Hello, Thank you for standing by, and welcome to the Shawcor second quarter 2022 Results Webcast and Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. Please be advised that today's conference may be recorded. I would now like to hand the conference over to your speaker today, Meghan MacEachern, Director of External Communications in ESG. Please go ahead. Good morning. Before we begin this morning's conference call, I'd 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 Shawcor's statement on forward-looking information is included in section 4.0 of the second quarter 2022 earnings press release, and in the MD&A that is available on SEDAR and on the company's website at shawcor.com. For those that have tuned in via webcast, you may follow the visual presentation that accompanies this call. I'll now turn it over to Shawcor's president and CEO, Mike Reeves. Good morning, and thank you for joining Shawcor second quarter conference call. Today, Meghan and I are joined by our CFO, Tom Holloway. Our second quarter saw further progress in the company's strategy of simplifying our portfolio while investing to accelerate growth in less volatile industrial and other critical infrastructure markets. Our industrial and infrastructure-focused businesses continue to benefit from the expansion of global investment in communications, transportation, low emissions energy, and water-related infrastructure. These tailwinds, coupled with strong execution, enabled revenues from businesses serving industrial and infrastructure end markets to contribute 46% of total sales during the second quarter, up from 39% in the prior year quarter. In parallel, our remaining onshore oil field-related businesses experienced higher demand as North American oil and gas operators seek to capitalize on elevated commodity prices, and our offshore pipeline coating and inspection businesses, which are later cycle and have weathered several quarters of low activity, saw sequential quarterly growth, an expansion of backlog, and substantial movement of projects from budgetary to bid status during the quarter. These factors combine to reinforce our belief that a multi-year upcycle is evolving across all of Shawcor primary markets. During the quarter, Shawcor divested of its Global Poly polyethylene pipe production business, which historically formed part of the Composite Systems segment, securing CAD 5.8 million in net proceeds for this business, which contributed CAD 24.4 million of revenue during 2021, with modestly negative adjusted EBITDA. As we position the company to generate maximum stakeholder value in this environment, we also remain committed to our 2030 greenhouse gas emissions reduction goals, continuing to identify and execute opportunities to lower overall energy consumption and improve energy efficiency across the company. I'm very proud of our accomplishments in this space and pleased to report that our total Scope 1 and Scope 2 GHG emissions fell by 11% in 2021 when compared to 2020, and are now 32% below our 2019 baseline after adjusting for business divestitures. We will release our 2021 ESG report during the third quarter, which will provide a more complete update on progress towards our ambitions. Looking a little closer at each of our business segments. Our Composite Systems segment delivered strong operational performance during the quarter, with revenue climbing 40% versus the prior year, and EBITDA margins expanding as North American consumption of spoolable composite pipe and oilfield asset management services continued to rise, and demand for high specification underground storage tanks in the water and retail fuel markets remained robust. In addition to growing overall market demand for spoolable composite pipe, the second quarter saw the company gain market share, onboarding new customers, and benefiting from several historically strong Shawcor customers' elevated activity in the Permian Basin. While Canadian breakup impacts were observed in Q2, favorable weather caused these impacts to be muted when compared to recent years. Shawcor five-inch product line, which was launched in mid-2021, continued to perform well, and shortly after quarter end, the company completed its planned introduction of a six-inch variant. These additional larger diameter offerings expand our addressable market in North America and position the business for continued growth in the coming years. While our highly efficient production footprint is expected to deliver incremental margins as volumes rise. Moving to composite tanks, order intake remains elevated, and we are bullish on both fuel station and stormwater system construction activity in the coming years. While still a relatively modest part of the overall segment, our water-oriented business delivered its strongest half year revenue in history. Thermoset resin availability remained stable during the quarter as our supply chain and technical teams completed final qualification of additional vendors. Entering the second half of 2022, we expect to receive gradually increasing volumes of resin, which will enable greater tank production levels, improve manufacturing efficiency, and begin to lower customer lead times. Our tank backlog remains robust, and while general labor availability and cost escalation present lingering challenges, this business is positioned to gradually increase both revenue and EBITDA margin contribution. Overall, the favorable outlook for Composite Systems primary markets drives our ongoing investment in support of organic growth initiatives across the segment, with a particular focus on technology development, manufacturing efficiency, and capacity enhancement. Turning to the Automotive and Industrial segment, continued growth in Canadian industrial demand, coupled with specific one-time deliveries into communications, nuclear, and aerospace end markets during the quarter, enabled the segment to overcome typical second quarter seasonal impacts, delivering new quarterly revenue and backlog records. Industrial sales continued to represent approximately 70% of total revenue during the second quarter. With global automotive production continuing to face supply chain and other headwinds, our teams are closely engaged with our automotive customer base, ready to quickly respond to either further disruption or an acceleration of demand. We also remain vigilant to the impacts of natural gas supply in Germany and other parts of Western Europe. Overall, we maintain a constructive view of the mid and long-term market trends which impact this business. We will continue to invest growth capital to enhance our product offering and improve our manufacturing capabilities, including the previously announced intent to relocate, expand, and modernize our Toronto production site. A precursor to this relocation was the successful sale and leaseback of our current Toronto footprint, which was completed during the quarter, yielding net proceeds of approximately CAD 49 million. Lastly, our Pipeline and Pipe Services segment saw revenue move upwards from the cyclic low observed during the first quarter of 2022, driven by seasonally higher activity within our Lake Superior Consulting business, continued robust onshore pipe coating work in Canada, and rising offshore pipe coating activity in the Western Hemisphere. Segment EBITDA approached neutral during the quarter and is expected to contribute positively during the second half of 2022 and beyond. We continue to anticipate growth for the PPS segment moving forward, with second half activities substantially higher than the first and a particularly robust fourth quarter as several offshore coating projects currently in backlog, including Scarborough, move into the execution phase. Backlog within the PPS segment grew during Q2 with the capture of several smaller and mid-sized projects, while the segment bid balance rose significantly as multiple projects progressed from budgetary to bid status. A combination of the expected 2022 year-end activity run rate, a substantial backlog, and robustly growing bid balance means this segment now has a very clear pathway to deliver meaningful year-over-year earnings growth in 2023, while increased offshore project quoting driven by increased energy demand support our belief that a multi-year upcycle in offshore pipeline construction and coating activity is now unfolding. Turning to the consolidated 12-month backlog, at the end of Q2, the company's committed backlog of work to be completed within the next 12 months stood at $779 million, an increase of $77 million when compared to the prior quarter. This improvement was the result of substantial order intake across all three reporting segments, with backlog in our Automotive and Industrial segment reaching a new record. Total backlog, including committed work beyond twelve months, also rose in Q2, reaching CAD 859 million versus the prior quarter level of CAD 804 million. Shawcor bid number reflects the value of work where the company has issued a firm price with proposed contract terms against an explicit scope of work with a defined timeline for execution. At the end of Q2, the bid balance was CAD 1.48 billion, an increase of CAD 535 million when compared to the prior quarter, as projects moving from budgetary to bid more than offset movements of projects from bid into backlog. This expansion primarily reflects continued growth in bidding activity for offshore pipeline coating projects as customers move forward with new and previously contemplated projects in the face of elevated commodity prices and growing needs for more efficient movement of natural gas. Included in the bid number is CAD 61 million of conditional awards pending the client's final investment decision, modestly higher than the CAD 56 million reported in the prior quarter. Shawcor's budgetary number, reflecting the value of indicative pricing submitted to allow customers to build a project budget ahead of formal procurement activities, was CAD 1.2 billion at quarter end, down from CAD 1.5 billion in the prior quarter, as new budgetary quoting was more than offset by the movement of several projects from budgetary to bid. While lower sequentially, this still very substantial budgetary number further supports our expectations that pipe coating activity will continue to rise in 2023 and beyond. Tom will now walk through Shawcor second quarter financial highlights. Thanks, Mike. Operational results were stronger than previously expected, particularly in our Automotive and Industrial and Composite Systems segments, attributed to increased demand for composite pipe products and higher margin wire and cabling products. The second quarter's consolidated revenue was CAD 307 million, slightly above the second quarter of 2021. Adjusted EBITDA was CAD 31.5 million, an 11% decrease from prior year second quarter, primarily because of lower pipe coating project activity in our Pipeline and Pipe Services segment, partially offset by the aforementioned strong performance in our other two segments. Consolidated results for the second quarter included non-recurring items outside the company's normal course of business. The current quarter included a gain on sale of land and other of CAD 43 million for the completed sale and leaseback of our Rexdale facility in Toronto and the sale of assets related to the Composite Systems segment Global Poly product line. The current quarter also included impairment charges of CAD 20.3 million after performing evaluations in support of our ongoing strategy of portfolio optimization. Lastly, in the second quarter of 2022, the company recorded CAD 3 million of net restructuring costs as a result of the previously announced early exit from one of our leased facilities in Calgary, the sale of our Global Poly product line, and other cost optimization activities. Turning to segment results. The Composite Systems segment revenue was $135 million, a 40% increase compared to the second quarter of 2021, and adjusted EBITDA was $22.9 million, a 44% increase from the prior year second quarter. These results reflect improved demand for composite pipe from an increase in drilling and completion activities in the Permian Basin in Western Canada, market share gains in the U.S., and continued solid demand in the North American retail fuel and water markets for FRP tanks. Additionally, the segment's improved results also reflect higher activity in the Tubular Management Service Business in Western Canada and a rollout of price increases to help offset the increase in raw material and labor costs in all businesses. Automotive and Industrial segment revenue was CAD 79 million, a 19% increase compared to the second quarter of 2021, and adjusted EBITDA was CAD 16 million, a 49% increase from the prior year second quarter. These results reflect increased shipments and profitability for wire and cable products, continued strong demand for heat shrink tubing products in the North American industrial sector, and a rollout of price increases to help offset the increase in raw material and labor costs. Pipeline and Pipe Services segment revenue was CAD 93 million, a 34% decrease compared to the second quarter of 2021, and adjusted EBITDA was negative CAD 1 million, a 106% decrease from the prior year second quarter. These results reflect lower levels of pipe coating activity in Europe, Middle East and Africa, Latin America, and Asia Pacific, lower demand for girth weld inspection services, and the absence of revenue attributable to the Shawcor Inspection Services business sold in December 2021. Despite the decrease in revenue and adjusted EBITDA, the company's cost reduction and site optimization initiatives have substantially lowered fixed expenses for the segment, which in turn partially offset the lower activity levels in the quarter. Turning to cash flow in the quarter. Cash used in operating activities for the second quarter was CAD 8.8 million, reflecting a CAD 26.1 million investment into working capital, excluding the impacts of restructuring liabilities. This investment into working capital was driven by an increase in accounts receivable from increased activity and timing of billings and collections, an increase in inventories in preparation for higher business activity in the coming quarters and mitigating the potential impact of supply chain interruptions, partially offset by an increase in accounts payable related to higher activity levels and the timing of purchases and payments. The company expects working capital needs to moderate over the remainder of 2022 as our strategic supply chain initiatives allow inventory levels to move closer to historical norms. The company will continue to monitor the market and will continue to invest in working capital as needed to capitalize on revenue growth opportunities throughout the rest of 2022. Cash provided by investing activities in the second quarter was CAD 44.8 million, reflecting CAD 55.4 million in proceeds from the disposal of property, plant, and equipment from the completion of the sale and leaseback of the Rexdale facility and the sale of assets of the Global Poly product line. This was partially offset by CAD 10.5 million of capital expenditures. During the second quarter, cash used in financing activities was CAD 7.8 million, reflecting CAD 7.5 million of lease payments, which included an acceleration of the lease payments to complete the Adria, Italy, facility sale. Net cash provided in the second quarter of 2022 was CAD 30 million. Based on the actions completed, our diversified business, and confidence in our outlook, we expect to generate sufficient cash flows and have continued access to our credit facilities to fund our operations, working capital requirements, and capital programs. As of June 30, 2022, we had a cash balance of CAD 115.8 million, debt of CAD 278.9 million, and CAD 54.7 million of standard letters of credit. Our liquidity position has benefited from the initiatives undertaken since 2020, with continued focus on reducing our operating cost base, as well as repayment of CAD 153.5 million of outstanding net long-term debt since the start of 2021. Overall, the company's net debt has decreased by 53% since the start of 2020, bringing our net debt to adjusted EBITDA to 2.0x at the end of the quarter. The company continues to focus on the repayment of its outstanding credit facility to reduce overall net debt and continues to target a net debt to adjusted EBITDA ratio of 1.5x. Funds generated from the aforementioned sale and leaseback of the Rexdale facility will be used to further lower debt. As mentioned earlier, the company spent CAD 10.5 million in capital expenditure, of which CAD 4.7 million related to growth capital expenditures to increase production capacity in our Automotive and Industrial segments, and improve production processes and equipment in our Composite Systems and Pipeline and Pipe Services segments. On a year-to-date basis, the company has spent CAD 21.1 million on capital expenditures, of which CAD 7.9 million relate to growth capital expenditures. Our capital spending guidance remains unchanged at CAD 40 million-CAD 50 million for the year. We will continue to prioritize capital spend to drive growth in our most differentiated high value materials-based solutions in support of industrial and critical infrastructure end markets. Since the start of 2020, the strategic initiatives I've noted have delivered substantial profit improvement and balance sheet enhancement while lowering emissions. These actions and others that will evolve over the coming quarters are intended to enhance, over time, the company's margin and operating cash flow profile, lower overall volatility, and deliver greater full cycle value to all stakeholders as our market leading technologies enable responsible, sustainable renewal and enhancement of critical infrastructure. I'll now turn it back to Mike for some final comments. Thank you, Tom. In summary, the underlying trends for each of Shawcor primary businesses are favorable and expected to remain so for several years, with particular near-term opportunities in the North American industrial infrastructure and onshore energy markets, and slightly longer term opportunities in the offshore oil and gas pipeline market. In this environment, we remain committed to tightly controlling fixed costs, optimally deploying capital, lowering net debt, and securing full fair value for our differentiated materials-based products and services. Our commitment to enhance over time the company's margin and operating cash flow profile, lower volatility, and deliver greater full cycle value to all stakeholders is paramount, and we will continue to carefully evaluate appropriate options for any element of our current portfolio which distracts from this commitment. Our strategic approach to portfolio management is unchanged. We believe opportunities will exist to make strategic acquisitions that move Shawcor's composites and automotive and industrial segments further up the value chain and improve our ability to enable responsible, sustainable renewal and enhancement of critical infrastructure. With improved financial flexibility, we stand ready to take advantage of those opportunities at the appropriate moment. Despite continued cautiousness regarding the impacts of geopolitical events, COVID-19, supply chain risks, and rising interest rates, we remain very confident our momentum from the first half will continue and that the second half of 2022 will be substantially stronger than the first. I'll now turn the call over to the operator and open it up for any questions you may have for myself, Tom, or Meghan. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Aaron MacNeil with TD Securities. You may proceed. Hey, morning all. Thanks for taking my questions. In the past, you've given some goalposts for forward quarter guidance, and even if you don't wanna throw a specific figure out there, it seems like there's a lot of moving parts, so I'm wondering if you can sort of help us think about, you know, the magnitude of all of those on a sequential basis. Specifically, I'm wondering, you know, what sort of volume growth expectations should we be thinking about in pipe coating? You know, how do the nuances around thermoset resin availability and large diameter composite pipe, you know, impact that segment? You know, what's the magnitude of the modest softening in A&I? I'm sure there's other factors to think about, so maybe I'll just turn it over to you to answer. Thank you, Aaron. Good morning. You, you're right. There's, you know, for an organization that has a fairly broad portfolio of different businesses addressing different subsets of the end markets, there are moving pieces. I think what I generally tell you is that, you know, the comment that I shared towards the end of the prepared statements is certainly one that we stand firmly behind, that the second half will deliver substantially greater earnings than the first. I think, you know, Q3 is likely to be fairly similar to Q2, and then will represent a step above where Q3 is. The variety of moving pieces in Q3 cause it to be in that same ballpark. You're right, we see further movement upwards as we progress from here to year end and beyond in the pipe coating business and its activity levels. We see some normal seasonal activity in places like the Automotive and Industrial business, that will move them slightly down in Q3. Then the resin situation, as you mentioned, is certainly evolving in a favorable way for our composite tanks business and the North American demand for composite pipe is evolving in a favorable way. Those things all combined, lead us to the general direction that I've just you. Okay. That's helpful. You know, in my, for my next question, I can appreciate that you may be reluctant to comment on specific pipe coating projects, but, you know, the question's a factual, so I'm gonna ask it anyway. I'm wondering, you know, if you can comment on what stage the Southeast Gateway pipeline is at, and if this project, you know, represents the large shift from the budgetary bucket to the bid bucket. That's a great question. I appreciate you asking it. You're right. We would never comment on a specific project unless or until we had a client's authorization to do so. What I would say is that on the big scales, the FID announced late last week of the Southeast Gateway pipeline I think is a very, very positive indication that broadly the appetite from customers and from pipeline operators to engage in substantial offshore pipeline construction activity is real and we would expect to see more projects FID roll through what's left of this year and into next year, perhaps not as large as this one. Second, I would say you know the history of Shawcor in support of TC Energy and in support of offshore Mexican pipelines is extremely robust. Our execution of the Sur de Texas project several years ago was very successful, and we're very proud of the capabilities that we have in Mexico, and that despite the changes that have happened in the coating business over the last several years, we have maintained to support projects of this nature. It's too early for us to comment on it specifically, but I would just say, I think our historic performance, our physical presence, our ability to execute very large pipe coating projects positions us very well to compete for the pipe coating aspect of the Southeast Gateway pipeline. More broadly, the increase in the bid balance was the multiple projects moving from budgetary to bid during the quarter, not just a single project. Understood. Maybe one more from me. I guess, can you just update us on how active you'll be going forward on the footprint rationalization and cost optimization measures? It seems like, you know, you keep chipping away at things, and I know in the past you've said something to the effect that the portfolio is a little too broad for a company of your size. So, you know, do you think you've essentially gotten there with kind of the latest announcements, or is there other things that you may work on around the edges? No, I think our work is incomplete. We certainly continue to seek for opportunities to lower the fixed cost base to more effectively optimize where we are physically present, whether that's through, you know, real estate modifications or, you know, evaluation of the portfolio itself and where the businesses fit appropriately, within the Shawcor corporation. No, we are not yet complete with that. Okay. I'll leave it there. Thanks for answering my questions. Thank you. Thank you. One moment for questions. Our next question comes from David Ocampo with Cormark. You may proceed. Thanks. Good morning, everyone. Hey, David. Mike, it's been some time since we've seen what your margin profile looks like, just given all the cost adjustments that you've done in the division. I'm just curious if you can frame, you know, what peak margins look like, what through the cycle margins look like. I imagine what we saw in Q1 is probably bottom of the cycle. Just curious on those and where you think margins are going relative to the cycle in H2. Do you mean specifically in the PPS segment, or do you mean broadly across Shawcor? Oh, sorry. I meant in the Pipeline and Pipe Services division. Yeah. Hey, David, this is Tom. You know, as we see this product line or this segment moving upwards over the course of the year. I think by the end of the year, you could see us in the high single digits, low double digits on a margin perspective and growing from there. Okay. This peak, I mean, I know if you go back, it's kind of in that 20% range. Is that something that we could see in the cycle again, or is that not possible just given all the changes in the industry? Yeah. We don't believe we get the peak this year, so I think is correct. We could absolutely see those margins, you know, if large projects and we get notice to proceed. Okay, that's helpful. Tom, you commented a little bit on the leverage down to 2x from an incredibly high level in the past. How are you guys thinking about capital allocation? I know you talked about some M&A out there to kind of enhance the product lines that you're in. Just curious if that's something more near term where we can expect something, and if nothing gets executed on your end, can Shawcor potentially become a shareholder return story? Good question. I'll refer to the investor deck, and I'll just read what's in there. You know, we're committed to lowering that to 1.5 times or below, and I think by the end of the year, maybe first or second quarter next, depending on how things move. We see a very robust pipeline of organic opportunities in terms which is very appealing for the businesses and as Mike's comments said, you know, it's focused on the less volatile, more stable earnings profile businesses. But there are a few small inorganic M&A type of tuck-in acquisitions you could see us execute on. We do have a pipeline that we're looking at, but nothing at this point. I would just reiterate small tuck-in. We're not looking at large, and on the shareholder side of things, I do think that there is a story there and depending how things progress over the course of the year, there is a potential for you to see us, look to do something there. Okay, that's great. That's my cue. Thanks, David. Okay, that's great. That's my cue. Thanks, David. Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. Our next question comes from Michael Robertson with National Bank Financial. You may proceed. Hey, good morning, all. Thanks for taking my questions and congrats on a solid quarter. Was just wondering if maybe you could provide some more color on the plan with respect to the facility change in Toronto. Good to see you completed the sale and leaseback agreement. Was just wondering, you know, what sort of avenues you guys are considering moving forward there. I know you've got a pretty good window here to make some decisions, but, you know, would you be looking to buy another property, lease something, build a building? Just what are the sort of considerations at play there? Absolutely. Good morning, Michael. The Toronto facility that we completed the sale-leaseback on this most recent quarter, if you've ever visited it, you'll know. Aged is a polite description, but definitely not the layout or the scale that we need to support the growth of this business rolling forward. We have a three-year term on the leaseback, which does have two one-year extensions that could be added if needed, but that is not our intention. Within that three-year timeframe, our intention is to find an appropriate site that will allow the A&I manufacturing activities to grow, to become more efficient, more energy efficient, more operationally efficient, and to have the capacity to support the growth that we envision for the coming decade and beyond. We do not believe the best deployment of our capital is in owning real estate. You will not see us acquire a building. We will enter into an appropriate lease arrangement, whether it is for an existing facility. We will know that answer by the end of this year. Our intended timeline is to have committed ourselves to the next footprint by the end of this year, which will provide two and a half years to complete the work necessary to move with no interruption, all of the activities from the current facility. Got it. That's very helpful color. I appreciate that, Mike. Maybe just a semi-related follow-up. What's your sort of current capacity availability in your facility in Calgary with respect to composite? Composite pipe, you mean? Yes. Yes. The facility in Calgary has since the origination of that product line been our one and only production site for composite spoolable pipe. We have invested over the years to enhance its efficiency and improve its production capacity. We are continuing to do so. We are not production constrained as we sit here today, but are committed to improving the output from that facility as we move through the coming several quarters to ensure that we do not become production constrained. I think given the success of both our previously existing product lines and the newly introduced larger diameter pipe products, it is highly likely that you will see us add to the production footprint for that product line over the course of the coming, let's say year and a half. I do not believe that alone will be sufficient to support this business if we move out that far into the future. A big part of our focus for organic growth and value creation within the Composite segment. Got it. Just to clarify, that would be you'd be looking to make enhancements, you know, at that facility versus potentially finding a bigger site? I think it's a little early to be explicit on that front. We would certainly evaluate both options. The capacity in terms of just available land in the vicinity of the current facility is somewhat restricted. I think you should certainly anticipate that we will be looking closely at alternative sites to establish a second production footprint. To be clear, we recently renewed the lease recovery facility, which is a, you know, very firm commitment on our side that we will not be vacating that site. Now, that is at the heart of what we do, and if we do expand to a second site, it will be in addition to, not instead of, what we do in Calgary. Understood. Got it. That's helpful. I will turn it back. Thanks for taking my questions. Thank you. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. One moment for questions. I'd like now to turn the call back over to Mike Reeves for any further remarks. Thank you, operator. Thank you all for joining us this morning, and thank you for your continued interest in Shawcor. Very much look forward to speaking with you again next quarter. Have a great day, everybody. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.