Shawcor Ltd.

Ladies and gentlemen, and welcome to the Short Core First Quarter 2021 Results Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Megan McEachern, External Communication and ESG Director. Thank you. Please go ahead.

Good morning. Before we begin this morning's conference call, I'd like to take a moment to remind all listeners that today's conference call includes forward-looking statements that involve estimates, judgments, risks, and uncertainties that may cause actual results to differ materially from those projected. The complete text of Shawcore's statement on forward-looking information is included in Section 4.0 of the first quarter 2021 earnings press release that is available on CDAR and on the company's website at shawcore.com. I'll now turn it over to Shawcore's CEO, Steve Orr.

Thank you, Megan. Good morning, and thank you for joining us on this morning's conference call. This morning, Megan and I are joined by our CFO, Gaston Tano, and President Mike Reeves. Before talking about our business, I would once again like to express my deep appreciation for every member of the Shock Corps team. While we see indications of a return to relative normality in many countries as vaccination rates rise, there is no doubt that employees across this organization continue to face substantial challenges on a daily basis. I'm so grateful for their commitment to keeping each other healthy and safe while continually meeting the needs of our customers around the world. Yesterday, we released our results for Q1 2021, during which the company generated adjusted EBITDA of $19 million on a revenue of $279 million. Revenue declined compared to Q4 2020, driven by normal seasonal slowness in composite tank shipments and lower levels of pipe coating activity. which were expected, but amplified by impacts from acute U.S. winter weather and some project timing delays. Conversely, continued strong demand for heat-shaped tubing and premium wire and cable products drove another record quarter within the automotive and industrial segment, which included the capture of a substantial communication cable supply contract, the largest single customer contract in the history of this business. At quarter end, the company's backlog stood at $521 million, an increase of $68 million, or 15%, from the end of 2020. This growth was a result of very strong underground tank storage orders, lower than expected backlog burn within our pipe coating business, and an increase in orders within other parts of the organization. Focus on cost management and restructuring activities continued during the quarter, with Shockware's salary to workforce now 25% below Q1. 1 2020 levels sdna expense in q1 was below our previously communicated 60 million per quarter run rate and included receipt of 1.4 million in canadian government subsidies excluding government subsidies we now anticipate sdna express expense will average 55 million per quarter during 2021 thoughtful timing of investment decisions limited capital spend during the quarter to 4 million Our full year CapEx spend guidance remains unchanged at 40 to 50 million. During Q1, we announced that our pipe coating facility in the UK will close after it completes execution of the Baltic Pipe Project. With the UK facility closure announcement, Chakor has now completed or initiated seven pipe coating facility exits during early 2020. Oh, sorry, I apologize, since early 2020. We will continue to assess further footprint optimization opportunities to lower our cost base while retaining the right capabilities in strategic locations to meet future market demands. Entering Q2, despite lingering impacts of COVID and industry-wide polymer supply chain interruptions, I anticipate a step up in revenue and earnings driven by continued strength in demand for automotive and industrial products, a rebound in composite tank shipments tied to seasonal construction activity, and execution of scheduled tight-fitting projects. This organization remains intensely focused on those variables we can control, with our priorities unchanged from those that I shared last quarter. Number one, protecting the health and safety of our employees. Number two, delivering the products and services needed by our customers. Number three, strengthening the balance sheet and conserving cash, and number four, capturing our share of increased customer spend. Although exact timing of pipe coating projects remains subject to change and some volatility quarter to quarter is inevitable, in line with our previously communicated expectations, we remain confident that 2021 full year adjusted EBITDA will be higher than 2020. This will be driven by the execution of pipe coating work secured in backlog continued strong demand within our non-oil and gas businesses, and the expected reduced quarterly SCNA expense run rate. We also remain confident that Q1 results will ultimately prove to be the lowest of the year. Charcot's diverse priority, including early and late cycle oil and gas exposure and a strong non-oil and gas component, has enabled the company to weather recent market challenges and emerge a stronger, more profitable organization ready to create and secure opportunities as spending recovers in the energy, transportation, and infrastructure markets. Mike will provide more detailed comments later in this morning's call, and I will now turn it over to Ghassan Tano, Charcor's CFO, to discuss the numbers. Ghassan?