Mullen Group Ltd. (MTL) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of Mullen Group Ltd. Annual Meeting 2021. Please note that this meeting is being recorded. It is now my pleasure to turn today's meeting over to Ms. Joanna Scott, Corporate Secretary and Vice President of Corporate Services. Ma'am, please go ahead.

Thank you. Good afternoon, and thank you for joining us today. Before we begin today's meeting, we would like to provide you with a quick overview of the Lumi virtual meeting platform. [Operator Instructions] This year, we will not be providing you with a business update, but only holding the formal part of our meeting. However, for those that are interested in learning more about our business, you can scroll through the slides at your leisure, which you will see on the right-hand side of your screen. Thank you. And I will now turn the meeting over to our Chair, Chief Executive Officer and President, Mr. Murray Mullen.

Good afternoon to all. On behalf of the Board of Directors of Mullen Group, I want to welcome you to our 28th Annual Meeting. Our team is social distancing today, so I'm speaking to you from my home office. And although we are disappointed that we can't see each other today, our decision to hold the meeting virtually was in response to the continued COVID-19 pandemic. The health and safety of our employees, communities, shareholders and other stakeholders is of utmost importance to us and our decision not to meet in person again this year was made with this priority in mind. So we want to thank you for attending our virtual meeting, and I hope that you agree that we did the right thing by moving to a virtual format, yet again, this year. We look forward to a day when we can all hold an in-person annual meeting once again and celebrate the end of this pandemic. Now as we proceed to the formal part of our meeting, please note that as with any virtual technology platform, unexpected glitches may occur. But our service providers for this platform at Computershare are very experienced at running this type of meeting and will help out as required. So with the few housekeeping items now completed, the meeting will now come to order. In accordance with the company's bylaws, I will act as Chair of the meeting. But before proceeding with the agenda, I will ask Joanna Scott, Corporate Secretary of Mullen Group, to act as the Secretary of the meeting; Kyle Gould, representing Computershare Trust Company of Canada, to act as a scrutineer. And I have received confirmation from Computershare as to the due mailing of the Notice of Meeting, information circular and instrument of proxy on March 29, 2021, to shareholders of record as of March 16, 2021. I direct that this confirmation, together with the copies of the documents mailed to the shareholders, be kept by the secretary with the minutes of the meeting. The business may be transacted at this meeting if we have at least 2 shareholders present who hold or represent by proxy in the aggregate at least 5% of the shares entitled to vote at the meeting. A shareholder is present if the individual representing the shares in-person or by proxy has logged into Lumi. And according to registrations confirmed to me by the scrutineer, there are 50 -- 62 shareholders present, representing 68.76% of the shares entitled to vote at this meeting. As a result, a quorum exists. Shareholders and any other person attending the meeting of shareholders may address the meeting when there is a call to discuss any of the motions that are made today at this meeting. Should you wish to address the Chair of the motion, please type in your question or comment in the message section of your screen once it opens during the discussion period. If there's any discussion or question, the secretary will read the question aloud. So I now declare this meeting to be regularly called and properly constituted for the transaction of business. Now at today's meeting, we will be receiving or voting on 4 business items: first, to receive the audited financial statements for the year ended December 31, 2020; second, to fix the number of directors to be elected; third, to elect the directors; and fourth, to appoint the auditors for the ensuing year. The business items I have just referred to are further described in the Notice of Meeting and management information circular and proxy statement dated March 16, 2021, that was delivered and filed in advance of the meeting as required by law. So the first item of business is to receive the 2020 annual financial statements and the auditor's report thereon. This document includes the consolidated financial statements of Mullen Group Ltd. for the fiscal year ended December 31, 2020, together with management's discussion and analysis thereon, which was mailed to each registered shareholder, and this item does not require a vote. The remaining items of business will require a vote. And I would now like to turn the meeting over to Joanna Scott to explain the voting process for this virtual meeting. Joanna?

Thank you, Mr. Chair. We have received all proxy voting results for today's resolutions in advance of this meeting. Anyone in attendance today, who has not yet voted and is not signed in as a guest, will have an opportunity to vote online in real time using the Lumi platform. In accordance with the company's articles, every shareholder, entitled to vote on the matter, has 1 vote in respect of each share held by that shareholder. Rather than hold up the business of this meeting for the final tabulation of votes cast on each motion, the Chair has provided the interim results received from the scrutineer in advance of this meeting on each of the motions presented. As a matter of convenience, we have asked certain shareholders to move and second routine matters of business. This is not intended in any way to limit shareholder discussions, but only to assist with the progress of the meeting. The Chair has directed that the final combined results of the advanced poll and the votes entered through the virtual platform on all motions today be included with the minutes of this meeting. These results will also be available in the report on voting results posted on SEDAR following the termination of this meeting. The polls are now open. Shareholders and duly appointed proxies will now see your screens change to show the various items of business for today's meeting. You will have from now until the conclusion of this meeting to cast your votes on each of these items. [Operator Instructions] I will now turn the call back to you, Mr. Chair.

Thank you. Now as Joanna just explained, the next items of business require a vote. They are as follows: first, to set the number of directors of Mullen Group Ltd. to be elected at the meeting at 6 directors; second, the nomination and election of the directors; and third, the reappointment of our auditors. So do I have a motion in this regard, please?

Good afternoon, Mr. Chair. My name is Kim Derbecker, and I am a shareholder of Mullen Group. I make the following 3 motions: first, that the number of directors to be elected to the Board of Mullen Group Ltd. at today's meeting be fixed at 6 directors; second, that each of Christine McGinley, Stephen H. Lockwood, David E. Mullen, Murray K. Mullen, Philip J. Scherman and Sonia Tibbatts be nominated each as a Director of Mullen Group Ltd. to hold office until the next annual meeting of shareholders or until a successor is elected or appointed, subject to the provisions of the Alberta Business Corporations Act and Articles and Bylaws of Mullen Group Ltd, and that the nominees presented to this meeting be elected as directors of Mullen Group Ltd; third, that PricewaterhouseCoopers LLP, chartered professional accountants, be reappointed as the auditors of Mullen Group Ltd. until the next annual meeting or until their successors are appointed and the Board be authorized to fix the remuneration.

So thank you. Would a shareholder please second the motion?

Mr. Chair, my name is Richard Maloney, and I am a shareholder of Mullen Group. I second each of the motions.

So thank you. Is there any discussion of any of these 3 motions or any further nominations for directors?

[Operator Instructions] Mr. Chair, there are no questions at this time.

So as there's no discussion, and there are no questions, I will now call for a vote on the 3 motions before the meeting. Will all shareholders please enter your votes in Lumi. In accordance with our majority voting policy, shareholders will vote for each director individually. [Voting]

Have the polls closed?

Yes, they have closed now.

Thank you. So the scrutineer has collected and tabulated the votes on each motion and reported the results to me. And as I mentioned before, our majority voting policy requires that we conduct the election of directors on an individual basis. As a result, the decision of the meeting of the election of directors was conducted individually using the voting functionality of Lumi. Having received confirmation from the scrutineer, I declare that each of the motions that was made today passed. Accordingly, each individual who was nominated today to be elected as a director of Mullen Group was so elected. And the results of this vote will be disclosed by way of news release, which will also be available on the company's SEDAR profile and company's website. This now concludes all matters before our annual meeting, and I would now entertain a motion that the meeting be terminated.

Mr. Chair, I move this meeting be terminated.

Could I get a seconder, please?

Mr. Chair, I second the motion.

So thank you, all. I declare the meeting terminated. And as a result of the formal part being done, I thought what I'd do is take a little -- the next few minutes and provide a few closing remarks. Now as Joanna explained at the beginning of today's event, we decided that given the current situation, it was best to keep the meeting short and leave the business presentation for another day when we can all get together and present the old-fashioned way, in person. Besides with today's technology, we can deliver everything about our great company to you in a multitude of different platforms, which you can do at your leisure. But when you check us out, this is what you'll see. We have a diversified and a very dynamic organization. We're structured into 3 operating segments, which are differentiated by service offering. The Less-Than-Truckload segment, which we often refer to as the last mile of logistics, is the largest segment. And the one we are most excited about because we have built through acquisition, a network of recognizable regional brands across Canada that are absolutely best-in-class service providers in the communities where they operate. And collectively, the network we have assembled is second to none. The Logistics & Warehouse segment is more aligned with the long haul of the supply chain, which essentially means that the goods being consumed must be transported from point of origin to the end market, typically requiring a warehousing component. We really like providing the customer with an end-to-end service solution, which is why we offer a wide range of logistics, trucking and warehousing options to our customers. And we have the Specialized & Industrial Services segment, which is more closely aligned with the capital spend part of the economy. I'd like to refer to this segment as the little gem segment because we look for great companies that operate within a regional market and generally offer very nice returns on capital. In this segment, we continue to hold our investments in the oil and natural gas service industry, which maybe, just maybe might be on the verge of a breakout after many years of decline. I say this because the hydrocarbon energy molecule will still be required for many years, perhaps decades, despite the move towards a carbon-free society. Transitions such as the green movement are not events, meaning it will take a long time to shift away from carbon. In the meantime, commodity prices are rising as demand returns, and I expect capital investment by the oil and gas companies to accelerate in the coming quarters. The industry will not go back to where it once was, but it has the potential to get a whole lot better than last year, for sure, and we will be positioned to invest when we see the opportunity to generate nice returns for our shareholders. Now through these 3 segments, we oversee 35 independent business units providing strategic direction, capital, along with some shared services group that is unbelievably talented and knowledgeable. The day-to-day management of the business, we leave to the seasoned leaders in each business unit because they know their customers, their employees and the markets they serve better than anyone. And they are as competitive as any entrepreneurial company or a competitor there is. This is how we manage such a large and diverse organization. So as I wrap up 2020 in today's meeting, there are so many I have to thank for contributing to our overall success. There is 1 group, however, that deserves special mention this year. With COVID, we have all come to realize the importance of the supply chain in our daily lives. And who drives the supply chain? It's the frontline worker, the essential workers they've been referred to. Now many of us, myself included, were fortunate enough to be able to practice social distancing and stay out of COVID's way by working from home. Technology has enabled us to do our daily job in ways unthought of before. But the essential worker, and we have over 5,000 driving truck, working in the warehouse, doing the maintenance and mechanical work who are on the front lines making the business work, serving the customers. I cannot thank them enough for their hard work, their commitment to our company and [ tell a worker ] and their service to our communities. The day when their health and safety is not compromised by COVID-19 will be a day we can all celebrate. So to our shareholders, I've never been more optimistic about the future of the Mullen Group. The economy is poised to take off once COVID is brought under control. In addition, we've announced 2 significant acquisitions already this year that are not just great companies in themselves, they provide new growth platforms to our organization. So as a shareholder, you're a part of Canada's largest pure-play logistics company. We have a motivated and experienced senior executive team, a Board that's 100% supportive of our strategy, our commitment to our people and to the communities we work in. So this concludes my very short business overview. But before I bring closer to today's meeting, I would be glad to entertain and address any questions you may have. So Joanna, can I just turn this over for the Q&A session, please?

[Operator Instructions] Mr. Chair, I do not have any questions at this time.

Okay. Well, we're not seeing any, I think what I'd like to do now is just to thank everyone for joining us today. Thank you for your continued investment and support of our organization. We look forward to seeing everyone in person next year. So thank you very much, and stay safe. Joanna, that concludes my presentation.

Thank you.

Thank you. This concludes the meeting. You may now disconnect.