Greetings, and welcome to Titan America's Third Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Daniel Scott. Thank you, and you may proceed, Daniel.

Thank you, operator, and good afternoon to everyone on the line. Thank you for joining us for Titan America's Third Quarter 2025 Conference Call. I am joined by Bill Zarkalis, President and Chief Executive Officer of Titan America; and Larry Wilt, Chief Financial Officer. Before we begin, I would like to remind you that earlier this afternoon, we released Titan America's third quarter financial results, which are available on our website at ir.titanamerica.com, along with today's accompanying slide presentation. This call is being recorded, and a replay will be made available on our Investor Relations website. During the call, we will present both IFRS and non-IFRS financial measures. The most directly comparable IFRS measures and reconciliations for non-IFRS measures are available in today's press release and accompanying slides. Certain statements on today's call may be deemed to be forward-looking statements. Such statements can be identified by terms such as expect, believe, intend, anticipate and may, among others, or by the use of the future tense. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as the risks and uncertainties described in our SEC filings. I would now like to turn the call over to Bill. Please go ahead, Bill.

Thank you, Dan. Good afternoon, everyone, and thank you for joining us today for our third quarter 2025 financial results call. If you turn to Slide 4 in the presentation, I'd like to begin by highlighting our key messages for the quarter. We delivered solid performance in the third quarter, including 6% revenue growth with adjusted EBITDA and net income growing faster at 18% and 45%, respectively. Additionally, free cash flow reached $68 million in the quarter. These results reflect the strategic benefits of our vertically integrated business model and our ability to execute effectively in a challenging environment. Our Florida segment produced outstanding operating results, driven by our strong presence in the infrastructure and private nonresidential end markets as well as robust aggregates performance, where our recent investments in additional capacity enabled both volume growth and margin expansion. In the Mid-Atlantic region, we are pleased to report a return to growth in the quarter, supported by a release of project backlogs, improved pricing, and more favorable weather conditions. Pricing across our markets remained resilient on a like-for-like basis, moderated by mix impacts and residential softness. Operational efficiencies and cost management initiatives also contributed to margin expansion. We believe that our strategic investments in plant capacity and efficiency, logistics infrastructure, and digital capabilities position us to capitalize on the secular growth trends ahead. As we approach the end of the year and based on our results through the third quarter, we are updating our 2025 outlook. We now expect full year revenue growth in the 2 to 3 percentage range, and continue to expect modest improvement in adjusted EBITDA margins compared to 2024. Turning now to Slide 5. Let me provide some context on the market environment and the factors that we believe position us well for continued success. The…

Thank you, Bill, and good afternoon, everyone. Moving to Slide 8. Let me share an overview of our third quarter 2025 financial highlights. We delivered strong financial results in the third quarter with revenue of $437 million, up 6% compared to $411 million in the third quarter of 2024. This revenue growth was driven primarily by higher volumes across our aggregates, cement and ready-mix businesses, supported by favorable weather conditions compared to the prior year quarter. Adjusted EBITDA of $117 million, increased 18% compared to $99 million in the third quarter of 2024. Importantly, our adjusted EBITDA margin expanded to 26.7%, up 250 basis points from the prior year quarter. This margin expansion reflects the positive operating leverage in our business model, combined with cost management, operational efficiencies, and price gains in selected products and geographies. Overall, our third quarter performance was driven by strong execution across our business and the benefits of our strategic capacity investments. We delivered robust volume growth in aggregates, cement, fly ash, and ready-mix concrete with our aggregates performance driven by the continued ramp-up of our expanded Pennsuco capacity. While residential end markets remain soft, robust demand from infrastructure and private nonresidential construction supported our revenue and margin growth. Turning to Slide 9. Let me walk you through our third quarter 2025 volume performance by product line. Overall, our results reflect the strong year-over-year performance in the quarter across our integrated platform. Total cement volume increased 2.6%, ready-mix concrete volumes grew 4.1%, and total fly ash volumes increased 23.7% year-over-year. Our total aggregates volumes increased 11.9% year-over-year, benefiting from our strategic investments in Florida production capacity. Concrete block volumes declined by 0.7%, reflecting the ongoing softness in the residential market, though we continue to see better demand from the repair and remodel sector through the…

Thank you very much, Larry. Let's go to Slide 17. And let me say first that our third quarter results demonstrate the strength of our vertically integrated business model and our team's ability to execute effectively in a dynamic market environment. The strategic investments we made in expanded aggregate capacity, improved plant reliability, enhanced logistics infrastructure, and digital capabilities are delivering tangible results in the form of volume growth, margin expansion, and strong cash generation. Before we move to the Q&A portion of our call, I want to address our outlook for the remainder of 2025. As shown on the slide, we are updating our full year 2025 revenue growth guidance. We now expect 2025 revenue growth to be in the range of 2% to 3% when compared to the prior year. We continue to expect modest improvement in adjusted EBITDA margins compared to full year 2024. This adjustment to our revenue growth rate reflects our year-to-date results with first half weather impacts and delays in residential demand recovery more than offsetting our strong Q3 results and outlook into the balance of the year. Looking ahead, we have announced price increases that will be effective January 1, 2026, across all our product lines in both our Florida and Mid-Atlantic regions. While we are not yet in a position to provide guidance for 2026, directionally, we expect improved conditions across our key markets. However, still at this time, it remains a question whether the single-family housing market will reach an inflection point within 2026. We look forward to providing more details on our 2026 outlook when we report fourth quarter and full year 2025 results. I must say that we remain excited about the opportunities in front of us. The markets we serve are beneficiaries of powerful long-term trends, including infrastructure modernization, urbanization and population growth in the Sun Belt, expansion of data centers and advanced manufacturing facilities and ongoing investment in climate resiliency and sustainable infrastructure. Our strategic positioning along the Eastern Seaboard, combined with our comprehensive product portfolio and logistics capabilities, we believe, position us well to capitalize on these secular growth drivers. We look forward to building on this momentum in the fourth quarter and into 2026. With that, I'll turn the call over to the operator for the Q&A session. Operator?

[Operator Instructions] First question comes from Anthony Pettinari from Citigroup.

This is [ Ashish ] on for Anthony. I think you talked about the release of some project backlogs in the Mid-Atlantic. So can you just talk about what project backlogs look like today across your footprint more broadly? And then anecdotally, is there still some kind of uncertainty weighing preventing some projects from getting released still? Or is that kind of largely lifted?

Yes, it's Ash, it's Larry. Look, I think on the project backlog, if you think back to what we described in Q2 and what we described in the first half of the year, what we've said is that the second half of the year was expected to be better given what we thought would be better comparables. And that's, in fact, what happened in the third quarter for 2024. Your question was specifically about Mid-Atlantic. This really is the realization of some of those things that we were describing. So without getting into specifics of individual projects, you heard the general comments about some of the data centers coming through from some of those portable plant investments we made, some of the major infrastructure projects, whether it's some of the things we featured in some of the slides that you saw on the screen for roadways, bridges, that sort of activity as well as some airport type work that we're doing also in the Mid-Atlantic region. So, this is what we describe when we describe release of backlogs.

Got it. And then switching gears, are you guys able to walk through maybe the cadence of cement and aggregates volumes through the quarter? And then just sort of remind us what weather cond maybe looks like in 4Q compared to 3Q?

Yes. I think if you mean by cadence, you're describing the cyclicality of the business. Obviously, it's more cyclical in the Mid-Atlantic than it would be in Florida, although both have their elements, rainy season in Florida coming in the summer typically, but in Mid-Atlantic, obviously, a cold weather and the occasional storm activities that you would see. But in terms of importance of quarters generally for us, we would say 3, 2, 4, 1 in terms of profitability and revenue given the weather impacts of the Mid-Atlantic region in particular. Now, last year -- I think the second question was how many days were impacted, right? It's difficult to assess days, but we would say weather impacted events. And if you remember last year's fourth quarter, we had several hurricanes come through. The most meaningful one for Florida was Milton, which happened in the third quarter -- sorry, fourth quarter last year, and the most meaningful ones in Mid-Atlantic, a combination of Helene and then Bonnie that came before that. So big impacts, obviously, in the third quarter. This is why you saw, in part, some of that increase in Mid-Atlantic you didn't see in Florida for the third quarter. We expect strong improvement in the fourth quarter in Florida given the impacts last year.

The next question comes from Philip Ng from Jefferies.

Strong quarter. The margins were impressive, good operating leverage. How much of that is just cost deflation, or it's really driven by some of the operational excellence and just pricing and all that good stuff you guys are working on to kind of drive profitability?

Okay. I mean just in general terms on cost inflation, Phil, cost inflation-deflation, I think there's some offsetting things that go on there, right? If you think about what makes up our cost, labor, energy, fuel, et cetera, some of those things have pluses and minuses, including tariffs, right, that come through and impact the year-over-year looks. So when you see the improvement, what you see is the work that we do to mitigate those impacts. So you see the cost improvements coming through that way.

Got it. Okay. That's helpful. And then on your full year guidance, you trimmed the full year outlook from a top-line perspective, certainly tougher first half weather and housing. Any perspective on how that momentum has looked in the fourth quarter? I know [ conds ] were a little easy from a weather standpoint. So any color on that momentum going into the fourth quarter? And then the full year EBITDA guidance, I think, was a margin commentary given the strong operational improvement on the margin side. Was the margins enough to offset that, so your EBITDA dollar impact is largely unchanged? Or actually that's going to be impacted as well, just given the tougher first half?

Yes. I think a couple of parts perhaps to that question. So first part of it is how is the fourth quarter going, I think, is what you're getting at. So October is all we know about, right? We know about what's on the order books, what we expect to happen. But what has happened has been October, a good month in October in terms of revenue growth, double-digit revenue growth overall, stronger in Florida than in Mid-Atlantic as we would see it for the month of October. Now coming to the second part of the question, at least in the Mid-Atlantic, this is where it gets more challenging for us because of weather and the holidays can have some big impacts and be disproportionately affected one year to the other. So we're cautious, I think, in that sense, but I think we give you a sensible look at what we think the revenue growth would look like given what we know right now. On the margin side, again, given the impacts of some of the volume impact that can be particularly in the Mid-Atlantic in the fourth quarter, that margin will be less certainly than it was either year-to-date or in the third quarter itself on average for the company.

The next question comes from Chad Dillard from Bernstein.

So I was hoping if you can give more color on the product ramp for the precast lintel. So when is the plant going to be operational? How are you thinking about the growth outlook for the product line over the next, like, 3 years? How big could this business be? And then just how to think about the profitability contribution?

Yes. We are at -- as you noticed, we have approved our 40 different designs of products, which is a major milestone for us. Now we are on the engineering phase. We expect that we're going to have our first state-of-the-art plant towards the end of 2026 or the very beginning of '27, if I were to put some kind of time line behind it. We expect a fast scale-up because we have the technology, we have the locations, we have complementary products. We have the channels to market. And we expect that this is going to be an addition to our vertically-integrated comprehensive portfolio and complementary product mix strategy because these products -- the lentils are going to be added to our concrete block, stucco and masonry products. And we address the same customers we address today, so one car in the parking lot added these products. Also, we expect these downstream products to usher in more sales of our upstream products overall. So overall, we expect a substantial improvement overall in our revenue and our profitability when you look at this in the context of all the complementary products and the synergies that this will give us. But we're thinking, in the long run, obviously, in the depth of time as an -- overall as in even starting in '27 and moving into the years forward.

That's helpful. And then second question, just on tariffs. Could you quantify the impact in the third quarter? And what are you embedding as we go into 4Q?

Yes. I think what we would see year-to-date through the third quarter, probably in the order of $6 million, give or take, and when you look for the full year, something in the $7.5 million, $8 million is what we would expect coming through on the P&L side for this year. And obviously, the tariffs, as you know, have gone from 0 to 10 to 15 during the course of the year. So the run rate gets a little stronger as we go in, although the seasonal impact comes down, right, because the demand is lower in the fourth quarter.

And Chad, if you allow me because there was a question before, and Larry addressed it very well, just to address it from a different angle. In terms of cost headwinds this year, we had the impact from natural gas. We had the impact -- headwinds from labor and of course, headwinds from tariffs. What is very important, however, to say is that we managed to mitigate theses impacts and also to expand our margins, not only mitigate but expand our margins on the basis of our operational excellence and cost reduction initiatives based on our initiatives in digitalization, but overall, also in investments in logistics and improvement overall of our costs. So a success story there in terms of mitigating headwinds from costs, but also improving our margins on the basis of self-help.

The next question comes from Sherif El-Sabbahy from Bank of America.

So looking at incremental margins, they were quite strong in the third quarter. And based on your guidance, it looks to be similar in the fourth quarter. What should we think about as a normalized flow-through going forward in 2026 and beyond given that we'll be lapping some of these spin-off items?

Yes. Look, it's Larry again. Sorry, I don't think I implied that it would be the similar flow-through coming into Q4. Q4 is always going to have a slightly different profile of margin relative to Q3, which is obviously the strongest quarter. It moderates coming into the fourth quarter. Now, we do expect, as we said in the guidance, to have uplifted year-over-year margin improvement. And you can see that in the commentary that we made.

And just how should we think about flow-through on a normalized basis just as a framework going forward?

You need to clarify that for me.

What do you mean flow-through, Sherif?

In terms of just incremental margins on an annual basis.

I think we said modest year-over-year margin growth. You can put that in the 30 basis point range, something like this.

Sherif, on the qualitative approach here, when we talk about normalized margins, right, we are operating the last 3 years in a softness in the residential markets, right? And overall, on average across the U.S., residential part of the industry represents roughly 1/3, right? So 1 of the 3 wheels of this industry is operating under recessionary conditions, very soft, as you know, right? So right now, our margins are being compressed by the fact that the residential wheel is not operating as it is expected. As we've said many times, we have the infrastructure, and we have the private nonresidential markets being strong and the support and underpin the demand. Once residential kicks in gear as well, one should expect that price momentum, both in the heavy construction upstream materials, but also in the downstream materials is going to resume just like we had in '21 and '22. So I think when you ask about normalize, we have to expect some substantial margin expansion, but this is going to be contingent on the rebound of the residential sector.

[Operator Instructions] The next question comes from Wesley Brooks from HSBC.

Good quarter. So a couple of questions from me. First, I just want to come back to the segment margins and particularly on Florida, you called that aggregates expansion plan. I just wanted to get a sense of how much further there is to go on that, both in terms of the expansion and kind of how far you are through it, but also in terms of the additional margin benefits you could get from that?

On the -- let me just take this question in relation to the aggregates expansion. I think you're going to see it stepwise, Wesley. We increased our capacity in aggregates with our investments, especially in Pennsuco. And we managed really to move this product in the marketplace immediately, increasing our sales volume and increasing our market share. So the next increment is going to be, again, step-wise. It can depend on an acquisition. But in relation to organic growth, we expect to see the next incremental margin around 2027. As we have discussed before, as part of our strategy, we are investing in a project, a substantial project to increase our reserves in Pennsuco by 125 million tons by investing in our capability to beneficiate reserves that we have there. So this is really the plan and what we should expect.

Okay. So sort of -- we're kind of there for now and then we wait a couple of years to get another leg up in the margin there?

Unless there is inorganic initiative.

Yes. Okay. And then my other question, you mentioned the price increases that you've sent letters. I don't know if you'd be willing to give us some indication of the level that you guys are asking for. And also, at the beginning of this year, obviously, there was a delay in getting those price increases through. I don't know if you shave any insights on what some of your competitors are doing and if there's a risk to getting those through at the beginning of January.

In terms of our announcements in the markets, we have announced for cement across all areas where we operate, so Florida, Virginia, North Carolina, New York, New Jersey, everywhere, $12 per ton as of January 1. For ready-mix concrete, we have announced between $10 and $12 per cubic yard. For aggregates, $3 per ton. And that's really some key elements. Fly ash about $6 per metric -- per ton -- per short ton. So these are really some of the indications for -- block, we have announced for common block, $0.08 per block. In relation to the success, obviously, it will depend a lot on the -- first, we are confident about the continued trends in demand in relation to infrastructure and private nonresidential. And this obviously is going to support the momentum and the resiliency of our prices. A key factor will be the rebound, as I mentioned before, of residential, which will allow for more momentum. But at this point in time, it's hard to make any prediction.

Great. Yes. I mean those are impressive starting points even if you get close to that. So yes.

Thanks, Wesley.

The next question comes from Brian Brophy from Stifel.

Just one big picture one from us. It's been about a year since you guys first talked about some of the green cement targets to the Street and some of the adoption expectations there. Just curious how you're seeing adoption unfold relative to some of those initial expectations.

We are proceeding according to our plan, and we're very proud about the progress we've made. As we have mentioned in the previous call, we have already qualified through the Department of Transportation, 1T cement with different cementitious materials and for different applications. I can say that, right now, in relation to our production, we are approaching a level between 3% and 5% of our total production on an annualized basis that is coming from 1P. We are utilizing these products as we have done in the past as we were the first to introduce and the first to be 100% shifting into 1L cement. We are utilizing these types of cement on our high-performance concrete products, and we're testing them across different high-performance applications in the marketplace. But fundamentally, the adoption is happening on the end-use level through our downstream products as we're testing these new innovations and this -- the ability really to produce ultra -- high-performance and ultra-high-performance products with unique capabilities and properties. And some of them or the concrete and the other downstream products that we produce with this green cement are having strong adoption in the marketplace. So overall, good progress according to plan.

Thank you very much. At this time, there are no further questions. I'd like to turn the floor back over to the CFO, Mr. Larry Wilt. Thank you, Larry.

Okay. Thank you very much, and thank you for your time today. We appreciate the interest in Titan America, and look forward to updating you during our call for the fourth quarter. And have a great rest of your day. Thank you very much.

Thank you. Ladies and gentlemen, that does conclude today's call. Thank you very much for joining us, and you may now disconnect your lines.