Thank you for standing by. This is the conference operator. Welcome to the Mullen Group's 2023 Business Plan and Budget Conference Call and Webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press Star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing Star, then zero. I would now like to turn the conference over to Murray K. Mullen, Chair, Senior Executive Officer, and President. Please go ahead. Thank you, welcome, everyone. This morning, we will be discussing our business plan and expectations for 2023. Before I commence today's update, I remind everyone that this presentation contains forward-looking statements that are based upon current expectations and are subject to a number of risks and uncertainties, and as such, actual results may differ materially. Further information identifying the risks, the uncertainties, and assumptions can be found in the disclosure documents, which are filed on SEDAR and at www.mullen-group.com. With me this morning, I have our Senior Executive Team. I have Richard Maloney, Senior Operating Officer, Joanna Scott, Senior Corporate Officer, and Carson Urlacher is our Senior Accounting Officer. We have a full agenda this morning, and I already see that the queue is building for the Q&A session, let's get started. You know, it's a new year, along with it comes that annual ritual of recalibrating expectation. Everyone knows that this year is gonna be different than 2022, with the most likely scenario being that there will be some interesting developments throughout the year that will alter future expectations. This is why it's so important to remain flexible. It's also why we have a diversified business model, that business model is one that provides logistical support and services to a wide range of sectors and verticals in the North American economy. The reason we have this diversified business model is because you just never know how any sector of the economy could be impacted by events or by short-term capital flows. Today, I'll provide a quick summation of how 2022 finished off, the final results are not available today. As such, I can only make general comments because in a few weeks, we will provide the detailed results in conjunction with our Q4 update. This is after the auditors have completed their review. This update is scheduled for release on February ninth. The primary purpose of today's call is to outline our 2023 business plan. It's to provide insight into how we believe the new year will unfold, along with highlighting the priorities that we will focus on this year. This will include a discussion on the emerging trends we view as crucial to our long-term growth strategy. As always, we'll close with that Q&A session. Let's start with an update on 2022. What we do know is that MTL will close out 2022 with financial results that far exceeded our initial projections. There were 4 primary reasons for this strong performance, with the most obvious being robust freight demand, which we partially attribute to strong end consumer demand, along with that, freight surge precipitated by shippers and retailers ordering far too much inventory in late 2021 and early 2022. This overbuying trend, by the way, occurred at exactly the same time that supply was limited, and let's blame a lot of it on COVID-related issues. This all led to supply chain shortages and bottlenecks that very quickly morphed into shipping delays and productivity losses, a combination that ultimately contributed to the second reason, that we had such good results, and that's significantly higher pricing as shippers scrambled to move their freight. In addition, diesel prices skyrocketed, costs that were passed along to customers in the form of fuel surcharges, and that became a third revenue generator in 2022. Of course, in 2021, we completed a series of acquisitions that added scale and size to our core business. Now, each of these factors, strong consumer demand, higher pricing, fuel surcharges, and acquisitions, contributed to our outstanding performance in 2022. Initial revenue projections for the fourth quarter are coming in at around CAD 500 million. That's generally in line with the expectations we articulated during the Q3 conference call. In other words, I would say to you, I think there's still appears to be a pretty strong correlation between end consumer demand and our overall revenues. Operating margins, however, are slipping as pricing comes under pressure from slowing freight demand in certain segments of our business, which I believe is related to that recent trend of shippers and retailers rightsizing inventory levels. They have virtually closed their order books as they try and get a handle on bloated inventories. There was also a slight decline in fuel surcharges, which is correlated to the drop in price of diesel fuel. That's a slight negative to margins as well. To close out the year, operations across our network of companies were really hampered by the winter storms. Business virtually came to a standstill. As a result, we do not expect operating profitability to be as strong as Q3 or even as we'd originally planned in our latest correspondence. In saying this, December is never really a strong month, due to the holiday schedules, and this year we virtually lost two weeks of work in the month of December. December kind of is a difficult month to translate into future expectation. What we can say is that the quarter started out very strong. But as the quarter progressed, we started to see some clear and pronounced changes in the economy and in overall freight demand, which as I mentioned, is now translated into a freight recession territory after several quarters of a freight surge. This is a freight recession is not the same as an economic recession. The freight recession, as I'll talk about later really is because of inventory rebalancing, in my view. This is the one trend that I think is the primary reason why I was so reluctant to pursue acquisitions in 2022. Far too many carrier owners believed that business and profitability would remain elevated forever, that this time it's different. Well, I took a different view. After several years in this business, it's taught me that freight volumes eventually normalize, and that's why one must pay particular attention to end consumer demand, not to events. This is precisely what we did last year and what we see happening today. Besides, when I look backwards, I said the asking price was way too higher, so much higher than my bid price, so we just waited. Now, I firmly believe that this prudence and patience will eventually serve our shareholders well over the longer term. Enough on 22, what about 2023? I'll start with the obvious, the general economy, and I would say, in particular, the consumer is starting to adjust to high interest rates. However, despite all the negative headlines circulating in the newswires and the short-term challenges associated with that inventory rebalancing I spoke about, we do not see any material or structural declines in most of our business. The fact is that end consumer demand remains quite strong, even though central bankers are pushing really hard on the brakes in an attempt to slow the economy. No one really knows how hard they will push or how steadfast they will be. Just in case the central bankers get what they wish for at rooting out inflation, we stay at, on high alert here at the Mullen Group. What we do know is that there is a little bit higher level of uncertainty today, which I think can easily manifest into an economic slowdown. The extent of any slowdown will ultimately be determined by future economic activity, consumer spending, which in turn is influenced by the most factors like headline inflation, interest rate policy, capital market stability, geopolitical stresses, et cetera. Within this context, and given what we know today, it is reasonable to assume that our 2022 financial performance will not be repeated in 2023, at least in terms of our same existing store sales, our same 38 business units. This in itself does not mean we will not have a good year. In fact, we will have another solid year despite the recent drop in freight demand, which as I said, is closely associated with the precipitous decline in overseas import shipments and more challenging pricing environment, particularly in the full truckload and long-haul freight business. As I discussed earlier, I believe this is more to do with the inventory rebalancing than a decline in end consumer demand. You'll recall that in 2021, shippers and retailers, manufacturers, they changed their traditional buying trends to response to the supply chain disruptions. As they tried to get ahead of the shipping bottlenecks, they started booking freight two to three cycles ahead. Either that, or they misread overall end consumer demand, ordering far too much inventory. Now, of course, when they did this, all they really accomplished with excessive buying was to exacerbate the supply chain issues, and this led to the freight surge that we witnessed in late 2021 and most of 2022. However, as they say, too much of a good thing is not a good thing. Inventories became bloated, and these same retailers and shippers have curtailed new buying, and I would offer quite significantly. This is why carriers involved in the long-haul freight business are now suffering as the freight surge has now morphed into a freight recession. Today, we see prices declining just as yesterday we saw them surge. I expect that we will start 2023 with less freight to haul at competitive pricing. Thankfully, a good portion of our long-haul freight businesses utilizes independent third parties, as such, are business units that will be focused on managing the spread and should do well at maintaining margins. I would say to you, some carriers are going to pay a hefty price, I suspect. What matters most to us is not these temporary, let's call them transitory supply chain disruptions. It really is end consumer buying that eventually drives demand. From all the data I read, consumers are still buying. Maybe not quite as much as early 2022, but they're still buying. Most likely, they will cut back if they do want big-ticket items like a new car or a new home. They will still be buying the necessities. We also expect, by the way, the bloated inventory levels to normalize, and retailers and shippers are going to once again begin reordering for tomorrow's sales. That's going to create another cycle. I suspect we'll see a new ordering trend sometime in Q2 as they rush to meet back to school and the next consumer buying cycles. Truthfully, folks, this is just inevitable. There's another reality that must be factored in the supply chain story, and that's warehousing. Now, warehouses remain full and near all-time capacity limits, primarily because shippers and retailers, et cetera, must order in advance of the selling cycle. However, a significant amount of today's inventories are what are referred to as dead inventory. Now, I know this because when I visit our warehouses, they are full of stagnant inventory. It simply will not sell because consumers are very picky and a lot smarter than what some of the retailers and manufacturers have thought they would be buying. From our perspective, this is not all bad news, at least for our this warehousing business. This dead inventory I referred to takes up valuable and expensive warehouse space, keeping warehousing charges sticky. As we think of 2023, there are just a few critical components that we have factored into this year's budget and business plan. To be honest, there was nothing easy about trying to calculate what 2023 would look like, which is why our senior executive has taken a practical and prudent approach to setting out our expectations for this year. We know there's a changing economic landscape, exactly how everything plays out and all that's way beyond our control. This is why we budgeted 4 different scenarios for 2023. In each scenario, MTL will generate strong free cash, enough to meet all of our obligations, including CapEx, which is to ensure our business units can continue to generate outstanding results. Our obligation on interest on the debt, which is now mostly tied to long-term, just our long-term notes, and I think, Carson, that's still at about sub 4%? Correct. Taxes, which everybody knows, they fluctuate with earnings. Lease payments, which we try and keep to a minimum, as you know, and of course, dividends, which will be held at $0.72 per share in 2023, and that's payable monthly at $0.06. The level of excess free cash that we will generate will ultimately be determined by the level of economic activity, freight demand, and pricing stability. In other words, we have stress tested our business model under various scenarios, and I can say with a high level of confidence that 2023 will be another very good year for the Mullen Group. Today, we will outline our base case scenario for '23, which, by the way, only reflects the results we expect from the business units we currently own and operate. It does not factor in any acquisitions. This base case budget encompasses a dose of reality, along with what I refer to as the power of our diversified business model. You know, consolidated revenues are still gonna come in around CAD 2 billion, and operating profitability, or OIBDA, will be around CAD 300 million. That's down from 2022, but that's still very good. That does not mean we will do to CAD 300 million of OIBDA. What we've done is, we're just planning and doing our allocation of capital as if we're gonna do CAD 300 million. All in all, I think it's a pretty good outcome, given the changing economic circumstances. I've got Carson Urlacher, who's now gonna provide some additional detail by our operating segments. Carson, it's over to you. All right. Well, thanks, Murray. Good morning, everyone. As Murray mentioned, I will provide some detail of how our CAD 2 billion of revenue, our CAD 300 million of OIBDA, and our CAD 85 million of CapEx is broken down by segment. Before I get into the details, let's look at what CAD 300 million of OIBDA means from a high level. At CAD 300 million of OIBDA, we generate approximately CAD 45 million of free cash, which is calculated after paying dividends to our shareholders, funding CapEx, paying cash taxes, interest on our debt, and our lease payments. The CAD 45 million of free cash is then reinvested throughout the year. How do we get to CAD 300 million of OIBDA? The breakdown is as follows: We expect to generate CAD 135 million from the LTL segment, CAD 100 million from the L&W segment, CAD 75 million from the SNI segment, and six and a half million from the US 3PL segment, all of which is somewhat offset by corporate costs. Let's first start with our largest segment, being the LTL segment. Our LTL segment is predominantly driven by consumer demand. We expect approximately CAD 800 million of revenue to be generated within this segment, generating operating margins of 17% to 17.5%, resulting in OIBDA in the CAD 135 million-CAD 140 million range. This budget assumes that economic activity and consumer demand is slowing but not collapsing. Our business units have strong regional market share within our LTL network that provides final-mile delivery. Pricing is therefore less volatile and more sticky than other types of freight. Our LTL segment is largely an asset-based business, whereby our business units can adapt to changes in demand levels to ensure load density remains strong. The 17% to 17.5% operating margins budgeted for 2023 is a slight contraction from the operating margin generated in 2022. The margin contraction is largely due to some continued inflationary pressures, as well as some pricing pressure noted within the segment. We expect CapEx within the LTL segment to be approximately CAD 40 million. That will focus on newer, more efficient operating equipment that will assist us in maintaining our margins. Our second largest segment is our L&W segment, which is mainly driven by large capital projects and infrastructure programs. Unlike the LTL segment, these business units are more asset-light, the focus becomes on managing the spread. We expect approximately $600 million of revenue to be generated in the L&W segment, generating operating margins of 17%-17.5%, resulting in OIBDA in the $100 million-$105 million range. This budget is likely to be flat compared to 2022 from a revenue perspective, as many of the sectors of the economy with which we operate in are expected to remain strong. That said, we expect some margin contraction within this segment, as pricing has come under pressure due to a lack of overall freight demand compared to what we experienced in 2022. Smaller independent operators are leading prices lower. Given that higher cost of new equipment and higher interest rates, this trend may not last. We expect CapEx within the L&W segment to be approximately CAD 25 million. That, again, will focus on the newest, most environmentally advanced operating equipment. Our third largest segment is our S&I segment, which is driven by a number of sectors of the economy, including the energy sector, the mining industry, civil and infrastructure projects, including pipelines. We expect approximately CAD 375 million of revenue to be generated within the S&I segment, generating operating margins of 20%-21.5%, resulting in OIBDA in the CAD 75 million-CAD 80 million range. There is some optimism in the oil and natural gas sector going into 2023, as drilling activity levels are expected to be slightly above 2022 levels. This should bode well for our business units in both the production services and drilling-related services groups. We anticipate that this increased demand will offset a decline in pipeline hauling and stringing activity. We expect demand within our specialized group to remain strong due to the continued investment in civil and infrastructure projects, supporting both Smook and Canadian Dewatering, respectively. We expect capital expenditures within the S&I segment to be approximately CAD 20 million. That will focus on introducing new capital into those business units where we've seen increased pricing and commitments from our customers. This marks the first time in many years where we've allocated any meaningful capital to this segment. In the US 3PL segment, we exclusively utilize third-party contractors to move freight, so the focus will become managing the spread to improve margin. We expect approximately $225 million of revenue to be generated within the US 3PL segment, generating operating margins of approximately 2.5%, resulting in OIBDA of $6.5 million. A significant portion of our revenue in this segment is tied to LTL, which is not declining as steeply as the full load truckload business. We expect 2023 to be another competitive year in the US freight market, and we plan on continuing to develop our next generation of proprietary transportation management software named SilverExpress. With that, Murray, I will pass the call back to you. Thank you, Carson. appreciate that. To achieve these results, we've established a set of goals and priorities that our organization will focus on in 2023, and I've asked Richard Maloney to speak to these initiatives and how they are aligned to support our 2023 budget, business plan and long-term growth plan. Richard, over to you. Thank you, Murray. The four priorities we've established for the 2023 business plan and budget, first and foremost, we're gonna continue to invest in our companies. Capital investments, we have identified CAD 85 million of capital investments. This does not include any investments in investments or, pardon me, in acquisitions or facilities, lands, or buildings. CAD 70 million of this capital will be directed to maintenance capital. And specifically, you will see us focus on new power units. The fuel efficiency of the new power units are providing us with a 30%-40% improvement in miles per gallon. CAD 15 million will be focused on sustainability-focused capital, things like CNG, compressed natural gas trucks, which are focused on reduced emission vehicles, electric transit vans. Gardewine, in partners with our Manitoba group, have focused on those investments. Intermodal, we will continue to build out that aspect of our operations, knowing that intermodal transportation reduces greenhouse gases by 65%. Our second priority, prioritize margin over market share, and we're going to focus with our business units on process improvements. Within that, effective deployment of technology, think about automation with our existing ERP and enhance our digital platforms that we have, SilverExpress with HAUListic and their direct IT platforms. We will continue to optimize the operations of our business units. We will make sure we are working with the right customers, and we will continue to focus, as we did in 2022, on monetizing non-core assets. 3, we will pursue acquisitions, opportunistic with consolidation opportunities. We believe the climate could be right. With high interest, high interest rate environment and cost of new equipment, this is making things difficult for our competitors. With that, we will continue to look at tuck-in acquisitions that make our business units stronger, and we will continue to focus on strategic acquisitions that are presented to us, and we will vet all those out. 4, we will continue to maintain balance sheet flexibility, and that'll be a focus for us. Murray, those are our priorities for the 2023 year, and I'll pass it back to you. Thanks Rich. Just before we go to the Q&A, let me turn to the longer term. You know, despite what everybody's gonna say, oh, the, you know, the obvious economic slowdown that I think most of us would probably expect, there are a couple fundamental trends that are emerging within this higher interest rate environment. The first of all, the comment I'd make on the high interest rate is anybody under 40 probably doesn't know about high interest rates. Your first 20 years, you didn't know what an interest rate was, and you had no money, so it didn't matter. Over the last 2 decades, interest rates have been very, very low. We've been living in for 2 decades in a lot of money available and very, very cheaply. Things are changing on the with higher interest rates. The first fundamental trend that I see changing is, and that's the shrinkage of the independent operator. That's the backbone of the long-haul trucking industry, particular for the last several decades. Today, they're facing higher costs. They got higher borrowing rates, and at the same time, you've got this price-sensitive environment at exactly the same time that many are entering the twilight of their careers. Like all of us, age can have an impact on your investment decision. This trend favors large, well-capitalized operators like MTL because we can pivot, and we'll add company trucks as required. This trend as it changes, would also impact our financial results, because as the company fleet grows, we would expect higher margin expansion compensatory with the capital investments. You can see from our capital-intensive businesses, if you're capital-intensive, the margins are higher. The other trend that I see, and probably not new, and Richard highlighted a little bit of this, but it's very active these days, and that's consolidation. Entrepreneurs need to monetize their investment. They too, are entering the twilight of their careers, and selling to a well-funded public entity is a compelling option. You know, for 30 years, we've been growing via acquisition. I doubt this is gonna change anytime soon. I'll also point out that we do not do acquisitions to meet anybody's expectations, an investor, an analyst, anybody's expectations. We invest when we find the right fit at the right price. In summary, I believe our future remains pretty bright because MTL has the potential to grow over and above baseline overall economic growth, which, by the way, we just don't see any growth in overall the economy in 2023. We really have two paths to grow. Firstly is the acquisition route that we talked about. All you got to look for when you're doing acquisitions, truthfully folks, is it the right fit and is it the right price? Those are the only two things that I really focus on here, and along with my senior team. The second option that we can grow is via internal market share gain as weaker competitors struggle under the weight of the slowing economy and substantially higher borrowing costs. You know, our balance sheet today is in excellent shape, primarily because we prudently managed last year's exceptional year to pay down debt, and everybody knows we crystallized over CAD 50 million with the sale of non-core assets. In other words, in 2022, we bullet-proofed the balance sheet. You know, at the end of 2022, for example, our overall bank debt was a very modest CAD 25 million, leaving available lines of credit at nearly CAD 250 million to pursue strategic alternatives. You'll also recall that Carson talked about that free cash that we'll generate in 2023 as well. We have lots of flexibility to pursue additional share buybacks, acquisitions, or growth wherever we see it fits. We also know that the Canadian banks are eager to lend additional funds to MTL to pursue a large transaction. In other words, we're well positioned to capitalize on the right strategic opportunities as they arise. We've got a lot of calls in the Q&A. Let's turn it back to the operator. Let's go right to the Q&A session. Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. Our first question comes from Konark Gupta of Scotiabank. Please go ahead. Thanks, operator. Good morning, everyone. Happy New Year, Murray Mullen and the team. Murray Mullen, my first question is about the 4 different scenarios you mentioned. If you can help us understand what those four scenarios were, and which of those scenarios did you pick as your base case for 2023? Of the four scenarios in 2022 Konark, is that what you're talking about? No, I thought you said 2023. I'm not sure. Like, if you can lay out what the scenario is you are assuming for 2023, what's your macro assumption there, and what are you doing for the rest of the thing? Yeah. No growth, a little bit more competitive pricing. Last year, we saw surge pricing. I think that comes off. I think diesel prices are gonna normalize, at least for the first part of the year. That'll take away some growth, some revenue. If you have brand-new equipment, you get good fuel mileage, you kind of make a margin on that. I see a little bit of erosion there. Inflationary pressures are gonna take a little bit. When we come out and we say, "Look, here, we're gonna do CAD 300 million," I don't know what number we're gonna do. Nobody knows for sure. Last year, I think I came out and I said we'd do CAD 260-CAD 270 or something like that, and I was only off by about 15%-20%. You can't predict what the market's gonna do. What we can do is outline, here's our base case plan, and this is how we're allocating the cash that we generate. I can tell you, we'll manage the short-term market gyrations that might be down, might be up, depending on what happens. Really, we manage this business, Konark, for the longer term. We play the long game here, as we say about, which is why we always are cognizant of the balance sheet. I think there could be some short-term issues in the economy. Why not just come out at the start of the year and say to everybody: "Look, there's some headwinds." The central banks might get it right. They might slow the economy a little bit more than they think. We don't wanna get trapped on the downside. We just took a prudent approach. I think we took a middle of the road. You know, we're not predicting it's gonna be a disaster, but I'm going, you know what? It's gonna slow a little bit. Okay, now that makes sense, thank you. Remember, that's just off of the existing businesses we've got. It had nothing to do with acquisitions. Acquisitions, you gotta add on top of that, and, as Richard pointed out, when we find the right ones, we're gonna do them. Right. That's great, clear. In terms of the tenants for the year, are you seeing, as you pointed out, in Q4, late Q4 of 2022, the supply chain started to kind of normalize, rates have come down and the competition has intensified. Is it fair to expect then the first half could be tougher than the second half under your base case assumptions for 2023, or it's the opposite? Yeah, that's a good point. We don't think there's as many supply chain issues today as there was 3 months ago, not as much as six months ago, for sure, not as much as nine months ago. They progressively got better. There's still a couple little bottlenecks that might have happened, but I think those are virtually in the rearview mirror. Konark, along when that happens, you know, you get the surge pricing goes away, and that's happening. If one takes a look at the ocean freight, movement of containers and freight that comes in through the ports into North America, those rates have collapsed back to kind of pre-pandemic levels in many cases. You know, you know, I suspect that, you know, we'll have a little bit of contraction in the freight business, but that's mostly in the long haul. The LTL, it's sticky. It doesn't change much and we just manage the spread in LTL. It really is in the long haul business. That's a part of our business, but you know, as I said, we're a diversified company. Yeah, that gets hit a little bit. We did mention that our pipeline business is gonna come off this year. Well, we built the pipelines. Well, that's fantastic news. Our pipeline business did a great job for us for the last three years. Now we've laid the pipe, now we got to put the pipe in the ground and drill, and that's why we're predicting that they'll balance themselves out, and drilling activity is gonna increase to offset the our pipeline stringing business. We got all these levers that we pull back and forth. That's what a diversified business model does for you. On balance, it'll be softer but we still generated. You saw how much cash we generated last year. We're still gonna generate a lot of cash this year. Okay, that's great color Murray. Thanks so much, and I appreciate the time. Thank you. Our next question comes from David Ocampo of Cormark Securities. Please go ahead. Hi, David. David, your line is live. Sorry about that. Just a quick clarification for Carson to kick things off. In your prepared remarks, you gave kind of a range for all four of your segments, LTL, TL, and S&I. In the press release, I think you guys just gave a CAD 300 million number. When I added everything up, the 300 is the low end of your range. Is that what you guys are using as your base case, or should I use the middle of the range as the base case scenario? Well, we always come out conservative, David, as you know, and we always tend to, like Murray said, manage the business based on worst case scenarios. For the news release, we picked the lower end of what we were expecting for margins to come in at for 2023. You know, we allocate capital based on those. You got to remember that it's a budget. We use the budget to manage the business. Obviously, as we go into 2023, things are gonna change, and we're gonna have to call audibles here and there. I would say that, you know, for the base case, we use 300, and that's really for us to allocate capital when it comes to the CAD 85 million of CapEx that Richard talked about. Yeah, I'm sorry. I just wanna make sure I have my numbers right. The top end, if I add it all up, it's CAD 320. Yeah, there's some corporate costs in there, David. Yeah. If you add in what the business units do, then, I think we got in the press release, we got the corporate costs in at about CAD 16 million? Yeah, you got to back out. You back out corporate costs, and then you get down to roughly CAD 300 million. As Carson said, it's not gonna be exactly CAD 300 million, and we won't get any of the segments exactly right. When we go to allocate capital, David, that's the number we thought was prudent. We don't wanna be naive that there couldn't be some economic challenges, given some of the headline news that we're not in control of the headline news. We just report the numbers. Yeah, it might be the calibration of the corporate costs that come out of there. Okay, sounds good. On your revenue guidance, it's essentially flat year-over-year. Murray, you just talked about no surge pricing, lower diesel prices. Is your expectation for volumes to be slightly up if you're flat year-over-year? Yeah, the volumes are gonna be pretty flat. That's why we came in at two. We don't think it's really so much on the volume side, David. We think it's more on the cost side and you know, things are competitive. I mean, our customers are all discounting to get rid of this inventory that they've got. They got too much of the inventory, and they got the too little of the good inventory. They're starting to push back. You know, like six months ago, customers said, "Move it." Today, they're going, "What's your price?" We need to be realistic until, you know, until the inventory thing rebalances itself, we don't know how exactly how that price is gonna stabilize out. I suspect they're gonna have to go back ordering here pretty quick, David, because otherwise, the shelves will be bare come summer. There's not enough freight coming in from overseas. You just have to look at the shipping statistics coming in from overseas. It's not gonna be enough to meet current end demand, not from my perspective. Last one here on M&A. you guys noted that you have a quite a bit of dry powder available. Just curious what segments of the market interest you the most? Is it LTL, logistics, or even further expansion? Yeah, LTL for sure. Yeah, our number one priority is LTL, because when you build a network out, it's really. It just helps you strengthen your business and improve margins. LTL will be, let's call that focus number one, and then focus number two is kinda on the warehousing and the long mile, which is intermodal. We've got to marry the two together. If all you do is chase intermodal, that's a 10% margin business. You just have to look at J.B. Hunt or Schneider or Knight anybody. We try and marry the warehousing component with the intermodal so that we can feed our own LTL network. We just wanna be that virtuous supply chain provider. One stop, one call, one stop, and we'll look after it. Warehousing is a very integral component of where we're building this freight network out. Once we get it, we can move it long mile, and then we can feed our LTL network. That's perfect. That's all for me. Thanks, guys. Thank you. Thanks. Our next question comes from Tim James of TD Securities. Please go ahead. Thank you very much. Good morning everyone, and happy New Year. Yeah, thank you David, or Tim, sorry. Good. Yeah. Yeah, thanks. I guess my first question, just as you look at 2023, you talked about, you know, prudently about some uncertainty here, which shouldn't be surprising. Are there any particular business lines that you think uncertainty is actually higher than others? Are there some business lines where maybe the certainty is a little bit stronger? If you could just talk about that by business line for a minute. Yeah, LTL, as we've articulated, pretty sticky. We still see end consumer demand staying up, we're not anticipating too much on that. I think we said, look, we might have a little bit of margin erosion, we still get a little bit of pricing leverage. We have some cost improvements. We said, let's call LTL is basically flat on our current business lines. On our logistics and warehousing, I think Revenue is gonna be okay, there has been some pricing challenges on the long-haul part of the business, particularly as it relates to, as I said, to that long-haul business, which is part of our logistics and warehousing. It's not the whole thing, a little bit of margin there. Specialized industrial, the only thing we're losing out there is the pipeline business, we think we'll pick that up and balance it. The U.S. 3PL business, it's down, that's the top line is down more in that business. The margin, it's gonna be down a little bit, it's still, that's all free cash to us, because there is, it's really a technology play that's in the logistics business. It's really not a trucking business. There's, because there's no CapEx in that business. We just build out our technology platform, and we've encouraged our team, don't stop building out and investing in technology, because that's our future of that business. We're building out a digital platform there that will be seamless to the shippers and to the, and to our, to all of our suppliers. That's what we're gonna continue to do there. Outside of that, it's just a little bit here, a little bit there, a little bit on fuel. I think, you know, just to be practical, Tim, I think same store sales, existing business will be down a little bit, but when that happens, we'll then become more active on the M&A front, because M&A now is a lot more these business owners are a lot more practical today than they were six months ago, because they're starting to see the same things that I'm just talking about. They don't have a diversified business model. They are in a certain vertical, and they can get whipsawed pretty easily. you know, the overall market might be a little bit softer, but to our shareholders, I'd say the win for us is, we'll be aggressive on M&A. you know, what taketh away on one side, it give us on the other side. Overall, I think we're in pretty good shape. you know and all we gotta do is get the right fit at the right price, and we'll be able to backfill in 2023 with M&A. Okay, that's helpful. Maybe just to sort of round that off, maybe I can ask this way as well: Do you find one segment is tougher to budget than the others? Like, is one more difficult to forecast, like maybe LTL, because it's consumer, and it's tough to judge what the consumer is gonna do? Or sort of is it the project basis that, you know, can kind of drive specialized? Or do you find budgeting and planning for each segment, the challenge of it is pretty similar with each? Yeah, you know, generally, you know, clearly on the project side business, whether it's pipelines or a major construction business or, you know, or those kind of things, you know, you need a lot of things to go right on those things. They can be a little bit choppy, I guess, Cars. Yeah. You know, budgeting, it's just a plan. You take a look at it, you make your best guess, your best analysis after all your years in the business and say, "Okay, well, what do you see happening on the demand side, and what do you see happening on the supply side?" Then you just kind of reverse engineer from there. All we're trying to articulate to everybody is that the economy is gonna be different in 2023. We acknowledge that. We're not, we're not gonna bury our head, and I'm not gonna come out and tell you, "No, everything is good." It's gonna be a different economy, and that's what the central bankers are telling you. No, we got to slow it down a bit." Well, I'm taking my cue from the central banks that says it's gonna be a little bit slower. When you're a little bit slower, you'll have a little bit more price sensitivity, and we built that into our business model. The specialized industrials probably doesn't have the same kind of issues. It's not quite as price sensitive. The central bankers won't influence that. That's more public policy, you know, on the fiscal side and what and government, and whether the government would support mining businesses or whether they'll support carbon capture, or whether they'll support oil and gas, those kind of things. Budgeting is never easy. That's why I say all we do is recalibrate it, and then we manage the business every week, every month. I mean, that's what we do every quarter. If you got your balance sheet squared away, you can always play the long game. If you don't have a good, strong balance sheet, you can't play the game. These countercyclical opportunities just won't help you. As I say, just count on the fact the economy a little bit slower but we'll be more active on the M&A front, and everything will be just fine. Thank you. My last question Murray, you mentioned about the, you know, your thoughts, and of course, the independent owner-operators and probably the challenges that they will face in this environment, which is, you know, beneficial to companies like a Mullen Group. Are you seeing at this point, as we sit here today, any benefits starting to come from, you know, that capacity leaving the system? I would think also, is it having any impact on the availability of equipment, of your ability to procure new equipment in a timely manner? I wonder if you're seeing any changes in the market at this point, or if that's more of something you think is still to come in 2023? Yeah, I think it's. We see it right now. There is no new entrants, independents coming into the business. That's the first thing. The second thing is age the demographic is catching up to independents. They get in, and they're not gonna make another investment. Over this next cycle, it's catching up to it, and besides, they can't get a new truck. New trucks are being hogged by the big order books, by the big carriers, and they're kind of boxed out. Heck, they can't even get parts and service right now. They'll eventually just, they're not gonna make the next investment. The question is whether they stay in the business and come to back to work for carriers like ourselves. I think they will, but they're gonna increasingly wanna work more local than regional and not long haul. That's why we're investing in intermodal, because intermodal is a long haul, and regional and short haul LTL is where we see the future for for the trucking business and for the business we have. Okay, that's great. Thank you very much. Thanks, Tim. Our next question comes from Walter Spracklin of RBC Capital Markets. Please go ahead. Yeah, thanks very much operator. Hi, everyone. How are you doing? Hi, Walter. We are gonna do acquisitions again. Good. Good to clarify that one. That'll be my second question. I only paused it Walter, because the asking price was too high, based upon the reality that I was anticipating in the market. Reality is hitting home. We're gonna continue to do acquisitions to grow our business, guaranteed. I think that makes sense. I mean, from what I understood, you indicated the sellers' expectations weren't properly reset back in 2022. You feel like they're reset now or will be reset in time, or at some point in 2023, where you can get a lot more active in acquisitions. Is that right? Yeah. Yeah. The conversations we're having today with people, Walter, are substantially different than six months ago. Okay, awesome. Yeah, substantially different. Okay, just to understand your scenario here for the base case. What I understood, you said slowing, flat growth, a tough pricing, I heard you say. It doesn't sound like recession is part of that base case, or, you know, if we do have even a, you know, kind of a mild recession, is that your base case when you say slowing? If we have a mild recession, there could be some downside to the numbers you provided today? Our base case is, I don't think there's a difference between no growth and a mild recession. The change that we've seen in the freight business right now has to do with inventory rebalancing. The major retailers and shippers ordered too much. Now they're right-sizing their inventory levels. That's a freight recession if you're involved in that business. Got it. We see that as a short-term scenario. Just as we saw, Walter, last year, we saw the freight surge as a short-term surge. Why? Because we look at end consumer demand, and we're looking at our LTL business and saying, "Okay, it's good, but it's not surging. Right. The slowdown we're seeing, Walter, is more with inventory rebalancing than the economy really suffering yet. But I did say to you, I don't know whether the central bankers are gonna get what they are trying to do, which is slow the economy. So far, they've hampered the value of equities and certain things, but it really hasn't slowed the economy a whole bunch, Walter. Got it. There has been a little bit of shift in the consumer spending. They're now traveling more rather than buying more, but it just shifts. Consumers are still spending. I still see it being reasonably strong. Okay. We're not counting on a recession, but that's why we budgeted. We had four different scenarios. We had one where everything gets normal. I could have come out with that and said, "Oh, everything's gonna be great." We could have come out and said, "Oh, my God, it's gonna be a terrible." I said, "I don't know which one it's gonna be." We took a base case. Okay. On industrial services, there was some questions sent to me and, you know, about some of the activity levels going on there that could be, could result in a, in a good year in that segment in 2023, and you were a bit below us on that. Again, is that kind of just conservatism or? No. Are you not seeing? No, I think, Walter, you know, you have to look at the sum of the parts. What we're highlighting to you today is that the pipeline business streaming business is not gonna be as strong as it was for the last three years, 'cause we're nearing the end of those projects. Coastal GasLink, Trans Mountain, we're still on the projects, but one of these days, those projects are gonna be done. I don't see any major projects on the horizon that our federal government will sponsor. Okay. I think we're gonna move away from that pipe, it's that pipeline business that's gonna come down, and that was high-margin business. Now it's gonna go to drilling, which is high-margin business. Right. It'll probably come out flat, which is, I think, what we're articulating. You know the only way it gets is if we decided to do some M&A on that side, 'cause we think that just the deals are so good. That's what you'll see on specialized. Okay. You were running corporate costs fairly low in 2022, or the corporate cost adjustment in the segmented approach to your business. And down substantially, at least on a year-to-date basis from 2021, and your guide for this year is showing quite, again, quote, "quite a, quite a big lift." Is there anything going on in the corporate cost segment? Or will there be a true up in the fourth quarter that will bring it more closer in line with 2021 and 2023, given that it's been running a lot lower year to date in 2022? Carson, this one's yours. I suspect there's some currency adjustment. Yeah That moves around. We take out all currency adjustment. There's a little bit of noise in there, Walter. You know, we don't budget for foreign exchange gains and losses, and we held the U.S. cash within corporate. If there is noise, it's gonna happen within the corporate cost segment based on that. Got it. That's probably your biggest bogey point in there that's moving it around a bit. All right. Understood. The last thing, you did kind of reaffirm the CAD 500 million for the fourth quarter in revenue, but you didn't mention I know you mentioned in the third quarter that CAD 90 million was your target for the fourth quarter, but you didn't mention that in the fourth quarter. Just to make sure expectations, to your point, are aligned appropriately. Are you still thinking CAD 90 is doable, and that's in the plan? Or is some of the pricing and margin weakness that you alluded to make that a little less achievable? Yeah, I think I like, we spoke about a lot of things, but that was one of the things that I did point out, is that. Yeah. It's not gonna be quite as strong as that, because of the winter weather. It shut down every one of our businesses virtually for two weeks because it happened right around Christmas, which is already a slow period anyhow. So we really lost two weeks of work there. You know, like, what we do know is, we do know that October and November were pretty solid, but December was kind of cranky, and I don't know yet. We won't have all the numbers out for another week or so, but I'm just cautioning people, maybe not quite as high on that side. Yeah, the railroads. Pretty much in the same. Yep. Yeah, we just lost too much business there, and it got a little competitive there for a little bit, too. I think that competitive stuff, I think that goes away in 2023. It's just it's gonna be a quarter or two, once the buying trends come back in, well, everything will normalize again. We'll be okay. Excellent. Okay, that's all my questions. Really appreciate the time. Thanks, Walt. Bye. Our next question comes from Matthew Weekes of iA Capital Markets. Please go ahead. Good morning. Thanks for taking my question. Mine was kind of just on the sustainability CapEx and kind of where you are in terms of, you know, evolving the fleet and the fuel efficiency and the compressed natural gas. I'm just wondering if you have an idea of, you know, how much of the fleet right now, is compressed natural gas. Is it a significant amount? You know what, Matthew, right now, again the availability of these reduced emission vehicles is very limited. You can't get many of them. You hear a lot of headlines about them, but it's very tough to get them. The CNG trucks we do have, compressed natural gas, are within our Mullen Trucking business unit. It wouldn't make a big, you know, constituent of our 4,000 trucks altogether. It's one of these initiatives that we have. We're looking and we're working with the various OEMs, the Cummins group, as well as the Clean Energy Group, to make sure that they're working well. I can tell you from our initial, we bought a set last year. We have a new set coming in right now that are in the works, and they're operating very well. They give very similar fuel mileage to what we get with the standard internal combustion engine, but the fuel costs CAD 0.70 instead of CAD 2 a liter, and they reduce emissions. We're continuing to work with it. It's just difficult to get, you know, a large scale of them as well. We are able to subsidize part of this through grants from various government initiatives. You know, you, the, you know, the reason we're kind of, we're just taking a measured approach to this, one of the major reasons is, you know, we can go get electric trucks, but we can't get power into our facilities to recharge the electric trucks. What good's an electric truck if you can't get power? The biggest issues with electric trucks is the grid and distance. Those are your two biggest things with electric trucks. I can tell you right now, like for example, in Vancouver, we want to get electric trucks for the city of Vancouver. Get in line. You can't get any power grid for at least a year. Right. We're just easing into it. The trend is inevitable. We need a bunch of other things to go right before we deploy a lot of capital. I don't need to buy a bunch of company trucks that are all electric or CNG, and then you don't have the infrastructure, and they just sit there idle. We're trying to match up reality with our commitment to do our part, for sustainability and all those things. Okay, thanks. Just one last question for me. Just thinking about a bit more of a focus in the coming year on sort of cost optimizations. I'm just wondering if you can point to a few things, maybe specifically you can do or that you're kind of looking at to drive, you know, those efficiencies, drive kind of increased yield in the network and just things like that. Well, of course. Matthew. Sure. All right. I'd say, Matthew, on the LTL side, it's predominantly asset-based, we own the truck, we own the trailer. Specifically, if we're looking at driving margin within that segment, you're looking at lane density. How much is in that trailer? Because virtually, a truck going up and down the road costs the same, whether it's empty or full, it doesn't matter. It's all about getting that trailer full to capacity. We have wiggle room on, you know, the trucks going down the road, when they go down the road, that sort of stuff. We look at lane density as the best way of driving margin within that segment. In the logistics and warehousing segment, I would say predominantly, we use owner-operators and subcontractors in that space. Really, that's just managing the spread, and that's really the way that we can maintain and hold margins within that segment. Specialized and Industrial, it's really largely about pricing. Again, mostly focused on asset-based equipment. You know, if you're getting the pricing from the customers, then we can deploy capital and put it to work. Really, those are kind of the three factors. US 3PL, again, it's all about managing that spread. So far, we've done a good job in there. You know, we're deploying a little bit more capital into our technology platform, which is tweaking margins a little bit. You know, again, that's an internal thing that we've decided to play the long game on that. We're happy with the progress that we've made and we'll continue to do so. Okay, thank you. Appreciate the commentary on that. I'll turn the call back. Thanks. Thanks, Matt. Our next question comes from Michael Robertson National Bank Financial. Please go ahead. Hey, good morning, all. Appreciate you taking my questions. Cognizant of the time here, so I might just slip a quick one in here. You noted the potential for monetizing some non-core assets, pretty successful with that last year. Was just wondering if you had any sort of rough bookends in terms of, you know, potential proceeds expectations? For last year? No, for this year. Sorry. For this year, well, we'll look at monetizing. We don't have anything on the book. The ones we had earmarked for last year, we did, we got two of the three done, I think, Richard, is what we did? That looked good. This year, you know, what we've said is, to all of our business units: "Look, if you want capital, you need a margin, and if you don't, if we're not gonna deploy, put capital to work in your business, then we might look at just monetizing you. Get your bloody margins up." We don't have anything else planned right at the moment, but, you know, you've got to have a willing buyer, and it just so happened last year, we had willing buyers. We don't actively go around looking to sell a bunch, but when there's willing buyers at our price, we'll monetize and redeploy that capital into other areas where we think we can build out for the future. We don't have anything. There's nothing to factor in on that I see at the moment, for 2023. We're always on the lookout that we'll either make good investments or de-invest. Understood. Just one other one from me. Have the sort of supply chain bottlenecks and limitations there eased enough that you've got, you know, a high level of confidence in being able to procure what you're looking at in terms of that CAD 85 million CapEx budget? I know last year there were some difficulties in being able to actually get out and purchase the stuff you were targeting, so. Yeah, last year, you're spot on. Even if you wanted things, it just, you know, the supply chain was in manufacturing, and everything was kind of bottlenecked. That's why we're, you know, we think that there's gonna be, you know, a better flow this year, which is why we're budgeting up at that CAD 85. I think we'll know this next quarter. We might have some more commentary on that come at our February meeting. Certainly our 1st quarter. If the trucking industry doesn't roll, I think there's gonna be a lot of the order book is gonna be accelerated because some of these carriers are getting, they're getting over their skis. These high interest rates, you got high price for the truck. Whenever you put technology into a vehicle, I don't care if it's our, you know, our personal vehicles or our trucks, and let me tell you, there's a lot of technology in these trucks. Yeah, they're good, and they help us be safe, but they're very expensive, and now you've got really high interest rates. That's why I say to you, if you're not well capitalized right now, little independents are not well capitalized, and they have to pay a pretty steep price on interest rate and lease payments. I wouldn't be surprised if some of that order book doesn't really soften for these manufacturers. We've already had a number of calls already this year, Michael, where they're saying, "Hey, you know, all of a sudden, something's available." I said, "Well, give us a call back when your price comes down, and then we might be a buyer." We're on top of both ends of this. We don't like to overpay for anything. Understood. Well, appreciate the call as always, team. I'll turn it back. Thanks, Matt. Thanks a lot. This concludes the question and answer session. I would like to turn the conference back over to Mr. Mullen for any closing remarks. Yep. Thanks, folks, for taking us. We've got a decent plan for this year. We're gonna have another good year. Same store sales will be down a little bit, we'll be more active on the acquisition front. We look forward to buttoning up 2022 with a short call on February 9th. Thank you very much and take care, everybody. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.