Good morning or afternoon, everyone, depending on where you are, and thank you very much for attending. We're still admitting people in the room here. Gentlemen, a heck of a quarter. Record all the way around. So most welcome in this particular junior market environment. I'm going to turn it over immediately to Jeff Kendrick, President and CEO of CEMATRIX, and Randy Boomhour, the CFO. So with that, Jeff, I'm sure you have some opening remarks and definitely a moment to celebrate.
Well, thank you, Grant, and yes, Randy and I want to welcome all of you, either as a good morning or good afternoon, and thank you for attending our third quarter earnings webcast presentation. Of course, you all know it's been a record year and to date, a record quarter. If we sound giddy, we are. We're excited about how things are going at CEMATRIX, and we want to share that with you. So I plan to start off the presentation and cover some topics I want to highlight for you, then I'm going to pass it over to Randy, who's our CFO. But I also wanted to mention that he's also managing our Canadian operation as well.
So he's really not only in tune with the financial side, but also the operations, particularly on the Canadian side, and but also learning a lot about the U.S. operation as well. So let's get started. Table of contents, we'll just go over that quickly. We're gonna go over the third quarter highlights, record-breaking sales, of course, a strong fourth quarter expected as well. Talk about safety and equipment, and it's a priority for us. We'll update you on the backlog and the sales pipeline growth. Talk about the million-dollar projects that we introduced at the beginning of the year and where they stand and how that is going. Talk about million-dollar project locations. We're also gonna talk about 2024, how excited we are about that.
And then I'm gonna pass it over to Randy, who will go over the quarterly and year-to-date financial statements in detail with you. Then at the end, of course, Grant will come back on and monitor the question session, and look forward to answering any questions that you may have. So first, the third quarter highlights: record sales, quarter and year-to-date, and of course, we're already over last year's annual sales, which was a record year as well. Margins continue to improve. They're not all the way up where they could be yet, still some lingering effects of the supply issues from last year. A return to quarterly profitability, which is very exciting. No significant safety issues, even in this time where we've been extremely busy. Balance of the year looks strong.
We've landed CAD 30.2 million of new contracts since the end of the last quarter, and of course, we continue with a strong backlog in pipeline. There's many other highlights, but those are some of the strong ones for the quarter.
Jeff, you're still on the front slide.
Well, sorry about that, everybody. Let me move it forward. Thanks, Jeff. So move on to the next slide. Of course, record-breaking sales continue. All-time quarterly record sales of CAD 20.3 million, all-time nine-month sales of CAD 33.7 million, and we've landed CAD 51.9 million sales contracts since the beginning of the year. Strong fourth quarter expected as well. You know, fourth quarter is not usually as strong as the third, because we're heading into the end of the construction season, but we're going to have probably a record quarter for the fourth quarter as well. Those contracts are already in place.
Of note, nine of the $15 million projects that are still going this year are either being poured during the year and completed, or during the quarter and completed, or started previous to the quarter and will be completed, or will be starting in the quarter and completed next year. So it's been, it's gonna be a big quarter for us as well, and the balance of the quarterly sales will be made up of projects under $1 million. There's many of those projects as well. With this busy time, we're incredibly stretched as a company. When you go from little sales to a significant amount of sales in a very quick part, point or amount of time, it always puts a strain on your people and your equipment.
Fortunately, we have a great staff with us, and we have a great maintenance program. Our staff are well cross-trained, and they are always looking out for themselves and the safety of others. Of course, these maintenance programs that we have in place that we basically run all year round, but mostly during the wintertime, keeps our equipment running full-time. Hence, there have been no significant safety issues and no significant equipment timeout, so that keeps us operating at full capacity. Our backlog. You would expect this backlog, after putting CAD 20.3 million in sales in the ground during the quarter, would have actually gone down. It's actually stayed fairly consistent and strong as we continue to land more projects. Sales pipeline is also still up at CAD 425 million.
It usually goes down near the end of the year, as a lot of the projects for the year that have come out have been contracted and are no longer in that list. But again, that's been added to all year, and it stays very strong, over $400 million. Million-dollar project changes. There were a couple of projects that got pushed into next year, which is kind of amazing with what we've been doing without them. One of them happens to be the North Carolina project that was partly scheduled to be done this year. What's really interesting is that we actually, in our original budget, $13 million related to that project. Those sales have been all pushed to 2024, but we've replaced that entire delay with other projects, and it's the great year that we're having.
What's very also interesting is that entire project has to be completed next year, or they start to run into penalties, so this means that we'll have a very busy 2024 with respect to that project alone. We always like to show you where these $1 million projects are. Now, I got $20 million projects locations, because we have five new ones that have been announced that relate completely to next year, in addition to the ones that are either being completed this year or started this year and will be completed next year. So you can see that these projects are all over North America, and they pertain from projects to tunnel grouting, to MSE and overpass panel backfill, to road construction, to commercial and industrial construction. So it's been a very, very busy year for us right across North America.
Then the other thing to keep in mind is, besides the fact that we're having a great 2023, we've already got a strong 2024 already in place. I've announced in previous webcast and news releases that CAD 40 million of the CAD 75 million, or the CAD 70 million related to those larger projects that have been landed relate to next year. So we've already got a great start for 2024 in place. And the other thing to keep in mind, too, is that if we're doing CAD 40 million+, and CAD 30 million relates, in 2023 that is, and CAD 30 million relates to the larger projects, that means 25% or CAD 10 million+ relates to these small to mid-sized projects.
So when you add to that, that, and continue to see the growth in that category to the projects that we already landed on from a large project perspective, we're looking at a good 2024 and beyond as well. That's really, my section summarized up. I will come back again at the end to answer any questions that you may have, and I'll pass it on to our CFO and general manager of our Canadian division, Randy Boomhour.
Thank you, Jeff. If you could go to the next slide for me, that would be great. And then maybe one more. So these are just our financial statements. I won't go through these in detail. They're obviously public, released on our website and on SEDAR. We've already talked about the quarter, but if we go to the next slide, we'll pick out some highlights, some of the, some of the metrics that are important to us that we track and pay attention to. So obviously, from a revenue perspective, CAD 20 million in the quarter versus CAD 11 million last year, 76% increase. Almost CAD 34 million year-to-date versus CAD 21 million last year, 63% increase.
Gross margins are up, CAD 4.6 million in gross margin, 23% this quarter versus CAD 2.2 million or a CAD 2.4 million improvement. year-to-date, we're at CAD 6.5 million, 19%, versus CAD 2 million last year, so a CAD 4.5 million improvement. So really significant improvement in gross margins. Operating income also up in very similar numbers, which makes sense, 'cause operating income really is just gross margins less SG&A. Adjusted EBITDA, which is very important to us, up significantly as well, CAD 3.2 million in this quarter versus CAD 0.9 million last year, CAD 2.3 million improvement.
On a year-to-date basis, which we're especially proud of, we're now positive CAD 2.1 million year-to-date versus - CAD 1.9 million last year, so a CAD 4 million improvement. Cash flow from operations, and this is cash flow from operations before working capital changes. Again, positive in the quarter, CAD 2.2 million improvement versus last year, and year-to-date, CAD 2 million versus CAD 1.9 million last year. So again, CAD 3.9 million improvement, so very significant. Cash on hand, as of the end of September, is CAD 1.9 million.
With our positive EBITDA and positive gross margins, we do expect to be generating cash, which should start showing up in our bank account here as we get paid for our work in Q3 and Q4, in early Q1 would be our guess. So overall, just a great quarter, as you all know. So this slide, we like to show basically because we are a specialist construction contractor. As a result, we are subject to the seasonality of the construction business and industry, especially when we work in the northern climates, where much of our work is, especially in Canada and northern states. So Q1, Q2, on average, tends to be about 35% of our revenue. Q3, on average, tends to be about 35%-40% of our revenue, and Q4 is generally 25%.
You can see that trend in these lines from the previous four years. The other thing we're especially happy about is how we've delevered and simplified the balance sheet, really increasing the long-term survivability and sustainability of the company. The chart on the left shows our borrowings, and as you can see, back in 2020, our borrowings of all types was quite high, over CAD 20 million at one point, and now we're down under almost CAD 3 million dollars. Capital structure has also been dramatically simplified, and really, we're just have the shares outstanding of around CAD 134 million, and then we've got some options and RSUs outstanding associated with the equity program. So, great, great income statement, profitable, cash flow positive, simplified balance sheet, strong balance sheet, and also simplified capital structure.
We really feel like the company is poised for dramatic growth, and we've set the company up to basically have the flexibility to be able to realize on that growth potential. I think that's it for my section, Jeff.
Thank you, Randy. We'll pass it back to Grant, and get into the question- and- answer section.
Thanks, Jeff and Randy. Again, congratulations on the numbers. They are outstanding. If you can, Jeff, maybe kill the presentation, and then we can see both of your beaming faces full on here. The Q&A button here at the bottom, that's where you submit your questions. We have one, so I'm gonna start with that. People sometimes just submit those questions. In regards to Glavel, if you can provide an update on that investment, please.
I'll handle that, Grant. So, Glavel is, again, a private company, and, like us, in the past few years, they've been affected by the, the COVID and, the supply chain issues in developing their business. Right now, their sales are growing. They're struggling, in growing their sales, as we are, and partly because they only have one kiln in place, again, because of the COVID delays that, caused that second kiln to be delayed. And, because of the delays, they're in the process of, you know, working those things out, getting the funding in place for the second kiln. And, of course, when they do that, then they'll be able to, bid into the, very strong, growing infrastructure market that we are actually into as well.
So that is hopefully gonna happen within the next six months to a year. In the meantime, you know, again, because they're private, can't say much more about it at this point in time, because we're a 20% shareholder, and I'll leave it at that.
Great. Got one here from Andrew, the former equity research analyst. It's a long question, so I'm gonna break this up in different parts. First, he's congratulating you. He's very optimistic in the company. First part of his question is about growth margins in the bidding process, and he says, "Since you're the leader in cellular concrete, for the most part, you must be competing against the alternatives to cellular concrete, which are more expensive, slower, harder to use, et cetera. So shouldn't there be room for pricing power? Could you capture higher growth margins on pricing?" So let's start with that part of the question.
Okay, I think we are already. So yes, the answer immediately would be yes. But there is competition out there, right? He had mentioned one was other competitive products, so not other cellular concrete suppliers, and that's really critical. And really, the big part of our market, which is MSE panel backfill, which is replacing EPS block, and the prices that they charge in doing so, that really sets the price limit that we can go in from a market. We are still early stage. Remember, it is growing like crazy, but it is still early stage, and many projects are still done with the old legacy products. And hence, we are still again developing markets. And that you can really see that this year.
Our backlog before discounting sales has actually grown by over 64%, and we see this continuing to grow, maybe not as strong as 64%. Last year was 36%, so... But what it is, it's we continue to replace these legacy products in these projects that are going forward. It doesn't mean we don't still compete with them on a price basis. What also is happening in the marketplace on the cellular concrete side is there's a few more competitors coming into the marketplace. They don't have the technology that we do- we have or the capability that we do, but they're still out there bidding against us on these projects. Some of them bid on them even though they can't do the project. So, pricing is always an issue.
We are improving our margins, and our margins will continue to improve over time, but there will be a leveling off process, where there's a maximum that we can charge in a particular field, and it all depends on the individual market and the products that we're competing against in that market.
This question is in regards to material cost changes, and how much that has been impacting your price that you have to charge the customers. And then the last part is in regards to the relationship with suppliers, if there's been any changes there.
Well, there's no doubt that the material price increased by as much as 30% last year when we had the supply chain issues. Have they reduced the price from that because there isn't a supply chain issue there? No. so but what we've done, everyone, is that we charge our percentage or the same margin on top of that cost. So our margins, actually, from a dollar perspective, should increase because we're charging the same percentage on those same projects, thus, the dollar part of that margin percentage should be higher because the project dollars value will be higher. but, we don't expect to see significant price increases on the cement side over the next year, but you will see inflationary pressures in other areas, including wages and things like that.
The inflation is very strong out there still, and, you know, the governments and banks are doing their best to try to minimize or, the effect of inflation, but it still is affecting the marketplace out there. And our relationship with Lafarge continues to grow. It's strong, but one thing that we recognized during the, supply chain issues last year is that we need to develop relationships with other cement companies as well. So 2023 was not only spent growing our sales base, but also in growing our, alliances with various cement companies that work in different markets that Lafarge was not as strong in, but also in the markets that Lafarge is in as well.
Because last year, as you can remember, Lafarge wasn't able to supply many of our projects due to the issues they had with their plants and their supply themselves.
few of the questions, and there are a lot of them already, I will try to aggregate ones which are on the same topic. So still on margins, great job, given the size... Sorry, are the margins a lot higher on the bigger projects? Will there be a point in time that you would have minimum project size?
I'll let Randy handle this one. He's knowledgeable on this side, too, so.
Yeah, thanks, Jeff. So, definitely as the projects get larger, more and more of our competitors are interested in them and have visibility, so there's a lot of competitive pressure. So often, the larger the project, the smaller the margin has to be in order to win that work. So there's definitely a balancing act there. And sorry, Grant, what was the second part of that question?
Will you reach a point where you will have a minimum project size? I believe what's being asked here is, you will get so busy that you might very well say, "Well, folks, we can't bid on it. We won't bid on anything that's, you know, under CAD 1 million.
Yeah, so I would say that is possible in the future, but I don't see that in the near future. Right now, those small jobs help to keep our equipment and crew busy and keep the lights on while we wait for the bigger jobs to start, so I think those are still a very important part of our business model.
There are several questions, all asking about 2024. You've already said you're set up for a great 2024. People are asking what you anticipate in revenue and potential margin, for the coming year.
2024 is going to be a good year, but let's remember that 2023 was a remarkable year. We've never seen this in the past, but projects actually moved up. Usually they get delayed by six months to a year, but we've actually had some projects move from next year into this year. So, we're going to have a good year, and but we're not going to give any guidance right now. This is a very fickle, early-stage growth market, and and because we're in the construction business, you see variability in the projects. Next year, we do have that CAD 22 million North Carolina project to put in place. Early expectations is they would like to complete it all next year. Do we have confidence that it will all be placed next year?
No, to be quite honest. So again, we have to be realistic. Let's look at it, look at this as two parts. 2023 is a great year, better than expected, and 2024 will be a good year, but it'll be hard to judge where exactly how much better or similar it will be to 2023.
Given the size of the backlog, is this mainly due to the number of available projects or to cellular concrete being accepted or even more accepted as a viable solution?
It's both, you know. There are certain markets that are already developed and growing, and then we're entering new markets and areas where cellular concrete hasn't ever been used before, so it's starting to be accepted more and more in other places, and other types of applications, too, as well. I mean, one of the big projects we've done this year is a geothermal insulation project, something that we've never done in the past, and it's a very large project that's being worked on right now. So we expect that the sales pipeline or the backlog will continue to remain strong, but it should slowly come down to, you know, 1x-1.5x sales in the future.
This is unusual that it's this high, partly in part, as people should know, is that we have two large projects in there, that were awarded in the past few years, that both of them are not underway yet, but both of them are expected to be underway in 2024. So that will... as those start to go in the ground, assuming that we don't replace them with other larger projects, we may see the backlog come down a bit.
Starting to see repeat business as you work with different contractors?
Absolutely. You know, without getting into detail, there are a number of occasions where we get called back regardless, and it doesn't go into tender for the second part of the project, or it does go to the tender, and we may be high, and we still get the project because the skill and the capability and the results that we've had with previous work with them. So lots of repeat business.
Congratulations on the excellent quarter and year-to-date. Can you talk about macro trends and how do you see infrastructure today in 2024 and beyond?
Grant, I'm sorry, and I don't know if Randy heard you, but you came in very garbled on that.
Okay, I'll hopefully without breaking up. Congratulations on the quarter and the year-to-date. Can you talk about macro trends in your business? How do you see infrastructure spending in 2024 and beyond?
Randy, do you feel up to taking this one on, or would you like me to?
I think maybe you take a first shot at it, Jeff, and if I have something to add, I'll tack on.
So, you know, just to go back to where we were and what people were talking about a couple of years ago was all of the infrastructure spending that has been planned, you know, across North America. And last year, Biden had approved a $6 billion infrastructure spending on infrastructure, and that was just a small part of what is required to bring the infrastructure in the U.S. up to grade. So it just keeps getting worse. The funny part about it is we've never seen any of those projects go into the ground. Even our cement supplier, Lafarge, hasn't seen any of those projects, so we're not sure what is happening with them.
But what it does tell us still is that there's a huge market out there, that has of many different types of bridge and road and stuff, projects to replace aging infrastructure that we will be part of. And we're not even seeing that yet. So all we're seeing is the growth in just the normal markets, the normal annual replacement of bridges or new bridges, I should say mostly, and the repairs and maintenance of roads and highways and building of new highways. So, once this infrastructure spending starts to take off in the U.S., which we expect, because it has to happen, it's certainly gonna affect our markets and the overall conditions in the marketplace.
I don't know if you want to add to that, Randy, but in other words, it's still a very strong growth market.
Yeah, I agree, Jeff. I just would say just the aging infrastructure and the headwinds associated with that will drive it, less so about political announcements. And the, I would say, the cycle between a political announcement and an actual project being thought about and then a project actually being delivered, that lead time could be years, maybe even decades. So often the work that we're working on now is stuff that was thought about 10 years ago and planned five years ago. So I think you nailed it.
Talk about buybacks. Given that you are now cash flow positive, is there a desire to buy back shares? Management believes that the stock is undervalued.
There, there certainly is... We've talked about it, but, one of the things that's important to do here is to make sure that we have the cash in the bank to do that, right? So not only the cash in the bank to do that, but also the cash in the bank to manage our operations moving forward. As Randy mentioned earlier, we expect to generate strong cash flow this year. Because we're looking at a strong 2024, we'll continue to generate strong cash flow next year. So, we'll continue with our current focus, what is, again, to pay back debt, put us in a strong position moving forward so that we can have decisions like potentially buying back shares to be part of our discussion in the future.
How much growth have you seen in road construction, and has Ontario adopted your technology?
That one was, again, garbled, Grant. Sorry.
Right.
I think you asked about the Ontario market?
Yeah. Okay, how much growth have you seen in road construction? Am I coming through okay?
Yes.
Okay, and has Ontario adopted the technology?
I would say we're getting there. It's been many years since we first got approval, and then we started to put the product in the ground. So, we're expecting good things for Ontario, but it's still early stage. And we hope, we are very hopeful that, you know, within the next year or two, that the Ministry of Transportation of Ontario will start specifying our product into more and more projects in Ontario.
Well, you don't want to move too fast, right? Because of seasonality, do you think you can maintain profitability every quarter, despite the offsetting seasonality for 2024?
I'll let Randy answer this one.
Yeah, so it's a really good question. It's one that we think about quite a bit, actually, and we're working hard to develop markets and applications where we'd have a lower seasonality impact. For example, if we do work on the West Coast, the winter really doesn't apply out there. If you do a large tunnel grout project, often it's underground, so again, the winter is not a factor. So we're looking at ways to mitigate seasonality. But I would say, realistically speaking, unless we have a large project that goes in the first quarter or second quarter, we're likely not gonna be cash flow positive or EBITDA positive in the first quarter. And then hopefully second, third, and fourth, we should be going forward, depending on, again, it all depends on the projects, but that's our plan.
So we're looking for ways to mitigate that impact, but realistically speaking, the first quarter is gonna be tough for us.
Well, I just got the mic. There was a question here about what were the earnings per share this quarter?
I'm sorry I missed that again, Grant. You're coming through garbled.
Quick walls. The question about what was the number in terms of earnings per share this quarter?
I don't have that off the top of my head. I know it's in our financial statements. I can look it up and get back, we can circle back to it, Grant.
Okay. How do your current staffing levels map to your future workload? Do you have the people to deliver what you're bidding on, or would you need to increase staffing?
As we grow, Grant, we'll have to add some people. You know, right now, again, we're gonna be able to do CAD 40+ million in sales with the staff level we have. In order to do that, we hired two or three seasonal employees during the summer. Our key employees are trained well and cross-trained to break down to do different teams for different projects, and we've done that this year, and we'll continue to do that in the future. So we will have to add staff, but not significant. Each one of our large pieces of equipment can operate between three and five staff, depending on the type of project, and the smaller projects are usually, you know, two to three staff at the max.
So again, one of our big pieces of equipment can produce up to 250 cubic yards an hour. So we don't need a lot of staff to produce a lot of material. So it won't require a significant increase in operating staff, but it will require some increase as our sales grow.
Any further acquisitions there next year, and what cash balance is then? Yeah, so-
Grant, sorry, you're not coming through again.
Okay, obviously I got a mic problem here.
I can hear you now.
Okay. Are you expecting to conduct further acquisitions in fiscal 2024? With a low cash balance currently, do you plan any further fundraising next year?
No, we're not planning any acquisitions in the short term. I think we've explained to our shareholder base and the audience that, you know, we put a hold on that for now. What we're focused on is achieving, and, and when we achieve, we're gonna generate cash flow and put the company in a better position, not only to grow, but also to be able to do different things, to look at potentially acquisitions in the future. Because we're generating significant cash, we will not be going back to the market to raise funds in the short term. So, we're in a good position moving forward. As Randy explained earlier, we've delevered our balance sheet. We have very little debt. We're generating cash. Our sales are growing dramatically.
Our margins are increasing, and we're making money, so we're pretty happy and excited about that. For now, we'll focus on those things.
On this side, someone was asking you about, is there any concern about CEMATRIX being acquired because the stock is nearing 4 million, and then potentially could be at risk of a hostile takeover or a low bid offer? And what, if anything, has management done to prepare for that, should that come, or come to pass?
We are concerned about it. It always is a possibility, and we have discussed and met about it, but it's very difficult to protect us from that particular situation, other than we have a strong base of key shareholders, right? If you put them all together, we're probably at 50% plus. So again, maybe not that high, maybe it's a little bit lower than that now with the the CAD 23 million raise we did in the past couple of years, but, we're in pretty good shape moving forward, but we can't stop something that may happen in the marketplace. We can only do the best we can to protect ourselves and just move forward with the operation of the company.
Can you talk a bit about any additional traction in using cellular concrete as a road base? I know you have those studies going on with the University of Waterloo. I think it's an option of the product as the road base could be one of the bigger growth areas for you. How many projects have happened in this application, and are you seeing any activity?
Yes. I'd mentioned that we look at the Ministry of Transportation in Ontario starting to approve our product for more and more projects in Ontario over the next few years. That will include road bases. As part of the University of Waterloo research project, which is complete now, there were a number of road bases that were done and tested. They all came in. The results were very good, and now engineers are starting to use that knowledge to design roads and projects for the future. As Randy mentioned, you know, you start designing them, they may take two or three or four years to start rolling into place, and that's the reality of getting approved, filing, and getting specified. It doesn't happen overnight, because a lot of these are very large projects. But it is moving forward.
That Waterloo project, or University of Waterloo research project, was extremely successful, and engineers are now using that knowledge in order to design future roads.
Well, congratulations on the great quarter. Two part. Part one, please comment how working capital requirements are expected to change with substantial growth in revenue.
Randy, do you wanna answer that one?
Sure. Yeah, I think like any business, when you experience a growth in revenue like we have, there's gonna be a draw on working capital, and we definitely saw that in the third quarter. So despite being cash flow positive from operations, we were cash flow negative from working capital. But as those revenues get collected over time, that will turn into cash in the bank, especially as if, you know, when we hit our slower period in Q1. So Q1's really when we expect to accumulate the cash that we've earned in Q3 and Q4. And then if we can be profitable overall, that cash stays in the bank and helps us fund the working capital requirements in the future.
And we also have the CIBC credit facility in place, which was put in place for the specific purpose of helping to manage working capital, and we haven't had to use it yet. So I would say, Grant, it's kind of the working capital increase, to summarize, is as expected, and if we are profitable overall, that will turn into cash in Q1, which will help us manage our business going forward.
Okay, the second part of the question is, do you expect the bidding process to become less competitive as cellular concrete becomes better known as an efficient, green alternative?
Are you saying the bidding process would become less competitive?
I think what is being asked here is, as cellular concrete becomes more accepted, and it's more viable and it's greener, let's put it that way, than some of the competitive materials, such as, you know, the block, Styrofoam block, in terms of cost savings, you anticipate that less of that material would be used, and on the other side there'd be more and more demand for cellular concrete.
Yes, there definitely will be more demand. You know, as people get used to using our product, and, and the benefits, not only from an environmental, but from a price, from a placement, from a strength, from a longer lasting, all of these benefits that become part of the cellular concrete story will mean that, we will displace more and more of these legacy products. And you can see that in the U.S. already, where the market is about 10 years ahead of the Canadian market. And even in Western Canada, where, you know, we started to develop in the market, we're seeing significant growth in our markets out here in Western Canada, and we're seeing strong growth continuing across the U.S. And all of that growth is really replacing legacy products, products in the projects that used to use them, right?
Yeah, the answer to that question is a yes.
CAD 40 million in contracts, which you talked about for next year, does that include all of the CAD 22 million North Carolina job?
It does.
Great. That's to the point. Congratulations on the great quarter. Can you speak about what specifically is being done to market the CEMATRIX as an investment? So question in and around, you know, how are we gonna get this stock price up? And I was just noting, last time I looked, which was about half an hour before you started this webinar, that we were closing in on about 900,000 shares. So there's a lot of very good turnover, the volumes have come up. It's a combination of spectacular results, and people should know that you now have grown the registered list for CEMATRIX to over 3,000 people, you know, and that's tripled in the past year. So there's a lot of eyes on this story, but I'll turn it over to you folks now.
Well, I think the main thing is to really succeed. So we're putting the product into place, making the sales, generating the profits, generating the EBITDA. That's first and foremost, it has to be done. Hard to tell a story when you're not achieving. So not only we achieved, but as Randy mentioned earlier, and we've talked about before, so we've delivered the balance sheet. Like, we're in a really good spot going forward. We're generating our own cash, we're growing in sales, we're growing in business, and, you know, now we've got something to tell. So the past few years, there hasn't been a lot to tell. We've been talking about COVID, and we've been talking about supply chain issues. Forget about all those things now.
We'll talk about success, putting the product in the ground, and we can start to tell that story, and the story doesn't end with 2023. We're gonna see it continue to grow through 2024 in the future. So that sets the basis for the future. The other thing that has to happen, and the thing that's really hurt all of the micro cap stocks, in, in this world, is that the micro cap market has to turn around. And doesn't matter what we say out there or what we do, if the micro cap- people don't start investing again in this micro cap story, it's gonna take a while for it to turn around. Now, we all know that this goes in cycles, and we expect that this market will turn around.
But until then, it's gonna be up to us to continue to succeed, continue to tell the story, continue to get our story in front of the new eyes, and prove it out by making money and generating cash flow for all of us.
Just to add to that, just so people know, we're not just sitting around here. There's a number of initiatives that are starting. One that will start soon is the focus that's targeting new investor groups, utilizing the online version of the Financial Post, so strategic advertising and placements and a number of other things. Because you have to build a large audience, because at any one time, only a small percentage of those people will know enough to go ahead into the market and buy. You need to grow that audience, and certainly it makes a huge difference with the spectacular results that you folks have delivered. And you're set up great for 2024. So that'll just continue to build on itself. Back to the question: Does CEMATRIX have any competition for cellular concrete in Canada?
Oh, we have a couple of small competitors, that really don't... We don't even see them bidding against us in many spots. But there's a small player in Vancouver area, there's another small player in southern Ontario, couple of small players, but they're focused on other businesses, and they really don't affect our market at all.
Cash flow. Now that you are cash flow positive and positive for the future, could we expect possible uplisting to the TSX?
We certainly will consider that for the future, as we've discussed, and our focus right now is having a strong year, and the timing of that will be dependent on how things progress for not only this year, but also 2024.
Clear to me, the cash balance is low, in brackets, because of the increase in working capital, which, you addressed. My question is: What is the expected timeframe to collect your receivables, and are there any holdbacks? Will there be holdbacks on big projects next year?
Randy, if you can take this one now, that would be great.
Yep. So, mostly our credit terms we aim for is net 30. Sometimes we get net 45, sometimes we're pushed into paid- when- paid. But essentially, on average, we're getting paid within 60 days. On any large construction job, there's always a holdback percentage, and so that will definitely apply for all the large jobs that Jeff talked about. Sometimes those holdbacks can be collected quite quickly, and sometimes they're outstanding for years, depending on what the final completion date is of the overall project. So, that's something that we manage quite closely, and I think if you look at, in our notes and our financial statements, you can see the aging of our receivables.
I think that would give everybody a lot of comfort that we are on top of collecting receivables, and we're doing a good job of it.
Well, that's where we talked about your asset utilization, and I think the individuals getting that here is what is the equipment utilization rate, when we're... How much of the time is it sitting there, and then how much have we seen an increase in the utilization of that equipment?
Well, you know, there's different types of equipment that we have, and you all know that we've acquired Pacific International Grout a few years back, and they have equipment that's specific to the tunnel industry. And so, we have four large dry mix units as part of that acquisition that are dedicated to the tunnel industry. And at any one time, sometimes all four of them, it can be busy, but generally, the two or three of them we've got going, and then, you know, one is kept in reserve, basically. So, that's from the tunnel side. In the US, in our geotechnical business, which is really MixOnSite out of Chicago, they are busy, busy, busy almost constantly, right? So their equipment utilization is high and growing.
In Canada, we're again in new markets here. It's taking time to develop those markets. Western Canada, right now, all of our equipment is out pouring projects, and we're getting busy in Ontario, too, as well. So, utilization has some room to grow, and that's why we talk about our capacity is very good. From a business perspective, we still got a lot of room in that equipment, but it's not utilized fully. Part of it is to have machines in backup, just in case there are issues, and part of it is dedicated towards regional growth in the Southern U.S. to also help with seasonality of our business.
Thank you for the questions. Thank you to all those people who submitted questions. They were, they were good. Very good questions.
Absolutely.
Jeff, Randy, any closing comments?
Randy, do you have any?
No, I just... The only thing I would say is, you know, we're shareholders, too, Jeff and I. We are aligned with you guys. We're working hard to increase the share price. We firmly believe that the best way to do that is deliver on the business results, and then that makes everybody's job that's trying to get the share price up easier. And so that's what Jeff and I are focused on, and I mean, laser focused on it. So, we're with you guys, and we're working hard to get the job done for you.
As a shareholder of 12 years, I agree with that.
Yeah. And just to add to that, I mean, one of the reasons that we're still here and able to do that and able to commit to you is that you, as shareholders, have kept us going. It's taken 20 years to make this a viable business. And, you know, we've gone through a lot of hiccups and company-ending situations along the way, but we really believed in this product, and our shareholders did as well. And because of that, we're in a very good position moving forward, but we wouldn't be around today without you. And we thank you for that, and thank you for your continued support, and we look forward to a great balance of 2023 and 2024, and we look forward to telling you about it in the new year.
Thank you, gentlemen. Thank you to everyone who attended, and with that, wrap. We'll be releasing more news for year-end. Thank you very much.
Thanks, Ryan. Thanks, Randy.