Superior Plus Corp.

Thank you for standing by, and welcome to the Superior Plus Third Quarter 2024 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star-1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star-1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Chris Lixon-Hill, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Jonathan. Good morning, everyone, and welcome to Superior Plus' conference call and webcast to review our 2024 third quarter results. On the call today, we have Alan McDonald, President and CEO, and Greer Coulter, Chief Financial Officer. For this morning's call, Alan and Greer will begin with their prepared remarks, and then we will open up for questions. Listeners are reminded that some of the comments made today will be forward-looking in nature and are based on Superior's current expectations, estimates, judgments, projections, and risks. Further, some of the information provided refers to non-GAAP measures. These refer to Superior's continuous disclosure documents available on CDAR Plus and our website. Dollar amounts discussed on today's call are expressed in U.S. dollars and less otherwise noted. I now turn the call over to Alan.

Thanks, Chris. Good morning, everyone, and thanks for joining our Q3 earnings call. Before I jump in, I'd like to welcome Chris Lichtenheld, our new VP of Investor Relations. Chris joined us about two months ago and is a seasoned IR veteran who's also had experience on both the buy and sell side. We're really pleased to welcome Chris to the team, so welcome. Today is obviously a significant day for Superior Plus, and I'd like to take a few moments to provide some context about our strategy, our future, and our plans to transform the company. I use the word transform for good reason, because that's the journey we've been on. When I joined Superior back in April of last year, it was immediately apparent that this was a company with a lot of potential, but realizing that potential meant tackling some structural challenges. And with any transformation, structural challenges are the most difficult and time-consuming to overcome. In discussions about the long-term future of Superior Plus with our shareholders and with many of you, I heard familiar themes. What's the future of propane, and is there a path to growing the core business organically? How will you invest for growth with the current leverage and dividend obligations? Do you have the right presence in emerging energy markets like CNG, power generation, and renewables like RNG and hydrogen? And finally, do you have the team and expertise to make it all happen? These questions have guided our focus over the past year, and I'm pleased to tell you all today we'll provide you with the first look at our strategy to transform Superior Plus into the company we all believe it could and should be. So with this in mind, let me provide some context in terms of how we plan to raise the bar and Transform Superior Plus, moving forward with a more profitable, modernized business model and a stronger, more flexible capital structure. But before I discuss our future, let's start with where we were. Our company's history includes a long track record of consolidating the North American propane business through acquisitions, and today we proudly operate as one of the leaders in the market across North America. Our most recent acquisitions, Soteris, gave us even broader exposure to growth opportunities and positioned Superior Plus as the leader in the CNG energy sector at a time of unprecedented demand for alternative and local lower carbon energy solutions. Despite the addition of Sataris, our challenges remained. We were structured to integrate acquisitions, and our core propane assets were not delivering substantial organic growth. While we acquired good assets, we need to organize and operate them differently. Our propane business spanned from producers all the way to commercial customers and individual households across North America. But we still operated like a regional company, and the performance reflected this. Our job was to take advantage of this incredible market footprint and customer base and transform our operating model to drive sustainable growth and profitability. And that's exactly what we are doing. which leads us to where we are today with a clear plan to move Superior Plus forward. Over the past 18 months, we've initiated key organizational changes, including, one, retooling our leadership with an experienced team focused on operational excellence with a mix of both internal and external talent. Two, we've significantly revised our compensation structure to drive alignment between management's priorities and those of our shareholders. Three, we've made the deliberate decision to shift away from growing through acquisition to a more balanced and disciplined capital allocation approach with a focus on shareholder returns and growing the business organically. And finally, as with any successful operations-focused organization, we are embracing performance management, Our new company-wide balanced scorecard has established aggressive performance objectives for each aspect of our business. And as we all know, what gets measured gets improved. These decisions were critical enablers of our transformation. And while we are in the early innings of reaping the benefits from the work we put in place, I want to share more with you about where we are going. To transform Superior Plus to becoming a best-in-class energy solutions provider, there are three main priorities we've identified as critical to our success. First, I'm excited to introduce Superior Delivers, which is what we've named our collective efforts to transform our propane business to drive more sustainable, profitable growth. Superior Delivers is a productivity initiative and a growth initiative. In fact, it's an everything initiative, a true transformation of the propane operating model. We have been meticulously working on this transformation program over the last eight months, and it comes after an exhaustive review of our underlying business assets, operating model, and competitive advantages. Today, we have over 100 specific initiatives in various stages of planning and execution that are all centered around three key areas of the business. First, growing our customer base profitably and retaining our customers for life. Second, becoming the lowest cost operator in the industry. And third, allocating our capital effectively and generating best-in-class utilization of every dollar. To do this, we had to shift our thinking away from inorganic growth toward becoming customer-centric, putting our customers at the core of every decision we make. Data-driven, making decisions with better insights than ever before, and operationally excellent. holding ourselves accountable to ambitious targets and achieving measurable results in everything that we do. Over the next three years, as we continue to execute Superior Delivers, our vision is to emerge as the leader in attracting and retaining profitable customers for life. We will be the low-cost operator and truly use our scale as a competitive advantage with a capital efficiency far beyond historical levels. While we are announcing this initiative today, We aren't starting today. Superior Delivers has been in progress for months now, and while the road will be long, we've already had some encouraging early wins, and the changes we have made to the business will ensure we have the tools and capabilities to continue to execute with haste. By early 2025, we anticipate our propane business will begin realizing the optimization improvements with a full realization of at least $50 million of incremental EBITDA by the end of 2027. Second, with Soteris, we continue to believe there is excellent long-term opportunity as the industry shifts and new demand for alternate energy solutions arise. There is tremendous excitement about the forecasted growth in demand for energy, and Soteris is well positioned to remain the leader in this space. We are cautiously evaluating the best opportunities, including expansion and introducing new offerings to capitalize on prospects beyond the well site. While we are continuing to invest in MNSUs, we're moderating our pace of investment while we assess new markets to ensure optimized returns on our capital and to maximize financial flexibility and free cash flow. Now, this is a foreseeable evolution for Sataris. As with any emerging businesses, opportunity shift and leadership needs to make sure the business continues to adapt to changing market dynamics. Third, As announced this morning, we have made the strategic decision to reduce our dividend by 75%. Since our time as an income trust many years ago, Superior Plus has allocated a disproportionate amount of capital towards supporting our dividend. This has limited our financial flexibility to invest more substantially in other shareholder value-creating opportunities. We see the transformation of Superior as all-encompassing. And creating financial flexibility is the final key element. A significant decision, yes, but one we feel is critical in positioning the company for long-term success. With this decision, we immediately benefit from approximately $135 million Canadian in additional available free cash flow, which can be directed to short-term opportunities to deliver value to our shareholders by investing and buying back stock. It's an exciting day for Superior, and I'm pleased to be able to share this vision with you, and it's just the beginning. That's why we're also announcing our plans to host an Investor Day the first week of April 2025. During this event, we'll provide deeper insights into our plans for Superior Delivers, Soterras, and our financial strategy, along with an opportunity to meet our team and hear directly from our leaders about our progress. In the meantime, we'll continue to do what we've been doing, challenging ourselves and the business, focusing on execution, and allocating our capital with discipline. Now, with all that said, I'd like to comment briefly on our Q3 results before passing it over to Greer. Our third quarter is a seasonally lower contribution quarter for us. We're nonetheless pleased with our performance. Our propane business performed in line with our expectations, and Soteris delivered a strong quarter with 15% growth in EBITDA, despite increased competitive pressure. And with that, I'll turn things over to Greg.