CEMATRIX Corporation

So thanks to all of those who are attending today. My name's Grant Howard, president of the Howard Group. And with me today is Randy Buhmauer, who's the CEO of Sumatrix. Marie-Josie Cantin, who is the CFO. And from the big city of Chicago, we have Jordan Wolfe, who's the president of Mix on Sight, a division of Sumatrix. First, congratulations on the record. Second quarter, best ever. Purchase of another 700,000 shares under the normal course issuer bid, which is great to see. And I know you have a lot to talk about. So with that, I'm going to turn it over to Randy, MJ and Jordan.

Thank you, Grant. Appreciate the introduction. Thank you everybody for attending our webinar on an earnings call. Really proud of our Q2 as we stated in our news release. Just a quick forward-looking disclaimer. We will sometimes make forward-looking statements and you can see what those mean here and what they could mean in the future. So every time we do these presentations, we're always conflicted in whether we try to make it something new and snazzy or we repeat the story. And unfortunately, not much changes quarter to quarter in terms of what we're doing in the overall strategy. So it is going to be a bit of a repeat for those of you who have been on past earning calls. But we think it's important to cover these things so people understand the company and the opportunity. So from an investor, the key highlights are we're an innovative cellular concrete solutions company. We're a leading provider of lightweight, cost-effective, durable cellular concrete for infrastructure projects. We have a strong competitive advantage that I'll discuss later. And we work primarily as a subcontractor for major North American general contractors. We are in a position of overall financial strength. And we've also demonstrated an overall growth trend that I think sometimes can get missed when people are looking at just the last year or quarter to quarter. If you look at our 2024 revenue, it was $35 million and we had adjusted EBITDA of $3.3 million for the year. Our 2024 cash flow from operations was almost $5 million. At the end of June 30th this year, we have $8.6 million in cash and no long-term debt. And we've been saying this for a while, but we're forecasting a record year in 2025. We have a significant market opportunity in front of us. We're an industry leader in Canada and the US or the North American market. The overall global cellular concrete market is estimated somewhere between $4 billion to $27 billion with steady growth. Now, that number, of course, is for all applications across all countries in the world. Obviously, the markets that we operate in, the opportunity size is going to be smaller than that, but nonetheless, it's a big opportunity in front of us. Then lastly, there's just increased infrastructure spending in both Canada and the U.S. provides a very strong tailwind for our business and for the opportunity. In terms of the team and the corporate timeline, the three key executive members of the team are here on the call. It's myself as CEO and President, Jordan as the President of MixOnSite, our biggest business and where we have our biggest growth opportunities, and MJ Canton as our CFO. On the board, we have Manaz, Patrick, Steve, and Anna, and John. Very strong board. Insider ownership, we have about 150 million shares outstanding. Fully diluted, it's 167 million shares. That's options, RSUs, and warrants. Insider ownership is 15.4 million shares, or roughly 10% of the company. And the two largest insiders are Jordan and myself. I always like to show this company timeline. Some people say I shouldn't show it because it shows we haven't had success, but success isn't instant. It's not overnight. Success is an accumulation of a lot of hard work and a lot of effort that's put in over time, and then you reach an inflection point. And in 2023, we reached that inflection point when we went from a startup company that needed to raise capital to survive to a company now that's growing and is consistently profitable and consistently generating cash. For those of you who don't know much about cellular concrete, cellular concrete is made by mixing cement, water, and a foaming agent together. The foaming agent creates bubbles in the mixture which results in a cellular structure, hence the name cellular concrete, when the concrete sets. This mixture has some key properties including being cost effective, it's low density and lightweight, has a high bearing capacity, is extremely pumpable, it's highly flowable and self-leveling, it's self-compacting, it has some thermal insulating properties, it's durable, but it's also excavatable. So all these properties actually lend it to multiple applications in the construction industry, especially geotechnical. The primary applications that we pursue commercially is lightweight engineered fill, MSE or retaining wall fill, a lightweight insulating road sub-base, flowable or self-compacting fill, pipe or culvert abandonments, tunnel or annular grout, and shallow utility and foundation insulation. So in terms of our customers and our competitive advantage, our customers are almost always a sub, we're almost always a subcontractor to a general contractor. Very occasionally we'll work directly with an owner, usually on smaller scopes of work. And we've worked with many, if not all of the largest general contractors in North America. I won't go through the list of names there, but you can see those are many of the bigger names in North America. From a competitive advantage point of view, we believe it's our reputation. We've been successfully delivering cellular concrete solutions on time and on budget for over 25 years. We have our team and expertise, over 200 years of in the field experience, which just can't be replicated. Our equipment, we have a large fleet of mobile, technically advanced equipment for producing cellular concrete with lots of capacity to grow. Our size and scale, we've got multiple locations from coast to coast in the US and Canada. And we believe we're more sustainable generally and generally more environmentally friendly than the legacy products that we replace. So I've talked about this already in terms of customers and market opportunity. We've tried to get some third party data on how big the overall market size is. You can see we've got as low as $4 billion from market research future to as high as $27 billion. They all agree that the market for solar concrete is large and growing. And the market for lightweight fill, which includes competitive products, is a multiple of this size larger. Infrastructure spending in general is increasing as the infrastructure in Canada and the U.S. is aging. Infrastructure needs to be replaced and repaired. Populations continue to grow, which requires new infrastructure and places additional loads on existing infrastructure. So as a result, we see spending on infrastructure is expected to grow and continue to grow into the future. So MJ is going to get into the specifics of our record quarter, but there's some overall financial concepts that we think are important for shareholders and our stakeholders in general to understand, regardless of what may happen in a quarter or the year to date. So one of the ones that's really important is we have a top line growth trend. So despite the step back in 2024 overall revenue, the overall trend line is one of growth. So we had revenue of 22.6 million in 2021 and 35.6 million in 2024. And we're forecasting this year to be a record year We have a positive bottom line and we're generating cash. So in 2024, EBITDA was 3.3 million. And then we had positive cashflow from operations of 4.9 million in 24. And again, MJ will talk about our results in 25. And we have a healthy balance sheet with low leverage. So we have 8.6 million in cash and we have no long-term debt as that Q2 of 2025. So some key points to understanding our business, it's really important because whenever I talk to investors or stakeholders, all they want to see is a staircase of growth where growth grows by 10% a quarter. But we're not a system as a service type business. Our revenue doesn't grow like that. It's going to be lumpy. And it's going to be lumpy based on when large projects start and stop. Construction is also a seasonal business, and so we're going to have higher revenues in warmer months. So our average revenue over the last five years has been 18% in Q1, 18% in Q2, 36% in Q3, and 28% in Q4. So you can see we're heavily weighted to the second half of the year in terms of our revenue. We're a specialty contractor. So margins are going to tend to be higher than general contractors, but we have more bench time and more fixed costs because we spend a lot of time to train our operators and our supervisors and we can't afford to lose those. So we have to keep those people on site, even if we don't have the work for them at that time. Project size definitely impacts margins. Larger projects have more competition, and as a result, the margins are going to be lower in those projects. And we have excess capacity, which will enable us to do significantly more revenue with our equipment and our staffing levels. We have more capacity and equipment than staffing levels, but we can basically significantly ramp up revenue on both. So with this, I believe I'm going to turn it over to MJ, who's going to go through our 2025 Q2 results.

Thank you, Randy. So as you've heard, we have a record Q2 in the first six months revenue. So revenue for the quarter was 10.6 million versus 6.4 million in 2024. That represents a 66% increase. And for the first six months of the year, we had revenue of 17.3 million compared to 14.9 million in 2024, a 16% increase. Gross margin as a percent of revenue was 39% during the quarter compared to 17% in 2024. That's a 22% gross margin increase. And year to date, we had 32% gross margin compared to 24% in 2024. That's an 8% gross margin increase. We have positive operating income for the quarter in the year at 1.8 for Q2 compared to a loss of 1.1 last year. That's a $2.9 million increase. And for the first six months we had 1.1 million. compared to a loss of 0.8 million in 2024. That's a 1.9 million increase. Adjusted EBITDA is also positive for both the quarter and the year. So 2.4 million in Q2 compared to a loss of 0.5 in 2024, a 2.9 million increase. And 2.4 million year-to-date compared to 0.5 million in 2024, a $1.9 million increase. Cash flow from operations also positive. This is cash flow before non-cash working capital changes. So for the quarter, we had $2.4 million generated compared to an investment of $0.5 million in last year. That's a $2.9 million increase. And for the first six months, $2.3 million compared to $0.4 million in 2024. That's a $1.9 million increase. Randy talked about the cash balance. We had $8.6 million of cash at June 30th, and last year at the same period, we had $5.5 million. Looking at the graph, Randy talked about the trend line trending as a growth. You can see that like from 2017, our compound annual growth rate is about 24%. And just so you know, in orange is the year to date revenue and the teal boxes are all full year revenue. But you can see the 17.3 for this year is almost as much as we did for full year in 2018. So pretty pleased with that progress. On the right hand side, you have our gross margin, 32% year to date for this year, definitely tied to our increase in revenue. And the dip that you're seeing, as we mentioned in the past presentations, is due to COVID, supply chain issues, cement shortages. So year to date, 32%. On the left-hand side for the debt and interest, we have come a long way since 2017. The only debt we have right now is our equipment finance loan. And on the right-hand side, you have the shared structure. So as Grant mentioned at the beginning of the webinar, We've repurchased for the first time in the history of the company some shares, so we reduced our account. We purchased just over 700,000 shares. Then at the end of the quarter, we had 150.2 million shares outstanding, 6.1 million options outstanding, RSUs of 2.5, warrants of 8.2. That tallies up to a total of 167 million instruments outstanding. Now we can talk about our backlog. Our backlog went up despite our record revenues. So it continued to grow with sales success. So since the beginning of the year, we announced 31.7 million in new project awards. That's for various applications for our product. So backlog at the end of Q2 was 76.4 million and it's compared to 69.6 million at the end of the year. I'm now going to pass it on to Randy for some closing remarks.