necessarily favorable for the business, there are also bright spots. We've spoken about Xerxes and the overwhelming demand that business has. I think Xerxes will enter 2026 with lots of opportunities. We talked about Flexpipe's large diameter. We talked about the success that Abberable has had in penetrating the U.S. data center market. We continue to see strong demand from U.S. utilities. We continue to see strong demand for mining outside of Canada, nuclear, and water. There are a lot of areas where we see strong demand and think that will prevail throughout '26. The areas where we are facing some challenges are substantial enough that they are worthy of conversation. So I am trying not to be overly negative or overly positive. Hopefully, we're presenting a balance.

Operator: And our next question is a follow-up from the line of Tim Monachello from ATB Capital Markets.

Tim Monachello: Quick follow-ups. On the freight costs from Europe on DSG, how much that contribute to the margin weakness in Q3 projections?

Thomas Holloway: Yes. I mean, I would say it was an order of magnitude, a couple of million dollars. So you can probably do the math on that. But that's the order of magnitude. And as I said, we don't anticipate that continuing at that level going forward. But yes, that's the impact for the quarter.

Tim Monachello: And then on the intermediary position, I'm just curious, strategically, what prevented you from just going straight to the...

Michael Reeves: So obviously, you have to, I think, be mindful of what experience and skill sets you have in an organization and what you don't have. In this particular case, we were not perfectly positioned to organically execute the establishment of a production footprint and the output of these products in the case of Vietnam. So we chose to work through a party that had that experience, and I'm very pleased that we did. The pace at which we were able to set up that footprint, have access to those products and those costs and those quality levels has been very beneficial over the course of the last 12 to 18 months. So we chose a pathway that we thought would yield the highest value for the business. And at this point, I think that's going to prove to be the case.

Tim Monachello: And does that intermediary have any other customers, or are you the sole customer? Just curious if there's any other revenue that comes out of this acquisition.

Michael Reeves: We did not acquire anything that involved us supplying to a third party. So this is entirely supplied to our own business.

Tim Monachello: And do you get exclusivity?

Michael Reeves: Yes. So we have a multi-decade exclusivity arrangement, which obviously we believe will have that.

Tim Monachello: Is that one of the strategic rationales? Like, are you cornering the market on this component from Vietnam, I guess?

Michael Reeves: So I would describe these components as being proprietary components to us. But in the way we've structured the deal, we can ensure that our competitors don't get similar products from the same source. So I think we have protected ourselves in terms of intellectual property, having a pricing advantage, and, of course, now gaining some tariff advantage as well.

Tim Monachello: And in the event that these tariffs go away, does the accretion of this deal also go away? And does it make sense if there are no tariffs?

Michael Reeves: The accretion does not go away. Obviously, if there are no tariffs anywhere in the world, then the calculation would change a little bit, but the value associated with securing this incremental margin by removing the intermediary and having direct access to the end producer is something that would have made sense regardless of the tariff environment.

Operator: This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Mike Reeves for any further remarks.

Michael Reeves: We appreciate everybody's time and attention here this morning. We look forward to speaking to everybody when we release our Q4 earnings results next year. Have a great rest of the day.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.