CEMATRIX Corporation (CEMX.TO) Q3 FY2025 Earnings Call Transcript & Summary

While they're doing that, I think we're going to get started. Good morning, afternoon, and welcome to the CEMATRIX Q3 Financial Results Webinar. The results were very good. And presenting today will be Randy Boomhour, who's the President, CEO of CEMATRIX; Marie-Josee Cantin, who is the CFO; and out of Chicago is Jordan Wolfe, who is the President of MixOnSite. So again, congratulations. And with that, Randy, I'm going to turn it over to you and the team.

Thank you, Grant. Much appreciated. We're really excited to be here with all of you today to share with you some information about our company and our financial results for Q3 2025. As always, there's a disclaimer here. We will make some forward-looking statements so that you understand the context of those. We always like to start with this slide, which I kind of view as a bit of an executive summary, key investor highlights, key things that investors should know. So number one is we're an innovative cellular concrete solutions company, a leading provider of lightweight, cost-effective, durable cellular concrete for infrastructure projects. We have a strong competitive advantage that we'll cover off in an upcoming slide and work primarily as a subcontractor for major North American general contractors. We're in a position of financial strength and overall growth trend. Sorry, I had trouble getting that out. We've had revenue cumulative annual growth of 24% since 2017, which is very impressive. Our margins have been improving. We've met our record for -- a record 2025 commitment already in Q3, and 2026 is forecasted to be another good year. I like this chart here on the right here because it really shows kind of the key metrics that we follow, 2023 being a record year. 2024 is a step back year, but still profitable and then 2025, focused on profitability and delivering a record year already. So, there's a significant market opportunity in front of us. We're an industry leader. The global cellular concrete market is significant and is expected to continue to grow. And there's just increased tailwinds around infrastructure spending, both in Canada and the U.S. And we see more and more the federal and provincial and state budgets just adding more fuel to the fire of increased infrastructure spending. So, I'm going to hand it over here to Jordan next, who's going to cover the next couple of slides.

Thanks, Randy, and hello, good morning and good afternoon, everybody. So, I'm going to just take you a little bit through the team and corporate time line. We are just -- management was introduced just a moment ago by Mr. Howard. So, we are also led by a Board of Directors, including Minaz, Patrick, Steve, Anna Marie and John, who offer valuable insight with all of their experience across many different industries. Insider ownership in our company is strong, roughly 10% of the 150.2 million outstanding shares, 166.8 million fully diluted. The largest insiders include myself with 12.2 million and Randy with 1.8 million shares. In the lower right corner, we like to show this company time line. It just kind of shows you everything that we've been through as a company from being founded in 1999, going through many different scenarios, challenges from financial crisis, oil price crashes and over the last 5 years with the pandemic, the Ukraine outbreak causing global shortages of cement. We've been through it all, but here we are persevering and flourishing with a record level of earnings. So next slide, please. All right. So, let me give you a little recap or explanation, cellular concrete one-on-one, if you will. The product description is -- cellular concrete is basically made mixing water, cement and a foaming agent that looks like an everyday Maxima shaving cream. The foam agent basically creates a bubble inside the mixture, and it holds its shape long enough until the cement and water harden around it, leaving a cellular structure that has many different air pockets and causes a lightweight effect. The key properties include being cost effective and it is low density and lightweight. It has a high bearing capacity. It's extremely pumpable. We've pumped upwards of 14,000 feet before to give you an idea. It's highly flowable, self-leveling, self-compacting, has thermal insulating properties that help out greatly in colder climates. It's very durable and it's very excavatable. And these are just key properties. There's others as well that I'm not mentioning. Primary applications would include a lightweight engineered fill. This is the bulk of the work that we do, otherwise known as load reducing fill and has many different names. One of those would be MSE or mechanical stabilized earth, retaining wall backfill. Others include lightweight insulating road subbases, flowable self-compacting fills, pipe culvert abandonments, tunnel and annular grout applications, shallow utility, foundation installations. And again, this just names a few. There's several others that we rarely get involved in, like roofing and flooring applications as well as underwater placement applications. So this just, again, highlights the primary applications that we do. And our competitors -- our customers and competitive advantage. Our key customers would include some of the largest companies, general contractors and engineering companies in the North Americas, including your Bechtel, Kiewit, PCL's, I could go on and on. We pretty much work for them all. We'll occasionally contract directly with an owner, but the vast majority of jobs that we work on, we are always a subcontractor. And for our competitive advantages, our reputation is probably the most important. We've been successfully delivering cellular concrete solutions on time and over budget -- on time and on budget for 25 years. I often tell people that our production team is actually one of the greatest assets of our sales team because we do so well in the field. It really speaks volumes when general contractors and owners come to us or come to GCs and say they'd like to use MixOnSite CEMATRIX, Pacific International Grout because of our experiences. So it's really important. And that reputation, of course, is built on our team and experience having 200 years -- over 200 years of experience in our field across our employees. Our equipment gives us a great advantage being the largest fleet of technologically advanced equipment producing cellular concrete, and we actually, with our existing equipment, have capacity to grow. Our size and scale helps tremendously. We have multiple locations coast-to-coast, and we can successfully complete projects across Canada and U.S. in a manner that our competitors are not quite fit to do. And we're more sustainable, generally more environmentally friendly than legacy products that we replace. And just to give you an idea, one ready-mix truck that can come down the road with 10 cubic yards, we can take that 10 cubic yards and turn it into 35, 40, 45 when we're doing wet mix applications. The same is true when we do dry mix applications. We can take one tanker that delivers roughly 50 tons, and we can turn that into around 125 cubic yards of material depending on the mix design. But you can imagine having only 1 truck versus 12 trucks on site, not only does it help be more environmentally friendly, but it also adds a safety element as well, having less construction traffic on site. And with that, I'll pass it off to Randy.

Thank you, Jordan. Really good job. One of the questions we get quite a bit is just how big is this opportunity? How big is the market? And it's very tricky to nail it down. Really, the best way to do it would be to add up every single bid that came across cellular concrete and across all the markets and across all the applications, but that's practically impossible to do. So, what happens is third parties estimate the size of this market. And so we've seen estimates from as low as $4 billion from Market Research Future to as high as $27 billion from Allied Market Research. Now that would be worldwide. It would be every single application for cellular concrete, even some that we don't pursue like roofing and flooring applications that Jordan mentioned. But I think the bottom line is the opportunity is pretty big, and then all these sources agree that the market for cellular concrete is growing. And then if you look at the market for other lightweight fills or competitive products, that market is even bigger, which means the market that we can capture is a multiple of the sizes that we would estimate. The other thing that we chat about already, and it's really important is infrastructure spending. So, infrastructure in Canada and the U.S. is aging. It needs to be repaired and replaced. Populations continue to grow, requiring new infrastructure and also placing additional load on existing infrastructure. And so because of that, spending on infrastructure is expected to continue to increase now and into the future. And we see this kind of budget cycle after budget cycle for governments. Even the Canadian government recently just came out this week with a focus on putting more investment into infrastructure spending. Now it's really hard for us to tie those bills to very specific cellular concrete projects. But we know in general, with there's more money spent on infrastructure, that's going to be ultimately more opportunities that pop up that require cellular concrete based on the properties of the material and based on the applications and geotechnical needs of the situation. So just a quick summary here of our financials. MJ is going to get into the details of Q3 here, but I just wanted to highlight, we are forecasting a record year for 2025, and we're very careful about the words we choose. We didn't say we're forecasting a record revenue year. We forecast a record year, and we've hit that achievement already in Q3 by delivering EBITDA that's higher than our best year ever of 2023. Despite stepping back in 2024, we have an overall growth in revenue. So the company continues to grow. So the cumulative annual growth rate of the company since 2017 has been 24% per year. And we should be -- we will grow revenue this year as well. We have a positive bottom line, and we're generating cash. So, we've got a record $5.9 million in 2025 year-to-date adjusted EBITDA, and we've got a record $5.6 million of 2025 year-to-date cash flow from operations before working capital adjustments. We have a healthy balance sheet with low leverage. We've got $9.9 million in the bank and no long-term debt at the end of Q3. So the things that are important to understand about our business is that the revenue growth will be lumpy. Everybody I talk to would love to see a staircase, but that's just not the way it works in construction and it's not the way it works, especially in specialty construction because we don't control when our scopes of work start and stop. And so because of that, our revenue can move quite a bit or be variable quite a bit based on when large projects start or stop. But the overall trend, as we've mentioned many times, is one of growth. For our business, because we operate primarily in Northern climates, it's a seasonal business. So, we're going to have higher revenues in warmer months. And I think we've all experienced that where construction activity picks up in the summer and into the fall. If you look at the last 5 years, we've averaged 18% in Q1, 18% of our revenue in Q2, 36% in Q3 and 28% in Q4. Now obviously, each year is different. They're not all 18%. They're not all 36%, but it gives you an idea of how our revenue is spread out through the year. We're a specialty contractor. So because of that, margins tend to be higher than general contractors, but we have more bench time and fixed costs to cover. So, that's an important concept to understand. Project size impacts margins. So when we bid larger projects, there is more competition for those for obvious reasons. Everybody wants to win the big ones. And then when that happens, the margins that we recognize on those projects will always be lower because of that extra competition. And we do have excess capacity. We have excess capacity in our equipment that Jordan mentioned quite a bit, where we could easily do 2 to 3x the revenue we're currently doing and we have excess capacity in our staffing levels. We can't do 2x revenue with existing staff levels, but we could do 2x revenue without a significant increase in staffing. So, I'll hand it over to MJ, who will go through our Q3 financial highlights.

Thanks, Randy. So let's talk about revenue. So revenue for the quarter was $15.3 million compared to $10.1 million in 2024. That's a 51% increase. For the first 9 months of 2025, we did $32.6 million in revenue compared to $25 million last year. So, that's a 30% increase. Gross margin is up at 34% compared to 27% last year for the quarter. That's a 7% gross margin increase. And year-to-date, we had gross margins of 33% compared to 26%. That is also a 7% gross margin increase. Operating income is $2.8 million in Q3 compared to $700,000 last year. Som that's a $2.1 million increase. Year-to-date, we did $3.9 million in operating income compared to a loss of $100,000 in 2024. That's a $4 million increase. Adjusted EBITDA was $3.5 million in Q3 compared to $1.4 million in 2024. That's a $2.1 million increase. And as Randy mentioned, we have a record adjusted EBITDA year-to-date at $5.9 million compared to $1.8 million, which is a $4.1 million increase. Cash flow from operations, both positive for the quarter and the year, $3.2 million in Q3 compared to $1.3 million in Q3 of last year. That's a $1.9 million increase. And year-to-date, a record as well, $5.6 million year-to-date compared to $1.7 million year-to-date last year. So, that's a $3.9 million increase. So, we ended up the quarter with almost $10 million in cash, which is similar to what we had at the same period of last year. Looking at these graphs. So on the left-hand side, you can see our revenue and the trend line is growing, as Randy mentioned. So just as a reminder, in teal, you see full-year numbers and in orange, you see year-to-date. So, we basically did quite the same as last year and past previous years. So, our revenue line is growing, which is great. Gross margin percentage is improving over the last few years. So year-to-date, it was 33%, largely due to the higher revenue that we experienced, as well as key contract structure that we'll talk in a minute. And maybe what can I -- sorry, sorry. All right. 32% apologies for that. Debt and interest were -- debt and interest, we have no longer debt on our balance sheet, but we have an equipment financing loan for $1.6 million. So aside from that, there's nothing else. We've come a long way since 2017. In our share structure for Q3, we had 150.2 million shares outstanding, 5.9 million of options, 2.4 million in RSUs and 8.2 million in warrants. These warrants are set to expire at the end of July 2026. So fully diluted, we have 166.8 million financial instruments. Let's talk about our backlog a little bit. So, we had announced $43.6 million in new project awards since the beginning of the year. In Q3 only, we announced $17 million, and these awards are for various applications for our product. Our backlog is growing. It continues to grow with sales success. So at the end of the quarter, we had a backlog of $75 million, and that's compared to $69.6 million at the end of the quarter last year. So, that's a $5.6 million increase. So, I'll pass it back to Randy.

Thank you, MJ. So, one thing that we want to highlight for investors from our perspective, the numbers are the numbers. But I think when you're trying to do comparisons, it's important to understand this. So, we had a large contract in 2025 that was going on through Q3 and continues into Q4, where we made the arrangement to allow the customer to buy the cement themselves and the deal was that we would make the same amount of gross margin dollars. So because of that, our revenue and cost of sales was lower than would be versus kind of comparable contract structure and our gross margin percentage was higher. So in this chart here below, we've kind of shown you what it would look like if we had entered into a traditional contract structure with this customer and the impact it would have had on revenue and gross margin. So, you can see that revenue would have been 14 -- sorry, $4 million higher, up at $19 million and gross margin would have been 7 points lower at 27%. And then you can see on a year-to-date basis, our revenue would have been $36.7 million and our gross margin would have been 30%. So again, the numbers are the numbers as reported, but if you're trying to do comparisons and understand what's happening with revenue growth or understanding what's happening with gross margins, it's important that you understand this contract structure. So yes -- so just we always like to end just like we like to start is, if you're a potential investor or an investor, why should you invest in CEMATRIX? And these are the 5 points that we believe are key to understanding that. Number one is we're an industry leader. We're really well positioned to capitalize on the large opportunity in the growing infrastructure construction segment. We are a growth company. We have growing revenue, 24% annual cumulative growth rate since 2017. We have positive adjusted EBITDA, record levels all time, positive cash flow from operations, and we have a really strong balance sheet. We believe that we're currently undervalued based on traditional valuation metrics. Whether that be forward revenue or forward EBITDA multiples, we still think the share price is under where it should be. We don't have to raise any capital in the short term or long term to fund a burn rate. We're self-sustaining now. Any new capital would only be raised in support of an accretive acquisition. And we don't have an accretive acquisition in the short term or near term here that's being contemplated. And lastly, we do have capital to deploy, and we're adding to that capital because we're generating positive cash flow. And so we're looking for opportunities to grow organically or to grow via acquisition if we can find the right opportunity. On the right-hand side here is our Investor Relations contacts with Howard Group and Bristol. And then we have one analyst covering the company from Beacon Securities, who is Russell Stanley. So then, I think that will take us to the Q&A session. Just before we get into the actual questions, I just wanted to cover a couple of things that I think may come up or that I've been thinking about. Number one is just as an investor, like diversification is important. And so if you have a portfolio of stocks, I'm sure you've heard stories of people that have invested everything they had in Tesla or Bitcoin or some other stock and made out like bandits. But what you don't hear as much about is people who did the same thing in other names and lost everything. So, no security in your portfolio should be more than 5% or 10% of your holdings as an investor. It doesn't matter how great any company sounds. You don't want to risk everything on one company. If you do, that's not investing, that's gambling. So don't do that. CEMATRIX is -- we're slow and steady. We're a traditional bricks-and-mortar infrastructure stock that is focused on profitable growth. We're not really -- we're focused on building and running a profitable business that puts the needs of our customers first because we know if we do that, that the share price is going to follow. So, we're less concerned about the day-to-day or week-to-week fluctuations in the stock price. We know that if we run a good business, sooner or later, the share price is going to follow, and we've seen that happen this year. And so the final thing I'll say is we care why the share price goes up. We know that some stakeholders and some shareholders don't care. They just want to see the price go up. They don't care if it stays there as long as they can exit and make money. We don't want that. We want a share price that makes sense, trading based on fundamentals. I want every investor in CEMATRIX to make money, but we do that by focusing on the customer and the 3 things that we're obsessed with: safety, quality and profitability. So that's it. With those kind of comments, Grant, I'll turn it over to you, and we can go through the Q&A.

Thank you, Randy, MJ and Jordan. That was a good wrap, Randy, or wrap up, not a wrap. We've got about 13 questions already in the queue, and you were mentioning Russell Stanley, who happens to be the Managing Director of Equity Research at Beacon Securities. And the first few questions are from Russell. His first one, outside of the contract restructuring, was there anything unusual in the quarter such as revenue pulled in from Q4 from faster work or pushed out to Q4?

Yes. Good question, Russell. I mean it's very rare in construction to have revenue move forward. It almost never happens. So, that would be the exception rather than the norm. The norm is that projects and start dates push. So, we definitely saw some revenue push into Q4, and we've seen some projects that we originally thought might go in 2025 that have pushed into 2026.

Next question is about project size. Can you talk about what you are seeing now in terms of projects starting in 2026? Understanding you see a very wide range of project sizes, how do the jobs you are bidding on and winning compare in size to what you were seeing a year ago? With respect to demand, have you seen any specific projects in the pipeline get trimmed back in scale and/or pushed out perhaps out of caution? How does your level of optimism now compare to what you had a year ago on the demand front?

Okay. We're testing my memory there. That's a lot of questions. I'll do my best here if I missed part of it, just let me know, Grant. So in terms of contract or project size, right now, we are actively executing the 2 largest contracts that we've ever had in the history of the company. One being the North -- the project in North Carolina, which we talked about quite extensively, that started in Q3, and it's going to continue into 2026 and likely spill over part of it into 2027. The second was the tunnel grouting project in the Midwest that we started in Q2. We're working on in Q3 and we'll finish this quarter. So, we don't see many projects of that size. I will say we're seeing more and more projects in the $5 million size. And I would say, in general, we're seeing more opportunities for cellular concrete where cellular concrete is spec-ed in, and we're finding more opportunities where other lightweight products are spec-ed in and we're working to actively flip them. So from an overall market perspective and kind of consistent with the earlier slide, we just see the market for cellular concrete continue to grow and more and more people are getting exposure positively to cellular concrete and seeing the benefits that it can provide in solving their geotechnical challenges. So, we're really optimistic about where the business is today, really optimistic about 2026 and really optimistic about the future in general.

Well, that answers the latter part of Russell's long questions or series of questions about your level of optimism. You just addressed that. I think the only thing you might want to touch on here more is with respect to demand. Have you seen any specific projects in the pipeline get trimmed back in scale or pushed out?

We haven't really seen that. I think -- and I tried to talk about this earlier is people always try to get us to draw direct lines between administrative directions or administrative changes at the federal government level. And we never see that. I think you would more see that at the GC level. When we see projects that kind of get to the point where they're engaging subcontractors, those projects generally are green lit and they're moving forward. So, I haven't seen anything to indicate that there's any kind of slowdown in infrastructure spending. In fact, what I would say is all the tailwinds point to more money will be spent on infrastructure.

Russell's next question. Can you talk about what you are seeing on the M&A front? In the past, you've noted your first choice would be another cellular concrete player in the U.S. with complementary products, technologies representing plan B, how has that environment evolved since the August call?

Yes. I would say really, there's no change, right? Nothing has changed there. Our first priority was executing on our commitment this year to deliver a record year, and we really are trying to get the share price fixed to where we're much closer to a fair value because any acquisition we do would be primarily cash, but we would want to have an equity component as part of that. And so until we kind of get the first part of the job done, which is deliver this year and get the -- get our equity more fair valued, we're not really engaging in deep conversations with potential targets.

Next question, but not from Russell. Could you please elaborate more on your comment that you mentioned in the press release and then the quote was "Looking forward into the fourth quarter, we will be very busy in the first 6 weeks of the fourth quarter and then slowing down in the last 6 weeks, consistent with the normal seasonality in our business."

Yes. I mean, this feels like a sort of a tricky way to ask me for like more specific guidance on the fourth quarter. And as you know, Grant, we just don't do that. I would just say the fourth quarter is traditionally our second best quarter, and I would expect this year to be really no different. And that's always the pattern. It's always busy for the first 6 to 8 weeks as October, November is a big push to get things done before winter hits. And then once winter hits and we hit into the Christmas season, we always slow down. There's exceptions sometimes like in 2023, we're really busy over the Christmas season because there was a big push on the Trans Mountain project to get that finished. But generally speaking, that's normal pattern that's in our business since we started these companies.

I know this was addressed during the presentation in some way, but the question is, is any percent of your revenues due to residential business?

Not really. I would say sometimes we might be working on infrastructure related to residential development, whether that's a gas line or a banding in a pipeline or supporting road infrastructure. But we don't do residential work specifically.

Since AI is such a big topic these days as well as data centers, the question is, do you see any demand coming from data center construction?

Yes. So, I've gotten this question probably the last 2 or 3 calls. And what I would say is it always depends on the geotechnical situation. So, you can't say if there's $1 billion in data centers, there's x percent that's going to be for cellular concrete. It doesn't work like that. You could build 10 data centers and have no need for cellular concrete, but you could build a data center in a situation where there's weaker unstable soils or it's in an environment where they're worried about lateral load or they've got some annulus to fill or pipes to abandon from an existing site, and there could be lots of cellular concrete. So, what I would say is I always go back to is just any increased spending in infrastructure sooner or later is going to result in an opportunity for cellular concrete. But it's not going to be -- like every data center is obviously going to have a huge electrical component. So, there's a one-to-one correlation. There's not going to be a one-to-one correlation with data center construction and cellular concrete usage. It doesn't work like that.

How much of your labor costs are variable?

Yes, it's an interesting question. I mean, we really think about labor costs as fixed, but there's an element of our labor that does fluctuate with revenue. So, for example, overtime costs are going to be higher during the peak periods and overtime costs are going to be lower in the slower periods. So, I think that just makes sense and it is common sense. But we spend a lot of time and money training our employees and their experience in the field really to what Jordan mentioned earlier, is one of our key competitive advantages. So, we don't want a lot of turnover in that team. And so as a result, even when we're slow, we keep those employees employed because if we don't, then we can't execute projects successfully in the future. And that really gets back to our comment around understanding the margin as well is when you're a specialty contractor, when you work, you get a higher margin because when you're working, you're not just paying for that day's labor, you're also paying for all the labor and the bench time. It's a very similar model that you would see in consulting or any other specialty construction business.

Question about the stock. And have you considered a reverse stock split? Or another way to put it is a consolidation of the stock?

Yes, it's funny. I can ask 10 different people for their advice, and I would get 10 different answers. And so believe it or not, there are people that are advocating that we do a stock consolidation. But the vast majority of the experts I talk to don't recommend that. And so we don't anticipate doing that anytime in the near future. It's not something that we're actively considering. It's not something that we're looking at. We're really focused on just running and building a good business because, again, as I said many times, I know if we do that, the share price will follow. I know it's very frustrating for some of our long-term shareholders, myself included, Jordan included. Jordan is the largest shareholder in the company. I'm the third largest shareholder in the company. So, believe me when I tell you that we feel your pain when the share price doesn't respond the way we expect it to respond. But we also know that if we do the right things for the business, over time, the share price will improve. All you have to do is look at this year where earlier this year, we were trading at $0.16 or $0.17. And even though we've stepped back today on the share price, we're up significantly from that low. We're up significantly from last year when I took over as CEO. And we know that if we continue just to run a good company, grow revenue, be profitable, that share price is going to follow. And it will probably take longer than we all hope, but it will follow because it will be based on fundamentals. It won't be based on some hype or press release. It will be based on us actually doing a good job for our customers and our customers recognizing that good job and rewarding us with more work in the future. That's how you build a good company.

Next one. What does the pipeline look like today versus this time a year ago?

Yes. I mean, we had a similar question like this, but I would say the pipeline today looks better than it did a year ago. We're seeing more opportunities to bid. We're actively chasing more opportunities. We're investing more in business development so that we're uncovering opportunities we didn't see in the years past. And so our bidding activity is higher this year than it was last year. So, we remain extremely optimistic. And I think you can see that success in our sales results. So, we've so far this year, sold more revenue, added it to backlog than what we've delivered and we're on track for a really good year for revenue. So, that's pretty impressive and I think indicative of what's happening in the marketplace for us.

Question about earnings per share. Maybe MJ, a specific question was what is the EPS for the third quarter, if you have that?

I do. The EPS for the third quarter was $0.012. And year-to-date, we are at $0.015.

Yes. And again, Grant, I would say there's all kinds of fancy metrics that the spreadsheet analysts can come up with. But it always boils down to the same thing. There's certain constants in the numerator and denominator. And we know if we increase the numerator by making more money, all of those metrics are going to improve. So, people can ask us about free cash flow, return on capital employed, return on assets. It all boils back down to the same thing, fix the numerator, and I guarantee you that calculation gets better, and that's what we're focused on. We're going to make more money and all those metrics that you can dream up or think about are going to get better.

I think the fact you've had a 6-point bump in your gross margin is incredibly positive. And the fact you're sitting on almost $10 million in cash and virtually no debt speaks volumes in itself. Do you have an estimated contract size that generates the best return for CEMATRIX?

I don't really because it's very situational, right? So if you had a situation where you just had a large fill or a large hole to fill and it's just an open pour, literally, Grant, you and me could probably go buy a piece of equipment and run it and have a good chance of executing that project. But if you talk about grouting a tunnel that's underground where you're pumping thousands of feet, then you need specialized equipment and you really need to know what you're doing. And so the margin that we would get is really dependent on the situation, the complexity of the task. Who could compete in that area? How far is it from one of our offices? And this is an area that we've really made a lot of strides in, in the last 5 years in terms of trying to get better at recognizing those factors so that we can price that project appropriately. So if it's relatively simple and straightforward, but big, we know there's going to be a lot of competition on it, and we know the margin is going to have to be tight. If it's very complicated, very sophisticated, very sensitive, we know that's going to rule out many, if not all, of our competitors. And so on that one, we can and should demand a higher margin. So it very much is very situational and the answer is it depends.

You do have some major projects underway right now, and this individual is just asking for an update on those projects.

Yes. No different than Procter & Gamble wouldn't give you an update on Crest sales in the U.S. We're not going to provide information on specific projects because we don't want to help our competitors. What I will say is both those projects are going well and kind of as expected from our perspective.

A couple of questions on share buybacks or the normal course issuer bid. What's the status of that? And any plans to continue buying?

So the status is we've purchased 700,000 shares all in Q2 related to that as we've disclosed. The NCIB remains in place. If in discussions with the Board, we think there's an opportunity to buy more shares after looking at the best use of capital, we could potentially do more than that. I personally -- this is not necessarily the company's position, but my position. I'm a fan of the NCIB. I think in situations where we think the shares are undervalued, I think it's a good use of capital if we don't have an active acquisition. We will never buy back the maximum. I don't see us deploying that much capital into that, but I do see us hopefully doing more NCIB purchasing in the future.

With the proliferation of MSE wall construction, have you seen an increase in contracts specking cellular concrete as backfill material?

Yes. No other elaboration, yes. Yes, we have seen that. And I think you can see that in our numbers. That's part of what's contributing to our growth. We make a lot of sense in that application in terms of ease of construction and often, we can be cheaper than EPS. So it makes a lot of sense for us.

Not sure where this one came from, but do you feel confident on collecting accounts receivable that is aged over 90 days? Could you share a little color on that?

100%, we do. As we talked about earlier, our customers are almost always the large general contractors that operate in North America. Almost all of them have really good credit. And there's lots of legal security around these projects, whether it's liens, whether it's payment bonds, whether it's holdbacks. So, we have very rarely had any AR-related losses. When we do, it tends to be on a very, very small job. So, we do a 5 cubic meter job for Randy's pools, and Randy turns out to be not a reputable guy. So, that's where we run into sometimes occasionally an AR issue, but we almost never run into it on a very large project because of the protections that are built in the construction industry.

Another question on buybacks, which you've already addressed. I guess the only other part of it is whether or not those are filed on SEDI.

Yes. So, there's no requirement to file NCIB purchasing on SEDI. We are required to disclose it in our financial statements and our MD&A, which we do every quarter.

I already know what your answer is, but what does Randy think the fair share price should be at present?

Yes. I don't want to speculate what would be. Just my personal opinion is it should be higher, right? And you can use whatever valuation you want to use, whether it's a discounted cash flow, whether you want to look at peers, whether you want to look at a forward multiple, whether you want to look at a forward multiple of EBITDA, I would say in almost every one of those, you'll come up with a share price that's probably higher than where we're at today. And then what I would say is we're lucky enough to be covered by Russell Stanley out of Beacon, who's a financial analyst who does this for living. And I think you could take some guidance from what he's put out there.

You heard of other players in the cement industry, cellular industry, such as Martin Marietta Materials or Astec. Do you compete with them?

So, obviously, we've heard of those guys for sure. Some of them will have a project or a project -- a product that's similar to cellular concrete. But generally speaking, commodity players struggle in what I would call the more specialized or technical sales. So if you sell cement, you're almost like an order taker. So, someone phones you up and they say they want so much cement and you say, here's the price and here's when I'll deliver it. Cellular concrete is a much more complicated sale because you sometimes have to convince people to use it and you've got to go through the technical qualifications about why it makes sense. So it's a much more complicated sale. So, we don't really compete against those guys. Much like we see general contractors trying to self-perform work, you will often see cement companies trying to figure out how they're going to make more money or grow their business. And sometimes they'll dip down into specialty construction around cement products. But our experience is they're generally not successful at it because it's just a different sales process. So we don't -- I would say we don't compete against those guys.

Interesting one around national defense. Federal government has said it's going to spend up to 2% of GDP on national defense and 5% by 2035. We'll see. But anyways, a significant part of this would be updating defense infrastructure. Are you seeing or expecting any demand from national defense?

It's a good question. I'm not sure I've seen anything specifically, but examples I could think of is if, for example, the Canadian military or somebody want to upgrade a port, there could be applications for cellular concrete there. We've done some work down in the Houston area around upgrading a port where cellular concrete, again, because of the geotechnical situation, made a lot of sense. So it really is -- it's definitely possible. It would have to be like a physical infrastructure as opposed to the equipment for obvious reasons. So, I wouldn't expect that to be a big opportunity for us, but there could be opportunities that come about for that.

And this was addressed in the presentation and Randy, you've commented further, but any growth plans like acquiring any other companies? And I believe you said that at this point, there's nothing on the horizon.

I'd say there's nothing imminent, Grant, right? Like my hope really was that at Q3, the results would come out, the share price would reflect the progress we've made, would reflect the commitment that we achieved by having a record year already in Q3. We'd be in a better spot to come -- to go talk to some of these players more actively. But what I don't want to do is engage in a conversation and not have the ability to complete the conversation. So, we're still kind of waiting to fix the equity. Any acquisition we did because of the types of company we're target is going to be primarily cash based, but we would want some kind of equity component as part of that.

You've talked about this, but what are the key catalysts investors should keep an eye on in coming quarters? I think you're probably going to say watch the fundamentals.

Yes. Exactly, Grant. I mean, when we manage the business, we focus on revenue, how is revenue growing, what are gross margins, what's the bottom line, what's adjusted EBITDA, how is cash flow going? And then we're looking at what investments do we have to make to continue to grow our business or maintain our business. And so the things that we show investors are the same things that we use to track the success of our business. So, we really are fundamentally a fundamentals company, right? And I believe strongly that as those fundamentals continue to improve, that's going to get reflected in the share price. One of the things I would really like to see is to get less -- how do I say it, more institutionals or more long-term shareholders, long-term shareholders involved. So, there are some people who have been shareholders for a long time, and those people are definitely frustrated because many of them have a cost basis that's higher than where we're at. But we need more people that believe in the long-term view of the company and hold so that we don't have as much trading that happens around announcements or as much emotional selling or buying that happens around the company. I'd really like to get more of our shares in the hands of people that are long-term holders and see the future in the company, so we can get some of the volatility out of it.

With that, we've got a couple more, but they've been addressed already or they've been addressed. We don't have any other questions. Team, any closing comments?

Yes. Maybe I'll just -- I'll let MJ and Jordan do some closing comments, and I'll do something right at the end, Grant.

I don't have much to say other than thank you for the opportunity to present, and we're really looking forward to the future here, not just with Q4, but 2026 and beyond.

I echo what you say, Jordan, pretty excited for the future.

And I guess I will just kind of pile on there is we're all equally excited. I think as people that are owners of the business and people that run businesses for a living, when we look at where CEMATRIX is, we really couldn't be happier. Like we're growing revenue, we're generating cash flow. Our customers are happy with us. Our employees are happy with us, and we're focused on the same things that our investors are. So, I would say just keep on believing. I think the people that stick with CEMATRIX continue to be investors are going to get rewarded over the long term.

As a shareholder of 15 years, I keep on believing. So with that, thank you very much to all of those who attended. And thank you to the CEMATRIX team, and we'll see you next quarter. Thank you.

Thank you, Grant.

Thank you.

Thank you.