Mattr Corp. (MATR) Q1 2026 Earnings Call Transcript

Thank you for standing by and welcome to Matters First Quarter 2026 Earnings Conference Call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Megan McCracken. Investor Relations, please go ahead.

Good morning. Before we begin this morning's conference call, I'd like to remind listeners that today's call includes forward-looking statements that involve estimates, judgments, risks, and uncertainties that may cause actual results to differ materially from those projected. The complete text of matters statement on forward-looking information is included in Section 4.0 of the first quarter 2026 earnings press release in the MD&A that is available on CDR Plus and on the company's website at matter.com. For those joining via webcast, you may follow the visual presentation that accompanies this I'll now turn it over to Matter's President and CEO, Mike Graves.

Good morning, and thank you for attending our first quarter conference call. Today, Megan and I are joined by our Senior Vice President of Finance and CFO, Tom Holloway. Q1 saw MATA's talented teams deliver sequential revenue and adjusted EBITDA growth. Normal early year seasonal slowness was largely offset by strong wiring cable sales into mining and utility applications, underground tank sales into retail fuel and water management markets, and sequentially stronger operational efficiency across MATA's newly modernized North American manufacturing network. I was particularly pleased with the sequential margin progression delivered by our composite technology segment, where Xerxes set a new first quarter performance record. Across matter, our focus remains on what we can control. Operational execution, technology development, and disciplined capital allocation, all of which strengthen the quality and durability of our earnings. We continue to build momentum within mining, data center, and utility, wire, and cable markets where our unique products, delivery speed, and technical support translate into accretive margins and defensible share gains. Across our manufacturing footprint, startup inefficiencies and one-time modernization costs that have weighed on results in recent years are largely behind us. And as volumes rise, mix improves, and cost absorption increases, we expect to deliver progressively stronger margins over time. It's worth noting that recent external events have had limited impact on our organization our strategic shift to a largely localized supply chain during 2025 has positioned matter to navigate recently updated u.s copper tariff rules with no incremental effect on our wiring cable businesses and we have not experienced raw material availability issues tied to the middle east conflict while we have observed rising costs particularly in resins we generally have the ability to pass these onwards paul will now walk us through some additional financial details thanks mike revenue in the first quarter of 2026 modestly increased year over year and sequentially

primarily resulting from strong production and sales of zersky's fuel and water products within the composite technology segment adjusted evita came in below the prior year period primarily driven by less favorable margins in the connection technology segment when compared to the fourth quarter of 2025 adjusted EBITDA improved on the strength of composite technologies performance. Connection technology segment revenue in Q1 of 2026 was roughly flat versus the prior year quarter with segment adjusted EBITDA declining by 20% versus the same period. This decline in profitability was expected and was primarily driven by a less favorable product mix, most notably the absence of specific project-driven mining and energy-related revenues, which drove particularly strong results within our wiring cable businesses in the prior year quarter. This was partially offset by share gains in utility and data center in markets. In addition, higher average copper prices slightly inflated Q1 wiring cable revenue with little corresponding benefit to a just the EBITDA. Common, the technology segment revenue during the quarter increased slightly versus the prior year quarter, while adjusted EBITDA increased 15%. Year over year growth in revenue and profitability was primarily driven by increased productive output and improved operational efficiency within the Xerxes business, which dampened typical seasonal softness as fuel and water tank demand remained robust. turning the cash flow q1 is typically our largest working capital investment quarter and this year was consistent with that pattern as we supported operational scaling and late quarter revenue acceleration accounts receivable increased with strong finish to the quarter and inventories increased as we positioned the business for the seasonally stronger middle quarters cash use and investing activities was primarily made up of capital spending on property plant and equipment which was nine million dollars during the first quarter this cash outflow includes approximately seven million dollars that was previously accrued and then paid in the first quarter of 2026. we still expect full year capital spending to be in the 35 to 45 million dollar range during the quarter the company increased net borrowings by 10 million dollars on the revolving credit facility. At quarter in, the company's net debt to adjusted EBITDA ratio was 3.7 times or 2.6 times if lease liabilities are excluded. This ratio reflects the impact of a larger first quarter of 2025, which included a strong result in our now divested Brazilian pipe coding business being replaced by a slightly smaller first quarter of 2026. We anticipate this ratio will move lower throughout the remainder of the year and remain committed to debt reduction activities. Our strengthened outlook, including a clearer view on likely U.S. tariff risks and impact, has positioned the company to resume share repurchases under its NCIB during the current quarter and continuing for the foreseeable future. Subsequent to the current quarter end, the company renewed its credit facility through October 2030. This renewal provides funding stability and additional flexibility to continue growing the business while taking advantage of appropriate high return opportunities as they may arise. We thank our banks for their continued support and partnership. I will now turn it back over to Mike.

Thank you, Tom. From a market perspective, conditions largely remain consistent with what we shared during our fourth quarter call. with strong and rising demand for products serving retail and backup fuel, water management, power generation, utility, and data center end markets. We've also seen constructive activity in the mining sector, particularly in Canada and certain international markets. Mining was the largest single end market by revenue in our connection technology segment during the first quarter of 2026, and I'll talk in more detail about it later. in oil field markets our customers have remained cautious despite a structural rise in oil prices we have not yet seen a meaningful change in U.S. onshore customer spending and currently anticipate U.S. activity levels will remain relatively flat during the second quarter however we believe the first half of 2026 represents the cyclic low for North American drilling and completion activity and anticipate a gradual upward trend commencing in the second half of 2020. In parallel, we have seen some promising demand indications in certain international markets. With an expanding product portfolio and enhanced production capacity, Flexpipe is well positioned to benefit from these increasingly favorable market conditions. In automotive, we have observed modest downward revisions to global production expectations, with particular pressure in Europe. Despite this, we also continue to see average electronic content in newly launched vehicle platforms rise, creating an ongoing opportunity for matter to grow market share. We're watching the Middle East conflict closely and as I mentioned earlier are seeing petroleum derived raw material costs move higher, though availability has not been an issue. That said, the potential for broader economic impact rises the longer this conflict continues. External conditions remain dynamic and we have appropriate contingency plans ready, if needed. However, our focus is firmly on those things we can control. Commercial execution, operational efficiency, technology development, and targeted growth in end markets where we see durable demand and attractive returns, all of which contributed to sequential margin expansion in Q1. If we look more closely at our mining-related business, within the surface and underground mining sector, which we serve via premium wire and cable products, our exposure spans a variety of subsectors and geographies. We benefit from a relatively consistent baseline of maintenance and repair demand at existing mine sites in all geographies, which is often enhanced by project-specific revenue, typically tied to mine extensions or new mine initiation in Canada and other international locations. This project-driven revenue tends to have less quarter-to-quarter consistency. Our current exposure skews towards US and Canadian markets, although we have a long established history beyond North America and invested last year to enhance our international commercial presence. Within each mine site, matters rugged, waterproof, crush and wear resistant cables are used to reliably bring electrical power to heavy equipment, from massive mobile shovels in surface mines to high-speed conveyors in underground environments. Our Our products serve as heavy-duty extension cords for some of the largest, most demanding machines in the world, and are critical to keeping production running. With rising demand for copper, precious metals, critical minerals, metallurgical coal, and other mined commodities, and slowly improving regulatory environments with new mine permitting in North America, we believe MATA stands to benefit from a multi-decade mining upcycle, which is one of the reasons we are investing to increase productive capacity and efficiency in AmarCable's U.S. manufacturing facility over the next 18 months. Our teams performed well in Q1, and our outlook continues to strengthen. The pace of operational efficiency improvement was consistent with our expectations, and strong commercial execution, particularly within Xerxes and the mining and utility sectors of our wire and cable businesses, helped partially offset typical early years seasonal slowness. As we move through the year, we expect adjusted EBITDA in Q2 will improve from Q1, supported by continued commercial success, further operational efficiency gains, and seasonally favorable patterns that typically make Q2 and Q3 our strongest quarters. These factors, plus a sizable international flexpipe order which was secured subsequent to quarter end, and a growing order book for our new 8-inch flexpipe products, support our favorable outlook for the second half of 2026. In combination, our full year 2026 adjusted EBITDA outlook has moved higher and is now expected to be similar to last year after adding back approximately 10 million dollars of 2025 MEO expense. In the longer term, we firmly believe that continued strong execution across internally controllable areas is the key to further expanding matters EBITDA margins. Ongoing operational efficiency optimization and both higher volumes and an increasingly favorable revenue mix from sustained commercial execution in higher margin end markets have the potential to propel the company towards our 20% EBITDA margin aspiration with limited help from external factors required to achieve this milestone over time. We maintain high conviction that our differentiated technologies, which support increased generation, movement, and use of electrical power, and the ongoing transition to composite materials in fuel and water management applications provide matter with substantial long-term growth opportunities. I'll now turn the call over to the operator and open it up for any questions you may have for myself, Tom, or Megan.

Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone. To remove yourself from the you may press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Arthur Nagourney of RBC. Your line is open, Arthur.

Hey, good morning. Just wanted to start with Section 232 tariffs. It doesn't seem like you guys have any direct exposure, but wondering if the tariff update puts you in a better competitive position in any way.

Yeah, good morning, Arthur. So the recent tariff announcements certainly have not introduced any new negative impacts for our organization, and it's one of the reasons that we've been a little more confident in our outlook for the full year. The most recent announcements around U.S. copper-related tariffs specifically indicated that there would be limited new products added to the tariff list going forward. So we have an elevated level of confidence that the products we make in Canada and sell into the U.S. that contain copper are likely to continue to be tariff-free. So in that respect, I think we were positively impacted by these announcements. Obviously, we've got to be nimble. I think we have all of the right contingency plans in place in case something were to shift. But at this point, I think we have lowered our concern levels.

Got it. That's helpful. Then I guess I just want to follow up on your Canadian business. Have you seen any order improvement from kind of some of the announcements coming from the government regarding, you know, Build Canada and things of that nature? Or is it kind of still too early to tell at this point?

For us, I'd say it's a little too early. we can certainly see that progress is being made so I would hope that we will start to see some impact on demand for our products in Canada at some point over the next several quarters but it's a little early for that demand to show up in our order book at the moment.

And then for your 2026 outlook specifically within the connection technology segment I think you called out some improvement in utility and data center markets. Just wondering if you're seeing meaningful increases in kind of those business lines at this point in time.

Yeah, I was very pleased with the progress that we've made in the early part of the year. I think within the segment, there's a few things that have moved modestly in a favorable direction since we last spoke. We've seen a little more activity in the Canadian mining sector than we had expected to see, and that looks like it's probably going to continue. We've seen some early, modest, but early wins from the investments that we put into international commercial efforts from mining. That's been a positive. We've continued to see a very positive progression of operational efficiency across the connection technology segment, particularly in the newer sites, so the DSG site in Ohio and the ShoreFlex site in Toronto. And then, as you mentioned, utility and data center, the ShoreFlex brand of our wire and cable business has been very focused on growing their presence in both Canadian and U.S. utility markets and made a very positive step forward in that direction during the first quarter. And data center demand is strong. As I mentioned before, We are thoughtful in how much data center wire and cable business we take because the margin profile is not quite as positive as we see from mining and oil field and certain other applications. So we take a balanced approach there, but the demand is certainly strong.

Got it. And then last question for me. I just wanted to touch on the facility transitions. It sounds like in your press release, you kind of talked about, you know, now moving past most of the challenges that you've encountered over the past couple of years. So just curious, you know, what the path forward is from here. And could you also provide an update on the tariff exposure at DSG Canusa with the Ohio site as well?

Yeah, so broadly speaking, I would say that all of the new operating facilities that we've put into service over the last two years are moving in a positive direction. Most of them are now at what I would describe as normalized levels of performance, positively contributing to the organization. The one that is still working its way to that point is the DSG facility in Fairfield, but it's moving in that direction very quickly and will reach that point later this year. So largely speaking, I'd say the distraction that comes from ramping up new facilities is behind us. And it's now about just constantly maturing those facilities and driving progressive improvement in overall efficiency at both new and old facilities, which we did very well over the course of Q1. The DSG business in North America does continue to import product made outside North America. So there is some exposure to tariffs, but with the IEPA element of those tariffs having been removed, the tariff burden is considerably lower. So I would say we are in a better position for DSG today than we were 90 days ago.

Great. And that's all for me. Thank you. You're welcome.

Thank you. Our next question comes from the line of Nathan Poe of National Bank Capital Markets. Your line is open, Nathan.

Good morning. Thanks for taking my question. So there's still a lot of volatility at the geopolitical and macro level, broadly speaking. So what gives you the confidence to step up to guidance by around 6%, even though we're not quite halfway through the year?

So you're certainly right. The world around us continues to be an unpredictable place. But as we've said for several quarters, this is an organization where we believe we can drive growth, margin expansion, free cash flow expansion through a lot of internal efforts. And that's what you saw in Q1. A lot of continued progress on operational efficiency across our production network, which met our expectations in Q1 and gives us confidence that we'll continue to hit those expectations as we move through the year. we are largely a north american focused organization so while the middle east situation certainly has an impact on input costs for certain raw materials it has not impacted our availability of raw materials and at this point it has not impacted our customers demand for our products so that we believe is favorable and as i mentioned earlier a number of tariff adjustments that have occurred over the last 90 days have generally been positive for the organization. So while we have to remain nimble, and we certainly have contingency plans in place ready to enact if something were to happen geopolitically, I think our continued focus on operational efficiency, technology development, and market share capture and key target markets primarily in North America will be the source of strength for this organization as we roll through 2026 and beyond, and that's what gives us the confidence to share our outlook with the market, which is a little bit more favorable today than it was 90 days ago.

Okay, I appreciate the color. And I also want to ask, on the NCIB comment, to what magnitude are you anticipating to use this given your current leverage levels?

Yeah, so I think I said on the last call that we would not expect to reintroduce it at the levels we did before. So you shouldn't expect 10 million a quarter. I would point you to kind of a mid-single-digit millions is probably where you would expect us to be. And we think that's entirely manageable within the debt levels.

Gotcha. Thank you. And switching gears to composites, what's the level of confidence you have in shipping that significant international order within the second half and what are the risk factors around cancellations or delays?

Very confident. You didn't ask but I suspect others are wondering so I'll share what I can here. This is an order for Flexpipe going into an international customer that we've worked for before. Revenue impact we would expect it'll be north of $20 million and we would expect all or substantially all of that revenue to be recognized in the second half of the year. I'm afraid I can't give any more specific details than that because we do need to preserve some competitive information. The customer has made a firm commitment. I have no concerns about the order being cancelled and delivery terms are such that we can recognize revenue upon completion of production. So I am not concerned about the shipping element. Obviously, the world is a bit of a crazy place, but the pathway from us to our customer is one that does not run through the straighter formulas. So in that respect, I think the risk is low.

Thank you very much. And just one last one. How does that order change the expected magnitude of revenue contribution for the 7- to 8-inch products in 2026? is how's the mix effectively?

It doesn't change our expectations for seven and eight-inch product revenue contribution. Obviously, it moves the overall revenue for the FlexFight business up. So on a percentage basis, seven and eight-inch revenue will be a smaller percentage than it would otherwise have been. But I can tell you, seven and eight-inch order book continues to fill. I expect first revenue around mid-year. So we continue to be very positive on the 7- and 8-inch product line, and our expectations for those contributions in 2026 haven't changed since the last update.

Thank you very much. I'll turn it over.

Thank you. Our next question comes from the line of Tim Monticello of APB Cormac Capital Markets. Please go ahead, Tim.

My question is really around that international project, but as a follow-up, Can you provide any more specifics on which region it's going to?

Not really. I can tell you it's the eastern hemisphere. But we do need to be a little thoughtful here about competitive dynamics.

Has, I guess, the bid pipeline internationally for flux pipe change? Because it's been a while since we've seen one of these international awards. Sorry, is this, I guess, symptomatic of a broader trend, or is this kind of a one-off?

No, I think this is a good indication. As I think I mentioned on the last call, we've certainly seen a higher level of inbounds inquiry coming from really most of the larger onshore oil field markets here in the first part of 26 than we had certainly at any point last year. and you probably have to go back to late 23, early 24 to find a level that's at this kind of magnitude. I think there's pent-up demand in the international market. We've seen customers be very careful with their spending. And oil prices where they are, I think there is a reasonable chance that it continues to move higher still. So I have a positive outlook for the overall international marketplace. I think large orders of this magnitude tend to be relatively infrequent. that the pace of small and mid-sized orders has picked up. And I think that's going to be a positive for us over the coming years. So all in all, I think we would generally view the oil field demand, both domestic and international, to have hit its low point in late 2025, early 2026. And we would expect a gradual upward trend in terms of demand, both domestically and internationally from this point forward, which is wonderful for FlexPipe. We've invested over the last couple of years to deliver new technologies, to expand the product portfolio in larger sizes, in higher temperatures, and, of course, to establish a far larger production capability both in Canada and the U.S. That means we are well-positioned to take full advantage as the market gradually rises. So we're excited for FlexPipe over the years that come.

Okay, and then the Xerxes business, can you talk a little bit about your backlog looking and I guess the outlook there relative to how you saw it at the beginning of the year?

I think the outlook for Xerxes is quite similar to how we saw it at the beginning of the year. We were expecting that demand for retail fuel, backup fuel, water, all of the tanks that we make would be at a high level, and it is. At the end of Q1, Xerxes' backlog set a new all-time record, and Xerxes' business performance in Q1 was the best Q1 on record for the company. So I think what I point out for Xerxes is we've been particularly pleased with the progress on operational efficiency in that business. As I've mentioned before, we have the ability to sell every tank we make. So this is a question of how many tanks can you make while maintaining quality and controlling cost? And the team have done a very good job over the last several quarters of moving in the right direction on all of those metrics. And I think they'll continue to do so. So we expect Xerxes to have a very strong year, and they've certainly started well.

How many tanks do you think you can make this year relative to last year? And what do you think that, I guess, the growth and capacity of that business is going to look like over the next couple of years? to put automation in some of these facilities.

Yeah, as you point out, automation is going to be an important element in the mid-term growth of this business. I think we have a multi-year period here where we can get somewhere on the order of a 10% improvement in tank production year over year. And I think that's a realistic expectation for 26 versus 25. So, as I've said before, we've invested in Xerxes over the last two and a half years, new facilities, new equipment. We're continuing to make more modest investments, particularly around automation. And I think all in all, Xerxes is well positioned to drive something on the order of a 10% growth rate year over year, this year, next year, and the years that follow. And we certainly do not see any anticipated slowing in demand for their products.

And then last one, just around margin progression, it sounds like you're making some nice progress in normalizing the efficiency levels within your new facilities and, you know, your revenue seems like it's getting better. So, like, where do you think your consolidated EBITDA margins are going to land by the end of the year?

Yeah, I mean, I think last time we talked about margins being roughly similar to 2025 as we exited 2025 at 12.2%. I think with the positive Q1 and the move up in our outlook, you'll see that marginally move up. But I think the guide to similar to prior year is still intact at this point. it's marginally higher than it was last time, but not materially yet. We're progressing down that pathway, as Mike has talked about, good operational efficiency moving in that direction, but I don't think you'll see a ton of that this year. Again, as we talked about last time, we will exit this year on a higher rate than we exited last year.

Yeah, I think when you look at the slope, the first half of 25 was a strong margin period. The second half of 25 was a little weaker. I think we bounced off the low point there and we're building. So first half of this year, I think we'll make good progress. Second half will be stronger than the first. And that means, as Tom said, on average, I think year over year, the margin is similar, but obviously we're working hard with all of the internal items we've discussed to try to drive it upwards.

And I think it will certainly progress upwards from this point all right thanks thank you our next question comes from the line of yuri link of canaccord genuity please go ahead yuri hey good morning everyone morning um i just want to make sure i understand the the guidance for the year um You were previously looking for, I think, flat Q1, which would have been about $31-$32 million of EBITDA on Q1. You beat that by about $9 million. You're taking your guidance up by about $10 million. So is it fair to assume that your expectations for the rest of the year are relatively unchanged? and how does the international FlexPipe border kind of play into all that?

So at the last call, we indicated a full year adjusted EBITDA expectation that was similar to or slightly below the reported number for 2025. And now we're suggesting that the full year will be similar to 2025 if you were to add back the MEO costs that we absorbed in 2025. So I think on a full year basis, our modified outlook is a little more than a $10 million improvement from where it's stood. And that improvement is a combination of Q1 being a little stronger than we thought it As I mentioned before, mining activity was a little higher than I thought it might be. And our progress to capture utility market share in the wiring cable space was also a little stronger than I had expected. You add to that the international order that we've mentioned and a little bit, I'd say, lower concern around tariff impacts to the wire and cable business, and that's what gets us to the current projection for the full year. obviously the oil field market hasn't yet shown major changes domestically if that starts to move in a positive upward direction and there may be some room for further upward revision for the year but it's too early for us to build that in so I think we're trying to be thoughtful balanced recognizing that we have a lot that we can do internally to drive positive progress The outside world sometimes gets in your way. But right now, I think let's call it maybe more like a 15 million improvement year over year, and the outlook isn't appropriate. Okay.

Yeah, that makes sense. Just turning to Xerxes, I mean, very positive commentary there in terms of backlog. and it sounds like you're trying to keep up with demand there. Can you just talk about the pricing environment and your ability and willingness to take price? Because it seems like an ideal environment to do that, but I'm not sure we're necessarily seeing that in the margins.

So any color would be helpful. yeah um we obviously have to balance what our customers can incorporate into their total project costs with what we think our product is worth i would tell you that we have consistently moved our pricing upwards because i i don't think we were as effective as we needed to be back in the, let's say, the 21, 22, 23 timeframe of getting prices where they should have been. So I think we're being thoughtful, but effective in driving prices to an appropriate level. And obviously, at the same time, working very hard to make our internal efficiencies a contributor to an improving margin in our business. And while we don't break out Xerxes specifically, and we won't, I can tell you that the margin profile for that business has moved upwards quite substantially over the last several quarters, primarily as a result of all of the operational efficiency gains that we've seen. So I have a positive outlook that the Xerxes business will get to and move beyond our overall target level of 20% EBITDA margin here over the course of the next year or so.

Very helpful. I'll turn it over.

Thank you. Once again, to ask a question, please press star one one on your telephone. Again, that's star one one on your telephone to ask a question. Our next question comes from the line of Ian Gillis of Stiefel.

Your line is open to Ian. morning everyone morning morning sorry to go back to margins but when you think about composite technologies for the quarter a bit of a loaded question here but if you were to portray the improvement do you think it was more xerxes related or flex pipe related in the quarter and i guess the follow-on from that is the new dallas flex pipe facility and the new xerxes facility in south carolina would they be generating margins consistent with the division or is there still some work to do there to bring them bring them up in line with the rest of the group yeah so so i'll

i'll start and then mike can add some color here in terms of mix between xerxes and flex pipe the positivity in the q1 margins was largely xerxes as mike has talked about very good operational performance, good production. We're very pleased with the direction of that business. On the new facilities, I would say Rockwall is very positively contributing to the organization and we're very pleased with that.

Similar comment on Blythewood, it's still ramping in terms of the levels of production we would like to see, but it's at a productive level and it's a good part of the portfolio it's no longer a drag as we would have talked about it last year yeah i think a fair statement i would describe both both of the new facilities as being positive contributors but still nowhere close to their ultimate potential which is one of the reasons that we have such an optimistic view of the growth potential within xerxes and also flexpipe um from a from a flex perspective, Q1 is typically a slower quarter, and it was. While the team did very well, and I think the margin profile in that business was as good as we could have hoped for this seasonal quarter, certainly, I think Q1 is likely to be the low point for Flexpipe from above the revenue and EBITDA contribution in the year.

So to have a strong Q1 in the segment with Flexpipe not necessarily contributing anything over and above what we would originally have expected is a good I think position to be in and onwards and upwards from here that's helpful maybe switching gears to the amber cable at the time of acquisition I recall energy exposure being about 25% of revenue for that business and it was primarily focused on maintenance but I'm just wondering in the I guess just over a year that you've had the business do you think there's anything or any way you can sell any of that product to benefit for what may be increasing activity in the energy sector over the next 12 months?

So the proportion of Amra Cable's revenue that's tied to traditional oil field activity in recent quarters has been considerably lower than that percentage you just noted. The business had some fairly large orders that were oil field oriented in the first half of 2025. It's been a little bit less busy in that front since then and the gap has been plugged with rising sales into data centers and more recently here rising demand from mining which has all been very positive. I think that our sales of products that get consumed by land, frack fleets, land rigs, will certainly move up as activity in that space rises. And where we see particularly large opportunities for that business tends to be new construction of LNG export facilities, of offshore production platforms, or new build land rigs, which in North America tends to be in the Middle East. So I do think that there's some project opportunities that might be interesting as well over the course of the next couple of years. But those larger projects, particularly offshore projects, tend to have at least a two year planning cycle associated with them. So we've said before, and I'll say it again, I think oil field related revenue in the average cable business in 2026 will be lower than it was in 2025, simply because the larger offshore projects are clearly laid out and there will be fewer of them this year than there were last year. What I do think is an elevated oil price, an elevated futures curve, and a growing recognition around the world that there is more instability in supply of oil than people realized is likely to spur incremental investment over the course of the coming years. And I think Amra Cable is very well positioned to take advantage of that. The key is that we can increase their productive capacity. As you probably remember, when we acquired the business, we knew that we were acquiring a business that hadn't had a lot of capital injected over the course of the decade prior. We're injecting capital now, and we'll do so over the course of the next couple of years to make sure that AmarCable is positioned to take full advantage of these growth opportunities.

That's very helpful. I'll turn the call back over. Thank you for your time.

Thank you. I would now like to turn the conference back to Mike Reeves for closing remarks, sir.

Thank you all for your interest in matter. We were delighted with our Q1 performance, excited by the opportunities ahead of us in 2026, and we'll look forward to discussing Q2 performance at the next call with everybody. Have a great day.

Thank you for participating. You may now disconnect. This concludes today's conference call.