Superior Plus Corp. (SPB) Earnings Call Transcript & Summary

Hello, and welcome to the Annual and Special Meeting of Shareholders of Superior Plus Corporation. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to David Smith, Chair of the Board of Directors of Superior Plus. Mr. Smith, the floor is yours.

Ladies and gentlemen, good afternoon, and welcome to the 2025 Annual Meeting of the Shareholders of Superior Plus Corp. I'm David Smith, and as Chair of the Board of Directors of Superior Plus. It is my responsibility and privilege to act as Chair of this Annual and Special Meeting. Consistent with prior years and now common practice among other public companies in Canada, we are holding this meeting virtually via the live audio webcast again this year. The virtual nature of this meeting has an impact on the way the meeting is conducted. Our goal is to preserve the rights of shareholders and proxy holders to vote on each of the resolutions before the meeting and to the extent possible, provide you with opportunities to participate in this virtual-only format similar to the way you would have at an in-person meeting. As with any technology applications, unexpected issues may occur and Computershare, our service provider for this platform, will help us resolve any issues that arise. I welcome our registered shareholders and all guests that are joining this meeting today through our virtual platform. We're excited to have your participation in the meeting, and thank you for your interest in the affairs of Superior Plus. There is also an accompanying presentation following the formal business of the meeting, which is viewable on the virtual meeting platform and on our website at superiorplus.com. Also joining me at this meeting is Allan MacDonald, President and Chief Executive Officer; Grier Colter, Executive Vice President and Chief Financial Officer; as well as Darren Hribar, Senior Vice President and Chief Legal Officer of Superior Plus, who will act as Secretary of the meeting. The moderator of the meeting is Chris Lichtenheldt, Vice President, Investor Relations. The Board of Superior Plus is responsible for overseeing the management and overall direction of the operations of Superior Plus. It is currently composed of 9 members. Ms. Laura Schwinn, Mr. Jean Paul Gladu and Mr. William Yardley are nominated for election for the first time at today's meeting. In order to facilitate our Board renewal process, Ms. Mary Jordan and Mr. Douglas Harrison have determined not to stand for reelection this year. Accordingly, there are 10 nominees for election as directors of Superior Plus at this meeting. All 10 of the nominated individuals have extensive business and Board experience, and Allan MacDonald is the only director who is also a member of management and therefore not considered independent under regulatory rules. You will find information and disclosure on our corporate governance process in the information circular. Your Board is committed to ensuring that Superior Plus continues to carry out high standards of corporate governance. I'd also like to take a moment to acknowledge and thank Mary and Doug for their years of service, hard work and many contributions to Superior Plus, which have helped set the stage for our future growth. The nominees standing for election or reelection at this meeting are as follows: Catherine Best, Jean Paul Gladu, Patrick Gottschalk, Jennifer Grigsby, Michael Horowitz, Calvin Jacober; Allan MacDonald, President and CEO of Superior Plus; Laura Schwinn, William Yardley; and myself, David Smith. The scrutineer for the meeting today is Kyle Gould of Computershare Trust Company of Canada. Immediately following this formal meeting, Allan MacDonald will make a short presentation to review 2024 milestones. Note that the presentation contains forward-looking statements and the use of non-GAAP measures. Turning to Slide 2. I would like to take a moment to comment on the voting procedures to be used at today's meeting. You should now see the agenda on your screen. Only a registered shareholder or duly appointed proxy holder can ask a question or vote at the meeting. Most shareholders or duly appointed proxy holders would have voted in advance of the meeting using the 15-digit control number provided to them by Computershare. If you had voted in advance of the meeting or sent in your proxy and do not want to change your vote, no further action is required. For those who haven't voted yet or wish to change your vote, all polls were opened 15 minutes prior to the meeting. Please use the vote tab to submit your vote. To vote, select your voting direction from the options shown. Your vote has been cast when the checkmark appears. The polls will remain open for all matters being voted on until the last item of formal business has concluded. After each motion, registered shareholders and proxy holders may ask a question related to that specific motion. Please note, we won't be addressing any general questions related to the business, financial results or outlook until the formal portion of the meeting is complete. We'll do our best to respond to all your questions related to the motions during the meeting. However, if a question or comment is not related specifically to the motion and more appropriately addressed during management's presentation, it will be answered or addressed during the Q&A session of the management presentation if time permits. If you have a question or comment on a specific motion, I ask you use the Q&A tab. Please type your question or comment in the text box appearing on the screen. Once you have finished typing your question or comment, please select the send button to submit your question. Mr. Lichtenheldt will read your question to the meeting and the appropriate person will address it. If we receive a number of questions on the same topic, we will group the questions together and provide a comprehensive response. As noted, today's meeting is being held entirely by means of electronic communication facilities in accordance with our bylaws and applicable laws. Superior Plus used the notice and access process for provision of its information circular and other meeting materials to shareholders for this meeting. I have received an affidavit from an official of Computershare that proper notice of the meeting has been given and that the notice and form of proxy were mailed on April 11, 2025, to all shareholders of record as of April 3, 2025. The 2024 annual report, which includes the audited financial statements for the year ended December 31, 2024, was also mailed to those shareholders who elected to receive it. I direct that the affidavit, together with a copy of the documents mailed to shareholders be annexed to the minutes of this meeting. I'm advised by the scrutineer that there is a quorum present. I declare that this meeting is properly convened and regularly constituted for the transaction of business. Only a registered shareholder or a person appointed as a proxy holder of such shareholder is entitled to make or second motions or to vote at this meeting. In order to ensure that the meeting covers the required business in an efficient manner, we have prearranged for Darren Hribar, who is a duly appointed proxy holder, to move the motions of business. I will now proceed with the formal business of this meeting. Turning to Slide 3. I am now tabling the 2024 annual report, which includes the consolidated financial statements and the auditor's report thereon. The annual report was duly mailed to those shareholders that had requested to receive it. Turning to Slide 5. The number of directors to be elected at this meeting has been fixed at 10. It is now in order to proceed with the election of 10 directors of Superior Plus Corp. The information circular lists the nominees for election for the ensuing year. May I now have nominations for the 10 directors to be elected?

I nominate each of the following persons for election as director of Superior Plus Corp. to hold office until the next annual meeting or until their successor is elected or appointed. Catherine M. Best, Jean Paul Gladu, Patrick E. Gottschalk, Jennifer M. Grigsby, Michael J. Horowitz, Calvin B. Jacober, Allan A. MacDonald, Laura L. Schwinn, David P. Smith and William T. Yardley.

Under the bylaws of the corporation, advance notice is required for additional nominations to the Board. There were no other nominations received within the requirements of the advanced notice bylaw, and therefore, I declare the nominations closed. The voting for directors is by individual director and not by way of slate vote and will be conducted by ballot. Each nominee will be elected only if the number of votes cast in their favor represents a majority of the votes cast for them by shareholders. May I have a motion to elect each of the nominees as a Director of Superior Plus Corp. I hereby ask Darren Hribar to move the motion.

I move that each of the 10 persons who have been nominated be elected as Director of Superior Plus Corp. to hold office until the next annual meeting or until their successor is elected or appointed.

Thank you, Darren. Chris, have any questions come in?

There are no questions related to this motion.

Voting is open. If you have already voted or appointed a proxy holder, no further action is required unless you would like to change your vote. If you are participating in the meeting through the virtual platform, please record your vote by using the vote tab. Based on the preliminary voting results for this matter, it is expected that the resolution will be carried in respect of each nominee. We will continue with the remainder of the business of the meeting while the scrutineer tabulates the results of the voting. Turning to Slide 6. Our next item is the reappointment of Ernst & Young LLP as the auditor of Superior Plus Corp. I hereby ask Darren Hribar to move the motion.

I move that Ernst & Young LLP be reappointed auditor of Superior Plus Corp. to hold office until the next annual meeting or until their successors are appointed at such remuneration as may be fixed by the directors of Superior Plus Corp.

Chris, have any questions come in?

No, there are no questions related to this motion come in.

Voting is open. If you have already voted or appointed a proxy holder, no further action is required unless you would like to change your vote. If you are participating in the meeting through the virtual platform, please record your vote by using the vote tab. Based on the preliminary voting results for this matter, it is expected that the resolution will be carried. We will continue with the remainder of the meeting business while the scrutineer tabulates the results of the voting. Turning to Slide 7. Our next item is to approve the resolution set out in the information circular approving the adoption of our stock option plan as more particularly described in the information circular. The rules of the Toronto Stock Exchange require that this resolution be passed by the affirmative votes cast by holders of not less than a majority of the voting shares present or represented by proxy at this meeting. I hereby ask Darren Hribar to move the motion.

I move that the resolution set forth on Page 22 of the information circular with respect to the adoption of the stock option plan be approved.

Chris, have any questions come in?

No questions related to this motion come in.

Voting is open. If you have already voted or appointed a proxy holder, no further action is required unless you would like to change your vote. If you are participating in the meeting through the virtual platform, please record your vote by using the vote tab. Based on the preliminary voting results of this matter, it is expected that the resolution will be carried. We will continue with the remainder of the business of the meeting while the scrutineer tabulates the results of the voting. Our next item is to approve the resolution set out in the information circular approving the reduction of the stated capital of our common shares to CAD 5 per share as more particularly described in the information circular. The Canada Business Corporations Act requires that this resolution be passed by the affirmative votes cast by holders of not less than 66 or 2/3 of the voting shares present or represented by proxy at the meeting that vote on such resolution. I hereby ask Darren Hribar to move the motion.

I move that the resolution set forth on Page 24 of the information circular with respect to the reduction of stated capital of the common shares of the corporation be approved.

Chris, have any questions come in?

No, no questions related to this motion come in.

Voting is open. If you have already voted or appointed a proxy holder, no further action is required unless you would like to change your vote. If you are participating in the meeting through the virtual platform, please record your vote by using the vote tab. Based on the preliminary voting results for this matter, it is expected that the resolution will be carried. We'll continue with the remainder of the business of the meeting while the scrutineer tabulates the results of voting. As part of Superior's commitment to good governance, the Board has sought nonbinding advisory vote to accept Superior's pay-for-performance approach on executive compensation as more particularly described in the information circular. I hereby ask Darren to move the motion.

I move that the form of resolution set forth in the information circular respecting the nonbinding advisory vote regarding Superior's approach to executive compensation be approved.

Chris, have any questions come in?

No. No questions related to this motion come in.

Voting is open. If you have already voted or appointed a proxy holder, no further action is required unless you would like to change your vote. If you are participating in the meeting through the virtual platform, please record your vote by accessing the vote tab. We shall pause to allow voting before closing the polls. Polls in respect of each matter of business are now closed. Ladies and gentlemen, I've received a preliminary scrutineer's report on the voting results. I've been advised by the scrutineer that based upon the proxies deposited for the meeting and total votes received in advance of the votes entered through the virtual platform, each of the motions and resolutions for all matters to be voted upon at the meeting has been carried. I declare each of the resolutions carried and direct that the results of the poll and the votes be entered through the virtual platform for all matters to be voted upon at the meeting be included within the minutes of this meeting. We will also press release the voting results as required by applicable securities laws. I direct that the final scrutineers' report on the meeting votes be filed with the minutes of this meeting. That concludes the formal business of the meeting. If there is no other valid business to come before the meeting, I will entertain a motion to conclude the meeting.

I move that the meeting be concluded.

Ladies and gentlemen, I declare the meeting concluded. We'll now move to a short presentation by Allan MacDonald, President and CEO of Superior.

Thanks, David, and good afternoon, everyone. Thank you to our shareholders, partners and employees for joining us today at our Annual General and Special Meeting. This year has been pivotal for Superior Plus, and I'm excited to share our progress and plans with you. Since I joined Superior 2 years ago, we've made significant strides in transforming our organization. While it has been a long journey requiring some difficult decisions, we have had a diligent, disciplined focus on putting the right team in place, creating a culture of continuous improvement and prioritizing customer acquisition, retention and growth. We are now emerging with tangible evidence that we've made permanent foundational fixes, arriving in 2025 with a sustainable balance sheet, responsible capital allocation and debt management strategy and a clear path to growth. In 2024, one of our key achievements was the successful launch of Superior Delivers, our visionary plan to modernize our propane operations and expand our customer base. In the past, we knew we had great propane assets, but we were struggling to grow organically. So we decided to undertake an exhaustive exercise to evaluate and design a next-generation propane company. We established a culture of shareholder value creation and disciplined capital allocation. We laid the foundation to leverage data-driven insights to understand, acquire and retain more customers, become a low-cost operator and share best practices across our teams to improve operations. By the end of 2024, we were well on our way to redefining our operating model. We set Superior up to deliver organic growth and expand our presence in the propane market by becoming more agile, customer-focused organization. With Superior Delivers, we are on track to achieve an incremental adjusted EBITDA of $70 million by the end of 2027. At Certarus, our compressed natural gas business, we continue to lead the market. We're in a position of strength and generating substantial free cash flow. Following years of aggressive capital investment, we are exiting a period of rapid growth and adapting to a more moderate market condition. We're now expanding and growing our CNG business in a self-sustaining way that will maximize shareholder value. In 2024, we reviewed our capital allocation strategy to ensure we were building a solid foundational financial base for Superior Plus and investing in maximizing returns. In keeping with this strategy, we made the difficult but necessary decision to reduce our dividend and create more financial flexibility for share repurchases and debt reduction. While this change may not have been viewed favorably by all, we have the utmost confidence that the reduced dividend in combination with substantial share repurchases will ultimately maximize value for all our shareholders. To demonstrate our commitment to delivering shareholder value, we accelerated our share repurchase program, repurchasing nearly 17 million common shares or approximately 7% of our shares outstanding over the past 2 quarters. Over the long term, we remain focused on financial prudence and capital discipline. This will provide us with the flexibility to reinvest in operational improvements and position Superior Plus for sustainable long-term growth. At Superior, environmental, social and governance priorities are a key component of our success. In 2024, we became the first company in Canada to pilot renewable propane with the city of Chilliwack in British Columbia. We also executed a number of renewable natural gas projects, nearly doubling the amount of RNG delivered to market over last year. A core responsibility of the Superior Plus Board of Directors is corporate governance, including Board effectiveness and Board renewal. Today, we look forward to welcoming 3 new individuals to the Board who possess the skills and expertise to help create value for our shareholders. Looking towards the future, we're thrilled about the opportunities ahead. We've never been more confident in our ability to generate strong returns, and we have the right plan and the right people to execute it. Thank you to our Chairman, David Smith and the Board for their guidance as well as the executive team for their leadership and commitment to our transformation efforts. I also want to thank you, our shareholders, for your patience. We knew there was a tremendous potential within this company, but also a lot of work to do. We appreciate your trust in our journey to become recognized as North America's best-in-class energy solutions provider. And finally, I'd like to recognize our thousands of dedicated employees who make this company a success in communities across North America. The team has done an outstanding job to reach this point. It's a new day, and we look forward to delivering generational growth at Superior as we set out to make 2025 our best year yet. And with that, I'll ask Chris if there's any questions that have come in.

No questions.

Thanks, Chris. Have a great evening, everyone, and thank you for attending our Annual and Special Meeting of Shareholders.

This concludes the meeting. You may now disconnect.