Secure Waste Infrastructure Corp.

Good morning, ladies and gentlemen, and welcome to the Secure Waste Infrastructure Corp Q1 2026 Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during the call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, April 30, 2026. I would now like to turn the conference over to Chad Nagus. Please go ahead.

Thank you, and good morning to everyone who is listening to the call. Welcome to Secure Waste Infrastructure Corps' conference call to discuss our first quarter 2026 results. I'm Chad Magus, Chief Financial Officer. Joining me on the call today are Alan Granch, our President and Chief Executive Officer, and Corey Haim, our Chief Operating Officer. During the call, we will make forward-looking statements, relate to future performance, and refer to certain non-GAAP financial measures do not have standardized meaning under IFRS and may not be comparable to similar measures disclosed by other companies. Forward-looking statements reflect management's current expectations and are based on assumptions that we believe are reasonable. However, actual results may differ materially due to the number of risks and uncertainties. Please refer to our disclosure documents available on CR-Plus for further details of these risks and for definitions and reconciliations of non-GAAP measures. Today we will focus on three areas the GFL transaction and shareholder meeting, an overview of Q1 performance and key financial highlights, and an outlook for the remainder of 2026 and beyond. I'll now turn the call over to Alan.

Thanks, Jeff. Good morning and thank you for joining the call today. I'd like to start with our recently announced transaction with GFL Environmental and the materials filed this week in connection with the upcoming shareholder meeting. This transaction delivers immediate and certain value to shareholders at an attractive valuation, including a meaningful premium to our recent trading levels, while also providing continued participation in future upside through equity ownership in the combined company. The Board unanimously recommends that shareholders vote in favor of the transaction following a comprehensive review of strategic alternatives. In making this recommendation, the Board considers the opportunity to crystallize the value created at Secure, the ability to participate in future value creation through GFL equity, alignment with a proven entrepreneurial management team, as well as limited number of alternative transactions available and the relative risk-adjusted value of continuing as a standalone business. The Board also considers that GFL shares are currently trading below historical levels. and, in its view, do not fully reflect the underlying value of the business, providing potential for future re-rating over time. Over the past several years, Secure has built a high-quality, infrastructure-backed waste platform with strong fundamentals and a clear path to continued growth. However, realizing that value on a standalone basis requires ongoing execution and capital deployment. This transaction enables shareholders to crystallize that value today, and reduces execution risk, and preserves meaningful upside through the combined platform. None of this would be possible without our people. Over 2,000 employees have built secure into what it is today, grounded in a culture of safety, operational excellence, and doing the right thing. These values are strongly aligned with GFL, and our team will play a critical role in the combined company going forward. We encourage all shareholders to review the materials and vote in favor of the transaction on May 27th. Turning briefly to the quarter, we delivered a strong start to 2026, generating $137 million of adjusted EBITDA, up 13% year-over-year and 21% per share. This performance reflects continued strength across volumes, pricing, capital projects, and acquisitions, despite lower oil prices for the majority of the quarter. prior to the recent strengthening in commodity prices. Operationally, we continue to advance our growth projects, including commissioning our produced water infrastructure in the Montney and progressing the reopening of suspended industrial waste processing facility in Alberta's industrial heartland, which remains on track for completion by the end of the second quarter. Overall, the quarter reinforces what we consistently see in our business, stable volumes, disciplined pricing, and incremental growth from capital deployment. We now expect results to trend toward the high end of our 2026 adjusted EBITDA guidance range, and we are increasing our growth capital to approximately $100 million from $75 million to support the acceleration of high-return infrastructure projects. I'll now turn the call over to Chad. Thanks, Alan.

In the first quarter, we generated $137 million of adjusted EBITDA on $383 million of revenue, resulting in a margin of 36%. While revenue growth was modest, EBITDA growth was stronger, reflecting a continued shift toward higher margin waste streams, disciplined pricing, and cost control. This is consistent with our strategy of prioritizing quality of earnings over top-line growth. We also generated $101 million A fund spoke of operations in the court, supporting both her capital program and returns to shareholders. On the balance sheet, let me walk through a few more items in more detail than usual. We reported restricted cash, $31 million, reflecting margin posted on hedging positions. This was driven by the sharp movement of oil prices during March, which created temporary margin requirements. These positions were fully offset by physical positions that have either been or are expected to be realized at a higher price. We also reported a higher than normal cash balance of $59 million, reflecting the large payment received on the last day of the quarter. As of today, our revolver balance has been paid down by $76 million since the end of Q1 to approximately $350 million. From a capital allocation perspective, we continue to execute on our priorities during the quarter. We increased the dividend by 5% to $0.105 per share paid quarterly. We repurchased nearly 1 million shares at a weighted average price of just over $1. previously announced plans. Our priorities remain unchanged. Invest in the business, maintain a strong balance sheet, and return capital to shareholders. I'll turn the call over to Corey now to discuss the business outlook for the remainder of 2026 and beyond.

Thanks, Chad. To start, I want to provide an overview of the underlying cash flow profile of the business. One of Secure's key strengths is that our cash flow is generally not tied to short-term commodity prices. Our business is driven by ongoing production, industrial demand, and mandated environmental spending. These are long cycle drivers resulting in stable volumes and predictable cash flow across cycles. What we typically see is limited near-term upside when prices rise and moderated downside when prices fall. That stability underpins our performance. Now tying that to our outlook, the move toward the high end of our guidance range primarily reflects oil prices that are approximately 20% stronger than our original assumptions. That said, given our limited direct exposure to commodity prices, the impact of our business remains modest and confined within a relatively narrow range. Importantly, this is not what is driving the underlying growth of the business. The year-over-year increase relative to 2025 is being driven by the same factors that have consistently underpinned our performance. First, the strength and resilience of our base business supported by steady volumes and disciplined pricing. Second, a full contribution from infrastructure projects and acquisitions commissioned through 2025 and early 2026, which are now contributing incremental EBITDA. And third, improved performance in metals recycling, supported by higher volumes, better pricing, and the logistics improvements we made last year. So when you step back, The move within the guidance range reflects macro tailwinds with the growth of the business itself, for while the growth of the business itself continues to be driven by execution, capital deployment, and the strength of our underlying platform. Looking longer term, the fundamentals remain strong. Western Canadian production is expected to grow approximately 3% annually through 2030, supported by improved market access through TMX and LNG development, resilient producer economics, and a continued focus on efficient, long life resource development. Additionally, increasing reclamation through remediation requirements are driving non-discretionary demand for our infrastructure. Produced water volumes are also increasing with higher intensity development, and as water handling becomes more complex and capital intensive, we continue to see a structural shift towards outsourcing. When you combine these factors, it creates a longer duration, highly visible, demand profile for our business. I'll now turn it over to Alan to conclude our prepared remarks.

Thanks, Corey. To close, Secure continues to deliver stable, reoccurring earnings, strong free cash flow, and visible long-term growth, core attributes that underpin the intrinsic value of our business. The transaction with GFL captures that value today, reduces the risks associated with realizing it independently, and and position shareholders to participate in the next phase of growth through a larger, more scaled platform. The transaction has the full support of our board, including a special committee of independent directors. Additionally, certain of our largest shareholders, together with our directors and executive officers, have entered into voting support agreements representing approximately 21% of our outstanding shares. We encourage all shareholders to review the materials and vote in favor of the upcoming meetings, I also want to recognize our employees for their continued commitment, their focus on safety and execution is what built this business, and we continue to drive success going forward.

With that, we'll open the line for questions.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Konark Gupta with Scotiabank. Please go ahead.

Thanks, Anne. Good morning, Ellen and team. I think maybe the first one on the volume side, it seems like you guys have changed the disclosures around volumes. So just trying to understand, you know, the volumes seem to be up on the liquid side on the waste segment and maybe down a little bit on the solid waste side, which I think includes now the scrap model. So if you can help us pass out the key underlying drivers in these volumes, I mean, I think it seems like produced water seems still more positive than other commodities, but what are the sort of puts and takes in the quarter on different commodities? Thanks.

Good morning, Conarch. It's Corey. Yeah, I think you kind of nailed it there in terms of the macro pieces. You know, it's kind of the same themes as we exited Q3 and Q4, where, you know, activity was a little softer in the field, but, you know, I think Q1 shows stability in our liquids volumes, which It was driven by the produced water volumes, as you mentioned. When you look at the solids processing side, we had outperformance in our metals group, which offset some of the softness in the landfill volumes. So, you know, when I look at this, it really just emphasizes the performance and stability in those two solids and liquids processing pieces of our business.

I think, too, as we think about the activity levels here in 2026. And obviously we just raised our guidance to the upper end of that range. You know, we were looking at a $65 WTI year where I think our expectation were volumes were going to be relatively flat in the first six months. And in the back half, we were going to see some growth as the, you know, demand and overall activity levels started to increase. You know, we're obviously seeing a lot of volatility in that price right now. So we are expecting that volumes are going to contribute. And I think it's just an easier way for us to just characterize them as lipids processing and solids processing. And throughout the last few weeks in terms of having conversations with some customers, I think You know, our business last year really showcased that even through these low commodity cycles, that the volumes are relatively robust in terms of, you know, where we're seeing break-evens. I mean, if you look at, you know, Western Canada, a lot of our plays break-evens at a $50 WTI. If you look in the U.S., it's 55. And so, we get these break-even levels. What we see is that reoccurring production volume coming through our liquids processing facilities and our landfills. And I think, you know, one thing that we've added here, and this might be helpful for a few potential shareholders and investors, we posted on our website our updated investor presentation. And it goes through, you know, what we've seen over the past few years in terms of growth in Western Canada and East here and you can see the movements in WTI but it also goes through some of our volumes and what happens through volumes through these cycles and you can see the stability in it and so I think that will give some color to those kind of looking for how stable the business is through these commodity cycles and the fact that we upped guidance and it's at the higher end of the range just shows you it doesn't move significantly on the way down and it doesn't move significantly on the way up and it's just you know, points to everything we talk about is these volumes are very reoccurring. We see them at our facilities on the day-to-day basis.

And that's helpful and I appreciate the investor deck with some history on that. On the landfill side, what's driving the weakness here? I mean, like, can you describe the nature of your landfills compared to, you know, the other solid waste companies. You're seeing a kind of different dynamic than maybe some of the solid waste guys. So what goes in there?

Yeah, great.

Good question, Conor. I think when you look at our landfills, there's kind of like three main drivers. The first being production waste that is generated every day, and we see this solid waste coming into our our non-haz and our one-haz landfill. That would represent approximately a third of the volumes that we see on an annual basis. Very consistent. The second part of it would be reclamation. So, you know, over a third of it would be reclamation-driven. And as you know, in Western Canada, we've got regulation changes a couple of years ago that are mandating that any customer, whether you're in the industrial, mining, or energy sector, you have to spend part of your asset retirement obligation on a rateable basis, i.e., approximately 5% per year. And so what we've seen in the landfill is that that 5% is required to be spent every year. So you see this reoccurring. volumes that flow into landfills. And then finally is, you know, drilling volumes, drill cuttings, which are driven by, you know, where the commodity price is and activity levels on the rig count. They don't fluctuate as much as they did, you know, 10 years ago. You know, if you look at Western Canada, the average rig count can move from 190 to not a lot of movement between higher activity levels and lower activity levels. So we do see a consistent stream on the drill cuttings as well. But in terms of the landfill, as I said, when you're into the lower $60 environment, which is what we saw in January and February, obviously we only had one month of increased WTI, which would represent more activity from our customers thinking potentially they're going to do more on the drilling side. And so our expectations were that things were going to be slower. You don't get a lot of cleanups happening in the colder months in, you know, call it January, February. It's just difficult to do that. So we typically see a higher peak season in Q3 and Q4. And we expect that trend to continue. So this is all within our expectations. And, you know, when you look at not only our volumes into landfills, but also our scrap metal volumes, you know, we're down 1%. That's exactly where we predicted. And my expectations would be that they're going to increase throughout the year. And then when you think about kind of longer-term tailwinds here, I mean, the strength in where WTI is going to land structurally, I think we've changed. And I think you're going to see some pretty robust activity here. in 27, 28, 29 as we have these higher energy prices for volumes to come into these landfills. And like I said, they're not building anymore. These landfills are very difficult to build. We're in core areas where it actively is taking place. And so I think what you'll see in our reporting anyways is the volumes increasing over time.

That's great, Alan. Thank you. On the metal side, I'm curious, you know, guys, I know we're adding a lot of rail cars and pushing the product into the U.S. market, which obviously is probably helpful given the tariffs right now. But the S-232 changes that we have seen recently on the tariff side, have you seen any incremental or detrimental impact on scrap metal demand in Canada?

Core markets, Corey, we haven't seen any impact today. About 95% of our shipments of scrap are outgoing into the U.S. today, still really involved in that low 5% sort of numbers into the domestic market. But nothing on the radar and no impact to 2026 as we see it today.

Okay, thanks. And last one for me, Corey, back in the queue. On the pricing side, are you very surprised how resilient the pricing had been the last three years? I mean, you have seen, what, 5%, maybe, annually. Do you think this is sustainable going forward? I mean, the inflation clearly is not moving down more substantially now in light of what's happening around the globe. But do you think there's further opportunity for pricing here? As you said, the regulations require and the complexities require more outsourcing than insourcing. Any thoughts on the pricing going forward?

Good question.

I think over the past few years, we have increased our pricing above inflation, and you can see that in our overall EBITDA margin this quarter being 36%. I think at the end of Q4 last year, we had raised prices on average in that 4% to 5%. But I would break it down into two buckets. First bucket being we've got a lot of contracts in place. Those contracts are CPI-linked contracts. So automatically increasing based on that PPI index every year. And so that's part of our business will have automatic pricing increases. In terms of where we are looking to raise prices in subsequent years, I mean, a lot of our infrastructure are in areas where, you know, we have the ability to move that price up. And you're correct, you know, we're going to see more inflation occur. And I think when you look at our infrastructure, it's just hard to to, you know, process and dispose of material that these producers need. You know, the insourcing side is really on the produced water, on the liquids, and the trend has been they're outsourcing more and more of that water. The complexity of that water to deal with is very difficult. The chemistry is around it, and so we take our skill set, our assets, We add the appropriate mechanical filtration and chemical components to it to be able to dispose of it safely. And so they value that service, and there's a price for that service. And so we're able to get that pricing to be able to give you a high quality of service. So I think we're going to be able to continue to do that, obviously, when you've got energy prices that are higher and having those conversations when your customers have strong balance sheets they're focused on, they want to grow production, they want to do it very efficiently. And, you know, our conversations with them is they want to outsource that waste to us and have it safely processed and disposed of. So a long-winded answer is yes, I do believe we're going to continue to increase prices every year based on where our infrastructure is located in some of these core areas.

It's great to appreciate the time. I'll be in the queue. Thanks.

As a reminder, if you wish to ask a question, please press star 1. Your next question comes from Arthur Nagourney with RBC Capital Markets. Please go ahead.

Hey, good morning. I just wanted to start on the GFL transaction. I guess my first question, I appreciate the rationale outlined in your materials, but why is now the right time to pursue a sale, especially considering how supportive the oil price backdrop is at this time?

Thanks, Arthur. Yeah, no, great question. You know, as I noted, I think over the past few years, Secure has continued to execute a clear strategic repositioning within the waste sector. And I think our investors have a better understanding of, you know, the nature of our high-quality infrastructure-backed businesses. And I think we've been very clear on the stability of the cash flows, the durability on the growth, and the financial metrics at which they, you know, which we have. And so over the past while, I think, you know, our multiple has increased, I think, reflecting a clear understanding of that. But we recognize it could be higher. When you look at this transaction, I think it accelerates that recognition, capturing that intended value today. And, you know, we're also very aware that our shareholders will have some meaningful participation on the upside of having 80% in GFL and the combined entity. I think when you also look at the share price premium on the 60-day, that was a 23% premium to the VWAP. And, you know, when you think about the context of the timeframe when we started having the conversation, you know, a couple of months ago, obviously all the volatility in the commodities was pre-that and obviously some of the up risk in our share price. But, you know, we're up 70% year-to-date and then you're getting a premium on top of that. I think when you look at the combined business, you know, the scale that we have together just overlapping their collection infrastructure and all of our critical infrastructure post-collection and being able to put that platform together, I think, creates a significant value. I think we bring that high margin free cash flow profile that's going to improve the overall pro forma entity as well. You know, we went and did a fairness evaluation, RBC, and both APB and ATB, I think, provided fairness opinions as we looked at the business. But, you know, we think about intrinsic value every day, and our board is very thoughtful on that value. And we looked at our strategy as a standalone business and our strategy, you know, together with GFL. And obviously, we felt You know, being in the business for 19 years, combining with GFL and layering our infrastructure and looking at the opportunities was very attractive to us. I felt like, you know, this is the opportunity for us. I also considered M&A, you know, and I've been working on this M&A strategy on the metals, which has been hugely successful in Western Canada. I think we're at the tail end of that. And when you think about, you know, future M&A, I think for us it was getting a bit limited when, you know, we're now looking at business lines that, you know, GFL can keep it today. They've got a hopper of opportunities. And I think when you think about M&A opportunity on their perspective, I think they're very efficient and they're very good at integrating businesses. And I think when you look at our where we're really strong at is our organic growth platform where we can, you know, grow our offer of opportunities. You know, we've been spending $100 million per year and adding some really great new projects that contribute, you know, 20% after tax IRR. These are great projects. And so I think when you put the two businesses together with these, you know, management teams, I think you've got a very high-quality business.

Okay, that's helpful.

And then I know it's still early in the process, but do you have any preliminary views on potential divestitures that may be required from the Competition Bureau review or anything, you know, if not required, maybe any voluntary sales of any business lines or anything of that sort?

Well, I mean, we're just in the midst of doing all of our analysis on what's required for the competition bureau submission. That will have to go in here relatively shortly where we'll provide our overall views of, you know, how the businesses overlap today. I mean, really, when we looked at it, there were really no material issues on combining the two businesses together. The Competition Bureau is very knowledgeable about this market. We've been through it, obviously, with them in the past. We recognize that this process is going to take three to five months for them to, you know, really make their assessments, and we'll give them all the data that they need to. But at this point in time, no, we're not thinking there's going to be any sort of material assessments. But, again, we're not quite done yet. you know, as we, you know, get more educated on it, we'll, you know, we'll be smarter and we'll update accordingly.

Got it.

Then maybe switching over to the quarter and looking at the metals recycling business. It seems like there's a few moving pieces there overall, but quite strong performance in the base business, even when factoring in the Edmonton facility acquisition process. Can you maybe dive into some of the drivers there, a bit more between what you're seeing? I think you called out U.S. and Canadian demand being strong, and I guess Canadian demand picking up. But then also on the pricing side, maybe both on the prices you're getting, but also on the prices you're paying for the scrap metals.

Yeah, I mean, you know, the performance of the metals recycling business in Q1 was quite strong. It's a combination of increased volume across the scale. It's also adding in inventory production that we've been working through the last couple of quarters based on the inventory build in Q3, Q4 last year because we couldn't move some of the volume as we were reestablishing some of those downstream markets. Quarter over quarter, the pricing that the mills were paying for is a little bit higher We paid a little bit lower for scrap across the scales in Q3 and Q4, so we're realizing some of that benefit. And we're also realizing just the integration efforts and the improvement in logistics that we've had over the last couple of quarters. So I think when you pack all those three things together, it's set up for a pretty strong quarter in that business.

And I think, too, just to add to it, I mean, we just purchased another 50 mail cars. And these 50-rail cars, why that's important is now we have enough, and I think we're getting deliberated here in August. When you think about the cycle time into the U.S., I think we were sitting around 35 to 40-day cycle time. Our main goal here, and this is our competitive advantage, is to be able to move the scrap metal here from the Western Canadian market into central U.S. within a 30-day period. And so we've now opened up all these U.S. markets where we can deliver the scrap. And I think that will start to knock down our inventory. But we've seen volumes coming through just because our competitors don't have the scale that we have in terms of being able to move the product via train. So to Corey's point, one, I think the U.S. market is quite strong right now. So we're going to see continued movement of scrap into the U.S. But we're going to now have all the tools we needed

you know, make it as efficient as possible. All right. And then last one for me.

I know the question about tariffs was already asked, but maybe just to double-click on it a little bit, specifically thinking about the 232 tariff update that was announced a couple weeks ago. Would you expect any potential indirect uplift to U.S. deal demand from these tariffs, or is it kind of still too early to say?

I think it's too early to say, Arthur. Perfect. That's all for me. Thank you.

Your next question comes from Ian Gillies with Stifel. Please go ahead.

Good morning, everyone.

I wanted to go back and just talk about Competition Bureau approval again. With respect to market share since you divested assets a few years ago, I guess the first question is, has there been any material change in your market share estimates? And the second one I would have is, as you're going through and prepping for this transaction, is there any instance of the Comp Bureau going back and looking at such a niche industry this quickly in such quick succession?

Thank you. No, good question.

I think, you know, when you go back to the Terbita secure merger, that was a fulsome analysis of all markets in which we operate. And as you know, we took that all the way to the federal court and then the Supreme Court. And so this is case law. And when you looked at the competitive environment in those markets, which is substantially a critical infrastructure, and we look at the competitive players, GFL wasn't one of them. So I think there's case law examples here that showcase that this doesn't have a lot of competition issues embedded in it within this transaction. And so we do know on our waste transfers, they'll look at other competitors in the market and see whether or not we have a market share that would be considered anti-competitive from this kind of action. We're still working on that. We're going to have a final conclusion here as we move report our ARC to the Comp Bureau. But I think we'll be able to work through with them. This is not material at all. And, you know, I think, you know, when it's relatively minor like that, we should get to a conclusion in a relatively quick manner. But again, we just want to make sure they're up to speed and seeing what we're seeing within this marketplace. But we think, again, I mean, they've got to go through their process and we're going to try to make it as easy as we can for them because we want to get to close and move on with the combined entity.

Understood. That's helpful. And maybe moving to your conversation about the guide, this question is inherently going to be hard to answer. But how did you think about providing that commentary in the context of how long oil prices are going to remain elevated for? And maybe put a different way, if the situation persists through the end of the year, Do you think that would lead to more positivity in how you're thinking about this year and next year and the EBITDA generation for secure?

Yeah, you know, it's a good question because I think, you know, we had in our own budget had $65 WTI. I think we recognized the back half of this year was going to be stronger with demand and supply getting to that equilibrium level. Our producers, you know, at the start of the year came out saying, you know, some of them were growing at 4% or 5%. Some of them were growing at 2% to 3% based off that forecast. They're not materially changing that because of all this volatility going on. They've got their plans through Q1 now, Q2. I think a few of the smaller players that are a little bit more nimble are going to look at that spot opportunity and potentially transact on it. And typically when we see increases in activity, then you start to see that lag effect in the next quarter in your waste volume. But I think structurally we recognize that WTI over 70 is probably what our future is going to indicate. I mean, you've taken a lot of supply off the market in the last 30 days. I think you've got geopolitical risk now that is going to be systemic for quite some time. And so I think structurally you see the large investment that's now coming into Western Canada where you have political environment and a resource base that is so strong. I mean, you saw Shell's move by, you know, taking out ARC and they're looking at Apache and looking at LNG. I mean, I think the prospects here for Western Canada are very strong. And I think when you look at WTI for 27 and beyond, even the next 10 years, I mean, we've been in a bottom cycle for quite some time and performed very, very well when you think of our customers in Western Canada. And now we're hitting the upswing of that, I think is going to be very, very positive. But again, these larger swings in WTI, we know we're going to get more waste volumes on the production side. And, you know, eventually the drilling and equipment and people pick up here and see that as an additional tailwind. So we're comfortable in moving our range up to, you know, to that 550 level. And, you know, every quarter you get smarter about activity levels and, you know, what customers want to do. As we get through Q2, more conversations, we'll have a better indication at the end of Q2 when we report as to what things are going to look like, not only for the remainder of 2026, but what 2027 is going to look like.

Okay. Last one for me. Canada is going through a bit of an infrastructure renaissance. Oil and gas growth seems like it's probably a bit closer than it has been. By rolling secure into GFL, does it give your infrastructure team a bit more flexibility to pursue larger projects than it might have done so in, call it, over the previous 10 years?

Yeah, I think that's a good question.

I think, you know, when you look at the overlay of GFL's infrastructure and our infrastructure, I think first and foremost, there's going to be some revenue synergies here where, When you look at our networks and what GFL currently offers to their customers, now we're going to offer an even larger suite of services that that customer needs. And when you think of some of these larger players, they want a one-stop shop where they can say, I'm going to outsource my non-hazardous waste to this company because I know they have the infrastructure and the collection network to be able to deal with it. And so, we know that that is going to be great for our customers. I think internally, we know that, you know, we could leverage off of each other's infrastructure, whether they're using third-party today or we're using third-party. We're going to make sure that that comes together. This isn't really a cost energy opportunity. I mean, obviously, there's the pump control and redundancy cost that like L&E Canada Phase 2 and ICWTI on the higher end of the spectrum, what you do see is more need for infrastructure, and we have infrastructure located in areas where I think we're going to need to expand. So to your point, I think our operating now is about $300 million to $400 million of organic new project opportunities that we want to execute on in the next couple of years. that can definitely grow in this type of environment. And so, one, you've got a cost advantage by almost being at an investment grade here in terms of, you know, where we want to put this capital to work. So I do think this hopper of opportunities will grow and we'll be able to execute it with this larger platform.

I think one thing that might be – oh, sorry. Go ahead. Sorry. I think one thing that's also important is just around utilization in our facilities. You know, not really at a – we're not really constrained at a system level. So it positions us very well to accept any additional incremental volume without any outsized capital deployment. And I think where you've seen us deploy capital, it's where the system has been constrained. So I think we're set up very well for a back half 2027 uptick in volume.

Perfect. Thanks very much. Thank you.

You now have a question from Connor Upta with Scotiabank. Please go ahead.

Yeah, thanks for squeezing me in. Alan, I want to understand the mix of the business a little bit more from you. So, I mean, you guys have grown the mail recycling through acquisitions and organic growth. Obviously, produce water is growing pretty fast as well. If you look at your business mix today, would you say the mail recycling – would be breaching above the 10% mark on EBITDA basis? And what do you think specialty chemicals are contributing to these things?

Yeah, I think when we look at our business mix and the business segments in general, yeah, I mean, I think we're just above 10% on metal recycling. You know, when we looked at our hub and spoke opportunity and opportunity, processing. You know, there was a couple other tuck-ins we could potentially do. That'll be a future conversation with Patrick and Luke on where it's best to allocate capital. But I think the asset structure we have in metal recycling right now, you know, is well situated to, you know, be a standalone business here for the In terms of specialty chemicals, yeah, they'd be slightly above where metals sit today. They've really benefited from some specific chemistries and patents that they have around production waste. And so we characterize it as front-end waste management. So when you're getting production out of the ground, you've got waxes, you've got terrapins, you've got scaling, you've got corrosion. And typically we're there providing that front-end chemistry structure. processed just via chemicals, that then is, you know, taken via truck into our facilities where we're then processing it with equipment and with our disposal network. And so, you know, for those businesses, you know, they continue to have, you know, good opportunities and they're great grant businesses. And I think they fit very well in the overall network, but they're relatively small on the grant team, I think.

Yeah, thanks. That's great, Colin. That's And on the growth cap tax, maybe just to understand a bit, there's the incremental spending going. Can you share some thoughts on the target markets and customers for the incremental $25 million growth cap tax? Is it more on the waste side, specific basins like, you know, maybe Monting or something, or any thoughts there?

Yeah, co-markets, Corey, it's all on the waste side. We mentioned we're allocating some more capital for some rail cars, and the remaining portion is around some more water disposal assets in the Mahi. You'll see those come online in Q1 of 2027. So we're just advancing those projects. There's a ton of demand for this service, and we're happy to provide it to help our customers out.

Thanks. And then the 50 rail car order, where does it take up? Do we need to now?

Takes us to about 300 cars. About 250 of those are owned and about 50 are on short-term lease or to be, they're coming up to end of life. So on a go-forward basis, you'll probably see us run around 250 cars that manages our platform.

We also like these new cars because they have higher walls and they're a little bit deeper, so they can actually transport 30% more. And we're spending or paying for the same sort of transportation cost per car. So those older lease cars are smaller and you can't get as much material in it. So when we run the economics on these rail cars, you know, it's quite advantageous when you think of the transportation cost into the U.S. when you could put more scrap metal into the car.

Makes sense. I'll push to the front. Thank you, guys.

There are no further questions at this time, so I will now turn the call over to Alan Branch for closing remarks. Please continue.

Well, thank you again for your continued support of SECURE. Please be reminded that SECURE's annual general meeting will begin at 11 a.m. Mountain Time this morning via conference call. Questions at that meeting will be limited to the items formally up for vote. Thank you again, and thank you for your continued support.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.