CEMATRIX Corporation (CEMX) Earnings Call Transcript & Summary

[Audio Gap] structure today's gear for participants and are less familiar with the business. The discussion is going to be led by CEO, Randy Boomhour; who was also joined by CFO, Marie-Josee Cantin; and Jordan Wolfe, President of subsidiary, MixOnSite. We will break for questions at the end of the formal presentation. When we do break, we encourage those questions. As a reminder, we're only going to take questions through the webinar portal. If you're listening over the telephone, please access the web link sent earlier to ask a question. You can submit a question using the question box within the portal at any time. I'll ask the questions on the air for everyone to hear and then management will answer. I'm not going to reference anyone's name, but simply read the questions asked. And if I can't get to your question online and has not yet been interest during the call and can be, I'll come back to you by e-mail. I'm not going to read the forward-looking statements, but I do state that they apply and I reference them on Page 2 of this presentation. With that said, once again, thank you for joining us. Remember, this is fairly informal, and we do encourage questions to help you better understand the business and its growth path. And now I'll turn the call over to Randy to start his part of the discussion and presentation.

Thank you, Glen. Really appreciate that introduction. Before we get to this slide, MJ, if we could just stay on the disclaimer slide there, that would be great. I did want to say welcome to everyone to our investor webcast presentation. We're happy to have both people that are new to our story and then existing shareholders. This presentation will be more geared towards potential new investors than our existing shareholders. So as a result, we're going to spend more time on the company, what we do, the opportunity and a little less time on the financial results. But we will, of course, cover both. Unlike many microcap companies, we don't spend as much time talking about things we hope to do in the future. We're not a story about how we hope to one day be a growing profitable company. We already are a real company that is growing profitably. We don't trade on a multiple of future hopes and plans. A very large percentage of small public companies fail. They never get to commercialization. They never get the revenue growth, they never get to profitability. We've achieved all of those things already. We're already there. So let me tell you more about us and what we do. Next slide, please. Thank you. Yes. So matrix, we like to call this like a key investor highlights or an executive summary. But CEMATRIX is a cellular concrete specialty contractor. We're a leading provider of lightweight cost-effective durable cellular concrete for infrastructure projects. We provide solutions to our customers' geotechnical challenges using cellular concrete, on time, on budget, on quality is our mantra. Customers choose cellular concrete because of one or more of its physical properties and we have a strong competitive advantage that we'll describe in a later slide. We're really proud of our overall financial strength and overall growth trend. Revenue has grown at a cumulative annual growth rate of 25% since 2017. Our last 3 years, we've consistently posted positive financial results. 2025 was a record in almost all of our key financial indicators. Record adjusted EBITDA, record cash flow from ops and record EPS. 2026, we're on track to be another good year. I love this chart on the right here of these bullet points, which really just shows our or improvement in the last couple of years. And particularly, you can see how we're off to a strong start in 2026. And if you look at the trailing 12 months as of June 30, you can see well over $50 million in revenue, over $10 million adjusted EBITDA, cash flow from ops, so over $10 million. So pretty significant financial performance. 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 grow. We'll talk about the total addressable market later. It's hard to get our arms fully around but we'll do our best. And then in particular, there are some really strong tailwinds around increased infrastructure spending in Canada and the U.S. that are really providing a lot of support for our business. So we're going to pause right now and show a short video that we think kind of helps people get a really good understanding of cellular concrete, what it looks like when it comes out, what it looks like when we manufacture on site, and a common infrastructure application that we use. So I'm going to share the screen now and run a video. Just give me in a second here when I do that. This video should play without sound and then I'll do a little bit of stopping and talking as we go. This -- before I get to start to set it up, this is a video taken from our North Carolina project, which many of our existing shareholders have heard about for a long time. It's a project that has 5 bridge abutments where we're placing cellular concrete because of the underlying soil conditions. We believe it's the largest installation of learner retention North America. And we are now about to mobilize out for the third of the five bridge approaches. Let me get this started. So I'll stop right here, but this is a really good video of showing us kind of filling a cell here in this port. And you can see as the material comes out, it really kind of looks like a run milk shake. -- we'll fill this sell up and then it will look like these existing areas here. When it's first poured, obviously, it's liquid. So you can go in, but it hardens to the point where you can pour over top of it or use it the next day. On the top here, you can see an excavator that's sitting on a material and it's placing the MSC panel walls here, so that's sitting on our existing material. So again, this is a great shot where you can see existing pours here we're standing on it. Here's a fresh pour of a sell we just completed, and you can see this as the crew here pouring in a new cell to fill that spot. So back to MJ to share the presentation. So that video is a little bit out of order in terms of how we like to do things, but we think it's helpful in terms of people who have never seen the product before as to what it looks like and what one of our major applications would be. So I'll turn it over now to Jordan, who will go through some more information on CEMATRIX.

Thanks, Randy. My name is Jordan Wolfe, President of MixOnSite, one of CEMATRIX subsidiaries. I'm part of the key core management team alongside CEMATRIX and MJ. You can see here a list of our Board of Directors, their names. We work very closely, and I might add very well with them. I won't go through the company time line, you can kind of see CEMATRIX from the title was founded in 1999, all the way to 2025. But I will talk about inside our ownership a little bit more in detail. We have outstanding shares of around $150 million, fully diluted 157.6 million shares. I think it's important to note that insider ownership has around 16 million shares or 11%. The largest insiders being myself with 12.2 million and Randy Boomhour with 1.8 million shares, although that would be 3.4 million if you include his restricted share units. Next slide, please. So I'll talk a little bit about cellular concrete. For those that are new to the material in our company, cellular concrete is made by mixing cement, water and a foaming agent. The foaming agent creates bubbles in the mixture, resulting in cellular concrete structure when the concrete sets If I may, you can kind of picture a cubic foot of cement and water that weighs around 114 pounds per cubic foot without any foam in it. Once we inject foam, we can bring that density down to whatever specified on the projects. So that 114 cubic feet -- pounds per cubic feet can easily turn into 35 -- 25, 35, 45, 55 pounds per cubic foot. And when it does that, all that air is not only making it lighter, but it makes that 1 cubic foot expand as much as 2 or 3 or 4x. Some of the key properties of cellular concrete included being cost effective. The next two low density, lightweight and high bearing capacity are one of the -- some of the primary reasons why engineers specify our material, which is pretty much to solve geotechnical challenges across construction projects across the country. So a concrete is extremely pumpable. We've pumped at over 14,000 feet before in one shot. It's highly flowable, self-leveling, self compacting, has great thermal insulating properties because of the foam, which is highly desirable in colder climates. It's very durable and very excavatable. Our primary applications include lightweight engineered fill, MSE retaining wall fill, lightweight insulating road base, flowable self-leveling compacting fill, pipe and culvert abandonments, tunnel and annular growth and shallow utility and foundation installation. To go over some of our customers, our competitive advantage, our key customers -- so metric is always a subcontractor to a general contractor. We will occasionally work directly for an owner, but this usually happens on very small scopes of work. And we have worked with many of the largest general contractors in North America from AECOM [indiscernible] you name it, we probably work for them. To highlight some of our competitive advantages, I think our reputation is at the front of that list. We've been successful in delivering cellular concrete on time and on budget for over 25 years. Our team and expertise is an advantage with over 200 years of on-the-field -- infield experience across our crews. Our equipment gives us a large advantage. We have a large fleet of mobile technically advanced equipment for producing state-of-the-art cellular concrete with capacity to grow. Our size and scale is an advantage. We have multiple locations from coast to coast, successfully completing projects across Canada and the U.S. I would say we cover a lot of ground both above and below ground considering some of that work has taken place 200 feet below ground on Pika Air Force Base in Hawaii. So we really do get around. And also, we're more sustainable. We're generally more environmentally friendly than the legacy products that we replace. I told you a moment ago, we can turn 1 cubic feet into around 3 to 5 cubic feet. Well, when we get one tanker of cement delivered, we can turn that one tanker into as much as 100 yards or more. So there's less compared to ready mix that would require about 10 loads or 10 trucks, we can do that volume with just one load. So not only does that impact of environment less with less truck, but also improves our safety because there's less traffic on site. With that, I'll pass it back to Randy.

So a question we get asked a ton is just how big is the opportunity in front of us. And if we're being honest, it's really hard to nail it down. When we go research third-party data and the size of the global cellular market, we get ranges that vary quite dramatically. A recent estimate that we think is roughly accurate is the U.S. size, market size is around $1.2 billion. Now that would be for all potential applications of cellular concrete, some of which we don't pursue. But I do think, in general, we all agree the market for cellular concrete is growing and the market for lightweight fills, which is a multiple, which includes competitive products is a multiple still larger than just cellular concrete. There's also a lot of tailwinds right now supporting our industry and infrastructure spending in general in Canada and the U.S. is increasing, and that's because the infrastructure is aging. The infrastructure needs to be repaired and replaced for decades that repair and replacement has been ignored or paused. And as a result, what happens is we see infrastructure breaking in places. And when that infrastructure gets broken, then there's an immediate emergency repair effort and then other municipalities or governments take note and say, we better make sure that doesn't happen to us. Also a tailwind is as populations continue to grow. When those populations grow, they need new infrastructure, and that's placing additional and also places additional loads on existing infrastructure. So we forecast spending an increase on infrastructure now and into the future, and this is really providing a significant tailwind for our business. So I'll turn over now to MJ, who will go through some of the financial highlights of our business.

Thanks, Randy. So let's review some financial highlights. As Randy mentioned earlier, we had a record year for 2025. Our EBITDA was higher than our 10 -- 20 previous year combined. It was at $8.3 million. So if you look at our 2 best years that we had previously of 2023 and 2024, we are exceeding that number. If you're familiar with the Rule of 40 for a green investment, we fit that category as well with revenue growth of 27% and EBITDA margin of 18%. Our revenue is growing. We have positive bottom line, and we are generating cash. Our revenue CAGR of 25% has been going on since 2017. As we mentioned, we had a record $8.3 million in adjusted EBITDA. We had a record $8.2 million in cash flow from ops and EPS of $0.27 per share. We have a strong balance sheet with low leverage. We finished the year last year with $12 million in cash. And at the end of Q2 this year, we had $16 million in our coffers. So if you're new to our story, matrix or new to the construction industry in general, I'm going to give you some keys to understand our business a bit better. So revenue growth will be lumpy. It's not going to be a perfect stair case, and our financial results will be variable based on the timing of when large projects start and stop. Construction is a seasonal business. Usually, you have higher revenue in warmer months. And if you take our average over the last 5 years, we do 18% of our revenue in Q1, 17% in Q2, 34% in Q3 and 31% in Q4. We are a specialty construction contractor. Our margins tend to be higher than general contractors, but we do have more bench line and more fixed cost. Project size impacts our margins. So larger projects have more competition, and as a result, lower margins. We do have excess capacity that enables us to do significantly more revenue with existing equipment and staffing levels. I'm not going to go through that slide. Having said that, you can find it on SEDAR+ and on our website if you're interested in knowing more on our financials. This is our Q2 '26 financial highlights. Again, we've done an earnings call recently. So if you're interested, you can go on our website and have a listen. We -- can highlight that we did have some records for many metrics for both the quarter and the year, particularly for revenues and EBITDA. And perhaps a couple of things that I'd like to highlight for you. You may notice our gross margin look a little bit lower this year. But if you look at our MD&A, I encourage you to go have a read, we are discussing a key contract we had last year in 2025 that are benefiting our numbers last year. Now if you were to normalize this, we would have been ahead on the quarter and almost flat for the year. And maybe the second thing I'd like to highlight on this slide is despite our growth in revenue, our SG&A is lower. So we made some changes to our cost structure and it's benefiting our SG&A. We meet some improvement there. All right. So you can see at a glance what I mentioned about our revenue not being a perfect stair case, but you can see the trend line is a growth trend line. And if you look in Orange, that's a year-to-date number for revenue. So as you can see, we are exceeding a few of the years we've had previously in the past. And when you look at gross margin, I touch base a little bit on that. Our long-term sustainable target is 30% for us. And again, the trend line is of a growth. If you look at the middle graph around 2022, if you're interested in knowing what TIP is about, it's because we had some supply chain issues during the pandemic and some cement shortages. Our debt was dramatically reduced since 2017. We've come a long way, and that provides us with a strong foundation for the future for us. Looking at our sales success and backlog. This is a year-to-date number for Q2. We announced $26.2 million in awards, which just so you know, did issue a press release last month of $8.2 million. So the tally right now is at $34.4 million. Our backlog is strong. It's at 61.5 at the end of Q2. It supports future revenues, and our largest project in backlog is underway. Our achievements are getting recognized in the market. If you look at the graph on the left, if you were to invest $100 since Jan 1 of 2025, we would have exceeded the TSX composite. And next, if you look at our share price at September 15, but just like this week, we closed at $0.47. It's 81% higher than what we ended up at December 31 '24, when it was $0.26. It's an increase of 185% compared to what we had in March of 14 of 2025 when it was at $0.16. We have no plans to raise capital or issue shares at the moment. These are our share of setting and potential dilution as of August 31, 2026. So we have 149.7 million in common shares outstanding. We have 4.7 million in options and RSUs of 3.1 million. So for a total 157.6 million. As you may be aware, we do have an NCIB program. Since the beginning of the program, we repurchased about 2 million shares of matrix as of Q2 of this year. We've put some ratios for you on the right-hand side. They're all trending up, obviously, as we're making more money and we're becoming more profitable, so that can be a resource for you if you're interested. That's it for as natural to our financials, and then I'll turn it back to Randy. Thank you.

MJ, can you go one more for me, please? Yes. So we always like to end with this slide, which is just sort of a summary of why invest. And it really comes down to what we think are five key points. One is we're an industry leader we're really well positioned to capitalize on the opportunity in the large and growing infrastructure construction segment. Number two is we are a growth company. We are growing revenue, as we've talked about many times in this presentation at over 25% per year cumulative since 2017. We have positive adjusted EBITDA, positive cash flow from operations and a strong balance sheet. We do believe that we're currently undervalued based on traditional valuation metrics, but that gap is closing. Whether you think that metric is some multiple of forward revenue for EBITDA or for EPS, we believe in all of those that were lower than what we should be. We don't have any new plans or no new capital raises required to fund a burn rate. Unlike a lot of micro cap or small-cap companies, we are cash flow positive. So the only new capital should be in support of an accretive acquisition. And then importantly, we have capital to deploy right now. As MJ mentioned at the end of Q2, we have $16 million in the bank, and we're actively looking to grow organically and to support that cash to grow via acquisition. There is no pressure we feel to do an acquisition just because we're talking about it. We're only going to do an acquisition if it makes sense. If that happens in the next 3 months, great. If it takes 2 years to find the right one, we will take 2 years because we're only going to do an acquisition if it makes sense. On the right-hand side here, we have Investor Relations contacts. The retail side, we encourage you to e-mail the company, the information there. And on the institutional side, we encourage you to e-mail we're still capital the information there. We currently have one analyst that follows the company, that's Russell Stanley with Beacon Securities. Russell is on the webinar with us today, and I think we'll have some questions. And then just in terms of wrapping it up before we go to the Q&A, I just wanted to sort of reemphasize our focus is now is to continue growing profitably. If you look around the public markets and try to find a company that has a market cap under $75 million, with revenue over $50 million positive EBITDA and positive cash flow, you won't find very many. In fact, I think you'd be challenged to find more than 5. And the reason we know this is because we looked and there's not money companies that fit the profile that I just described, which is essentially CEMATRIX profile. Having said that, we're not an ESG company and not a crypto company. We're not an AI company. We're not a rare earth minerals company, not a data center company, not a computer chips company or fill in the blank for whatever you think the current hot market trend is. We're a traditional bricks-and-mortar execution story. There are some things about our businesses that some investors don't like. We don't hide from those things or to try to whitewash those things, things like our seasonality or uneven growth. We talk about them openly and honestly. We help our shareholders understand those. Now some of those things, some people won't like, but I think that creates opportunities for those who can see past them. We believe the companies don't exist to serve shareholders, they exist to serve customers and to solve a customer need. When companies serve their customers first, that's when they also serve their shareholders. That's what we're focused on. We're going to run a good company, and we're going to make money. So with that, I'll turn it over to Glen for the Q&A session.

We do have quite a few questions in the queue. So we'll get going. I'll try to start to segment them. So the first series of questions are around the product itself. Can you briefly explain the difference between cellular concrete and traditional concrete? Is it weight, strength? What is the differentiating characteristics?

I'm going to hand this one over to Jordan, who's growing up in the business and probably do a better job than me explaining this.

Yes. Good question. And it's predominantly the weight, concrete weigh around 140 pounds per cubic foot and our material typically is specified anywhere from 25 to 50 pounds per cubic foot. So it is a fraction of the weight of normal concrete. Our material is not considered a final wear surface like concrete would be. We are typically underground, not seen or if we're above ground, there's a final material that's put on top of our material because we are, by definition, a low-density -- or excuse me, a low strength material. So our materials might range -- might be in the range of 50 to several hundred pounds per square inch. That's the compressive unconfined strength, where concrete is typically measured in thousands of PSI. So we are meant to be a subgrade material, not the final concrete product. And we're typically a lot less expensive than concrete.

Sorry, Glen, just to add to that is some people think we're -- we compete against concrete, but we never compete against concrete. Concrete is a structural material in a different category. We're on lightweight to material. So we don't compete against regular concrete. Very important to understand that.

Good add.

Distillate concrete performed under prolonged exposure to extreme heat in the regions such as Africa. Have you conducted testing or completed projects in similar climates? And does the product require modifications for these conditions?

So the simple answer is the product performs very well, but it really has to be matched to the situation or the spec. So we've had cellular concrete installed in some instances for 25 years and is still performing and still meeting the spec. So it really depends on the situation. Cellular concrete could work very well in very cold environments or very hot environments.

Can the product be used in residential applications, i.e., baseband floors? If so, have you any plans to expand into this area?

Absolutely. So because of its insulating properties and lightweight properties and flowable properties, there are a lot of instances where cellular concrete does have retail or residential applications. The challenge of those applications is they are small volumes. And so as a result, it can be tricky to make money on those. And as a result, we've chosen not to focus on that segment of the market, and we focus on the industrial or commercial spaces or applications?

We have seen some splash announcements recently, the Canada Pension Plan and Brookfield Asset Management are launching a $50 billion fund that will make major investments in key sectors, including infrastructure. BMO and Sun Life announced a $75 billion spending pledge last week to support infrastructure. Do you have a sense as to how long it will take announcements to translate into real demand? The U.S. traditional contributed the majority of your revenue might these recent announcements in focus or Canada?

Yes, it's a really good question. And I would say those announcements really fit into the category of tailwinds that support this idea that infrastructure spending is increasing and is going to stay in place for many, many years to come. It's very hard for us to tie a specific project to some kind of government announcement. Maybe at the general contractor level, you could see those ties. But at our level, at the subcontract level, we just don't see those direct ties where we could say this project is tied to this piece of legislation. But we do feel like it fits very well with the overall tailwind message that we've been delivering. In terms of Canada versus the U.S., we're obviously going to continue to try to grow and find opportunities in Canada, but the U.S. market is at least 10x bigger than the Canadian market, and that's where we see our biggest potential for growth.

Okay. With that said, I know I saw some questions related to tariffs and the trade disputes or, I guess, lack of agreement between Canada and the U.S., any comments on that?

Yes. So far, we have not been impacted by tariffs. I would say generally, we see tariffs more as a negotiation strategy as opposed to an overall sort of clearing trade policy. And so as a result -- and then I guess the other thing is we procure cement and manufacture our product locally. So we don't have a lot of things across the Canada U.S. border. Now the U.S. is a net importer of cement. So they are also bringing cement from other countries like Turkey or Greece. And so to the extent the tariffs start applying against cement sources from there, we could also see some tariff impact. I do think the U.S. cement industry is pretty good about advising the current administration on the impact of tariffs on cement because of the U.S. is a net cement importer and have had some success at commencing the administration not to do that. So long story short, we feel pretty comfortably now in the current tariff environment that it won't have a meaningful impact on us. But of course, that can change very quickly.

Going on from my previous question related to large infrastructure investments taking place in Canada. There's sort of a secondary question to that from a different audience member, more or less repeating the same type of comments related to the opportunities. But more specific, if those opportunities exist, can you sort of define the end markets? Are they data centers, pipelines, LNG, energy gas mines, whatever you could share on that?

Yes. So we get asked a version of this question a lot, right? So for example, I talked about it earlier in terms of the types of companies right now that are hot in the investment community. One of those is data centers. And so there's not a one-to-one correlation with, hey, if you build a data center, you're going to need x percent of cellular concrete. It doesn't work that way. The one-to-one correlation is always around soil conditions or the requirement to reduce vertical or lateral loads in a situation where you need a lightweight fill material. So you could have 9 data centers, 9 mines, 9 bridges to have no requirement for lightweight fill. But then the 10th one does. And so it's -- there's no one-to-one correlation or some correlation. It's just if you build enough of these things, sooner or later, you're going to run into a situation where the soils are concerned or load is the concern. And then those are ideal situations for cellular concrete to be used. So it's not a situation where one of the easy equals one of these, but it is a situation where overall spending on infrastructure means there's more opportunities for cellular concrete.

Is this a commodity product? What is the competitive landscape? And what is your, I guess, market share within that landscape?

So it is not a commodity product. It's definitely a technical sales process. And we've hired people that have come from commodity environment, and they've struggled in our sales environment because of that requirement to understand the specification and alter the mix design to meet the specification or the need of the customer or to have a conversation with that customer about value engineering where the spec that they've put in might not be what's required in that situation, and we can offer them savings. The competitive landscape in each area is different. In the U.S., there is one other national player that we consider that kind of goes coast to coast. And then outside of that, you have several large regional players who might only participate in certain areas of the U.S. Canada is not really another large volume competitor. We see small volume competitors or alternative products. But in the U.S., there are other large cellular capable cellular concrete companies out there. And so the competitive environment is different depending on the situation and the region.

And I think the last part of that was market share.

Market share is really tough for us to estimate. There's no -- there really are no good estimates of the overall size of the market, as we talked about before. But we would believe, obviously, in Canada, because there are no other large volume suppliers, we probably have a bigger, more proportionate market share, whereas in the U.S., our market share would be less than the total because of the number of competitors there.

Okay. And I guess going off this theme, you answered part of this question, but I'll ask it again. What other companies or technologies are attempting like you to disrupt this industry and who are your chief competitors?

Yes. So I mean, our chief competitors really are other cellular concrete companies. As I said in the previous answer, we have one player that's nationally. We have probably somewhere between 5 to 10 large regional players. And then there are probably dozens of smaller family businesses that are probably doing $1 million to $5 million several in each region. Alternative products are also competitive against us. It really depends on the situation, also if it's grouting application might be competing against the polyurethane growth or some other contact growth, if it's behind walls, we'd be competing against EPS locks. If it's other applications, it could be other different materials could be formed last aggregate if they're looking for something that's ultra lightweight. So again, the competition and the competitive products really depends on the application in the area that we're talking about.

Perfect. These questions are lining up perfectly. So in that same mindset of the applications we're selling a concrete could technically be used as an alternative to conventional solutions or conventional materials, what proportion are currently using a cellular copy today?

Yes, it's really tricky because it sort of implies that I know what the total market is, and I'm seeing every opportunity and it just doesn't work like that. So I don't really have a good answer to that, Glen. I would say we actively search out opportunities where our competitive products are being used. And if we can flip those to cellular concrete, we definitely try to do that as a sales strategy. I would say, when we run into construction opportunities where it's more construction management, that can be a trickier flip where we run into opportunities where it's a design build or there's some kind of savings mechanism between the DC and the owner that they're more receptive to value engineering and flip. So again, it just really depends.

Okay. And where are your barriers to entry? What would stop a much larger competitor from copying your technology? Are there any patents protect...

Yes. There are no patents. We do have our own proprietary equipment. We do have our own proprietary foaming agent, but you can purchase large volume, mixing equipment now commercially. You can purchase foaming agents now commercially. The real barrier to entry really gets back to what we described as our competitive advantage. It's really around our years of experience and expertise. We've pretty much done every job that you can imagine. We pretty much made every mistake that you can imagine. And so the collective experience of having been there done that before, really is the biggest competitive advantage. Two people like you and me could go buy a piece of equipment, Glen. And if there's a pretty simple open pour, we could probably even pull it off. But obviously, the higher the volume, the more complicated, the pour, that's where the experience really matters. And then also the nature of being a specialty contractor is very tough, right? It's -- there are there are large periods where you don't have crews doing anything. And though we find lots of our competitors really don't have the expertise to manage those types of businesses that are both seasonal and then also have peaks and valleys. Most businesses want to run a consistent workforce. And then when the work slows down, they want to lay those people off. But when you're in a highly specialized specialty construction business like us or segment like us, you have to keep those people on board. And so you have to run your business in such a way that not only do you make money when you're working, you've got to make enough money to pay for that downtime and then pay for all your SG&A. And that's the trick and it takes a certain volume to get above that to break even and start making money.

Okay. You may have answered this, but I may have been focused on a different question, so I'll ask it. To what extent are you participating in the data center construction boom, if at all?

Yes. So we did kind of answer that one already. And again, there's not a one-to-one correlation. We get this question a ton. People always want to say there's 10 data centers, how much cellular concrete is in each one, and you could do nine of them that have no cellular concrete, but the 10th one is built in a situation where the soils are weaker unstable or you're worried about lateral or vertical loads against some other structure. And so then you got to have two row that need it and then maybe six more that don't. So the answer is it really depends. It's really about soil conditions and load management.

Okay. Can you walk through how the sales and bidding process works and characterize the size and quality of the opportunity pipeline you're seeing today versus, say, several years ago, for instance. And what is different in the market?

So the thing that's different in the market is we're seeing more opportunities. And that's really built on two things. It's every year that not only we're in the in the industry, but our competitors in the industry are delivering successful applications or projects with cellular concrete. It helps improve the overall confidence of the construction industry and the product and just creates more opportunities for us in the future. On top of that, we're meeting with all the different components of the decision-making chain, whether that's owners, design engineers, general contractors, specialty contractors. We meet with as many of those as we can to educate them on the applications and properties of cellular concrete, so that we can help get cellular concrete spec-ed in and designed into more projects in the future. So it's really we're standing on the shoulders of all the people that came before us and all the work that they did before is to build the market. And then we continue to add to that legacy to make it easier to sell in the future. And then you add on that, just the overall aging infrastructure tailwind that we've talked about many times and the new infrastructure that's being built it's really those two things that are just creating more sales opportunities for us and the industry in general.

When you started the presentation, you mentioned a large contract that's currently underway. Can you comment on how big that contract is? And how many quarters will it continue to last?

So as a general rule, we don't generally talk about specific contracts, but we've made an exception in the past that all continue to honor around this one. So this -- the North Carolina contract is around USD 20 million. We've done roughly 2 of the 5 scopes of work, if you will, 2 of the 5 bridges. We're about to start the third one this month. and then the next two will likely go sometime in 2027. So the work is not continuous. We'll go and show up and then we'll do the bridge pours for 2, 3, 4 months depending, and then there will be a break as the contractor goes to the next bridge and sets it up and then we'll start again. So it's not a continuous $1 million of revenue per month per se. It really will be a lump, a break, a lump, a break, a lump.

Okay. Can you talk a little bit more about your geographical reach in current locations?

Yes. So in Canada, we have three crews, three locations: Vancouver, Calgary and the GTA in Toronto. In the U.S., we have two primary locations, one based out of Chicago, Illinois, and one based on the West Coast near Seattle and Bellingham. We have some equipment staged on the East Coast of the U.S. And then with our ability to mobilize for a large project, we can really get very easily to anywhere in the Continental U.S. or Canada.

Okay. And how variable are your raw material costs from a geographic standpoint? Are your costs affected much by where you secure jobs? Do you have inflation escalation clauses in your contracts?

Yes, absolutely. So our biggest component of our cost is either cement or ready-mix. And those -- the cost of cement or ready-mix varies quite substantially based on how far you are away from cement or ready-mix plant. So obviously, if you're in a major metropolitan area with a cement manufacturing source close by, your cement costs are going to be lower. If you're bidding a job in the Northwest territories or in Hawaii, well, your cement to ready-mix costs are going to be substantially higher. But in every case, the local market already understands that distance requirement and how that impacts construction costs. And so those are just built into our prices. So you can't say a cubic yard or a cubic meter so the concrete is going to cost the same in Alaska as it does in Chicago, it doesn't work that way. But the pricing is consistent based on those market conditions.