Toromont Industries Ltd. – Third Quarter 2026 Results - DEFI TECHNOLOGIES INC

Good morning. Today is Tuesday, November 3rd, 2026. Welcome to the Torremont Industries Limited third quarter 2026 results conference call. Please be advised that this call is being recorded and all lines have been placed on mute to prevent any background noise. Your host for today will be Mr. John Doolittle, Executive Vice President and Chief Financial Officer. Please go ahead, Mr. Doolittel. Thank you very much, Marissa. Good morning, everyone. Thank you for joining us today to discuss Torremont's results for the third quarter of 2026. Also on the call with me this morning is Mike McMillan, our President and CEO. Mike and I will be referring to the presentation that is available on our website. And to start, I'd like to refer our listeners to slide two, which contains our advisory regarding forward-looking statements and specified financial metrics. After our prepared remarks, we will be more than happy to answer questions. So let's get started. Move to slide three, and I'll hand it off to Mike. Great. Thanks very much, John. Good morning, everyone. Thank you for joining us. There are a few things I'd like to highlight as we look back on the third quarter. First, we saw good growth across the business, with solid execution against our order backlog and project schedules, improving our performance on a year-to-date basis. Revenue increased 26% in the quarter to approximately $1.65 billion, supported by higher equipment deliveries, increased rental activity, and continued growth in product support. Importantly, that growth translated into improved profitability. Gross profit margins increased 240 basis points to 29.1%, while operating income increased 46% as the benefit of higher revenues and improved margins more than offset the increase and expenses. Secondly, activity across the equipment group continues to improve. Equipment deliveries increased, supported by power systems, including AVL, together with improved mining and construction activity. Rental revenue was also higher, reflecting our larger fleet and improving activity across most markets and regions. Product support continued to benefit from higher market activity in most areas. At Simcoe, packaged revenue increased, reflecting the timing of project execution, while product support continues to deliver healthy growth across Canada and the U.S. The third area I'd like to highlight is order activity and our backlog positioning. Bookings increased 50% in the quarter to approximately $892 million. This was led by the equipment Group, where we saw higher orders across power systems, mining, and construction, partially offset by slightly lower bookings at Simcoe. Our backlog ended the quarter at approximately $2.9 billion, compared to $1.3 billion a year ago, which also reflects the significant order related to our enclosure business reported in Q2 for delivery substantially in 2027. The combination of our backlog and healthy booking activity provides good visibility as we work through the remainder of 2026 and into 2027. Finally, as shown on slide 4, our solid financial position continues to improve to provide us with ample liquidity and flexibility to support our business requirements and future growth. We ended the quarter with approximately $1.2 billion of cash and a further $445 million available to us through our existing credit facilities. This capacity allows us to support our current activity levels while continuing to invest in the business and pursue attractive long-term growth opportunities. Working capital increased compared to the prior year as we support higher activity levels and continue to invest. We remained disciplined in how we managed that investment with a continued focus on customer requirements, market conditions, inventory levels, and collection activities. We expect inventory levels to be more consistent and elevated, reflecting growth in the business, customer fulfillment priorities, and factory optimization. Our net debt-to-total capitalization ratio also was negative 12%. Overall, our balance sheet is well positioned to support our expanding operations and growth initiatives, as well as navigate evolving economic and business conditions. As most are aware, Torumont targets a return on equity of 18% over the business cycle. ROE for the third quarter was 17.8%, slightly below our target, however, improved from 16.9% at year-end 2025, and comparatively higher than 17.5% reported at the end of September in 2025. Return on capital employed was 26.7%, also higher year-over-year, reflecting our increase in net earnings. Finally, as announced yesterday, the Board of Directors approved our regular quarterly dividends at $0.56 per share, payable on January 5, 2027. Overall, I would characterize the third quarter is one of good operational execution. Our team grew the business, improved margins and operating income, maintained a strong order book, and retained our solid financial capacity. John, I'll turn it back over to you for more detailed commentary on the results. Okay, thank you very much, Mike. Let's turn to slide five for a few additional comments on the consolidated results. On a consolidated basis, revenue increased 26% in the third quarter and increased 18 percent on a year-to-date basis. Growth resulted from both the equipment group and Simcoe. The equipment group growth was driven by higher mining activity, construction equipment deliveries, along with higher power system revenue plus rental and product support revenue. Simcoes growth reflects higher package revenue and higher product support activity. Two factors explain the increase in SG&A expenses. First, the prior year comparison includes a $14 million gain on a property sale in Q3 of 2025. And second, we continue to invest to support higher activity and business growth, including compensation, information technology, travel, and training. Expenses increased in both the quarter and year-to-date compared with the same period as last year. Operating income increased 46% in the quarter, and 43% through the first nine months of the year, reflecting higher revenue and improved gross profit margins, partially offset by higher expenses. As a percentage of revenue, operating income was 14.8% on a year-to-date basis compared to 12.3% last year. Turning to AVL, operational capacity and execution continued to expand in the quarter. Revenues were $218 million versus Q3 2025, which was $78 million, and year-todate was $518 million versus the first nine months of 2025, which is $157 million. During the quarter, AVL declared and paid a dividend of $15.7 million, of which $3.1 million represents the non-controlling shareholder's allocation in its expense. A dividend for Q4 was approved subsequent to the end of Q3, which will result in an $18.6 million expense in the fourth quarter. Dividend levels reflect the cash position along with the expected future cash flows and will vary from quarter to quarter. Purchase commitment expenses in the third quarter of 2026 were $14.3 million versus $1.7 million for Q3 2025, and on a year-to-date basis were $82.5 million compared to 2025 of $4.5 billion. As a reminder, this includes expenses related to the valuation of the company's commitment to purchase the remaining outstanding shares of ABL and represents the regular revaluation of the commitment based on actual and expected results. This also includes expenses related to dividends paid to non-controlling interests. After reflecting the purchase commitment expenses, net earnings increased 37% in the quarter compared to last year and increased 21%, or $69.9 million, for the first nine months of the year. Basic earnings per share, $2.35 in the corner, up 36% from last year's comparative and increased to $5.02 year-to-date. Turning to the equipment group on slide 6, revenue increased 26% in the quarter and 19% for the year, reflecting higher mining and construction deliveries, as well as higher power system sales, along with increased rental and product support revenue. Equipment sales, including both new and used equipment for both, were up in both the quarter, and for the first nine months of the year by 41%, and 29% respectively. New equipment sales increased 49% in the quarter and 33% for the year, mainly led by higher mining deliveries and power systems revenue, as well as improved construction activity. Used equipment sales decreased 4% in a quarter, largely driven by lower mining activity, slightly offset by improved activity in the construction and power system markets. On a year-to-date basis, used equipment sales reached 4%, with higher activity in most markets. Looking at the market segments for the quarter, total equipment revenue was up 55% in mining. Power systems was up 108% and construction up 11% while material handling was down 36%. Renter revenue was UP 12% in the quarter and UP 11% year-to-date. The revenue increase reflects a larger fleet and improved activity levels in most areas. For the quarter change in revenue was as follows. Heavy equipment rentals were UP 40%, light equipment rentales UP 6% and power rentals up 16%, partially offset by a decrease in material handling, which was down 6%. The RPO fleet was $119 million versus $104 million a year ago, and rental revenue was up 12% for the quarter and up 3% for a year compared to the similar periods last year. Product support revenue increased 14% in the quarter, and 11% year-to-date, reflecting equipment utilization in our territory, along with a larger technician workforce. Activity was generally higher across most markets and regions. Looking at specific markets for the quarter, change in revenue was as follows. Construction was up 3%, mining up 26%, power systems up 18%, and material handling up 2%. There are two distinct mix effects within the margin results. Within equipment sales, a favorable mix improved margins. Across the business, product support represented the lower share of total revenue, which was unfavorable for the overall mix. Rental margins improved with utilization, while product support margins declined slightly because of the nature of the work. Taken together, gross profit margins increased 320 basis points in the quarter and increased 330 basis points year-to-date compared to last year. Selling and administrative expenses increased 41.2 million, or 30% in the corner, and increased 88.9 million, or 22% for the year. Higher expenses reflect a continuing investment in key strategic areas. As mentioned previously, companies sold their property, resulting in a gain in Q3 of 2025 of $14 million. Compensation costs were higher in both periods, reflecting staffing levels and regular salary increases, higher profit-sharing accruals, and higher profit sharing accrues on the higher income. Other expenses such as training, travel, and occupancy costs have increased in light of sales levels, planned investment, and inflation. As a percentage of revenue, selling and administrative expenses were consistent compared to the prior year. Operating income increased 50% for the quarter and increased 49% for the year, reflecting a higher revenue and improved gross profit margins offset by the higher expenses. Bookings increased 59% in the quarter. Money markets are lumpy or cyclical due to the nature of the business and improved 294% on strong orders across the SOC comparable, and in part reflecting higher power systems orders, which were up 84%. Construction orders were up 13% compared to Q3 2025, reflecting normal demand dynamics. Material handling orders were down 28%. Backlog of $2.5 billion at September 30, 2026 remains at very healthy levels, reflecting good new order intake. Approximately 70% of the backlog is expected to be delivered over the next 12 months, but of course this is subject to timing differences depending upon vendor supply, customer activity, and delivery schedules. Turning now to Simcoe on slide 7, revenue increased 23% in the quarter after a slow start to the year. It was up 9% for the first nine months, largely reflecting project timing. Package revenue increased 33% in the quarter, reflecting project timing with higher activity in both the recreational market, which was up 21%, and the industrial market, which was UP 61% in both Canada and the U.S. For the first nine months of the year, package revenue increased 14% with lower recreational activity down 2% and being more than offset by higher industrial market activity, which is UP 31%. Product support revenue increased 9% in the quarter and 4% on a year-to-date basis, led by higher market activity in Canada. Activity levels continue to improve on good customer demand and the increased technician base. Gross profit margins were down 410 basis points in the corridor and decreased 250 basis points in the year versus the similar period last year. Package and support margins were lower due to the nature of the projects and process. Selling and administrative expenses were consistent with the prior year and decreased 600 million or 3% in the quarter and increased 300,000 or 3%, and increased 3.7 million or 6% for the first nine months of the year. Operating income was up 2 million or 10% for the quarter, however, down 5 million or 11% on a year-to-date basis with a slower start to the year, operating income as a percentage of revenue decreased 220 basis points to 9.2% on a year-to-date basis compared to the similar period. Bookings were down in the quarter, however, were 3% higher or up $6 million on a year to date basis. Backlog of $324 million is down 5% versus last year. Canada was down 14% while the U.S. was up 10% from this time last year, approximately 65% of the backlog and is expected to be realized over the next 12 months, however, again, this is subject to construction schedules. And with that, we can move to slide 8, and I'll turn it back to Mike to highlight some key takeaways as we look forward to rounding out the year. Mike? Great. Thanks again, John. As we look ahead to the final quarter of 2026 and into 2027, there are a few key areas I'd like to highlight. First, our priorities remain consistent, operating safely and efficiently, delivering exceptional service to our customers and maintaining the financial and operational discipline that has supported the business over the long term. We continue to operate in a dynamic environment and are closely monitoring the factors that could affect our customers and our business. Global trade negotiations remain fluid, including developments between Canada and the U.S., and we continue to assess and refine our mitigation plans as conditions evolve. We are also monitoring broader economic factors, including inflation, interest rates, foreign exchange rates, and geopolitical developments. We continue to actively manage foreign exchange exposure to our hedging program while maintaining appropriate balance between supporting our customers and managing credit risk. Against that backdrop, there are several things that give us confidence in the positioning of the business. Our backlog remains at approximately $2.9 billion, with healthy booking activity providing good visibility as we head into the fourth quarter and 2027. Our equipment supply chain is also well positioned to support customer requirements. We continue to invest in our technician workforce, which remains a very important strategic priority. Expanding this capability supports the growing demand for our products and services, strengthens our aftermarket capacity, and importantly, helps us deliver the level of service that our customers expect from us. Operationally and financially, we remain well positioned. We have experienced leadership teams, a disciplined culture, focused operating models, and ample financial capacity. together with these together these provide us with the flexibility to manage near-term uncertainty we'll continue to invest in our business and pursue attractive long-term growth opportunities over the longer term our approach remains unchanged we will continue to focus on disciplined execution thoughtful investment and managing the business in a way that creates sustainable value for our customers i want to thank our customers for their continued confidence in tormont our supply partners for their support, and our shareholders for their continued trust. I also want to recognize our people across the organization for their ongoing commitment to our customers, our business, and to each other. Together, we'll continue to work closely with our customers to solve their toughest challenges while investing in our people, capabilities, and business to build an even more resilient Tormont for the future. That concludes our prepared remarks. We'd now be happy to take your questions. Marissa, over to you, please, for the first question. Thank you. We will now begin the question and answer session. Should you have a question, please press star followed by one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to remove your hand from the queue, please press star, followed by two. And if you are using a speakerphone, please lift the handset before pressing any keys. Just a moment for your first question, Marissa. And your first question comes from Maxim Sychev with National Bank. Please go ahead. Hi. Good morning, gentlemen. Good morning. Hey, Max. I was wondering if it's possible to get a bit more color on product support margins as obviously revenue accelerated, which is nice to see, but I'm just wondering what's going on sort of under the hood and if we should potentially expect normalization there and maybe an overwatch timeframe if you can provide me a call to be helpful. Thanks. Yeah, no, thanks again, Max, for the question. I think, yeah, we did see a little bit narrower margins on product support. And I think it really, as John mentioned in the call, you know, it comes down to a couple of things. And I'd say one is the nature of the work performs. And so when there's a mix of, you know... We gave you a breakdown in the disclosure a littlebit about mining, construction, and power systems. And just the natureof the work sometimes affects that. You know, I think the other piece... obviously, is the inflationary effect that we've seen with commodity prices like steel in parts, which hasn't really been a material effect. It's just something we've been actively managing as best we can. But we don't, you know, I think it will vary slightly just based on the nature of the work and, you Know, the type of services we're performing and rebuild activity and so forth. Okay, that's helpful. Thank you so much. And I think there is some incremental language in your risk disclosure around deferrals, cancellations, et cetera. I'm just wondering if that pertains to obviously the AVL piece of the business where it is a little bit more lumpy. I'm wondering how you think from risk mitigation practices there and whether you're continuing to bid on new work for that vertical and what is the outlook for the enclosure business as you progressing your existing backlog thank you yeah i mean i'm actually really pleased i don't know about the the language you refer to there's nothing um nothing new there uh really pleased with the performance of um the enclosure business um you know we ramped up production in charlotte as we said we would um we've added we're adding capacity um in water down into 2027 so uh just We're pleased with that, and nothing in the language that you referred to. Okay. And in terms of the bidding pipeline there, can you comment in relation to that? Yeah, I would say, you know, we continue, as John mentioned, Max, and we talked a little bit last quarter about expanding production. You know, I würde say, we continued to position ourselves pretty well in terms of capacity and optimization of our facilities in that particular space, right? you know and so you know i i think what we're seeing there's a lot of noise in the system but what we are seeing is you know pretty strong demand continues especially when you look out into 28 29 um you know it's really a function of of our optimization of our facilities and also ramping up water down as we go but we uh you know I'd say from our perspective the other piece I'd mention is the Canadian marketplace you knowI think in our patch in eastern Canada it's lagging the U.S. and probably, frankly, Western Canada. You hear more about what's happening out west at the moment. But, you know, the team does a very good job of both on the enclosure side, but also our power and energy group. You know, Adam and his team are working really hard to position us well there and look into, you know. The coming years in terms of what might be developing in Eastern Canada and our capability here, I think, is well positioned for it. Very helpful. Thank you so much. Thanks, Max. Your next question comes from Uri Link with Canaccord Genuity. Please go ahead. Good morning, guys. Hey, morning, Uri. Just on the ramp-up and AVL's capacity, I thought that kind of $200 million a quarter would be where the two facilities would kind of max out. You did about $20 million above that. So am I bad at math, or were there some deliveries lumped into Q3? No, I don't think you're bad at maths, Max. As I said, we were attempting to get Charlotte production up to where Hamilton was. We managed to succeed in that by the end of the third quarter. We'll look for incremental production improvements out of Charlotte going forward. And then Waterdown will come on later in 2027. So I think your math was pretty close. We did a little bit better, so that was great. Okay. And the third facility, I have that kind of starting to ramp in the third quarter of 27. um is that a good assumption or should it be more in the back in the fourth quarter yeah i think i think based on everything we know today in the construction schedule we would see it starting in in the third quarter uh of of 2027 and you know like any uh new production facility um it won't be linear as it gets off the ground we'll have costs uh ahead of revenues and that sort of thing And so that's what we would expect to happen, start in Q3 and then build from there. Okay. Last one for me, just on the construction markets, I mean, we're seeing a nice turnaround in your numbers, both in terms of revenue growth and bookings. Can you talk about, is that driven by larger projects, smaller projects, any end market color you can provide? Yeah, no, I appreciate that question, Yuri. I mean, it's nice to see the team. The team has worked really hard this year, and we had, as you've noted, a pretty strong Q3. You know, what I'd say it's pretty broadly based. You know. One of the things we've talked about in the past and everybody's aware of is, you know, the residential market and infrastructure and stuff that our customers participate in is probably the slowest part of the construction industry. You know? Where we're looking at other infrastructure projects, some paving work. You know, I think the weather in the fall here has contributed. Activity levels, as we mentioned several times, both, I would say, construction and rental have benefited from a better level of activity. Certainly, we'd like to see it stronger, especially with the residential component, as I mentioned, but that's going to take some time, I thing, before we see it. But, you know, I would say I really would compliment our team in terms of how they're executing, you know, across all the different new equipment product lines. So they've worked really hard to position us well. We have good supply of product for most models, and the team has just executed very well. And so compliments to them as well. That's certainly evident in the numbers. Okay. I'll leave it there. Thanks, guys. Thanks, Jared. Thanks, Richard. Your next question comes from Devin Dodge with BMO Capital Markets. Please go ahead. All right. Thanks. Good morning, guys. Good morning. Devin. Okay. Equipment group operating margin, nice expansion there in Q3. I know AVL earnings contributions no longer reported separately, but are you able to frame how much of the earnings or margin lift in the equipment group can be tied to AVL versus the legacy operations? Well, let me just break down the margin components for you. We're not going to give you AVL, but I think you can back into that based on the numbers we have given you, Devin. And, you know, we've talked about new and used equipment margins having stabilized over the last number of quarters. AVL's margins, as you know. Add to the mix and are higher than traditional new and new equipment in the core business. Rental margins are up because of activity levels. and product support margins are down a little bit, as Mike talked about, but still strong. And so those are the components that go into it, and I think you can kind of get there in terms of AVL's contribution based on everything we've given you. Okay. Okay, thanks for that. Second question, financial utilization of the broader rental fleet, that continues to trend higher, which is great to see. Are you able to break down the trend by equipment type and frame how you're thinking about rental fleet investment in 2027? Yeah, it's a good question. I think, you know, I think some of the disclosure we've provided does give you an indication, Devin, that, you know, the heavy rental business has actually done quite well. Now, you know I'd say a couple of factors though. We've always been talking about how we've been investing in the rental fleet and I'd we're pacing at Q3 pretty close to where we were on a gross basis to last year across the business and that includes heavy power and battlefield, the light equipment side of things. You know, we've seen some improvement in the light segment, like under battlefield. We still have some room to go there. You know we have invested in a higher cost fleet, utilization started to come up a little bit. Probably the strongest performance on utilization has been on the heavy side and so, you know, we expect to be investing at a stronger pace next year. We'll update you as we go through the quarters, but you can anticipate that we're going to look to, you know, hopefully as we see some of these tailwinds take hold, we see som other projects pick up, you kno, usually rental leads, and that's probably where we'll put our focus and supplement that with new and used as best we can, depending on what customers require. Good call, thanks for that. I'll turn it over. Thanks, Dylan. Thanks. Your next question comes from Sherilyn Radborn with TD Cowan. please go ahead thanks very much and good morning um so very strong quarter for product support and that growth rate um is ramping up sequentially can you give us a bit of color and whether you think we're finally starting to see the impact of mining deliveries over the last five years in in that line item yeah we've been it's great to highlight that because like we did provide a little bit of color as you mentioned sherilyn about the composition of product support the contribution to mining and it does as we've always said it takes two to three years for new fleets to actually get to a point where they get beyond preventative maintenance and into you know some more significant component replacement and other opportunities we're starting to see you know we're we're starting to see that take hold. You know, we did deliver some nice fleets over the last several years, and so we are starting to See a little broader mix of mining versus construction and power and so forth. But, you know, that's certainly evident in the numbers, I think. You know? Rebuild activity, too. You know. One of the things that we're looking at, given the whole economic environment and dynamic, is, you Know, we've picked up a number in the rebuild side the business and trying to help customers you know with rebuild solutions in addition to used and new equipment sales as well so that that does affect a little bit of our product support requirements great and then um i think it's pretty obvious to everyone how the productivity mega deduction and build canada strong can benefit the equipment side of the business but But what do you see on the Simcoe side as it relates to those policy initiatives? Yeah, I mean, we're really pleased with the government's response there, Sherilyn, across our business. And, you know, for us as a company, it won't change our accounting tax rate, but does have a positive effect from a cash tax point of view. And we would expect, you know, most of our customers to be able to benefit across the businesses from the mega deduction and the recent announcement in Ontario mirroring up with what the feds are doing. So we see it as a positive step for the economy in general across all of our businesses. Yeah, the only thing I would mention just on when you think of your question around Simcoe as part of that, you don't keep in mind that Simcoes, these are longer engineered products, projects and so forth. And so where you can make a decision on a piece of equipment based on availability, it's a little bit different for Simcoe where there's an engineering and a planning cycle. However, maybe over the long term, given the duration of this policy, we'll see what that looks like for 2027. Thank you. Great. Thanks, Ellen. Your next question comes from Krista Friesen with CIBC. Please go ahead. Hi. Thanks for taking my question. And maybe just on the AVL side, can you speak to what you're seeing in terms of competition and if that environment has changed over the last 12 to 18 months here? Yeah, thanks, Krista. You know, I would say our goal, I guess, is we are seeing certainly, and we've talked in the past a little bit about, you know, this market segment is pretty attractive given that there's a lot of capital flowing into, you know, the entire supply chain, I think, as it leads into the data center space, including, you know, standby generators and enclosures. You know, our goal is, you know, we are seeing more productivity. We're hearing about other clients and so forth. But, you know, our focus has been on, you know, being the preferred supplier, providing the highest quality and differentiating in terms of our design and hitting our timelines and our commitments and so forth. And so, you know, that's where our team has been successful. And so we anticipate that we're going to continue to see more options in the space, but we haven't seen an effect in our particular demand cycle yet. Okay, great. And then you obviously have the large order being delivered substantially next year. But based on your conversations with customers, how far in advance are they willing to be booking these orders? Are we looking out into 2029 at this point in time? You know, I would say, maybe I'll start on that and John can add the color. But I would Say, you know, generally what we are seeing is late, like through 27 and into early 28. it's just starting to take hold. Part of that is, of course, the construction schedule on the site, the availability of the engines, and the sequence of what they're doing in each market. And it's changing a little bit. But I would say, you know, there's definitely indications for later years, but I wouldn't go so far to say that there's commitments on bookings and so forth. I mean, the big constraint continues to be engine supply and making sure that, you Know, as we go forward, even in Canada, for example, that we can try to make sure that we can get some build slots and we can execute on some of those opportunities. Same thing in the US. I mean, you've heard from Caterpillar, for ejemplo, that they're expanding their production in the diesel high output engines as well as solar turbines. And we see some of that coming on in that time frame, 2029. So difficult to say, but I would just say, I don't know, John, if there's anything you want to add to that, but I mean, as far as orders go, you know, generally speaking, we would look at 27 as for early 28 starting to develop. Yeah, I don't have anything to add, Mike. Thank you very much. I'll jump back in the queue. Thanks, Krista. As a reminder, if you would like to ask a question, please press star followed by one. Your next question comes from Sabahat Khan with RBC Capital Markets. Please go ahead. Great. Thanks, and good morning. I just wanted to revisit the earlier discussion around sort of the capacity at AVL. And just using that $220 million comment, I guess if we assume we're exiting Q3 at or close to the 100% capacity and until the new facility comes on, And would pricing really be sort of the upside driver here? Just trying to understand sort of the run rate here. And maybe if you can comment on where you are on utilization, as that might be the delta until the third facility comes on. Thank you. Yeah, I think what I said, Savit, and we've been saying it for a bit, is that we're pretty much at capacity in Hamilton. We have been for a while. And then we're going to ramp up Charlotte, which we have been very, the team has done a fantastic job ramping that up so that by the time we left Q3, the production in Charlotte was roughly equivalent to what it is in Hamilton, and I also said look for incremental improvements coming out of Charlotte as we move ahead, without defining exactly the production numbers, because we'll have to see engine availability, et cetera, as Mike talked about. And then you will look for water down to come on in Q3 next year. So there will be improvements in Charlotte, incremental capacity, but it won't be at the same kind of ramp as we've seen. Got it. And then on the dividend related to AVL, the $93 million and the $18.6 million to be paid in Q4, I think you noted this is based on future sort of cash flow. How will this get paid out in 2027? Is this a lump sum or would there be just through the year, even cadence through the years? How would that flow? Thank you. Yeah, I think what you've seen us do, Saba, is pay out interim dividends, and I would expect that trend to continue. So, yes, we look at the earnings of the company, we looked at the cash on hand, and we look at the projections. So, you know, we're building out water down right now. That takes some cash, so that goes into the blender in terms of how much we can pay out. And we'll pay out an amount at year-end based on the results for the year of 2026, and then we'll look through 2027 to pay out interim dividends as we go. So we'll have kind of a more stable trend, if you will, as we move forward, and those will be the components that go into it. Great, and then maybe just a quick one. You've been commenting on the power systems business sort of broadly with AVL. Is there any sort of additional color on sort of the pipeline of demand, particularly within Canada, for those power gen units and the RECIP engines that kind of alluded to? Just trying to understand sort of the power systems pipeline XABL. Thanks, and I'll pass the line. Yeah, no, I would say, and as I sort of mentioned it earlier, Saba, it's lagging, Western Canada lagging the U.S. certainly in terms, but we are seeing some good interest, again, but it's very early. You know, most of what we're seeing is, you know, and it's smaller players. We certainly see a little bit of activity for the hyperscalers, but not at any level that you've heard about, like, say, south of the border. And so there's a number of projects that are on the table, but I would say still quite early in terms of commitments. We, as I mentioned earlier, our power group has been also working with Caterpillar to look at timing and sequence of shift dates for engines. should we be successful and earn our way into some of those projects. And your next question comes from Steve Hansen with Raymond James. Please go ahead. Yeah, good morning, guys. Thanks for the time. It might be difficult, but with all the musings around cross-border negotiations, picking up steam here again around Kuzma, have you thought about where your business stands to benefit from increased trade flow again or some sort of degree of certainty out there? Is there a specific pocket for anything that business has been hurt historically here in recent years versus going forward? How do you plan for that? Thanks. Yeah, I mean, Steve, you know, one of the things we've talked about over the last number of quarters is we haven't had too much direct impact from the tariffs. We've been able to mitigate those in one way or another, but it has put kind of a damper on the overall economy. And one of the areas, as you know, that's suffering has been southwestern Ontario. Mike talked about residential. We've talked about slower activity in rental and construction in that space. So, you know hopefully we get to a trade arrangement fairly soon and that will create more stability in the economy and hopefully boost the economy in southwestern Ontario and residential going forward as well. Okay, very helpful. Thanks. And again, maybe difficult to comment here, but just still wanted to ask about Cat's recent decision to take in a dealership. Pretty unique circumstances, of course, around that. But just what are your thoughts around the idea of future dealerships either adjacent to or nearly adjacent to any opportunities there, given what you've got going on in AVL? Thanks. Yeah, thanks, Dave. I think you probably know my answer on that one already. But I would just say, you know, first of all, I would Just say it's a pretty unusual circumstance. And I think, as you can imagine, Cat has been very careful about how they talk about it. One of the things that I think they did say publicly was, you know, they are committed to the Deere model. It's a pretty unique situation, as You mentioned. And so, you Know, having said that, there isn't a lot known about Cat's plan and how they're thinking through, you know, the future of that particular dealership or that territory. But they've organized around that accordingly. So stay tuned on that. You know, I would say from our perspective, we always talk about, you know, our first priority on capital allocation is organic growth and driving the business and adding to, you know, complementary products and services to the portfolio and expanding within the territory. We certainly, you know, would be interested in looking at adjacent territories or others should the opportunity come up, but there's no indication from Caterpillar that, you know, that that would be the case, and they're very, very quiet on that front. So nothing to do there except execute on our business and be positioned with resources and capacity to be able to support and see what happens over the longer term. Okay, very helpful. I'll just sneak one last one in if I might around the product support. The technician growth has been a really great driver of the business in the last year with some additional capacity. Are you still looking to add techs at this point, and do you have a lot of room to continue to grow? Thanks. Yeah, I would say, like I mentioned in the comments, it is one of our top priorities to grow our technician base, and we're looking to do that. If you think of the tailwinds that we talk about when you think about infrastructure resource development in different areas, one of the ways we differentiate is to provide that customer service and product support to the lifecycle of the equipment, partnering partner with our customers to help manage that cost effectively. And so, you know, that continues to be a big focus for us. You know, it's our lifeblood, and we've got the infrastructure in place to support it. And, you Know, when customers are developing new locations, we're happy to put capital to work in terms of parts to support, you know... maintenance, repair of equipment and fleets and take on that responsibility on their behalf when we can. So we're certainly focused on that area of the business as things develop into the next couple of years. Yeah, I'll just call out, we've got a great recruiting team in place, and Steve, and they're doing a terrific job. And as Mike said, it's really, real important for us to continue to hire technicians through cycles. And so just wanted to compliment that group. Appreciate it, Ben. Thanks. Thanks. And your next question comes from Ian Gillies with Stifle. Please go ahead. Morning, everyone. Hey, Ian. Welcome to the call. Oh, thanks. I just wanted to ask a little bit about mining. Obviously, the AVL and backlog growth ads have been very important there and been the focus. But given everything that's going on in mining, even in Eastern Canada, I'm curious whether you're seeing anything that may be a potential add to the backlog or a significant add tothe backlog, just that maybe chunky in nature, just given everythingthat's happening. Yeah, no, thanks for the question, Ian, and welcome. You know, we often talk about that particular case because it's a long sales cycle. And as you know, like each of these projects are pretty unique, whether it's a brownfield, greenfield, or a fleet replacement. And, you know. It will be lumpy. We do see, you now, even in the major projects that have been announced federally and so forth, you do see a number of potential developments. You know. We hear about Ring of Fire. We hear a number about things. And I think, you know, it'll come in stages. You know, there are generally going to be, we expect, and certainly we have to earn our way into these projects. But as we see some of these packages come up for bid, you Know, our team will look to earn their way in. And so it will be lumpy, as you mentioned. And a lot of times it's going to start with maybe even some contractors doing infrastructure and access, and then it's overburden removal and then production. So we're pretty excited about the commitment the government's made on the resource side of things. But a very competitive space, and you can imagine we're going to do everything we can to go our way there. And the follow-on question I suppose I have along some of that, and You mentioned it in your remark, or some of your remarks there, was the ring of fire. I mean, we're obviously seeing the early stages of investment happening right now. it's pretty large numbers but how do you see toronto participating in the ring of fire over the duration of maybe a five-year time frame just given everything that everyone's expecting to happen in that region yeah it's um you know it's it's nice to see a little bit of activity up there keeping in mind you know its it's a long distance even when you think of where thunder bay is situated in the distance to where the ring-of-fire and is measured in hundreds of kilometers not not 10s, right? So, you know, I would say for the first number of years, it's going to be just development of access to the locations and seasonally in those areas, there's winter roads, there's all sorts of things to consider to get equipment into place. And so, you know, we have a good operation up in that jurisdiction. We're going to continue to invest both on the rental side, frankly, and the Tormo and Cat dealership to support contractors that are doing development, customers who are doing roadworks, and ultimately the folks that are in the mining space. But I would say it's a decade. It's not a number of years. Understood. Well, thanks very much. I'll hold off on any AVL questions until next quarter. Oh, bless you. Thank you. There are no further questions at this time. I would like to turn the call back over to Mr. John Doolittle. Great. Thank you very much, Marissa. And thanks, everyone, for joining today and for the great questions. It concludes our call. Please be safe and have a great day. Thank you, everyone. Bye, everybody. Ladies and gentlemen, this concludes today's conference call. We thank you for your participation. You may now disconnect.