What Mullen Group (MTL) Said on Its Q3 Earnings Call

Key Points

• Mullen Group reported one of its strongest third quarters, supported by its diversified operations, strong balance sheet and improving returns in select industrial markets. It held C$214 million in cash and C$381 million in working capital at Sept. 30, 2026.
• Management remains cautious about capital spending, committing funds primarily after major resource, infrastructure and industrial projects are confirmed. The company is targeting roughly 25% EBITDA margins on new investments while exiting or repricing lower-margin work.
• The project pipeline—including Canadian LNG, the Alaska pipeline and data-center construction—remains uncertain, although mining-related activity is already contributing growth. Mullen also ordered 100 trucks as a hedge against future demand and completed the announced Willson International acquisition, expected to add revenue to its U.S. 3PL and L&W segments.

Mullen Group TSE: MTL said its third-quarter operating performance was among its strongest to date, citing the resilience of its diversified business model, a strong balance sheet and improving returns in selected industrial markets. Management also said it remains cautious about committing capital ahead of confirmed large-scale projects in Canada and the United States.

Chair and Senior Executive Officer Murray Mullen said the company had C$214 million of cash on hand and C$381 million of working capital as of Sept. 30, 2026, along with unused bank facilities. He said the company’s long-dated 10- and 12-year bonds provide additional financial flexibility.

Mullen said the company used part of its cash position to pursue the Willson International transaction announced earlier in the week. Management did not disclose the purchase price during the call, saying more details would be released at year-end after the deal closes.

Capital spending tied to confirmed demand

Management said it expects to deploy more capital if major resource, infrastructure and industrial projects move forward, but does not intend to invest ahead of demand. Mullen said the timing of proposed projects remains uncertain, particularly in Canada, where projects can take time to progress from planning to construction.

“When it’s time, boom, we’ll go and we’ll go fast,” Mullen said, adding that the company has the balance sheet to respond quickly once opportunities are confirmed.

For new capital investments, Mullen said the company is targeting EBITDA margins of roughly 25%, compared with margins above 20% generally. He said Mullen Group will invest only where customer pricing supports those returns, particularly when demand exceeds available supply.

The company has seen more immediate activity in mining-related work, including within its Canadian Dewatering business. Mullen said those projects have produced growth and favorable returns, while broader energy-sector customers have not yet materially increased capital spending despite stronger commodity prices.

In the meantime, management said it is exiting or repricing lower-margin business. Mullen said the company does not intend to enter long-term fixed-price production-services contracts at current levels if it expects labor and equipment demand to strengthen later.

Project pipeline remains uncertain

Management discussed potential opportunities connected to LNG development, the Alaska pipeline, mining and data-center construction, but emphasized that many projects remain in early stages.

On Canadian LNG activity, Mullen said there have been announcements and public commitments but that the company has not yet received purchase orders. He said the company may be closer to seeing activity in 2027, though he could not provide a firm timeline.

Regarding the Alaska pipeline, Mullen said the company expects to receive “more than our fair share” of work if the project proceeds, but noted that approvals, First Nations engagement, environmental considerations and political factors still affect timing. He estimated that once a contract is awarded, it could take six to 12 months before operations begin generating revenue as equipment, personnel and logistics are positioned.

Carson Urlacher, Mullen Group’s Senior Financial Officer, said any Alaska project activity would be reported in the company’s U.S. 3PL segment. He also said the company is positioned to participate in data-center construction, including through businesses that move cement, steel and other materials. Urlacher noted that the company’s transload facility in north Edmonton is served by both Canadian Pacific Kansas City and Canadian National Railway.

Mullen said the company’s 2027 business plan, expected after its board presentation in early December, will be based on its core operating outlook rather than assumptions that major nation-building projects will proceed.

Equipment orders and tax impact

The company has spent about C$45 million on capital expenditures so far this year, while its board has approved approximately C$135 million, according to discussion on the call. Urlacher said equipment ordered in July is expected to arrive primarily in November and December, with some deliveries extending into early 2027.

Mullen Group has ordered 100 trucks, describing the move as a hedge against potential project demand and constrained equipment availability. Management said U.S. trucking companies are upgrading fleets amid improved profitability, which can limit the equipment available to Canadian operators. If larger projects do not materialize, Urlacher said the trucks can serve the company’s existing network and reduce the need for future capital spending.

Richard Maloney, President and Senior Operating Officer, added that driver availability will remain as important as equipment availability. He said the company will seek appropriate returns on capital and labor as activity grows.

Urlacher also estimated that the federal Productivity Mega Deduction could result in roughly C$10 million of immediate cash-tax savings, depending on the timing and classification of equipment deliveries. He cautioned that the benefit is a one-time acceleration of deductions rather than a permanent tax reduction.

Logistics, M&A and market conditions

Management described the broader Canadian freight market as generally balanced, with limited economic growth in less-than-truckload operations. Mullen said productivity initiatives, cost management and technology remain important in a flat-demand environment.

The company has seen stronger demand for cross-border shipments in its L&W operations, although Urlacher said the business is not a major part of that segment. Mullen attributed the improvement primarily to reduced supply, as some competitors have struggled to meet U.S. labor, training and compliance requirements.

On acquisitions, Senior Commercial Officer Lee Hellyer said Mullen Group continues to review a “robust” number of opportunities across multiple verticals, including its Specialized and Industrial Services business. He said acquisitions are evaluated based on quality, strategic fit and potential returns rather than growth for its own sake.

Management said the Willson transaction involves a 100-year-old company in a vertical Mullen Group favors. Urlacher said the business is expected to contribute approximately C$25 million to C$30 million of revenue to U.S. 3PL, with about C$55 million of revenue expected to be included in L&W.

Mullen also said the company has leased a former Hudson’s Bay facility in the Vancouver area, which it plans to use as an MTL Logistics Park. The facility is intended to consolidate regional operations and support logistics activity tied to Canada’s trade with Asian and offshore markets.

About Mullen Group (TSE:MTL)

Mullen Group 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.

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