Good day, and thank you for standing by. Welcome to the Superior Plus 2022 Q3 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during this session, you'll need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Rob Dorran, Vice President, Capital Markets. Please go ahead.
Thank you, Catherine. Good morning, everyone, and welcome to Superior Plus's conference call and webcast to review our 2022 Q3 results. On the call today from Superior Plus are Luc Desjardins, President and CEO, and Beth Summers, Executive VP and CFO. For this morning's call, Luc and Beth will begin with their prepared remarks, and then we will open up the call for questions. Listeners are reminded that some of the comments made today may be forward-looking in nature and are based on Superior's current expectations, estimates, judgments, projections, and risks. Further, some of the information provided refers to non-GAAP measures. Please refer to Superior's continuous disclosure documents available on SEDAR and Superior's website yesterday for further details. Dollar amounts discussed on today's call are expressed in Canadian dollars, unless otherwise noted. I'll now turn the call over to Luc.
Well, thank you, Rob, and good morning, everyone. Thanks for joining the call to discuss our Q3 results. I'm pleased to say quarter three results are in line with management expectation, and we're maintaining our 2022 adjusted EBITDA guidance range. It's important to know that quarter three is the seasonally slowest quarter for our business due to the lower heating load of this quarter. In particular, was negatively impacted by the timing of acquisitions completed in the past nine months. We've acquired two pretty good-sized enterprises, and we incur all the costs associated with the acquired businesses, but the volumes are lower due to the lack of demand in the summertime, and we have not yet had the timing to achieve all associated synergies, which are coming in the next 18 months.
Our Canadian business was also negatively impacted by warmer weather, especially in Western Canada, as well as the lack of Canadian Emergency Wage Subsidy of Q3 2022. Basically, I think there is an opportunity for everyone to understand that quarter three is so low in volume and we made those two acquisitions not a year ago, but not having the chance to have all the EBITDA that comes in quarter four and quarter one, which are gonna be coming in the next two quarter. There is a disconnect there. No surprise to us. We've acquired those business at the right price. The synergy are tracking a bit ahead of time because we start to work on it this summer. There is absolutely no surprise for us of this situation in quarter three.
As with our 2-year date results in Q4 2022, we're comfortable in our ability to manage the impact of inflationary pressure on our business to increase price and cost-saving initiatives. We saw the benefit of acquisitions completed over the last year to higher volumes quarter-over-quarter. However, as I mentioned, we also saw higher operating expenses in the quarter. Our focus on being a purely energy distributor means that our Q3 results will emphasize the seasonality of the industry we operate in, especially in our U.S. propane distribution segment, which has mainly residential customers whose consumption is dictated by heating degree days, which are very low in July to September. We're making great progress in our Superior Way Forward EBITDA growth initiative through acquisitions, continuous improvement, and organic growth.
During the quarter, we made great progress on our integration of our Quarles and Kamps acquisitions ahead of the heating season, which will set up very well for synergy realization going forward. We also closed three small acquisitions since our last update in quarter two, one in California, one in North Carolina, and one in Ontario, Canada, for a total consideration of CAD 29.9 million. With these three acquisitions, we have achieved the low end of our 2022 acquisition target range of CAD 200 to 300 million in enterprise value, excluding Kamps's acquisition. We continue to demonstrate our commitment to our dynamic capital allocation approach through our commencement of our normal course issuer bid on October 13, providing us with another lever through which to return capital to shareholders. This does not mean we're no longer evaluating M&A targets.
We will do acquisition, but we may also repurchase shares if that opportunity generates the appropriate returns. We're focused on creating long-term shareholder value, and we will only allocate capital to our most accretive opportunities. I'll now turn the call over to Beth to discuss the financial results in more detail.
Thank you, Luc, and good morning, everyone. As Luc mentioned, Q3 is the seasonally slowest quarter for our business, and our results were in line with our expectations. Superior generated Q3 adjusted EBITDA of -CAD 8.8 million, a CAD 21.8 million decrease over the prior year quarter. This was primarily due to lower adjusted EBITDA at our Canadian propane distribution and US propane distribution segments, higher corporate costs, and a realized loss on foreign currency hedging contracts compared to a gain in the prior year quarter.
The decrease was partially offset by higher adjusted EBITDA from our wholesale propane distribution segment. The Q3 loss from continuing operations was CAD 206.9 million, an increase of CAD 171 million compared to the prior year quarter. The primary driver for the higher net loss was an unrealized loss on derivatives and foreign currency translation of borrowings compared to an unrealized gain in the prior year quarter. Higher selling, distribution and administrative costs, income tax expense and finance expense, partially offset by higher gross profit. The loss on derivatives and foreign currency translation of borrowings compared to a gain in the prior year quarter was primarily due to the changes in the market price of commodities, the timing of maturities of underlying financial instruments, and the changes in foreign exchange rates relative to the amount hedged. Turning now to the individual business results.
Our US propane division adjusted EBITDA was negative $10.9 million, a decrease of $3.1 million from the prior year quarter, primarily due to higher operating expenses, partially offset by higher sales volumes from acquisitions completed in the last 12 months and higher average margins. Canadian propane adjusted EBITDA was CAD 3.6 million, a decrease of CAD 14.4 million from the prior year quarter, primarily due to higher operating costs and modestly lower sales volumes and average margins. Operating costs were higher, primarily due to the CAD 8.2 million Canadian Emergency Wage Subsidy, or CEWS, realized in the prior year quarter compared to nil received in the current quarter. Sales volumes decreased by 3%, primarily due to lower commercial demand related to warmer weather in western Canada.
The average weather in western Canada for the three months ended 30 September 2022, as measured by degree days, was 27% warmer than the prior year quarter. Average margins were lower, primarily due to the impact from the sale of carbon offset credits amounting to CAD 4.7 million in the prior year quarter. Wholesale propane adjusted EBITDA was CAD 5.1 million, which was an increase of CAD 1.9 million from the prior year quarter, primarily due to the contribution from the acquisition of Kiva Energy Inc. Turning to corporate results, the adjusted EBITDA guidance as well as leverage.
Corporate operating costs were CAD 6.2 million, an increase of CAD 5.2 million compared to the prior year quarter, primarily due to higher insurance costs, higher professional fees, and a lower long-term incentive plan recovery related to less of a share price decline in the current quarter compared to 2021 and the impact of inflation. Superior realized losses on foreign currency hedging contracts of CAD 0.4 million compared to a gain of CAD 0.6 million in the prior year quarter due to the average hedge rate of foreign exchange hedging contracts compared to the weakening of the Canadian dollar. Superior's total net debt to adjusted EBITDA leverage ratio for the trailing twelve months ended 30 September 2022, was 4.3x, which is above our target range of 3.5-4x.
The higher leverage ratio was primarily due to the impact of the higher US/CAD rate on the US-denominated debt. On a constant currency basis, using the rate as of 30 June 2022, Superior's leverage ratio at 30 September 2022, would be 4.1 times. As Luc mentioned, we're maintaining our 2022 adjusted EBITDA guidance range at CAD 425 to 465 million, with a midpoint of CAD 445 million. For the Q4 , we anticipate average weather to be consistent with the 5-year average for the US and Canada, and the wholesale propane fundamentals to be consistent with the past 6 months. With that, I'd like to turn the call over to Q&A.
Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Gary Ho with Desjardins. Your line is open.
Thanks, good morning. Maybe just to start off with a question on your guidance. You've confirmed the range. That's great to see. There's only a month and a half to go here. If you hit the five-year average weather patterns, we should think about meeting the middle of that range and then vice versa for better or below. Is that how we should think about that, you know, when we track the heating degree days for the balance of Q4?
Yeah. As you know, historically, if we were not to be in the middle of the range, we usually tell everyone and we adjust. We didn't adjust because we feel confident today that the year, normal weather going forward, the year will be what it is and will be in the guidance. October was better than anticipated in the States and of course, very warm in Canada. We've been around for nearly 12 years here, and there's many weeks to go, and the colder weather has already started out west. Any of you on the call that are out west are probably getting it. No, we're confident that, as of today, we feel we're in the range.
Okay, great. Luc, while I have you, wanna get an update on the CEO transition plan, maybe discussions with the board and what they're looking for your successor there, Luc?
Yes, that's a work in progress. They are not so firm. They're looking internally and externally for candidates. I assume that means they've moved that much over the last 2 to 3 months, because usually it's a process that usually takes 6 to 9 months, I would say. There's a committee of the board, three of the board members that are on that, and there's regular feedback to the board on a quarterly basis as to how that's advancing. No news at this stage. It's somewhat early. Progressing normally, I think, for me, because usually a project like that is at least 6 to 9 months.
Okay. My last question. You've announced your NCIB and executed a bit of it recently. Maybe for Beth, you know, as we stand here today, how would you kind of rank the capital allocation priorities, buybacks, M&A and the leverage? Just on the latter part, the leveraging, you know, if rate stays at roughly 1.35 here, when will you get back to that 3.5 to kind of 4 times target range?
A couple of questions in there. From a buyback perspective, yeah, we have the NCIB in place. As far as allocation of capital, as we consistently all communicate, it is a dynamic model. We would look at, you know, what returns make sense or what our view on the returns are and how we allocate. When you ask me sort of to look at it and to judge whether it's M&A or buybacks, I mean, that's gonna be on an individual basis. I think from the perspective for M&A, as you look out, and Luc may want to add on to this, M&A, as we look for the remainder of this year in particular, typically once you hit this time of year, you don't have a lot of people at this point looking to sell.
That'll typically pick back up from a normal shape perspective back after you're through the heating season. That April, May into next year. To your question on leverage and our target of the 3.5 to 4 times, I mean, at this point, we would view ourselves at the end of this year being near the high end of our 3.5 to 4 times. You know, synergies need to be or we'll continue to realize those, which will have a positive impact from a leverage perspective. As we've always said that 3.5 to 4 times range, while we're moving forward in doing our acquisitions, we have that range just because it's gonna depend on the timing.
We've had sort of very chunky where we've accelerated a bit ahead of our targets and what we're looking in that total. You may recall back from the investor day, the CAD 1.9 billion in total. You know, we've been well ahead of the CAD 250 million per year target. I mean, as we look to get to that CAD 700 to 750 million by the end of 2026 on EBITDA from operations, you know, it's gonna be chunky. To answer your question, it's really gonna be dependent on the opportunities and how they present themselves for when we'd be down towards that bottom end of the range.
Okay, great. Okay, those are for, that's it for me. Thanks for the color.
Thank you.
Our next question comes from Daryl Young with TD Securities. Your line is open.
Hey, good morning, everyone. Just one quick one for me. I just wanted to kind of reconcile your thinking around capital deployment, given where leverage is, and it seems like costs continue to march higher. I'm just wondering if it would make sense to hit pause on the M&A and the NCIB for a period of time and really focus on realizing those synergies and managing the cost profile. I'm also speaking with respect to the pro forma EBITDA numbers and your net EBITDA. I mean, with the CEWS rolling off and the decline in that pro forma EBITDA number, just seems like cost management could be a focus going forward. Maybe I'll start and then Jim add to that.
From an overall cost, quarter by quarter, also difficult to be on the percentage always of the right amount, but overall costs are not going up more than inflation. We are factoring all of that into margins. We are not at risk of not making our profitability due to cost increase from all the aspects. From an acquisition, to your point about the capital, good timing. We just did two good size deals. We're integrating them. I can promise you all the 25% improvement is on track. Then a bit less deal, like the small one happening at this stage. Let's go do those two integrations. Let's go through the fall, winter season, which usually there's not much deals going on.
We'll probably look at deals more when the H2 of 2023 comes, the summer. At this stage, probably a good timing that we're not having another big crazy deal in front of us. Because to reach a 50, we're confident, and we're ahead of the game actually. The balance act of having done two good deals, slowing down a bit because we're going through our winter, we're doing those two integration, will certainly help our leverage, I think, when we go through later 2023.
Maybe I'll just walk through a little bit. From a leverage perspective, we're at the end of the quarter. We are at 4.3 times. Just to walk through sort of some of the factors. So 0.3 times, you know, there was a lot of volatility with the FX rate right at the end of the quarter. That's where if you balance it out, there was roughly a $97 million impact on our foreign denominated debt, which had that 0.2 times impact, which would bring us down to the 4.1 times. When you really look at the EBITDA in Q3, you do have some individual impacts that were impacting the year-over-year reduction of the CAD 22 million.
Just to walk through some of those, you know, from an M&A perspective, where the U.S. acquisitions are primarily heating loads, they in Q3 will have a negative impact. There was roughly almost CAD 7 million of negative impact, which is Q4 and Q1, where you'll more than make up for that, and you're gonna see the growth in that EBITDA as well as achieving all of those synergies. Obviously, the wage subsidy impacted and timing of carbon credits. There was 4.3 million of carbon credits in the Canadian business that we would have realized in Q3 last year. This year, it'll be more than likely moved into different quarters, so we'll see that in Q4.
Again, you know, looking at all of that from a leverage perspective, you know, we do have that as one of our financial metrics, but we also balance that with the payout ratio. From a payout ratio perspective, we do target that 40 to 60% range. If you look at Q3 with the impact, we're, you know, modestly above the 60%. Certainly, when we design that target, we have it so there is a cushion. Again, that's just overall to ensure that we have plenty of free cash flow to pay out dividends. From a dividend perspective, to always ensure that we have the cushion in place.
Maybe just one follow-up to something that we've said about pricing the gross margin to account for the costs. Where do you stand today on a competitive basis in terms of your price? Is there a risk if price keeps going higher that you maybe create customer churn?
No, it's a very good question. We are doing analysis regularly by region as to where pricing of a market is. We know that maybe 90% is always a small one that is lagging on increasing the price according to new inflation cost. The gross majority of our industry is increasing the price accordingly. Most people don't want to make less profit year to year. We see our pricing is analyzed by region, by market. Where are we? What can we get to increase price with inflation and not lose business? There isn't a business loss. We're actually growing market share in Canada, residential and commercial. Very pleased with our marketing sales approach.
Not so much in the States, but still maintaining our same margin, same market position, market share. We're analyzing that properly and our thresholds to do it the right way. What we think we'll see in 2023, actually, I think much of that so far is probably conservation a bit more, you know, maybe one person more in the wintertime because people have less money, would rather not having the big bills. A bit of help these days for how we go through the winter is the propane price coming down compared to last year. This is gonna be a big help. Our customer really are gonna be getting a reduction in price, and that really shows well for the winter coming.
Okay. That's great. Thanks. I'll get back in the queue.
Thank you. Our next question comes from Matthew Weekes with iA Capital Markets. Your line is open.
Good morning. Thanks for taking my question. I was just wondering, you know, on the increase in kind of the U.S. dollar-denominated debt, I was wondering if there's any offset, if there's an asset or if there's any swaps or hedges or anything like that, or if that's something you'd you know, think about doing, you know, going forward.
I think we do have FX hedges, which you see disclosed. Those hedges are designed for the cash flows of the business as well as EBITDA of the US business. Offsetting the debt, no, it's done at a current rate and, you know, we have the business generating.
The view is we have a natural hedge, arguably, as we go forward for that long-term debt. Again, it's because it gets marked at the current rate. Now and, you know, on an average basis, our US EBITDA numbers and US earnings, I mean, they over time will be at the average rate. It's just you have a large disconnect right now between the two, between the EBITDA and the impact on the debt. What I will actually flag, which we don't factor into our leverage calculation, we do have a vendor note which actually matures prior to the long-term debt, and that's CAD 135 million if you include the accrued interest. That would actually have a positive impact on leverage if we reflected that in of roughly 0.3x.
Again, that matures before the long-term debt, but because it's not factored into typical covenant calculations, we don't reflect that in how we disclose our leverage.
Okay. Thank you. My next question is just you know kinda on synergies and you disclosed kind of the amount of you know synergies you expect to get from acquisitions here. We'll probably see that more as we go through the winter you know heating season. How does that compare to sort of your initial estimates? Is synergy capture pretty in line with what you you know initially thought when you were acquiring these businesses?
Yes. On Kamps, it's perfectly as planned. On Quarles, we have a bit more than the usual 25% we always commit to. Looking good. When we do the smaller deal, not that they account for a lot, but the return are even, and the synergies are even higher and more than 30% range. Everything is, as all the deals we've made, everything is marching on accordingly. When we do our due diligence, we can easily take our approach and our dashboard of how these synergies and the opportunities are. Having done this now 20+ times, we're not a lot of room for not achieving or hitting plans because of our history, our experience, and our integration approach.
Okay. Thank you. That's it for me. I'll turn it back.
Thanks.
One moment. Our next question comes from Joel Jackson with BMO. Your line is open.
Good morning, everyone.
Good morning.
First question, I know you're gonna talk about 2023 not quite yet, but, can you maybe, based on some of the acquisitions you've done this year, or you haven't achieved, a full run rate of earnings or the synergies or some lagging synergies for deals you completed the last few years, like, how much more would you think EBITDA earnings go up in 2023 versus 2022, just based on normalizing, you know, a full run rate of some acquisitions this year, plus some lagging synergies you haven't achieved, if you get my question right?
Yeah. This is not the time where we announce our guidance, but you're right that it's looking good as of now because we do have these two deals, and we have those synergies that we've achieved during the summer, when we are acquiring and that immediately the summer ahead of us. It's not the ideal time to acquire business, and then we wait forever. Yeah, we cannot give you the guidance, but it's positive, and it's gonna be a good improvement over this year.
Joel, maybe another way to think about it is if you look at the you know in our calculations of the leverage ratio, going back to the TTM, like you have pro forma adjusted EBIT on a TTM basis of CAD 468 million. From there, that does include sort of Kamps and Kiva. Basically, that's because most of the EBITDA comes in Q1 and Q4. I mean, from there, you have incremental synergies, which we'll be achieving going forward.
Right. Beth, that's what I was kinda getting at. Okay. My second question is, can we look at margins here? If I look at the Canadian propane, US propane, wholesale propane, gross profit per liter, you know, what might Q4 look like versus Q3? Then what kind of averages should we be thinking about for 2023 and going on for the?
Sure. Okay. Joel, maybe I'll talk about the US first. There was, I mean, obviously, an increase quarter-over-quarter of roughly $0.07, getting us to the $0.449 for the quarter. For the balance of the year, I think the best way to think about it is, again, looking at the range of the $0.30 to 0.35 or CAD 0.39 to 0.46. I think we'd anticipate for Q4 for it to be towards the high end of that range. What that would mean from an overall average basis for the year, think about it as, like, slightly better than 2021. In 2021, it was $0.325. From a Canadian propane perspective, very consistent quarter-over-quarter.
For the balance of the year, think of it in that range of CAD 0.28 to 0.30, and that's probably a good range for the total year as well or an average for the year, that CAD 0.28 to 0.30. Wholesale, I think the best way to think about the wholesale business is basically the range of CAD 0.03, which was sort of consistent quarter-over-quarter and also a relatively good number for an average for the year.
You've been hitting a lot better than $0.03 in wholesale the last little while, right?
Yeah. It's gonna depend, and you've got some FX in there as well. CAD 0.03 is a good for an average.
Okay. Thank you.
Thank you. Our next question will come from Steven Hansen with Raymond James. Your line is open.
Yes. Good morning. Thanks for the time. Apologies if I missed it, but I was hoping you could perhaps speak to how you're thinking about the somewhat volatile propane macro backdrop we've been seeing of late and what it might mean for your business this winter. You know, weather is always the key driver of course, but I'm just thinking about some of the conditions around energy shortages in Europe, the big export pull we've been seeing from North America on propane, a weaker grain drying season, factors like that, and just how you're navigating all those and whether you see this opportunity or risks or fairly neutral. Thanks.
Sure. At this point, you know, in our view, the fundamentals are actually pretty neutral. The inventory levels have improved. They're within three-year averages or in that range for both Canada and the US. The US has been well under three-year average for a period of time. Also from a price perspective, like, the prices have come down, so they are weaker, and that is linked as you're flagging there to the crop drying. Now, I think the next indicator where you could get some volatility is if you have extreme cold weather impacting. Now, I think, you know, if there is that cold, obviously the prices will typically strengthen. If it's weather normal, then I think it'll likely stay within the range, or that would be our view.
Now, from a macro impact, I mean, there's certainly pricing around WTI crude, the conflict in Ukraine, as well as potential COVID resurgence, certainly at a macro level. That could have some impact in the next four to five months. Now, from our perspective, I mean, we will purchase fixed price supply where we have fixed price contracts. From that perspective, we're comfortable that, you know, we've got, you know, predictable margins. Then just to flag, and I know everyone's aware, but just to flag, we do have the ability to pass through the increasing commodity costs. Again, the prices are down. They're down roughly 30% now from where they were in Q1, Q2, the highs.
I'll give you just a bit more color. When you produce more natural gas and you export, you also produce propane as a percentage of your total production. Propane doesn't export as much as natural gas. You end up in America at this stage having good inventory that are going up. Prices have come down to that point, which is always a good thing for us. We can maintain our margin. Prices are coming down. We're gonna do some fixed price with customers and help them also, I think, to pay. To their previous question, attrition and customer taking less volume, it's gonna be a good year because we're gonna end up giving them a discount.
Even though we keep the same margin, might be a bit better than the average, but they're getting a discount for their next six months for the winter to come from the previous price they paid by this past year. It's all good.
That's great. That's really good perspective, guys. Appreciate that. I don't mean to beat the dead horse on the capital allocation issue, but just wanted to circle back one more time on the idea around deleveraging versus M&A and even the buyback. I mean, how do you feel about the opportunity set of just, you know, those three buckets? I'm just struggling a little bit cause the multiple has gotten a lot cheaper, of course, of late for the equity. I know your pipeline's got good opportunities in it as well, but then you've got this debt paydown issue. It's just, it strikes me as, you know, multiple priorities for the same set of capital. I'm just trying to get a bit better sense for where you think the real priority is or if it's just, if it is perfectly balanced.
Thanks.
Yeah. I mean, I think I can sort of tick it off. I mean, I think from an M&A perspective, as I mentioned before, we always see much less in Q4 and Q1 from an opportunity perspective. You know, again, from a share repurchase perspective, you know, very small amount as we were looking at that. And that's when the returns make sense and we think that our shares are undervalued and it does present a better return to us. I mean, I think it's fair to say we're always balancing all of our various metrics and looking to delever balance with payout ratio and the other pieces and then, you know, long-term returns. We did communicate while we were going through accelerated M&A that we were targeting the 3.5 to 4 times, so that hasn't changed.
We will delever basically as the cash flows come in.
Okay, that's great. Appreciate the color, Beth. Thanks.
Thank you. Our next question comes from Robert Catellier with CIBC. Your line is open.
Yeah, I just have a question on the M&A market. Have you seen the market valuations change at all in light of the cost pressures in the higher interest rate environment?
I mentioned that in the last quarter. Good question. I believe prices of acquisitions are gonna come down. The last two little deals we did, we could see it. Not being in the market for a bigger deal now because of everything we chatted about for 2023, the people I know in the industry that I've chatted with them many years, they understand that valuation is not the same. Good sized companies that are in the propane industry, Canada and U.S. know that. Of course, we're always gonna buy when we have returns that are expected, otherwise we don't. The trend is now for lower prices overall propane independent companies. It is.
Okay. Are you managing risk in the M&A process any differently in light of those, you know, the inflationary environment and the higher financing costs?
Yeah. I mean, I think from our perspective, I mean, as you look at the increasing interest rates, it's better and obviously has an impact on our weighted average cost of capital. Looking and judging appropriate return levels, that does get factored in, and it'll have an impact on the hurdles as we look at the businesses. This gets back to as the underlying macroeconomic factors change, the expectation would be, you know, as things settle out, you're going to have lower multiples just to ensure that we get the appropriate level of returns to ensure that we're delivering what we need to from a shareholder perspective and a business return perspective.
There are too many private equity firms inside. They have the bigger situation than us when they go to the market day-to-day to raise. Now, interest rates are higher. We're well positioned for the years to come. They're gonna expect to pay less to get their return as well.
Sure. I was also wondering just about maybe how you structure the deals in light of the volatility that's out there, presumably some form of recession and whether you structure the deals to include more earn-out rather than you know just a you know firm valuation?
No, I think you end up paying less. Entrepreneurs don't like earn-out. They rather get the cash and then move on. I think it's valuation, not much earn-out.
Well, just to sort of clarify, your concern that you're flagging would get reflected in how we model. That would be reflected in how we model the business and what we would anticipate or expect to see, like, over the next four or five years. We would factor in, you know, recessionary pressures and the potential impact that would have. What I will flag, I mean, recall our business typically as well as the acquisitions we've been making are pretty recession-proof. If you look at historic-
Yeah.
The values because, you know, they are typically related to heating load, and people need to heat their houses whether we have a recession or not.
Yeah.
Yep. Okay. Thanks, everyone.
Thank you.
Thank you. I'm showing no other questions in the queue. I'd like to turn the call back to Luc Desjardins for any closing remarks.
To wrap up this call, I'd like to thank our management and employees. Very proud of all of our accomplishments to date, 2022. No surprise to us. We're on the game plan. We're in a solid position to deliver the 2022 adjusted EBITDA guidance. To a few questions that was raised, we expect a good year in 2023. Thank you all for your participation, and we'll see you next quarter.
Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect.