Joining CEMATRIX Corporation conference call to discuss the company's financial results for the first quarter ended March 31st, 2026. With us today is Randy Boomhour, President and CEO, Marie-Josée Cantin, CFO, and Jordan Wolfe, President of CEMATRIX subsidiary, MixOnSite. Before we get started, I wanna remind our listeners that today's call is being recorded and will be made available later on the Investor Relations section of CEMATRIX website. The full financial statements and all disclosures related to this earnings call are also available on sedar.com. After management's formal remarks, we'll conduct a Q&A. We're gonna take covering analyst questions live via the audio stream through the webinar portal and all other questions through the Q&A text box that you should see in the bottom portion of your Zoom window.
Prior to turning the call over to management, I will read the company's forward-looking statements, which are also available in the financial results, company press release, and investor presentation. This presentation contains certain statements that may be deemed forward-looking statements. All statements in this document, other than the statements of historical fact that address events or developments that CEMATRIX expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "potential," and similar expressions, or that events or conditions will, would, may, could, or should occur. Although the company believes the expressions expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results may differ materially from those in the forward-looking statements.
Factors that could cause actual results to differ materially from those forward-looking statements include failure to successfully negotiate or subsequently close transactions, inability to obtain required shareholder or regulatory approvals, uncertainty with respect to findings under exploration programs and general economic market or business conditions. Investors are cautioned any such statements are not guarantees of future performance, and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates, and opinions of the company's management on the date the statements are made. Except as required by the law, the company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions or other factors should change. Now, I'll turn the call over to Jordan Wolfe. Jordan, please go ahead.
Thank you, Glen. You're a tough act to follow. Today, I'm gonna be going over some of the key investor highlights for CEMATRIX. CEMATRIX, as you know, is a cellular concrete specialty contractor. We are a leader, providing lightweight, cost-effective, and durable cellular concrete for infrastructure projects. We provide solutions to our customers for their geotechnical challenges using cellular concrete on time, on budget, and on quality. Customers choose cellular concrete because one or more of its physical properties, as well as its cost savings. We also have a very strong competitive advantage, which is difficult not to after you combine three of the largest cellular concrete providers under one company in CEMATRIX group of companies.
For some of the highlights on our financial strength and overall growth trend, I can say that our compounding annual growth rate for revenue is around 25% since 2017. Our last 3 years consistently provided financial results, as you can see from the chart on the right, which I won't get into, but you can look at it at your convenience. In 2025, we had records in almost all financial metrics or KPIs. We recorded an EBITDA cash flow from ops and EPS or earnings per share at record levels in 2025. 2026 is forecasted to be another great year across the board. We have some significant market opportunities. As I mentioned before, we have competitive advantage. CEMATRIX is an industry leader.
The global cellular concrete market is significant and is expected to continue to grow. Increased infrastructure spending in Canada and US provides a very strong tailwind for us, and we plan to capitalize on that. MJ, I believe we're gonna skip the next few slides. Many of them have been in this presentation and are there for your review at your convenience, but we're gonna skip to slide eight, I believe. There you go. I'll continue on our financial highlights. Some of this I talked about briefly, but it's worth repeating. Again, we've had a record year in 2025. Our EBITDA in 2025 was higher than the previous 20 years combined. That should kinda tell you something about where we feel we're at and the direction the company is going in.
Our adjusted EBITDA of CAD 8.3 million is higher than the two best years combined in 2023 and 2024. We also are thankful that we're now meeting the general principle or Rule of 40, where we have over 40% when you combine our revenue growth and our EBITDA. I believe that we're at 27% and 18%, that makes 45%. We're within that compliance of the Rule of 40. Our top line growth trend and positive bottom line and generating cash is positive as well. As I've mentioned, a CAGR of 25% on revenue since 2017. Recorded CAD 8.3 adjusted EBITDA in 2025.
A record CAD 8.2 million in cash flow in 2025 from operations. We recorded a record earnings per share of CAD 0.027 per share in 2025. We also have a healthy balance sheet with very low leverage. CAD 11.9 million in cash with no long-term debt as of Q4 2025. We have CAD 15.7 million in cash as of March 31, 2026. You can see we've been doing an excellent job with our collections. Some keys to understanding our business. Randy said this before, but it's important to reiterate that our growth revenue will be lumpy. It's not necessarily gonna be a staircase growth. Financial results will be variable based on timing of when large projects start and stop.
Again, that's somewhat out of our control, but we are always there when the contractor is ready to go. That's important to us. Construction is a seasonal business. It's important to understand that higher revenues come in warmer months when and less so in colder seasons. Our average revenue over the last five years is 18% in Q1, 17% in Q2, 34% in Q3, and 31% in Q4. Again, we do better in Q3 and Q4. We are a specialty contractor, as I mentioned, and as such, our margins tend to be higher than general contractors, but we have more bench time with more fixed costs. Our project size impacts our margins.
The higher the project or the larger the project, the more competition we have, therefore the lower margin we have to go to land the work. It's also important to know that we have excess capacity with our equipment and manpower. We have the ability to produce significantly more revenue without increasing our staffing levels. We're here and ready for more growth and we're striving for it.
Thanks, Jordan.
You bet.
I'm gonna go through our Q1 2026 financial results highlights. On this slide, we published our financials. I'm not gonna go through it, just a quick reference for you if you wish to look at our slides afterwards. As Glen said, it's available on SEDAR+ and our website as well. We had mixed results in Q1. We had higher revenue, lower margins, reduced SG&A, and we had strong cash flow. Revenue has increased despite the seasonality, so it grew to CAD 7.3 million in Q1 compared to CAD 6.6 million. That represents an 11% increase. Gross margin was CAD 0.7 million or 9% compared to 22% last year. This is a temporary decline. It's largely attributable to project size and execution timing. I would say that, moving forward, a 30% gross margin would be a sustainable target.
On the cost side, SG&A declined to CAD 2 million, down from CAD 2.1 million last year, while we support higher revenue. We have strong cost discipline. When you look at our operating income, it's a CAD 1.3 million loss compared to CAD 0.7 million last year. It's driven by the same margin dynamics we just discussed. Adjusted EBITDA was negative at CAD 0.6 million in Q1 compared to a negative CAD 0.1 million in 2025. That's a CAD 0.5 million decrease. Cash flow from operations before working capital was an investment of CAD 0.6 million in Q1 compared to CAD 0.1 million in 2025. When you include working capital, we have a strong cash flow position at CAD 4.6 million in Q1 compared to an outflow of CAD 1.6 million in 2025.
That's a CAD 6.2 million increase, and Jordan touched base on it when we talked about cash. That's largely due to our collections. We had great collections from our Q4 balances. Again, our cash is CAD 15.7 million at the end of Q1 compared to CAD 11.9 million at the end of Q4. It gives us a strong foundation to execute on our 2026 plan. We like to put these graphs. This is a good visual for you to see that our revenue line, the trend is growing. As a reminder, the orange box for Q1 is just for one quarter, while the teal boxes are all for a full year. Gross margin, the trend has improved over the last 4 years.
Again, the orange box is just for the quarter, but as I mentioned on the previous slide, 30% is a sustainable target for us moving forward. The dip you see in 2022 was during the COVID pandemic. We had cement shortages and supply chain issues. When you look at debt and interest, we have a strong balance sheet. Our only debt right now is our equipment finance loan, so it's about CAD 945,000. We've come a long way since 2017. Talking about our sales success and backlog, we've continued our momentum in Q1. Last year, we announced CAD 50.5 million contract awards, and in Q1 only we announced CAD 17 million. This backlog supports our future revenues, and our current backlog right now is at CAD 70 million. It went up about 4% since quarter end.
The largest project we have in backlog is already underway. As shown on the chart, we have delivered strong share price appreciation over the last 15 months. Our achievements are getting recognized in the market. If you look at the opening market price, share price on April 22nd, we were about CAD 0.58. That's an increase of 120% since the end of 2024, where it was at CAD 0.26. If you look at our low in March of 2025, about a year ago, where we were at CAD 0.165, that's a 250% increase. In the past, we've bought out share price appreciation with new capital raises, and we have no plan to raise capital or issue shares in the near future. That leads to our share capital structure.
We have 149.7 million shares outstanding at the end of Q1. We have 5.5 million of options, 3.2 million of RSUs, and 8.2 million of warrants are expiring in July for a combined total of 166.6 instruments. With our NCIB, since the beginning of the NCIB program, we repurchased 1.4 or 1.5 million common shares under this program, and we just renewed it for the year. I'm gonna pass it to you, Randy, to do some closing remarks.
Perfect. Thank you, MJ. Can we go to the next one, please? Yeah. Just wanted to say really good job, MJ and Jordan, on talking about our company and our results. We always like to end on this slide. It's really just sort of a reminder of why we think CEMATRIX is a great investment. The reasons why we'd list to invest, as Jordan mentioned, we are an industry leader. We basically combine three of the larger companies in this space, and we're really well positioned as a result to capitalize on the opportunity in the growing infrastructure construction segment. We are a growth company. It's not gonna be a staircase of growth, but the overall trend is clearly one of growth. We're growing revenue. We have positive adjusted EBITDA, positive cash flow from operations and a strong balance sheet.
If you go looking for companies that are our size that have these four qualities, you're not gonna find very many companies that meet these criteria. We do believe that we're currently undervalued based on traditional valuation metrics, the gap is closing. You know, I've been kind of saying this for five quarters now that we think this. Like I said, people are starting to notice our results and what we've been talking about, the gap is closing. We think there's still room to go. You know, whether you wanna evaluate based on a forward revenue multiple, EBITDA multiple or EV/S multiple, I think in all cases, you can come up with a higher number. As MJ mentioned, we've got no new capital raises required or planned to fund a burn rate.
The only time we'd introduce new capital would be in support of a very large accretive acquisition. With our cash balance in place, we're pretty confident that the next acquisition we will do will be 100% based on our balance sheet, which would mean no dilution and a 100% accretion to existing shareholders. Lastly, at that point, we have capital to deploy. We're going to look to continue to grow organically, and we're going to also look for opportunities to grow via acquisition. On the right-hand side here is our investor relations contacts. For retail shareholders, we encourage them to reach out to the company through the information provided there. On the institutional side, reach out to Bristol Capital or Glen and his team.
As you know, we have one analyst covering the company, which is Russell at Beacon Securities. With that, we'll just kinda pause and turn it back over to Glen to lead us through the Q&A.
Super. Thank you, Randy. Again, we have covering analysts on the call. Please raise your hand if you want to raise a question, and then we'll take the balance of the questions through the Q&A portal. Russell, thank you from Beacon Securities. You are live. Please go ahead.
Good afternoon. Can you hear me?
Yes, we can.
Excellent. Thanks very much for the questions. Maybe first, more generally, Randy, you know, this call follows pretty closely on the Q4 call just six, seven weeks ago. Just wondering anyway, can you talk about any sort of market developments or any sort of trends you've seen since the last call with, you know, that are informing your outlook or perhaps any color around the kind of sales opportunities that you're seeing or that have arisen over the last over that period? Thank you.
Yeah, it's a really good question, Russell. I appreciate you asking it. You know, from my perspective, I wish I owned 100% of CEMATRIX, 'cause I just really believe we've never been in a better spot than we are right now. If you look at our balance sheet, our cash balance, you look at our backlog, and you look at the opportunities in front of us, I honestly believe we've never been in a better spot. I always find it a little frustrating as we go through the public market reporting cycles, and there's sort of retail investor panic if a number is down or retail investor excitement if a number is up. We, we don't look at it that way. We look at the long-term health and viability of the business, and it's never been better.
Our sales teams are finding more opportunities to bid. We're bidding more opportunities, we're winning more opportunities. Like I said, we're expecting 2026 to be a really good year for us.
That last comment, I think, dovetails into my next question. You look at the order flow year to date, it's been fairly strong. Obviously, your track record on prior projects probably helps, but I'm wondering what it is that your team is doing differently on the sales front. Is it more experience? You mentioned bidding more, winning more. I'm curious if there are tools, processes or best practices that you've implemented that you can talk to that are helping to kind of accelerate the traction.
Yeah. We're always a bit sensitive to getting into the details of how and what we do because we're the only public competitor in this space. We know our competitors listen and read our materials. What I would say, Russell, is just that we've got really good people. Those really good people are sort of perfecting and refining their approaches, and we're perfecting and refining the people that we're talking to. As a result of that, we're just getting better results. The other thing I talk about a lot is. In business, it's really important that when you get a chance to do work for a customer, you have to do a good job.
I think we've really put an increased emphasis on quality and performing in the field, as sort of paramount. It's more important to do a good job, even if you make a little bit less money, because if you don't do a good job, you know, you lose that customer for a long time, maybe forever. We've really prioritized putting the customer first. I think that's another message that you've heard me repeatedly say is we have to serve customers first. We don't serve shareholders first, because that's backwards. You have to serve the customer first, and if we do that, we'll grow the business. If we grow the business, shareholders will win.
Got it. That's helpful. Then maybe just thinking a little higher level here, the U.S. traditionally your largest market, I'm wondering if you're seeing or anticipating any tailwinds in Canada from the federal government's efforts. Too early for the Canada Strong Fund to make a dent, wondering more perhaps about the infrastructure component and the Build Communities Strong Fund, I think CAD 50 billion announced last year. I'm wondering, are you seeing any opportunities, any money actually hit the road from funds like that in Canada that give you perhaps additional optimism for work in this country? Thanks.
Yeah. Good question again, Russell. We used to get this question a lot with Biden's trillion-dollar infrastructure bill in the U.S.
Mm-hmm.
-or Trump's version of that infrastructure bill. What I would say for us is it's really hard to connect an infrastructure bill to a specific project. Often, I think if that happens, it's happening those conversations are happening at the owner level and the GC level. Because we interact with the GC, we don't often see that. I would just say it contributes overall to this tailwind that we've been talking about. I think just a general understanding of how life works is there's just been a deficit or a lack of investment in infrastructure. We've kind of relied on infrastructure that's been in place, but that infrastructure needs to be maintained. It's just, I think governments haven't been really focused on that because there's been other places to put their money.
If you don't maintain that infrastructure, sooner or later it fails. The failure is way more expensive than maintaining it. We see more and more governments at all levels kind of recognizing that it's important. Even right here in Calgary, we've had a water meter, water main fail, that's basically created a super expensive situation. It's a situation that we're gonna benefit from because they're putting a new feeder main in, and it has to be grouted. We're gonna get that work. I would just say, Russell, it's really hard for me to connect big legislation, but what I would say is that's just adding to the tailwind that we see where there's just increased focus on spending on infrastructure.
Got it. Thank you on that. Then maybe around SG&A, congrats on the cost discipline there. I think professional fee is down around CAD 150,000 year-over-year. I'm wondering, you know, it was such a good quarter. Do you envision having to invest in OpEx from here, or does the Q1 number more or less represent a reasonable baseline that we should expect to continue?
We will continue to invest in selling and sales resources. I'm trying to spend less money on people like me, people who administer the business and more money on people that sell or support selling in our company so we can grow revenue disproportionately to what we might have to grow OpEx. There was some disproportionate professional fees in the first quarter of last year that are making that savings maybe look a little bit better than it was. I'm not sure I'd use that run rate for four quarters. Definitely I would expect that our SG&A would trend below last year.
Maybe one last question from me, because you did talk to having a balance sheet to deploy. Just wondering what you're seeing on the acquisition front. You know, given the environment we're in and the tailwinds you've observed in your business, wondering how willing the acquisition targets are to talk and what level of interest you're seeing in completing a transaction.
Yeah. I think most people are willing to talk. I would say the interest so far to transact has been quite low. You know, even if the interest to transact is low, at least we're letting people know that we're interested, we're in the market, and if they change their mind, whether that be next year or in 10 years, we want them to reach out to us. I think that's really what it is. If you think about selling or business development, I mean, that's sort of the essence of it, right? Sometimes you're talking to somebody, and it could turn into something pretty quickly. Other times, you're talking to somebody, and it could not turn into something fruitful for years. That's really the approach we're taking.
If there's nothing that makes sense from an acquisition point of view, we won't do one. There's no pressure for us in that sense to do something. I don't feel pressure like that. We're only gonna do what's in the best interest long term for shareholders. That's really what we're focused on, just finding the right opportunity.
Great. That's excellent color. That's all for me. Thank you very much.
Thank you, Russell.
Thanks, Russell. I'm gonna put you on mute. If you want back in, just let me know. We're gonna take some questions from the audience now. I do see that there are additional questions around acquisition opportunities and pipeline. I think you just answered it with Russell's question. Perhaps just expand on it a little bit in terms of what type of businesses potentially you would be looking to add.
Yeah, sure, Glen. It's a good question. Again, we're always trying to find the balance between disclosure that shareholders wanna hear and also protecting competitive information. Essentially, our first choice would be another pure play or close to pure play cellular concrete company. That makes the most sense. It's what we know the best. It's what would fit easiest into our organization. Ideally, those companies would be in a market that we covet somewhere in the Southern U.S. Where, you know, there's a different seasonal revenue pattern. Although, you know, I've said many times I'm less worried about seasonality, I'm more worried about making money. If I had an acquisition that is CAD 50 million in July, I would do it even if it made seasonality worse, 'cause I'm interested in making money.
That said, we understand the benefits of reducing seasonality from an investor point of view and from a run the business point of view. The southern markets are probably the most appealing. If there isn't a pure play cellular concrete company that's available for sale, and I'm not sure there is, then we'd look to acquire a company that does something similar to what we do. Similar being a specialty construction company, similar in that they're not selling a commodity, but they're selling something that requires a technical sale process. You're dealing with similar customers, similar sales profiles, and that would be in a market that we're interested in. An example I would use a lot is like a polyurethane grouting company in the Golden Triangle in Texas. That's a market we're interested in.
They would have existing customer relationships that we could leverage and introduce cellular concrete. We could also take the polyurethane grouting technology as an example and move that into our businesses north. That'd be an example of something we might try to do. First, we're going to run down all the cellular concrete company opportunities.
Super. Thank you, Randy. Again, to our audience, if you have a question, please use the Q&A text box. Next question is, given the construction industry with constant delays in projects, how are you handling the delays, and do you foresee an end in sight?
Yeah, it's a really good question, and I don't see an end in sight, honestly. I think this is just part of how construction companies work. I would say it's much rarer. It's the exception rather than the norm for a construction project to start on time and end on time. They just don't. It just doesn't work that way. People always kind of start out optimistically, and then things happen or things change, and it's just the nature of the business. Trying to change that, I think, would be impossible. It's not something we can do as a small player. I just don't think it's something that can be done, period.
For us, it's more important that we just remain flexible, and we're ready, as Jordan said many times, that when our contractor phones us and our customer phones us and says, "Okay, we're ready for you," that we're ready to go. That's always been one of our strengths, is our ability to be flexible and start when the contractor wants us to start.
Super. Thank you, Randy. There are no further questions in the queue. Perhaps some closing remarks and then we'll end the presentation.
Oh, sorry.
Yeah, there's a question that came in, and maybe this is for MJ, if you could just give more color on the warrants.
There's 8.2 million warrants outstanding, and they're expiring on, I wanna say July 29, 2026 from memory.
What's the strike price on it?
Yes, it's CAD 0.60 for the majority of them, and the broker ones are CAD 0.51.
Okay, super. We now have no further questions in the queue, Randy, so maybe some closing remarks and we'll end the call.
Okay. Yeah, just maybe just cap off on that warrant thing is, you know, I've seen some chatter on the boards about if we hit CAD 0.60, all those warrants are gonna get exercised, and that's just not how it works, as you know, right? Just because we hit over the exercise price doesn't mean those warrants are gonna get exercised. They need to be in the money, how much in the money really depends on each investor's sort of point of view on it. We'd have to be well above CAD 0.60, I think, for those things to be exercised. In terms of closing remarks, like I said, I think it's really important to have a longer term or a full year view of our business. I think trying to judge it or assess it based on individual quarters is very tricky.
I think you're gonna make mistakes. As I said, I wish I owned all of the company. I've never been more optimistic and happy with where our company is than I am right now. I wanna make sure our investors understand that we're really in a great place. Q2 looks like it's gonna be our best quarter ever for a 2nd quarter. Again, I would caution some of our retail investors who sort of extrapolate my wording to mean that's the best quarter ever. That's not what I'm saying. It's the best 2nd quarter ever. It's gonna be really good for us, and it's gonna put us on track ahead of last year. As everyone knows, last year was by far our best year ever.
Just lots of good things to come and I can feel pretty confident saying those things 'cause they're based on backlog and by projects that are actually underway right now. Really confident in our second quarter and really confident in our full year for 2026. Just couldn't be more happy about where we are at as a company.
Super. Thank you, Randy. Thank you, MJ, and thank you, Jordan. This concludes our Q1 call.
Thanks, everyone.