Activity enhancement and continuous improvement. Earlier this year, we launched Project Cornerstone, a company-wide initiative designed to strengthen the foundation for long-term growth and operational excellence. The project has already delivered approximately $20 million in benefits during 2026, and we are targeting more than $50 million in annual run rate benefits by 2029. Project Cornerstone is focused on several key value creation areas, including delivering best-in-class operational efficiency with high throughputs while optimizing materials and energy consumption, with one of the key levers being our proprietary digital solutions. Also, driving low-cost to serve advantage, as we capitalize on our investments in increasing the capacity and capabilities of our distribution network. At the same time, we are boosting our rail and truck fleet efficiency. Another key lever for us is our campaign to buy less and buy better, as we have embedded procurement in our strategic business planning cycle, Capitalizing on AI-enabled analytical tools and forecasting models in order to increase focus on managing down consumption while negotiating lower unit prices and better terms with suppliers. Let's turn to slide 6 to discuss a project that highlights how we are strengthening the foundation for future growth. Titan America and Port Tampa Bay recently marked the opening of a newly constructed second berth, serving a marine terminal at the port, a milestone that reflects more than two decades of successful partnership. The new berth expands port capacity, strengthens supply chain resilience, and incorporates modern sustainable infrastructure features. Constructed directly adjacent to Titan America's multi-product megamarine terminal, the new berth significantly enhances the company's capabilities, reliability, and operational efficiency. The strategic investment provides our terminal with increased capacity to serve our West Florida markets and customers with a broad range of upstream construction materials, including cement, cement tissues, aggregates, and other bulk materials, with greater flexibility, dependability, and speed. As Port Tampa Bay has expanded its capability and cargo volumes, Titan America has invested in terminal operations and infrastructure to support its long-term growth, including the installation of a state-of-the-art ready-mix operation on the side in 2023, the inauguration of a 70,000-metric-ton bulk material storage expansion in 2024, and an upgrade of its dry-bulk unloading infrastructure. Seamlessly integrating existing operations with this new birth. I will now turn the presentation over to Larry, who will provide a breakdown of our third quarter financial results and business segment performance. Larry?
Thank you, Bill, and good afternoon, everyone. Slide 7 provides an overview of our third quarter 2026 financial highlights. Those results reflect the heightened market headwinds, higher material and energy costs, and unplanned maintenance outage at a Roanoke cement plant, and unfavorable September weather in Florida, which together weighed on our margins in the quarter. Despite the challenges, solid revenue growth in the Mid-Atlantic, including the contribution from Keystone, offset top-line softness in Florida. As indicated on the left-hand side of the slide, we delivered revenue of $462 million in the third quarter, an increase of 5.7 percent compared to $437 million in the third quarter of 2025, of which Keystone contributed approximately $30 million. Adjusted EBITDA for the quarter was $95 million, compared to $117 million in the prior year quarter, a decrease of 18.6%. Our third quarter adjusted EBITDA margin was 20.6%. Compared to 26.7% in the third quarter of 2025, reflecting higher material and energy cost, job site leverage constraints in Florida, the unplanned maintenance outage at a Roanoke cement plant, and a mixed impact from the addition of Keystone. On a year-to-date basis, our adjusted EBITDA margin was 20.9% compared to 23.5% in the first nine months of 2025. Net income for the quarter was $40 million compared to $57 million in the prior year quarter, with earnings per share of $0.22 compared to $0.31 in the third quarter of 2025. The decrease primarily reflects the lower adjusted EBITDA, as previously described. As shown on the right-hand side of the slide, operating cash flow for the first nine months was $220 million compared to $215 million in the prior year period, as lower net cash tax payments more than offset the effect of lower profitability. For the same period, free cash flow was $67 million compared to $94 million in the prior year, reflecting increased investments in selective growth projects. I will discuss our CAPEX profile later in the call. And finally, after accounting for the impacts of the Keystone acquisition, our leverage ratio at the end of Q3 was 1.43 times trailing 12 months adjusted EBITDA. Up from 0.64 times at December 31st, 2025. Our leverage remains low, providing continued financial flexibility. Turning to slide 8, our sales volume performance in Q3 was mixed, with growth in aggregates, flash, and concrete block contrasted with lower ready-mix concrete volumes and lower cement volumes on a like-for-like basis. Including Keystone, cement volumes, including external sales and internal consumption, increased 9.6% year over year. On a like-for-like basis, excluding Keystone, our cement volumes were 6.2% lower, reflecting the unplanned maintenance outage at a Roanoke cement plant, import disruptions, and softer demand in Florida. Total aggregates volumes, which were supported by resilient infrastructure demand, increased 1.2% in the quarter when compared to Q3 2025. Despite healthy growth in the Mid-Atlantic, enterprise-wide ready-mix concrete volumes were 5.2% lower year-over-year, reflecting more challenging conditions in Florida. So, compared to the prior year, Total fly ash volumes in the quarter increased 2%, and concrete block volumes increased 0.7%, despite a softer residential construction demand environment. Turning now to slide 9, external pricing was mixed, primarily reflecting both geographic and product mix. We continued to manage pricing responsibly in response to market conditions, driving value from our differentiated product portfolio. On a year-over-year basis, cement pricing decreased 1.7%, remaining broadly resilient despite softer demand conditions in Florida and the geographic mix impacts in the mid-Atlantic segment. Average aggregate pricing was broadly stable year-over-year and reflected product and geography mix. Ready-mix concrete pricing increased 5.4% when compared to Q3 2025, supported by pricing actions and favorable mix of high-performance product offerings in non-residential and infrastructure and use applications. Fly ash pricing increased 6.6% year-over-year, benefiting for strong demand in a supply-constrained market. Concrete block pricing decreased 3% year-over-year, reflecting softer residential demand. Turning to slides 10 and 11, I'll walk you through our third quarter business segment performance. Let's start with Mid-Atlantic on slide 10. Results in the quarter were impacted by an unplanned maintenance outage at a Roanoke cement plant which reduced cement production by approximately 60,000 tons. When combined with import disruptions in the mid-Atlantic segment, we estimate a similar reduction in cement sales volumes in Q3 in a market territory of higher demand year-over-year. The acquired Keystone assets contributed approximately $30 million in year-over-year revenue growth with improvements in reliability, quality, and initial commercial synergies positively contributing to the segment's adjusted EBITDA performance. Despite the unplanned maintenance outage, Mid-Atlantic external revenue was $213 million in the third quarter, an increase of 22.5% compared to $174 million in the third quarter of 2025. As mentioned, the increase was driven primarily by the addition of Keystone, but also reflects our strong position in ready-mix concrete where higher volumes and prices more than offset the impact on revenues from the lower volumes in our legacy cement operations. Adjusted EBITDA for the segment was $37 million in line with the prior year quarter, including the impact of the unplanned maintenance outage at a Roanoke cement plant, which reduced cement production and sales volumes and increased unit costs. Disciplined cost management supported performance in the quarter, partially offsetting higher energy and raw material costs. Segment adjusted EBITDA margin was 17.2% compared to 21.1% in the prior year quarter. And on a year-to-date basis, Mid-Atlantic external revenue was $572 million, an increase of 18.8% compared to $481 million in the prior year period. Adjusted EBITDA was $102 million compared to $88 million, an increase of 15.7% when compared to the prior year period. Segmented adjusted EBITDA margin was 17.8% compared to 18.3% in the first nine months of 2025. Turning to Florida on slide 11, Our quarterly results reflect ongoing housing affordability pressures and job site labor constraints, which negatively affected the pace of construction activity and the start of new projects in the quarter. September's record rainfall in some of our key southeast Florida markets also weighed on activity. Solid infrastructure activity continued to underpin demand. Florida's external revenue was $249 million in the third quarter, compared to $263 million in the third quarter of 2025, as lower ready-mix concrete and cement volumes and lower cement and concrete block pricing were partially offset by favorable ready-mix concrete pricing and aggregate volumes. Adjusted EBITDA for the Florida segment was $61 million compared to $81 million in the prior year quarter, with adjusted EBITDA margin of 24.4% in the third quarter compared to 30.8% in the third quarter of 2025. The change in adjusted EBITDA relative to revenue reflected higher material and energy costs, lower volumes, and the residual effects from Q2 import disruptions partially offset by cost control measures. On a year-to-date basis, Florida's external revenue was $759 million compared to $777 million in the prior year period, and segment-adjusted EBITDA was $184 million compared to $214 million in the prior year period. Adjusted EBITDA margin was 24.2% compared to 27.5% in the first nine months of 2025. Now, turning to our balance sheet and cash flows on slide 12. As of September 30, 2026, we had $48 million of cash and cash equivalents and total debt of $580 million for a total net debt position of approximately $531 million. That represents a leverage ratio of 1.43 times trailing 12 months adjusted EBITDA compared to 0.66 times at January 1, 2026. The Keystone acquisition, completed in Q2, was funded with a combination of cash on hand and a new term loan maturing in February 2031. Our balance sheet, combined with continued cash generation and disciplined capital allocation, provides strategic flexibility to support growth and invest in operating efficiencies while maintaining our commitment to returning capital to shareholders and navigating evolving market conditions. Slide 13 shares our capital expenditure profile for the first nine months of 2026. Net capital expenditures were approximately $153 million for the first nine months of 2026 and remain aligned with our long-term growth strategy. We prioritized attractive growth investments, including our Bruner Island fly ash expansion, strategic cement and aggregates investments, and ready-mix concrete investments, including capital-like portable plants. We also invested in alternative fuels to enhance fuel flexibility, efficiency, and sustainability, and in resource development at Keystone to support our integration priorities. Our investments reflect both our confidence in the secular long-term growth trends in our markets and our commitment to manage and maintain an attractive leverage profile. With respect to shareholder returns, at a meeting on October 29th, our Board of Directors approved an issue premium distribution of $0.04 per share, payable on January 11th, 2027, to shareholders of record as of December 18th, 2026. With that, I'll turn the presentation back to Bill for his closing remarks.
Thank you, Larry. Clearly, our team had to work hard to face the challenges of a third quarter of heightened headwinds, deteriorating housing market, increased energy and fuel costs, customer projects affected by job site labor shortages, and unfavorable weather conditions. To add to all these challenges, the unplanned maintenance outage at their own oxyment plant, which reduced cement volumes and increased operating costs. Let's turn now to our 2026 outlook on slide 14. Based on current visibility of the remainder of the year and in response to recent near-term market dynamics, including interest and mortgage rate levels, inflationary pressures, And job-side labor challenges, we have updated our full-year 2026 outlook. Including the contribution from Keystone, we now expect mid-single-digit revenue growth compared to 2025. We also anticipate adjusted dividend margin will decline by approximately 250 to 300 basis points year-over-year. Our updated outlook reflects evolving market conditions, the impact of the unplanned maintenance outages, and the low pre-synergy contribution from the acquired Keystone assets. Near-time market challenges denote change the big picture of a dynamic construction materials with attractive long-term growth expectations. Fueled by the secular trends of sustained infrastructure investment, digital transformation and the artificial intelligence economy, modernization of power production and distribution grids, manufacturing and restoring in our country, resilient urbanization, and most importantly, the ballooning shortfall in housing required to meet the needs of the U.S. population. We believe Titan America is in a strong position to capitalize on these trends, as we continue to strategically invest in growing together with our customers. Supported by our strong market positions, strategic investments, and ongoing productivity initiatives, we are confident in our ability to generate attractive medium- and long-term value for our shareholders. Before we open the call for questions, I'd like to congratulate our Roanoke CIMEN team as they celebrate their 75th anniversary. We sincerely thank our customers, investors, and community partners for the trust and support that have been the foundation of our success over the past seven and a half decades. This achievement stands as a testament to the generations of dedicated employees who have built Roanoke Cement into what it is today. With that, I'll turn the call over to the operator for the Q&A session. Operator?
Operator
Thank you. We will now begin the question and answer session. If you'd like to ask a question, press star 1 on your keypad. To leave the queue at any time, press star 2. We'll take our first question from Anthony Pettinari with Citigroup. Your line is open.
Good evening. Bill, Larry, talk a little bit more about what you're seeing in Florida. And you cited labor shortage, weather, and maybe weaker underlying demand in resi. And I'm just wondering, if you take maybe the $20 million year-over-year hit, how you would kind of roughly bucket that between those three categories? And just, you know, we heard a lot of homebuilders talk about pulling back pretty hard on activity from September to October. I'm just wondering if you could talk a little bit more about what you're seeing in Florida right now.
Yes. Hi, Tony. I'm going to start, and then perhaps Larry can take it over a bit with more details. But clearly in the third quarter of this year, we saw deteriorating market conditions in Florida, Florida, exacerbated by the increase of the mortgage rates. You know better, it started from 6.4, roughly, in early June, and it started climbing up to 7.4, which had a big impact, obviously, on housing activity. Then on top of that, labor shortages, which were prevalent in other states across the year, became intense in Florida. Perhaps you've read the statistics. We had perhaps an impact of monthly arrests of about 25,000 people, which became during the third quarter 50,000. And this had an impact on labor shortages in our customers' job sites, in the project job sites in Florida, which had an effect overall in the market conditions. And the third major impact in the third quarter was a record rainfall in September, especially in the southeast Florida. If I remember correctly, it was the record rate for over 20 years or more, and it was very bad weather. So these were the three conditions that led to accelerated deteriorating conditions, especially in the housing market. Now, having said that, infrastructure remains solid, and certain parts of the non-residential private activity were strong and underpinned overall the demand. Larry, you want to add anything else?
Yeah, I mean, I say hi, Tony. I think when we talk about the revenue impact, obviously, it's a strong revenue impact, but it also has the bottom-line impact as well. The revenue flows through to the bottom line. Obviously, you don't think there's some of the variable costs, but we did see energy costs higher. We saw some raw material costs come in higher, and then the volume effect closes the gap between that overall performance on the revenue and the EBITDA. That you see at the bottom. Those are the main contributors for the quarter. Okay, that's very helpful.
And then just shifting to Mid-Atlantic, the unplanned outage in Roanoke and the import disruptions that you mentioned, is there any carryover impact into 4Q and just sort of operationally are those behind you or any color there?
The unplanned shutdown was resolved within the quarter. As Larry mentioned, it had an impact of about 60,000 metritrons in cement production losses. Unfortunately, the lingering – usually in the past, if we had an unplanned shutdown like that, we would flex up our imports in cement, and we would cover the needs of our customers through imports. But the lingering disruptions in supply chain didn't allow us this time to do that. Now, the... The issues in relation to the unplanned outage, they're totally resolved. Now, lingering effects in relation to logistics disruptions remain. They're not as impactful or severe as they were in the second quarter, but so long as the war with Iran continues and there are disruptions there, one can expect that there may be some impacts in the coming months. But overall, not as severe as we witnessed in the second quarter of the year.
Okay. That's very helpful. I'll turn it over. Thanks, Sonia.
Operator
We'll take our next question from Philip Ng with Jeffries.
Operator
Your line is open. Philip, you may need to check the mute function on your device. And we'll circle back. We'll move to Chad Dillard with Bernstein.
Operator
Your line is open.
Hey, good evening, guys. So given that we only have a couple months remaining in the year, I was hoping to get your early thoughts. On just how to think about 27. Maybe we can begin with, you know, some of the puts and takes, you know, how to think about some of the cost savings, you know, kind of flowing through, you know, how are you thinking about price costs, and then, you know, there have been like a few, you know, one-time items, you know, during this year, and just trying to think through, you know, all of that as we're, you know, working to build our bridge to the new year.
We think in 27, the positive impact is going to be the continued infrastructure investment, clearly. We see the continued resolution into December 11, as you know. And there seems to be consensus, especially in relation to build U.S. 250, bipartisan consensus. And we think that the recent elections also sent a message about the need for improved affordability in housing. And also we expect continuation in positive trends in non-residential, for example, the AI economy, overall the investment in data centers, the investment in manufacturing reshoring, in healthcare, and of course resilient urbanization, all these trends, the positive trends are going to continue. In relation to the elements related to the near term deterioration we saw in the housing market, we think that these elements are not going to change in the near term unless we see a reduction in the mortgage rates and overall the pressures from the policy rates. So this may take a bit longer into the second half of 2027. Now, in relation to cost optimization, we continue to focus on productivity improvements. We mentioned that already we have generated $20 million in savings, and in the next three years, starting from 2027, we expect additional savings, and you see the graph that we have shared with an exit rate of this additional savings over the next three years of about We also see that in 2027, we expect a catch-up. In relation to prices versus cost, the rate of cost increases from raw materials with embedded cost of energy and fuels, but also overall the direct impact from fuel and energy prices was going faster than the ability to increase our prices. We expect to see some catch-up in 2027. We have already announced price increases as of January 1st. We have announced $12 per ton of cement, $15 per cubic yard for our ready-mix concrete, $3 per metric ton for our prime aggregates, and $0.10 price increase per block. So we kick in this as of January 1st across all our areas. Including the Northeast, which obviously in the past it used to be later in the year towards the springtime. So we start as of January 1st because it's absolutely necessary to counter the hikes in the coast that we have. So there is a positive, let's say, momentum in relation to that.
Great. That's a super helpful color. The second question is just on Keystone. I was hoping you could decompose the growth during the quarter versus legacy tightening and just how to think about, you know, margins on a go-forward basis that trajectory.
Hi, Judge Larry. On Keystone, we give you a sense of where revenues were for the three months and for the nine months ended or five months ended, I guess, in that case for Keystone. In the results, you saw that in the release. We don't break out the individual units, whether it's Essex or RONA. We don't break that as a policy. But we do try to give you a little sense of where Keystone is heading on the revenue side. We shared before that the opening margins for Keystone a year ago were 10 percent last year for the full year at Keystone EBITDA margin, and we shared, I think, in the last call that we have a couple-year plan to raise that to more normal levels. Obviously, we're just five months into that plan through September 30th, and we shared, I think, on the last call as well, we need to get through really a planned regular order outage for Keystone to put in place some of the regular CapEx investments and interventions that you can only do in an extended outage, which you can't do in the middle of the summer, obviously. So that's the plan. It still struggles a little bit on margins, but coming around on reliability, coming around on the quality of the product and some early synergies in some of the market areas that we see there.
Great, thank you. I'll pass it on.
Operator
And once again, for your questions, that is star one. We'll move next to Brian Brophy with Stiefel. Your line is open.
Yeah, thanks. Good evening, everybody. Just wondering if you could provide some additional color on the new Tampa Bay birth and what it enables for you guys. Is it expected to drive incremental volume or is this more of a cost-saving benefit? Thanks.
Hi, Brian. It's Larry again. A little bit of both. You know, certainly on the birth itself, it's a – they're right adjacent to our facility at the Dome we put in place. The silos had already existed. It's a priority birthing right for us, so things perhaps that were incurred in the past and things like demurages when we had to leave the birth is not a priority birthing arrangement for us. These can certainly be reduced on the cost side. When you look at the products itself, we've imported recently some slag into the facility, so this gives some additional capabilities, the multiproduct terminal that we described. So now we have additional flexibility to introduce other products there as well at the Tampa facility.
Got it. That's helpful. And then just on Project Cornerstone, is there any color you can provide on the level of spend that's required to realize some of the benefits you mentioned? Thanks.
Nothing terribly significant there. Some of it would come from some CapEx interventions on some of the logistics activities, for example, but they're not heavy, and some of them are already in flight for that.
The investments in the distribution network expansion that gives us additional capabilities, capacities, and reduced costs have been executed already, so it's very minimal remaining investments.
Understood. That's helpful. Thank you.
Operator
We'll take our next question from Philip Ng with Jefferies. Your line is open.
Operator
Philip, you may need to check the mute function on your device.
Operator
Phillip, if you can hear us, we are unable to hear you. Hi, can you hear me now?
Yes, now we can hear you. Hi. Sorry about all the technical issues. Larry, I guess margins were certainly impacted in 3Q by inflation. Can you size up the inflation impact in 3Q versus right in the first half of the year? I ask because I've thought historically you guys have done a pretty good job in terms of passing freight through surcharges and whatnot, and then you buy forward on the energy side. So just give us a little more perspective in terms of... And you are saying that going forward.
Sorry, you were breaking up a little bit on my side, Bill, but I think I get the nature of the question. So on the energy side, certainly as things progressed during the third quarter, energy costs had gone up year over year compared to even a second quarter impact. So we saw an acceleration of that. Diesel fuel, as you know, is $629, $630, something like that today. It was $2 plus less than that a year ago in the third quarter. So big impact coming through. We also saw some increases more in Florida than in Mid-Atlantic, certainly in natural gas coming into the facility down here, so that's an impact. Now, we mitigated some of that with increased levels of alternative fuels, so that didn't all come through, but it was something that we certainly faced during the year. There's some embedded energy costs, as you know, on some of the raw materials that come into the facility, you know, things that are transported in aggregates, for example, cement, for example, coming into the ReadyMix facility. It has an impact there as well. We saw some increases in some aggregate costs as well to the extent that we buy that from third parties more in the mid-Atlantic than in Florida, obviously, in that case. So those are the main drivers, I think, that you would see. Had the intervention on some of the costs, certainly as we were describing, for some of the repairs at Roanoke, And as we look forward to the next quarter as well, just to get ahead of the question perhaps a little bit, we do have the annual outages that come in Roanoke and now Keystone in the first quarter of next year as well. So just something to be aware of there as well. Okay.
Is there any way to size up those outages in Q4 and Q1 on a year-of-year basis so we won't be surprised?
Well, Q4, we don't have any planned outages of any significant interventions, right? You may have a week or so, but nothing significant that would come. It's, you know, comparable year-over-year in that case, so you wouldn't see something in that case. Next year, the outage in Keystone would be generally on the expense side. It would look generally like the Roanoke outages typically, so it's a typical pattern. What's different, perhaps, about Keystone is the intensity of winter in Pennsylvania, Ohio, is a bit different than it is in Virginia and the Carolina, so you can have that impact as well come Q1.
Okay. Helpful. And just a follow-up question. The price increases you guys announced that you just mentioned, Bill, are those all for January 1 or it's going to be more by April 1? January 1, all of them. Okay. And across 30 and a minute. Okay. All right. That's all I had. Really appreciate it. Thank you. Thank you, Phil.
Operator
And this does conclude the question-and-answer portion of today's call. I would now like to hand the call back to Michael Bennett for any additional or closing remarks.
Thank you for your time today. We appreciate your interest in Titan America and look forward to updating you on our progress on our fourth quarter earnings call. Have a great rest of your day.
Operator
Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
