Good day. Thank you for standing by. Welcome to the Badger Infrastructure Solutions 2023 Q2 results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to turn the conference over to your speaker today, Robert Dawson, Chief Financial Officer. Please proceed. Thank you, operator. Good morning, everyone, and welcome to our Q2 2023 earnings call. My name is Rob Dawson, Badger CFO. Joining me on the call this morning is Badger's President and CEO, Rob Blackadar. Badger's 2023 Q2 earnings release, MD&A, and financial statements were released after market close yesterday and are available on the investor section of Badger's website and on SEDAR. We are required to note that some of the statements made today may contain forward-looking information. In fact, all statements made today, which are not statements of historical fact, are considered to be forward-looking statements. We make these forward-looking statements based on certain assumptions that we consider to be reasonable. However, forward-looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them, as actual results may differ materially from those expressed or implied. For more information about material assumptions, risks, and uncertainties that may be relevant to such forward-looking statements, please refer to Badger's 2022 MD&A, along with the 2022 AIF. I will now turn you over to Rob Blackadar. Thanks, Rob, good morning, everyone, and thank you for joining our Q2 earnings call. As always, we would like to start the call with a health and safety update. Our number one focus continues to be on improving our leading safety culture, with a focus on making sure our team and clients make it home safely each and every day. For the last 30 days, most of North America has been under some type of heat advisory. Badger is successfully mitigating this heat stress by having our operators focus on hydration, cooling periods, breaks, and aligning our work hours with the coolest parts of the day. By doing so, we've been able to avoid heat injuries across our employee base, we appreciate our team's efforts to keep everyone safe. Now on to the results. We are pleased with the company's Q2 performance. We continued the momentum coming out of the first quarter with another record revenue quarter of $171.9 million, which was 19.2% higher than last year. We experienced strong utilization and operational performance across the business. We also made meaningful improvements in our year-over-year Adjusted EBITDA, which increased 51% compared to last year. Most operating regions experienced strong revenue and EBITDA growth due to improved utilization, coupled with our new pricing strategy we rolled out near the end of the quarter. Our results show that our investments in the commercial strategy, national accounts program, and operational excellence rolled out last year are working. We continue to be encouraged by the trends in our strong end markets, which is helping to drive our asset utilization. Revenue per truck per month, or RPT, was just over $44,000, up 10% from last year. This was achieved while also adding a net 117 units to our fleet over the last 12 months. This increase is largely driven by improved utilization, resulting from the investment in our sales and marketing resources and the beginning of our focus on pricing realization. Our Red Deer plant manufactured 55 non-destructive excavation units in the quarter versus 21 units in Q2 of 2022, with a total of 112 year to date. We retired 12 units in the quarter and 38 year to date. We ended the quarter with 1,470 non-destructive excavation units, compared to 1,387 at the end of 2022. We are reiterating our 2023 fleet guidance to manufacture between 200-230 units and retire between 80-100 units. As we have previously discussed, we have begun refurbishing select units by replacing key components to extend the useful life of these units by five years and increase the company's return on invested capital. We anticipate to refurbish between 40-50 units in 2023 at an average cost of $150,000 per unit. We've started work already on 14 units during the Q2 and are very pleased with the initial results we've received so far. I'll now turn the call over to Rob Dawson to discuss our financial results. Thanks, Rob. As Rob mentioned, we had another strong revenue quarter, up 19% from last year. Perhaps more importantly, our gross profit and Adjusted EBITDA for the Q2 were up 40% and 50%, respectively, compared to last year, more than double the increase in revenue, reflecting the continued returns of our focus on the commercial strategy, improved truck utilization, and the early results of a focus on pricing initiatives. We are encouraged by the trend in our Adjusted EBITDA margins rising to 23% for the quarter, compared to 18% last year. As we have discussed, our investments in sales and marketing, coupled with our earlier investments in corporate shared service functions, are starting to show the scalability of our business model. On a trailing four-quarter basis, we see record revenue and gross profits, and steadily improving Adjusted EBITDA margins with each sequential trailing four quarters. We generated CAD 0.32 per share in earnings per share in the Q2, which is more than double the same period last year. On to the balance sheet. Our capital allocation priorities are unchanged. We continue to maintain a strong, flexible balance sheet to support our organic growth and commercial strategy. Our compliance leverage was stable at 1.6x, consistent with year-end and down from 2.2x a year ago. This reflects the strong cash flow generation from our base business, funding steady growth, all while maintaining stable relative leverage. Our credit facility remains just over half drawn, providing us with in excess of CAD 134 million in liquidity and financial flexibility to fund both near and long-term growth and complementary capital allocation decisions. Our receivables portfolio remains strong, with over 90% below 90 days outstanding, and again, over 90% of customers having investment-grade characteristics. We continue to focus on customer credit discipline amidst the inflationary interest and credit environment in both Canada and the United States. I will now turn things back over to Rob Blackadar for some final comments. Rob? Thanks, Rob. Before we open it up for questions, a few last thoughts. We are excited for our first full year of operating under our renewed commercial strategy. We've seen positive results in the first half of the year and expect to continue to see strong year-over-year revenue growth. We expect to continue improving our margins by focusing on pricing, utilization, and operating discipline. We believe Badger is uniquely positioned to capitalize on the significant U.S. and Canadian opportunities for non-destructive excavation services in key end markets. Badger's long-term growth prospects remain unchanged. We continue to see strong and growing demand for our services. Our focus on growing and diversifying our customer base and national accounts program is expected to contribute to continued growth in the back half of 2023. With those comments, let's turn it back over to the operator to open it up for Q&A. Operator? Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered or wish to remove yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Yuri Lynk with Canaccord Genuity. Your line is open. Hey, good morning, guys. Hey, good morning, Yuri. Good morning. Nice quarter. Just talk about your gross margins. You know, ultimately, where do you think you can take these on a run rate full year basis? I mean, historically, the company was in that 30%-31% range. Is that kind of the end goal to get back to that on an annualized level, or do you think you can take it higher? Yes, I'll, I'll start, and then I'll let Rob, you know, clean up wherever, whatever I miss. Yes, we're, we're happy with the progress made in, in the gross margin, and how we're performing. We do believe that there's some continued upside. As you know, we've been really making improvements and strides in really, the, our operating discipline and some of our cost control, as well as, you know, investing kind of in the future. Overall, we, we are comfortable with where we are, but we do believe we have continued upside. We don't really give guidance for the back half of the year and, you know, like, Hey, here's exactly where we think the gross margin is gonna be at the end, end of the year, Yuri. We're comfortable that the trend is not a one time or just a one-time performance, but rather how we've, how we've worked on the improvements. We've really done foundational improvements, reducing some cost out of the business, but really just trying to grow as efficiently as we can. We're gonna continue doing that in the back half. Rob, if you want to add anything to that. Yeah, Yuri, I, I think Rob said it. We don't provide specific guidance, particularly not on a quarterly basis. When we do look in the 2018 and 2019 period before COVID, the business was earning, you know, roughly 24%-25% EBITDA margins. We do believe that we are heading back towards that, and we will be getting there certainly over the next, you know, one to two years. We do believe that we can, we can steadily grow through that number as well. In the near term, over the next one to two years, that would certainly be, I think, within our, within our expectations. Yeah. Okay, that makes sense. Last one for me, just on pricing. It sounds like RPT benefited only a little bit from, from price. Hey, your, your, your phone garbled up on our end, but I think you were saying. Okay. I think if I, if I picked up what you were saying, is something about the RPT looks like you benefit more from, i 'm assuming you were saying more from utilization than price. Is that what you were saying? Should we have. His line actually his line disconnected. Okay. I'll address. I think that's what he was saying, or what was really the driver of the RPT improvement. You know, Yuri, if you can hear us, if the call is being recorded, we actually started seeing some pricing lift throughout the quarter. That month of June started to accelerate with a new pricing engine we rolled out, and the team really adopting it and good adoption rate in the field. You're right, majority of that improvement was tied to utilization for this quarter, and we see pricing becoming more and more of part of our performance for the back half of the year and beyond with a new pricing engine. Operator, I'll let you go to the next question. If Yuri dials back in, we can certainly put him back in the queue. Sure thing. One moment for our next question. Our next question comes from Ian Gillies with Stifel. Your line is open. Morning, everyone. Good morning, Ian. With respect, I guess, to the refurb, formally rolling out a refurb plan, can you maybe walk us through what you're doing with the trucks to the point that you're comfortable? Maybe talk a little bit about, are they trucks that are typically towards the end of their useful life, or is it trucks that are in the middle of their useful life? Just to give us a bit of a sense of what's happening with those units. Yeah, sure. The, the quick genesis of the whole refurb program, Ian, was we were looking at all the work ahead of us for the next few years, specifically tied to a lot of the infrastructure spend in the United States and some in Canada. Then we started looking at what our manufacturing capabilities and run, run rate was gonna be, and then what our CapEx burn would be. We looked at all these assets that were at the 10-year mark, and historically, the company had a 10-year life cycle on the trucks. And pretty routinely, right at the 10-year mark, we would start to retire out the 10-year-old trucks and bring in new trucks. And, then we would have some growth trucks baked into it. Once. The way we spec our trucks, Ian, and this has been for a long, long time here at the company, if not from the beginning, but they are heavy spec. Almost, they're not, but they're almost overbuilt type trucks. They're right on the cusp of just a really nice spec-ed, heavy duty truck. A lot of the truck manufacturers, when we sat down with them about 6 months ago, they kept telling us, You know, the trucks have a lot more life in them than just the 10 years. It caused our fleet leader, Lon and, and myself, and I have a, a trucking background, and I was a diesel mechanic a long time ago, to really reevaluate, do we need to get rid of them at the 10 year mark? We did a couple of discussions with some suppliers, vendors, and realized that we only use four things on the truck in a very heavy way, and that's the engines to run the back of the Hydrovac, the transmissions, the transfer cases, or we call them T cases, and the blowers. That's it. Those things are run all day, every day. The rest of the truck is not used in a big way. Those four things are the ones that are the highest wear items on that truck at the end of the 10 years. We thought of what would it take? How long could we extend the use, the useful life of those trucks? How long could they go if we just replaced those four items when it's time or when they need to be replaced? We can replace those items for between, depending on where we are in the country and who's doing it, but $125 to $150. I think in the MD&A, we were talking earlier, we, we have an average of $150, is what our expectation is, and we're seeing that number. For $150,000, you can have all four of those major components new, with a warranty, with a three year warranty on the engine, and we believe we can get an additional five years out of the truck. That truck was on a 10-year depreciation cycle, so it's a no-brainer to say for an additional $150,000 and get an additional five years off of a truck, and it's a good performing truck. A few caveats to it, though, Ian, on the strategy. We really inspect the trucks to make sure they're good candidates. That's why you're not seeing us do it with every single truck. Think of the colder weather markets that have salt, sand, a lot of caustic materials that will eat up the frame of the truck. Those don't make good candidates, because by the time you reframe the truck, you put in a new engine, all that, you might as well buy a new truck. There are several markets that we operate in that don't have rust issues, rust concerns, anything like that, for the frames, and we do a thorough inspection before we flag it as a candidate for the refurb program. That's why you'll notice in my discussion that we said around 40 units this year. It's we're not doing it with all the units that we could be retiring. We're pretty excited about it because we think it's gonna im- improve the return profile. Does that give you some, some more color, Ian? Yeah, it does. That's actually great. I, I actually have two follow-on questions from that, if I may, one for you, Yeah. One for Rob Dawson. The first being, if you were a customer getting one of these refurb trucks or an existing truck in the fleet, is there any discernible difference? The second piece for Rob Dawson is: At some point, is this gonna cause you to take a look at the depreciation policy for those of us that care on earnings? Yeah. I'll, I'll cover the front side of that, and Rob, you, you can hit the backside. On the front side, in baked into that $150,000 is, we actually do, and we learned this from the trucking industry, when you, whenever you repower or refurb a, a over-the-road vehicle, is making sure that the paint job is still solid. If we need to, and, and remember, we have some access to paint facilities as well as our own, but we can sandblast, and either touch-up paint or if we need to repaint something. If we're gonna put a truck out for an additional five years, we wanna make sure it looks really good coming out of the refurb process, and our operators can be proud of taking it to a job, because that's our brand and our image. Then the second thing, we put in a new driver's seat with air ride. It's, it's a very minimal cost for a, a very happy operator to get in. Basically, the refurb truck is like new. All the control, everything's new to him during this refurb policy. It costs a little bit more to do it that way, and that's why we baked it, and we upped that number from $125 to $150 from our initial discussions. The customer sees no discernible difference because you have to remember, we have roughly this morning 1,470 trucks. They're all different ages that can show up on a customer's job site. The most important thing for the customer, though, Ian, is it starts, it runs, it performs, and the customers are happy. That's the quick summary on that, and I'll let you talk about the depreciation. On, on the depreciation, Ian, you know, a new truck, 10 years, depreciated down to residual value, and then refurb a truck, CAD 150,000 over five years. Okay. If you think about the refurb, it's gonna be pretty de minimis in the, in the full picture with 1,400 trucks versus. Yeah. 40 or 50. Yeah. Yeah. Fair enough. Last cleanup for me, CapEx in the quarter was a bit higher than I was anticipating, but absent the refurb program, are your views on CapEx and full year spending relatively unchanged at this point? Yeah, that's right, Ian. You'd see there is some discontinuity quarter to quarter 'cause we do keep some trucks in inventory until they're completed. So there are some trucks, if you, if you follow the unit count, that, that were on the fence line in Red Deer, waiting to be delivered to operations at the end of Q1. Those are all then put out into the field during Q2, so there's, you know, accounts as CapEx in the financial statements for GAAP purposes in the, in the quarter that they get released to operations, but the build occurred in, in Q1. There's some discontinuity between the two. Yeah. You'd see a higher number in Q2, and you would've seen a lower number in Q1. Our plans for the year are unchanged, and our capital expectations, other than that very modest increase from the refurb program, remain the same as, as from the beginning of the year. Perfect. That's what I figured. I just wanted to confirm. I'll turn it back over. Again, Again, ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. Yuri is back on the call. Did you want me to open up his line just to see if he had any, anything further? Sure, sure. All right. One moment. Hey, Yuri, I think I may have answered, when we lost you. You hear me? I think I may have answered the question. Yeah, I, I think maybe you did. I was just asking the, the, on pricing, when you started to raise prices and, and how that's being received by your, by your customers. Yeah. We have been working on pricing really since the turn of the year, and doing it, doing it how Badger's done it historically, which is, you know, on a one-off basis, and not very systematic. We've actually had some pricing improvement, very slight in Q1. In the first couple of months of Q2, you know, pricing was continuing to improve. Obviously, that's our, we're getting into our higher demand part of the season. In June, when we rolled out the pricing engine, it was brand new, and we weren't 100% sure how well it was gonna be received by the field, even though we've done a tremendous amount of training and everything. It was one of the most well-received programs in the company's history. We started seeing a little bit of acceleration in our pricing, specifically the very last month, month of the quarter. We are pretty excited about really having, you know, the full quarters of Q3 and Q4 coming up ahead of us and having that pricing engine in place during the middle of the season. As far as how the customers are receiving it, we, we aren't dramatically taking the pricing up. You know, we're not getting too aggressive, but we're doing incremental pricing, really focusing and tied to utilization and, and, you know, certain statistics on what type of work it is. So far, we haven't gotten a lot of pushback, but I'm also very, very focused on our utilization and the pricing. We don't want to sacrifice a lot of utilization for just trying to chase price. Obviously, pricing is a big opportunity and lever for us. The last thing, Yuri, I'd share with you to give you this context, and sometimes, it's just the way things work out, but this is working out in our favor, is the timing of the pricing engine rollout is happening right as the season was getting ramped up. Obviously, we are into our highest utilized months, and utilization's hitting so hard, so and very strong. It's a good time to roll out the pricing, but we're very cognizant of, you know, making sure that we're not upsetting a bunch of customers, and also making sure we're giving them value for the pricing. That's helpful. Quick last one for Rob Dawson. Before your time, Rob, there was some SG&A guidance out there of CAD 30 million-CAD 35 million a year. Is that still a good number, or you think you might come in closer to CAD 40 million going forward? Thanks. Yeah, I'm not familiar with that $30 million-$35 million. I apologize, Yuri. I, I would say, you know, year to date, we're, we're in line with last year, and I, I thought our expectations would be to remain sort of be holding the line on G&A spending. I think your latter estimate is probably more accurate than $30 million-$35 million. Thanks, guys. Thanks, Yuri. I'm not showing any further questions at this time. I'd like to turn the call back over to Rob Blackad for any closing remarks. Okay, thank you, operator. On behalf of all of us at Badger, thanks to our customers, our employees, suppliers, and our shareholders for your ongoing support that drives Badger's success. Operator, you may end the call. Well, ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.