Mullen Group Q3 2026 Earnings Results & Report

Mullen Group EPS Results

• Actual EPS: C$0.52
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A
• EPS Beat Rate: 7 of last 8 quarters

Mullen Group Revenue Results

• Actual Revenue: $653.17 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Mullen Group (TSE:MTL) is a public company with a long history of acquiring companies in the transportation and logistics industries. Today, we have one of the largest portfolios of logistics companies in North America, providing a wide range of transportation, warehousing and distribution services through a network of independently operated businesses. Service offerings include less-than-truckload, customs brokerage, truckload, warehousing, logistics, transload, oversized, third-party logistics and specialized hauling transportation. In addition, our businesses provide a diverse set of specialized services related to the energy, mining, forestry and construction industries in western Canada, including water management, fluid hauling and environmental reclamation. The corporate office provides the capital and financial expertise, legal support, technology and systems support, shared services and strategic planning to its independent businesses.

Mullen Group Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q3 operating performance was among the company’s best ever, supported by its diversified business model, productivity gains, and stronger activity in mining-related projects.
• Positive Sentiment: Mullen Group ended September with CAD 214 million of cash and CAD 381 million of working capital, providing substantial flexibility for capital expenditures and acquisitions.
• Positive Sentiment: The company announced the acquisition of Willson International, a 100-year-old logistics business expected to contribute roughly CAD 80–85 million of revenue and complement its existing international logistics operations.
• Neutral Sentiment: Management sees significant upside from LNG, pipeline, mining, data-center, and other major infrastructure projects, but emphasized that approvals and purchase orders remain uncertain; projects would likely require a six- to 12-month ramp once awarded.
• Neutral Sentiment: Mullen expects about CAD 10 million of near-term cash-tax savings from new capital-investment deductions, while noting the benefit is primarily a one-time timing advantage that reduces deductions in later years.

Presentation

[Operator]

Welcome to the Mullen Group Limited 2026 third quarter earnings conference call and webcast. As a reminder, all participants are in a listen-only mode, and the conference call is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then zero. I would now like to turn the conference over to Mr. Murray Mullen, Chair and Senior Executive Officer. Please go ahead, Mr. Mullen.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Welcome everyone to Mullen Group's quarterly conference call. This morning, we released our third quarter interim report. It is a 60-page document. It is full of detail, numbers, and analysis prepared by our team, headed up by Carson Urlacher and Nick Woodward. This document contains updated information. It is available on SEDAR+ and on our website, www.mullen-group.com. I am going to remind everyone that today's presentation and commentary contain forward-looking statements that are based upon current expectations and are subject to a number of risks and uncertainties. As such, actual results may differ materially. Further information identifying the risks, the uncertainties, and assumptions can be found in the disclosure documents. With me this morning, I am joined in Okotoks by the senior executive team. Carson Urlacher, Senior Financial Officer.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Joanna Scott, who is our Senior Corporate Officer, and on the line is Richard Maloney, our President and Senior Operating Officer, and Lee Hellyer, our Senior Commercial Officer. For today's call, we will follow a similar format as the last few conference calls, all in an effort to make sure that this call is as meaningful and productive for everyone as possible. All the prepared remarks by Carson and myself can be found in the third quarter interim report, the financial report and press release documents, which were released earlier this morning. Truthfully, we have nothing further to add, so we will head straight to the Q&A session, as I suspect you will have some interesting questions. Before I hand it over to the operator, I am going to offer up a few opening comments. Let us start with the obvious. Our operating performance in Q3 was very good.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

In fact, some of the best ever. It is a strong validation of the strength of our diversified business model. You know that truthfully, we have built up over 30-some plus years as a public company. Second, the balance sheet is rock solid. It is backstopped by those 10 and 12-year long-term bonds we placed a couple of years ago. This in itself looks pretty timely given where interest rates are trending these days. Furthermore, if you look at the cash position as it is September 30, 2026, you are going to see that we had CAD 214 million in cash on hand, CAD 381 million of working capital, and a boatload of untapped bank loans. This leads to my third comment. You need to consider the Willson International announcement on Monday morning in conjunction with our Q3 MD&A.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

We used a portion of the CAD 214 million cash on hand to grow the business with another quality acquisition, the backbone of our long-term growth strategy. Enough said. Operator, would you please open the lines to the Q&A?

[Operator]

Yes, sir. We will now begin the question-and-`answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are on a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause momentarily as callers join. The first question will come from Kevin Chiang with CIBC. Please go ahead.

[Kevin Chiang, Director of Institutional Equity Research at CIBC]

Hey. Good morning, everyone. Congrats on the good results here. Maybe two questions for me, and maybe just first one, as we think about how you look to deploy capital for growth. Is there a way to frame how you might think of the investment intensity in 2027 and beyond, just given maybe the growing optimism in the end market you are servicing and you have a Productivity Mega Deduction that looks like it will be helpful to your free cash flow conversion. So just in terms of if an improving free cash flow, does that get deployed towards more growth capital, or does that extra free cash flow get deployed to maybe other initiatives?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Good question, Kev. It is one that we debate here all the time, and it is not that we are not going to have to deploy more capital to capitalize on the potential new growth, which is basically, we all know, tied to these huge capital projects. The question, I think, Kevin, is really timing. Thus far, we have heard all the anecdotal evidence that these projects are going to go, but the only area that we have really seen them going is really in some of the mining projects. Then you can see in our results how we increase CapEx tied to those projects and the corresponding results that we have when there is growth opportunities. So it is all in the timing. Is it going to happen in 2027? Maybe, maybe not.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

All I can tell you is we will probably not get too far ahead on the CapEx until we know it's real. Otherwise, we're just gambling with our shareholders' money. Remember, this is Canada. It sometimes takes a long time to get these projects off the drawing board into shovels working. We'll just monitor it, Kev, and then when it's time, boom, we'll go and we'll go fast. Of course, we've got the balance sheet to go fast. I think that's the way we're going to look at it. Until that happens, the economy is pretty good and our business is pretty solid. You can see it from the results. But the outsized growth and the outsized opportunity for us is when these capital projects come to fruition.

[Kevin Chiang, Director of Institutional Equity Research at CIBC]

Right. That's great color. Maybe just my second question. When I look at your S&I margins, they're the highest at least I've seen since maybe during the pandemic when there was a little bit of noise with CEWS in everyone's numbers, I guess. But at the same time, as you mentioned, a lot of optimism in those end markets. Maybe we haven't seen a lot of the FIDs come through yet. Is there a way to frame how these margins could trend as those projects come through? Is this something where you could see a step function improvement in the profitability of S&I, given the combination of both maybe increasing activity, which we're all hopeful for, plus it sounds like you're repricing some of the book of business today to capture some of that higher pricing as you improve the quality of the existing book.

[Kevin Chiang, Director of Institutional Equity Research at CIBC]

Just, is there a way to frame how these margins could trend as hopefully some of these nation-building projects get off the ground here?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Tough to frame it, I think. I don't know if that's the right word, and not the way we look at it. I can tell you, once the projects go, you're going to need new capital. But I'm here to tell our shareholders and everybody, we're not deploying new capital unless we see that the rates are going to go up from our customers. Because new capital really implies that we should be making way north of 20% EBITDA margins, up around 25% for new capital. New capital, you're only going to get 25%, Kev, when there's demand exceeds supply in any market. Demand will exceed supply when the projects go. So when they go, we will put new capital work when we're going to get 25% EBITDA margins, or else we're not deploying the capital.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

And we're not going to take the risk on behalf of shareholders unless we can get 25 for our shareholders. So that's how we look at it here. We're poised to go. But we're not going to go too early, because honestly, you're just wasting your bullets.

[Kevin Chiang, Director of Institutional Equity Research at CIBC]

That's super helpful. Again, congrats on a good quarter, then I'll pass it along. Thank you very much.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Thanks, Kev.

[Operator]

The next question will come from Konark Gupta with Scotiabank. Please go ahead.

[Konark Gupta, Director and Equity Research Analyst at Scotiabank]

Thanks, operator. Good morning, Murray and team, and congrats on good results in Q3. I wanted to follow up on Kevin's question a little bit here as well on the S&I segment. It seems like from the commentary you put on the press release, there wasn't everything that was perfectly aligned in the quarter, yet the margin was pretty good. You still had some declines or challenges in the turnaround projects, maybe, though drilling was up. I don't think we are hearing that the drilling activity is kind of catching up completely with commodity prices today because producers are now taking the view that these commodity prices are structurally sustainable. So my question is, how much more upside you would think the S&I segment might have in terms of both top line and margin if this commodity price environment becomes more structural? You know what I mean?

[Konark Gupta, Director and Equity Research Analyst at Scotiabank]

It becomes more sustainable over the next few years.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

I think the simple answer is that, yeah, I agree with you that the energy prices are up. I'll be honest with you, we haven't seen that turn into a whole bunch of new increased demand yet. Our customers are doing exceptionally well off the backbone of high energy costs. We all know why. So they're doing exceptionally well. But I haven't seen where they've really upped their CapEx dramatically yet. I think everybody's waiting for the infrastructure to get built and get going, and then they'll free up their balance sheet to go invest. But right now they're holding their cards pretty close to the vest, to be honest with you. So we have to be very, very picky about where we go.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Until demand exceeds supply, as I said on the last call with Kev, is that look, we'll be prudent with our shareholder capital. Where we have seen nice uptick is, for example, Carson as our Canadian Dewatering group, which there's some really nice projects going on in Canada tied to mining. Those projects have gone and we've had some nice returns there and some really good growth. So, in the meantime, I'll just tell you, our margin's going up because we're still right-sizing and I'm getting rid of business where the margins aren't high enough. It's in anticipation that I'm not going to go to work for nothing. We're going to go to work where we can make a return for our shareholders and where we can create great jobs for our people. So we're just waiting.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

And when it does, we will go back to the margins we used to have when capital was flowing freely back in the last decade and a half ago. It is all about the flow of capital. And right now, it has not really increased yet. So that is why I am optimistic that once it does, we will do better, period.

[Konark Gupta, Director and Equity Research Analyst at Scotiabank]

Right. That makes sense. Thanks, Murray. Then if I can delve into LNG opportunities, obviously we are seeing some momentum on the LNG side in Canada come back. There is also a big contract you guys were talking about on the last earnings call. Can you provide an update, perhaps on what is happening on the LNG side for you guys, and how are you preparing for some of those contract opportunities?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Oh, we have heard the same thing as you and everybody else on the line because it is in the news every day. We have had lots of ceremonies and ceremonial signings and we have had lots of everybody patting themselves on the back that we are going to do it, but we have not seen the purchase orders yet. We have not seen this or that. We think maybe we are closer to that in 2027, but I cannot commit to what time that is. I do not have any better insight on that than you do.

[Konark Gupta, Director and Equity Research Analyst at Scotiabank]

Okay. Thanks, Murray. Then, Murray, last one before I turn the call over. On M&A opportunities, maybe you can perhaps explain the rationale behind the Willson deal, and is that the area where you think there is going to be a lot more M&A activity? That seems to be the area where a lot of your competitors have also focused. Recently, we have seen a few transactions in that arena. Then, are you looking at something more on the S&I side as things evolve in the oil patch over the next couple of years?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Well, Carson, I think what we did, I'll turn this to Lee Hellyer, but I think with Willson, first of all, it's a brand name company, and it's in a vertical we like. I think the big thing with Willson is, Lee Hellyer, is that we were able to use that strong balance sheet and turn making a couple of percent, I think, and turned it into a decent return.

[Lee Hellyer, Senior Commercial Officer at Mullen Group]

Yeah, for sure. With those, Konark, you can't really pick your time with respect to when those acquisitions become available. Entrepreneurs are on their own schedule, and they pick the time for the liquidity event, not us. We just make sure that we have the balance sheet that we can participate in those transactions, which we did this time. It's a 100-year-old company in a vertical that we quite like. It's going to complement our Willson International acquisition that we did just over a year ago. It's a space that we like, and the opportunity came available to us, and obviously, we transacted on it, as you know. That doesn't preclude us from looking elsewhere into different verticals as well too, including S&I. I would say that the number of opportunities on our desk right now is robust, to say the least.

[Lee Hellyer, Senior Commercial Officer at Mullen Group]

I think Joanna is been working her tail off here looking at files and such, but I would say that there's lots of opportunities for us on a go-forward basis.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Including in the S&I front. S&I, once again, I'm just going to caution everybody. It's coming, but when? When we see the right opportunity, Konark, we pounce. We do not do it to grow to grow. We do it because they're great quality companies, and we can see outsized returns, and they complement what we're doing in our business model. That's always been in our DNA, not changing today. Happy to do S&I, happy to do in any vertical, but it's got to be the right opportunity and a good brand.

[Konark Gupta, Director and Equity Research Analyst at Scotiabank]

Yeah. That is great clarity, guys. I appreciate the time as always. Thank you.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Thanks, Konark.

[Lee Hellyer, Senior Commercial Officer at Mullen Group]

Thank you.

[Operator]

The next question will come from Benoit Poirier with Desjardins Capital Markets. Please go ahead.

[Benoit Poirier, VP and Industrial Products Analyst at Desjardins Capital Markets]

Hey, good morning, everyone, and congratulations for the strong quarter. Maybe, Murray, just in terms of supply-demand, obviously, no big recovery in demand yet, but I would be curious to get some of your thoughts about how did you see the supply and demand evolving over the last quarter, and whether you still see a disconnect between Canada and the U.S. Just curious, especially given the temporary softening in pricing we saw back in July and August.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

I think basically you can see from our numbers, Benoit, is that the market appears to be in balance. If the market's not in balance, it would be really difficult for us to generate the results we do. The market's pretty much in balance. The pockets where we saw good growth primarily was where capital went to work, and I've highlighted that, and that was really in the mining sector and anything to do with that. It just so happens we've got a diversified business model and we've got multiple ways to capitalize on that. Generally, the overall market, it's in balance. Look at our LTL side. We said there's just no growth. That's the Canadian economy. You know it.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Everybody knows that the Canadian economy's got a little bit of growth, a little bit of downside, because of the trade issues, but on balance, it's about flat, and that's what we see. If the capital goes to work, which drives economic growth, then you're going to see margins go up because, now we're oversimplify it, but demand exceeds supply, and that's only time you can raise price, period. Our job here is to predict where we think there's opportunity for demand to exceed supply. In the meantime, you will see, including on our LTL side, where we work on productivity gain, on watching costs, on using new technology tools. I hate the word AI, but I'll use it because everybody talks about it. AI is just another tool to help you improve your productivity, and that's not going to change with our group.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

We're going to continue to employ all the tools available to drive productivity gain. You need to do that in a flat economy. There is no growth, so you have to improve. You can see we did a very good job of that. When growth does happen, watch out. That's when you're going to have outsized margin improvement. Until then, we just stay in our lane and run as best business we can.

[Benoit Poirier, VP and Industrial Products Analyst at Desjardins Capital Markets]

Okay. That is great. And in terms of CapEx, it seems to be well under control with about CAD 45 million spent so far this year, while the board approved close to CAD 135 million with the latest round of CAD 50 million. I was just curious about how we should be thinking about the Q4, given what you have spent so far and what the board has approved.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

I think that is timing, is not it, Carson? We have-

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Yeah

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

in our order books for CapEx. It is just when it arrives. But I think there is a fair amount coming in in Q4.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

That is correct. So we placed the orders back in July. So a lot of that new equipment is going through the manufacturing process right now. We are expecting a lot of it to land in November, December, and then early into the new year.

[Benoit Poirier, VP and Industrial Products Analyst at Desjardins Capital Markets]

Okay. That is great. Maybe in terms of the former question about the tax deduction benefits, I was curious if you could quantify what we could see in terms of free cash flow, given the recent discussion on those benefits.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Yeah, Benoit, there is a lot of variables that are at play on that, i.e., the timing of when equipment comes in, the class that it sits in, and those sorts of things. Just to give you a ballpark, we did kind of the back of the napkin as to our best guess as to when things are going to show up, but you are probably looking at about a CAD 10 million cash tax savings.

[Benoit Poirier, VP and Industrial Products Analyst at Desjardins Capital Markets]

Immediately.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Immediately.

[Benoit Poirier, VP and Industrial Products Analyst at Desjardins Capital Markets]

Yeah.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

But you got to remember that that is a one-time saving. So going forward in year two, three, and four, there is no tax deductibility now. So you are getting that benefit up front, but it does not help you long term.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Right.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

CAD 10 million is kind of our-

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Yeah. At the end of the day, I think truthfully, Benoit, I think it's a bit of smoke and mirrors. It helps with your cash taxes now and your cash flow, but it punishes you after year one.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Correct.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

It's just a temporary cash flow situation.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Yeah.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

We don't have that problem here. We've got a strong balance sheet. That might help some smaller business with some immediate tax deduction, but you pay the price in years two, three, four, five, six, seven, eight.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Yeah.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

So it's a one-timer. Yeah, it'll save us on tax this year, and it'll catch us in the back. So we'll never make a decision based upon, we maybe save a couple of bucks on tax right now. It's got to make economic sense.

[Benoit Poirier, VP and Industrial Products Analyst at Desjardins Capital Markets]

Okay. That's great, caller. Thank you very much, and congrats again.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Thanks, Benoit.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Thank you.

[Operator]

The next question will come from Walter Spracklin with RBC Capital Markets. Please go ahead.

[Walter Spracklin, Analyst at RBC Capital Markets]

Yeah. Thanks very much, operator. Hi, everyone.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Morning, Walter.

[Walter Spracklin, Analyst at RBC Capital Markets]

I would like to go back to the rates point you were making, Murray, that you need rates to go higher. I have been speaking to a couple of your Canadian peers, and they are really saying that the tax application now on the Driver Inc. model is indeed leading to some outflow of labor. Some of it was migrant workers, and that is not available anymore. So the driver pool is tightening up a bit, and that is allowing for the start of some nice price activity in Canada. I know it has been prevalent in the U.S. Are you seeing that, Murray? Are you seeing that driver availability affecting supply? Is that giving you the opportunity to raise rates to the levels that you need to? Is it something you expect to happen? Is it happening now, or do you not see it in the cards for Canada?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

It is a really good headline, newsworthy story, but I have not seen it actually show up yet. I think that it is a long-term trend that is happening. I think you are going to still have more immigrants in our business, but I think you are going to have tighter standards now in terms of training, in terms of certification, and that will end up as being a much better safety result for the motoring public. The facts are over the last bit, it is not that we had the immigrants come in, it is the fact that they just were not trained properly before they went out there. So they were not certified. But I think the standard is going up. I think that there is more enforcement, which is raising the bar.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

But thus far, I haven't seen where it gives us enough freedom, if you will, to tighten the market substantially to raise rates. It's different than in the U.S. That has happened in the U.S., but in Canada, just a little bit slower. I think the trend is there, but it hasn't given us enough, the leeway to go and raise prices to the customers right now. Haven't seen that yet.

[Walter Spracklin, Analyst at RBC Capital Markets]

Okay. On the large project pipeline, I was wondering if you could rank order for us both in terms of size and expected announcements or decisions on any RFPs you have out there. I know the Alaska Pipeline, you've got a few in the works on that one. Have any of those been decided on yet? And when do you expect those specific to the Alaska Pipeline to come across your table?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Well, the easy answer is, I expect those decisions to come in the future. The more difficult part of that is when in the future. I have no idea. But when they do, and it moves from us talking with our customers about what's the potential to we got a contract, we will press release it. Until then, all we're doing is the same thing as everybody else. We're talking, we're debating. Everybody's waiting for final approval from the government authorities and truthfully, that we've got First Nations on side, and you've got Arctic Green. So it's coming in the future. I'm convinced of that. But the timing, I have no idea.

[Walter Spracklin, Analyst at RBC Capital Markets]

When you say convinced of it coming in the future, do you mean you're, well, I guess I'll leave that question as to whether you're going to win it or not. Are you convinced of your positioning to win it or?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Oh, we are in good position to win our fair share. Guaranteed.

[Walter Spracklin, Analyst at RBC Capital Markets]

Right. Okay.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Will we win it all? No, we are not going to win it all. That is being too cocky.

[Walter Spracklin, Analyst at RBC Capital Markets]

Yeah.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

But we will get more than our fair share, and we will do quite well when those projects start going. We have proven it. Once those mining projects went, and capital went to work and people got employed, that very same thing will happen. For example, there is not enough activity yet for us to increase our headcount, Joanna.

[Joanna Scott, Senior Corporate Officer at Mullen Group]

Yeah.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

In fact, we did well. We did more revenue. But Joanna, our overall headcount is down year-over-year.

[Joanna Scott, Senior Corporate Officer at Mullen Group]

160 people. We are down 160 people despite being able to knock out the results we did.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

This economy, if we are going to look after Canadians and give jobs, we got to get capital going to work. That is my primary message to Canadians and the government. Get going so we can employ people. Until then, we are still on a productivity hunt. And how do we get better and smarter and using all the tools in the toolbox to make sure that we are as productive as we can be. But we are poised to grow. We are poised to get new capital, and we want to desperately hire more people, but not until the projects go, period.

[Walter Spracklin, Analyst at RBC Capital Markets]

Related to that, what do you think is the ramp time once a contract decision is made and when you start booking revenue and getting to work on that?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

6 to 12 months. Yeah, 6 to 12 months, I think once you get going. They are not going to happen in 2 days. It is 6 to 12 months. There are just so many logistical issues to get going. But once you get going, then the meter starts going, okay, start positioning, start getting capital, start hiring people, and those kind of things. But we will have a 6 to 12-month lead time.

[Walter Spracklin, Analyst at RBC Capital Markets]

Okay. Last question is, am I rank ordering it right? You got the Alaska Pipeline. You already mentioned the mining work, so that is ongoing, that you are capitalizing on now. The pipeline, still TBD in the future, but still TBD. Are you going to be involved in the data center construction and have you done any work on isolating of all the large projects that you see possible in your area, how many or how much of that you are ready and willing to bid on?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Carson?

[Carson Urlacher, Senior Financial Officer at Mullen Group]

I would say with the data centers that we are well positioned to participate in the construction of those. One of the leading products that goes into constructing those facilities is cement. As you know, we have a couple business units that are directly involved in that line of business. The data center that is projected for North Edmonton is well-situated by our transload facility that is serviced by both CP and CN. So we would be in a very good position to be able to be moving steel and various products that are required in that construction of that facility. Then on the offtake of it after, you need energy to run those facilities, which means natural gas and drilling activity.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

We like to participate in major projects right from cradle to grave, where we are involved in the construction piece and then that ongoing annuity at the end, where we are involved in helping generate or provide the power source to those facilities.

[Walter Spracklin, Analyst at RBC Capital Markets]

Okay. Are you still expected to give your typical update? Are you targeting December, Murray, for the following year? Can I ask if you will be putting anything out on project potential, or is it really on base business that you will be giving your business plan?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Carson, I think that we are going to be presenting to the board early December.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

December 2nd, yeah.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

We will present our base case to the board, then we will come out with our business plan that we will articulate to all investors of what we think will happen in 2027. Will we have any more clarity in the next six weeks on nation-building projects and whatever? I wouldn't hold my breath on that. We will not factor into our business plan that the projects are going to go. So we will factor in what we think is our base case. This year, our base case thus far looks to be, well, we are trending above what we said our base case was going to be for this year. Walter, I don't remember when we did our outlining of our base case that there was going to be a war in Iran and fuel prices were going to go up to where they went.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Anything to do with increase in fuel surcharges, we didn't put that into our base case.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

No.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

What we did is, and I give all the credit to our business units, we had these uncomfortable discussions to say to our customer, "You got to pay because we're not paying." Those are called fuel surcharges. That's where we're really off, Walter, in terms of revenue is on that side. Generally, our base case was pretty close, Carson.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Pretty spot on.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Pretty spot on. Ex of the fact I just didn't count I don't know what I missed on that. I didn't see that in December. There'll be something that comes up next year that I have no freaking idea what's going to happen, but I can tell you, our business model and our structure allows us to move very quickly, whatever happens.

[Walter Spracklin, Analyst at RBC Capital Markets]

Sure. Awesome. Appreciate the time and color as always, Murray. Thank you.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Always. Thanks, Walt. Appreciate it.

[Operator]

The next question will come from Tim James with TD Cowen. Please go ahead.

[Tim James, Managing Director of FICC Technology at TD Cowen]

Thank you. Thanks very much. Good morning. Great quarter. My first question, I just wondered if you could elaborate a little bit on the demarketing of lower margin contracts, I guess I am thinking of the S&I segment in particular. Your sort of runway with respect to demarketing, is it dependent on new opportunities coming in one side of the door, or do you kind of have your sights set on sort of a particular number of contracts or revenue where you want those to roll off and it is irrespective of the new opportunities, or do sort of more opportunities mean more demarketing?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

First of all, that's a really good question. But here's our thesis on that. Right now, on some of this production services, the customers, for all intents and purposes, are trying to trick you into signing a long-term contract and fix the price right now. We won't get sucked into that because we think it's going to get busier, and the biggest delta you're going to have in the future when it gets busier is going to be labor. We will not fix a contract right now. When we didn't see opportunity, we accepted lower margin and a lower return just to keep our people employed. But in the future, we think we're going to have to redeploy our capital into higher margin business, and we will need to move the people to where we can pay them more.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

We're just not going to get tricked by any big oil company. Not happening. If our little competitors want to sign on to that, fill your boots, but we're not doing it.

[Tim James, Managing Director of FICC Technology at TD Cowen]

Okay. Thank you. My second question, just getting into a little bit of detail here, was I noticed within the L&W segment, you called out in the MD&A greater demand for cross-border shipments. Just wondering if you could elaborate on that. Maybe surprising might be a strong word, but just caught my attention given the kind of trade environment we're in. What was the driver of the stronger cross-border shipments for that business?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Just a supply constraint. The U.S. has tightened labor standards, entrance standards, and we just have fewer competitors that can cross the border, because when you cross that border, you've got to comply with U.S. rules. And, a number of the ones that are doing it, they can't comply. So that's why, even though the demand hasn't increased, the supply has shrunk, and that's why we've done well, because we comply.

[Tim James, Managing Director of FICC Technology at TD Cowen]

Okay. I got it. Okay. That's helpful. Thanks, Murray.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Cross-border is not a significant piece of our business within L&W, but I would say that to Murray's point, the trend is showing that supply is constricting and the business units that we have in that vertical are benefiting from a reduction in supply.

[Tim James, Managing Director of FICC Technology at TD Cowen]

Great. Thank you.

[Operator]

The next question will come from Cameron Doerksen with National Bank. Please go ahead.

[Cameron Doerksen, Analyst at National Bank]

Yeah. Thanks very much. Good morning. Apologize if I missed this, but just hoping for a couple more details on the Willson International acquisition. I know that the revenue is going to be split, I guess, between L&W and the U.S. & International Logistics. Are you able to provide, I guess, a split of the revenue for Willson between those two segments?

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Yeah. Cameron, it's Carson here. I would say, in the U.S. 3PL, in terms of revenue, you're probably looking at about $25 million-$30 million, going into the U.S. 3PL segment. And in terms of the L&W segment, that'd be the remainder, call it, $55 million in revenue going into that segment.

[Cameron Doerksen, Analyst at National Bank]

Okay. That's helpful. And maybe, we'll get more details when the acquisition closes, but just on acquisition price, any color you could provide there?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Oh, we paid way too much. I told that to the seller. I said, "God, we're paying way too much," but it's a great quality company. It generates free cash. It's in a vertical we like. It's complementary to our coal business unit. And we were comfortable with the price. So that's the art of the deal, but it's a great quality company. And we just happen to have a great balance sheet in cash, and so we just turned the 2% money into 10+.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Yeah.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

We will work with that team and with our coal team to make it 10+++.

[Joanna Scott, Senior Corporate Officer at Mullen Group]

We haven't closed yet, so we're a little sensitive right now to disclosing all the details.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

That'll all be disclosed at year-end.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

It will be.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

of what it all is. Until then, I told the seller, "I'm paying you way too much money, but you got a great company.

[Cameron Doerksen, Analyst at National Bank]

Fair enough. I'll stay tuned on that. Maybe just secondly, in the MD&A, there's a mention of a lease taking of a facility in Vancouver, related to some logistics opportunities. Fairly sizable building. I'm just wondering if there's any specific opportunity that you're eyeing there or what can we read into that?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Well, I'll tell you about that facility. Everybody on the line might have heard of this great Canadian company called Hudson's Bay. Hudson's Bay could not make it in this ultra-competitive world, and they vacated this wonderful facility. It's sat empty for a couple of years, and we think we're going to be able to for our vast network, is we're going to use that as our logistics hub out in Vancouver area. Because we think as Canada grows and as Canada pivots to new markets and Asian markets and offshore, you got to bring it in through Vancouver. We just happen to say, we used our balance sheet to get that long-term lease on that facility, and that sets us up wonderfully to be able to service our clients. Away it goes. It's a great facility in a great area, and we got it.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

That's what we're calling it, the MTL Logistics Park. We're going to put all of our businesses that we got out in Vancouver under one roof and become more efficient.

[Cameron Doerksen, Analyst at National Bank]

Okay. That makes a lot of sense. Appreciate the color. Thanks very much.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Thanks.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Thank you.

[Operator]

Again, if you have a question, please press star then one. Our next question will come from Trevor Reynolds with Acumen Capital. Please go ahead.

[Trevor Reynolds, VP and Equity Research Analyst at Acumen Capital]

Just in terms of

[Trevor Reynolds, VP and Equity Research Analyst at Acumen Capital]

Yeah. Hey, guys. I think most of my questions have been asked, but just in terms of the Alaska project, I was just curious where that will fall, assuming it goes ahead in terms of U.S. 3PL and S&I.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

That one's coming in the future. What day? I don't know. Probably nothing you're going to hear anything until U.S. elections are over, Trev, and then we'll see what happens after that. It's such a political hot potato, I can't answer that. But we're still, I'll be meeting with our business partners next week and positioning and make sure that when it is finally announced, that we're ready to pounce and go. If, now, I'm qualifying this, if the customer will pay us appropriately. We're not doing it for practice, and I'm not doing it for free. We're going to put capital work, we're going to employ people, and we expect to make a profit for our shareholders. So we'll be positioned, but if they want it done for free, don't call us.

[Trevor Reynolds, VP and Equity Research Analyst at Acumen Capital]

Got it. Then, just in terms of, does that fall under the U.S. 3PL division or under S&I?

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Yeah, I think, Trevor, our plan is to include those results within the U.S. segment. We're differentiating our U.S.-based business, goes into the U.S. 3PL segment, which is kind of dedicated for that.

[Trevor Reynolds, VP and Equity Research Analyst at Acumen Capital]

Perfect. Then, just in terms of the truck build-out, do you guys think you ordered enough trucks there? Maybe just some insight, as you mentioned that you wouldn't be investing ahead of approvals yet you did invest in these 100 trucks. So just some insight there.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Yeah, I don't think so. We ordered 100. We're optimistic that there's going to be projects going on a go-forward basis, whether that's in Alaska or Canada. The timing of which is obviously uncertain. If they don't go, well, we ordered

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

That's just next year CapEx. We don't have to make CapEx. Yeah. So we hedged our bets on that, Trev.

[Richard Maloney, President and Senior Operating Officer at Mullen Group]

Yeah.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

We positioned. It's a perfect hedge because if it goes, we're ready. If it doesn't go, well, we just cut our CapEx for next year because we got the trucks ordered for our existing network. So, really no risk to our shareholders.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

And we really wanted to get ahead of the order book

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Yeah

[Carson Urlacher, Senior Financial Officer at Mullen Group]

to be able to get the access to that equipment.

[Trevor Reynolds, VP and Equity Research Analyst at Acumen Capital]

Perfect. Thanks for providing clarity there.

[Carson Urlacher, Senior Financial Officer at Mullen Group]

Yeah.

[Operator]

The next question is a follow-up from Tim James with TD Cowen. Please go ahead.

[Tim James, Managing Director of FICC Technology at TD Cowen]

Thank you. Just a quick follow-up question here that was kind of triggered by that last discussion. Murray, do you think there is any way that the supply and availability of trucks over the next couple of years could be an actual bottleneck in terms of some of these major projects if a lot of them go forward at once? Therefore, you obviously have moved ahead on 100. Do you try and kind of stay ahead of the game so that you are not impacted by that? Or do you, as you look out at the long-term truck supply, do you think that is not going to be an issue given what is on the drawing board?

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Yeah, it is a little bit of an art or a science. I am not sure which one it is, to be honest with you, Tim. But, in this case, we saw a couple things happening. One is we needed to get prepared because the U.S. It really was all about how much capital is going to be employed in the U.S. The U.S. truckers are making more money now, and they are upgrading their fleets quickly. Nobody is adding any more capacity, but the trucking industry down in the U.S. is making more money, and they are upgrading their fleets, and that hogs the order book and leaves very little for the Canadian market. We do not manufacture anything in Canada. We have to import it. So we get allocated, if you will. We just took a prudent move.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

But with our scale and size, we have more pull than a little guy, let us just put it that way.

[Tim James, Managing Director of FICC Technology at TD Cowen]

Okay. That is helpful insights. Thank you.

[Richard Maloney, President and Senior Operating Officer at Mullen Group]

Thanks, Tim. It's also important to point out, as Richard talking. I mean, at the end of the day, you can have all the equipment in the world if you don't have drivers. I mean, our focus will be to continue to get operators. At the end of the day, if there's only so many drivers, then we charge accordingly. This is a fundamental principle of we've got to get the right return for what we're doing. The last 10 years have been lost because of the lack of investments in the energy space. We got to rebuild that space. So we're going to do it. We'll do it safely, properly, retrain our people, and then be able to have the right equipment at the right time. So, and just part of the overall way in which we run a good business. Important to point that out.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Good color, Rich.

[Operator]

This will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Murray Mullen for any closing remarks. Please go ahead.

[Murray Mullen, Chair and Senior Executive Officer at Mullen Group]

Hey, thanks for joining us, folks. I sit here and I'm pinching myself that our team did such a great job over the last quarter, that things are doing as well as they are. But we're not going to get too ahead of our skis. We're just going to go back to work and make sure we're positioned to take advantage of whatever the market is and what will give us. So thanks for joining us, and we'll be talking not that, I guess, pretty soon. We will. So thanks so much. Have a great day. Cheers.

[Operator]

This concludes today's conference call. You may disconnect your lines. Thank you for your participation, and have a pleasant day.

Participants

Executives

• Murray Mullen, Chair and Senior Executive Officer
• Lee Hellyer, Senior Commercial Officer
• Carson Urlacher, Senior Financial Officer
• Joanna Scott, Senior Corporate Officer
• Richard Maloney, President and Senior Operating Officer

Analysts

• Kevin Chiang, Director of Institutional Equity Research at CIBC
• Konark Gupta, Director and Equity Research Analyst at Scotiabank
• Benoit Poirier, VP and Industrial Products Analyst at Desjardins Capital Markets
• Walter Spracklin, Analyst at RBC Capital Markets
• Tim James, Managing Director of FICC Technology at TD Cowen
• Cameron Doerksen, Analyst at National Bank
• Trevor Reynolds, VP and Equity Research Analyst at Acumen Capital