Secure Waste Infrastructure Corp.

Good morning, ladies and gentlemen, and welcome to the secure Q3 2024 results conference call. At this time, all lines are in listen-only mode. Following the presentation, we'll conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, October 30th, 2024. I would now like to turn the conference over to Alison Prokof. Please go ahead.

Thank you, and good morning to everyone who is listening to the call. Welcome to Securus Conference Call for the third quarter of 2024. Joining me on the call today is Alan Granch, our President and Chief Executive Officer, Chad Magus, our Chief Financial Officer, and Corey Haim, our Chief Operating Officer. During the call today, we will make forward-looking statements related to future performance, and we will refer to certain financial measures and ratios that do not have any standardized meaning prescribed by GAAP and may not be comparable to similar financial measures or ratios described disclosed by other companies. The forward-looking statements reflect the current views of SECURE with respect to future events and are based on certain key expectations and assumptions considered reasonable by SECURE. Since forward-looking information addresses future events and conditions, by their very nature they involve inherent assumptions, risks, and uncertainties, and actual results may differ materially from those anticipated due to numerous factors and risks. Please refer to our continuous disclosure documents available on CEDAR Plus as they identify risk factors applicable to secure, factors which may cause actual results to differ materially from any forward-looking statement, and identify and define our non-GAAP measures. Today, we will review our financial and operational results for the third quarter of 2024. I will now turn the call over to Alan.

Thank you, Allison, and good morning, everyone. Yesterday, our shareholders voted in favor of our name change to Secure Waste Infrastructure Corp., a name that better aligns with our core business activities, which are centered on processing, recovery, recycle, and disposal of diverse waste streams and the efficient operation of our critical infrastructure network. The new name reflects our strategic transformation over the last five years from a full-service energy service company to a specialized waste management and energy infrastructure provider. We are pleased to retain the trade name Secure, a brand synonymous with safety, reliability, and entrepreneurship. The formal adoption of the new name is expected on January 1, 2025, coinciding with certain year-end activities planned by the corporation. Our shares will continue to trade on the Toronto Stock Exchange under the ticker symbol SES. This morning, we reported another strong quarter, achieving adjusted EBITDA of $127 million, or $0.53 per basic share, on the high end of our expected range for the third quarter as a robust industry fundamentals drove strong customer demand. Sequentially from the second quarter, net revenue and adjusted EBITDA increased 11%, maintaining our strong 34% EBITDA margin. As we head into the final quarter of the year, we are reaffirming our guidance at the top end of this range, providing for full-year adjusted EBITDA of $470 to $490 million. This quarter, we generated $106 million in funds from operations, enabling us to fund fully self-fund share repurchases, dividend payouts, and growth initiatives. In total, we returned $77 million to shareholders through repurchases under normal course issuer bid and our quarterly dividend of $0.10 per share. We also advanced our organic growth capital program, spending $19 million primarily to add two water pipelines to an existing facility to integrate incremental volumes from existing customers. We also continue to enhance our capacity at the Clearwater heavy oil terminal to meet growing demand in the region and pursue various optimization projects to reduce costs across our waste network. At September 30, 2024, our total debt to adjusted EBITDA ratio was 1.1 times, a full turn below our target leverage ratio of 2 to 2.5 times, providing us with significant financial flexibility. Along with strong discretionary free cash flow, we're well positioned to continue to grow the business while delivering enhanced shareholder returns. Looking ahead, we have a robust pipeline of organic growth opportunities, and we will also consider strategic acquisitions that align with our disciplined approach to enhancing efficiency, expanding network density, and diversifying the waste streams we manage. While we've seen positive momentum in our stock recently, we still trade at a substantial discount to our waste and energy infrastructure peers. Consequently, shared buybacks remain key priority of our near-term capital allocation. We have 2.1 million shares remaining under our current normal course issuer bid, and we intend to renew this program in mid-December, allowing us to repurchase up to 10% of the public float over the subsequent 12-month period. I'll now pass it over to Chad to provide some further financial highlights for the quarter.