Thank you, operator. Hello, and good morning, everyone.

This is Jeff Schellenberg. I want to welcome everyone to our Q2 2026 earnings conference call.

Q2 2026 marked an important quarter for Decisive as some significant initiatives were completed in support of both of both organic growth and growth by acquisition. These completed initiatives included an on-strategy acquisition in our highest-returning industry vertical, an $8 million private placement with a strategic investor, a $25 million upsize in our credit facility, and a 6% increase in quarterly sales versus Q2 2025, driven by both organic growth and growth by acquisition.

BeFire, which goes to market in Europe under the well-known historic brands Jidé and Bodart & Gonay, was acquired on June 3rd, 2026. BeFire designs and manufactures a broad range of European EcoDesign-compliant wood-burning stoves, fireplaces, and fireplace inserts in a vertically integrated facility in Belgium.

This acquisition marked a major milestone for Decisive as our first transaction in Europe, a strategically important move as it helps diversify Decisive's revenue streams into non-North American markets where trade uncertainty has created volatility. Further, the acquisition of BeFire complements the company's other hearth businesses, Blaze King and ACR, as each business within the vertical has unique brands representing products that access a varied range of market segments within their specific geographic markets.

The opportunities to introduce the different brands, product designs, and capabilities within those brands across the geographies we operate in is a significant driver of future organic growth potential for these businesses and Decisive. The existing leader who built BeFire's group of businesses, Jean-Philippe Cuisinier, is continuing to lead this business over the next three years.

Jean-Philippe's ongoing leadership, combined with the existing expertise we already have in this segment, will help minimize post-transaction disruption, positioning us to immediately focus on pursuing cross-selling, geographic expansion, and new product development opportunities among the three hearth businesses, including a pellet stove product in development at BeFire. Further, our existing hearth industry leaders, Alan Murphy with Blaze King and Jason Searle with ACR, together with Chris Goodchild, our COO, have been working closely with Jean-Philippe to build an integration plan for this acquisition, including with respect to cross-selling opportunities for existing and new products each business produces within the network of dealers we have relationships with in the UK, Belgium, France, and North America.

The first cross-selling opportunities to be pursued are in the European and UK markets, given the similar regulatory environments and geographic proximity, and we look forward to updating our investors as initiatives in these areas progress. Another significant initiative completed in Q2 2026 was the private placement we completed private placement we completed with L6 in early April.

Adding another anchor institutional investor with a long-term approach to investing, including holding an investor rights agreement that allows them to maintain their ownership interest in Decisive in the event of of the completion of future capital raises, meant that we were able to complete the BeFire acquisition while maintaining significant balance sheet strength, with our post-acquisition leverage ratio sitting at 3 times. Further, following the announcement of the BeFire acquisition, we announced a $25 million upsizing of our credit facility with our banking syndicate, which provides us or which provided us with $47.5 million in in available capacity entering the second half of the year that we can use to fund both organic growth opportunities and support our M&A program.

Doing a material acquisition while adding a new anchor investor and upsizing our credit facility are all foundational changes that will provide support for our growth journey as an organization in the future. We saw early returns from the acquisitions we've completed in the last four quarters in Q2 2026 as overall sales increased 6% in the quarter to $38.5 million compared to $36.3 million in Q2 2025.

BeFire, along with Venger, which was added to the merchandising vertical in August 2025, contributed to this revenue growth. These contributions, combined with organic growth in hearth, agriculture, and merchandising product sales, and stable wear parts sales, more than offset the oil and gas and commercial vehicle customer-specific softness that has been discussed over the past year.

I'll provide a little more detail on how each business vertical performed in the quarter relative to Q2 2025. The hearth businesses realized a 48% increase in sales compared to Q2 2025, with 60% of that increase a result of organic sales growth from Blaze King and ACR, and the remainder generated by BeFire in its first month post-acquisition.

The agriculture businesses, specifically Slimline's orchard and vineyard sprayer product and IHT, generated a 24% increase in sales relative to Q2 2025, based on continuing strong order activity at IHT as well as increases in sprayer sales for Slimline. Merchandising product sales increased by 72% in the quarter compared to Q2 2025, with about a quarter of the increase attributable to organic growth in sales, while Venger contributed to the other half of the growth in this vertical, both on the back of ramped-up lead generation activity over the last couple months.

Our group of wear parts businesses, Unicast, Pro-Cor, and Techbelt, generated consistent sales relative to Q2 2025 as demand for the wear parts these businesses produce remained resilient. Lastly, and as we mentioned earlier, the industrial products businesses, which include Northside, Hawk, Capital I, and Slimline's evaporators, continued to be impacted by demand declines from certain commercial vehicle and oil and gas customers that began in the second half of 2025, although the impact has been less than originally expected.

Having other business mitigate the impact of these declines the way they have reinforces the benefits of the diversified nature of the portfolio of businesses we own and the differentiated products these businesses produce. Over the last few quarters, we've been making investments in leadership succession, sales teams, facility capacity, and organizational capability enhancements across our operating companies.

Even with the increase in operating costs driven by these investments, the overall increase in sales translated to a 1% increase in adjusted EBITDA compared to Q2 2025. At the same time, we have made moves that should result in reduced operating costs in future periods, like the move of Pro-Cor into Northside and the enhanced cooperation between Capital I and Hawk.

We are confident these deliberate decisions will strengthen the quality, resilience, and earnings power of our business delivering long-term benefit as we move forward. In this quarter, we generated free cash flow less maintenance capex of $2.6 million, a 7% decrease relative to Q2 2025, due primarily to current income tax and operating premise lease payment increases.

As a result, and with the increased share count from the private placement and only one month of contribution from the BeFire acquisition, the trailing 12-month dividend payout ratio increased to 83% at the end of Q2 2026. As cash flow contributions from BeFire ramp up in the coming quarters, we expect this ratio to improve.

In terms of our outlook for the remainder of 2026, we expect to benefit from the investments we are making in new products, sales capabilities, facility capacity, and productivity over the last number of quarters. Higher energy prices and uncertainty tend to drive strength in our hearth businesses, which provide a source of alternative low-cost secure energy, and where we have new products poised to more meaningfully penetrate the market.

We are still awaiting EPA approval for the new North American hearth products that launched in Canada earlier this year. When received, these should provide meaningful tailwinds to Blaze King.

However, timing of approvals remains uncertain as a result of ongoing organizational changes at the EPA. Overall, Q3 is off to a good start with consolidated backlogs and orders in July 2026 ahead of July 2025, and we are especially encouraged by the quoting and order activity within our agriculture and merchandising businesses.

However, we continue to face some ongoing certainty uncertainty, especially in the near term, including the threat of new tariffs, the impact of CUSMA renegotiations, and global upheaval in different regions, resulting in some specific challenges in a few of our subsidiaries. For example, we are seeing softer order levels and backlog in our cast steel wear parts as we enter the quarter, which has a longer sales cycle due to the international supply chain we work in.

As a result, discipline in cost control and efficiency will be critical in the upcoming quarter. We also continue to attract numerous acquisition opportunities as our buy, build, and hold model continues to resonate with exiting legacy-minded business owners who value our long-term approach.

With that, I now open up the call for questions.

Hello, everyone. First one from me.

You've been executing hiring, adding sales resources. It adds new expenses to support forward growth.

A temporary margin headwind, all else equal. Are you now at the tail end of that investment phase, and we should now expect to see some favorable cost leverage going forward, or is there more investment needed for capacity or sales resources?

Hey Kyle. I think that the real ramp-up is probably tailing off.

I think we are still looking to invest in certain businesses and for sales capacity improvement, just because we see great opportunity there, but I think that the real ramp-up is probably behind us. Like Jeff mentioned, we are working on the back end.

These are small businesses that we buy that have small teams and really, as we turn into a growth phase for these businesses post-acquisition, we do need to add capability throughout their organization. We are making moves like we have with Pro-Cor moving into a joint facility with Northside, combining or increasing cooperation with Capital I and Hawk that are starting to yield results here that will kind of provide an offset of some of those increases as well.

Sorry, Kyle, go ahead. Go ahead.

I was going to layer onto that. We added sales capabilities and personnel broadly across the group.

It's not just a single organization, it's kind of across the group. I think, with the added personnel, I think what we'll be seeing more so is performance management.

At this stage we've added the capabilities. If they're delivering results, in the sales function, that's a critical element.

There might be some turnover, but that would be a redeployment of existing investment more so than necessarily major new additional investment. I think that's a point I would make on that as well.

Got it. Okay.

Then, second one for me. Just on your hearth platform, it was very impressive organic growth.

I think when we back out the M&A, it was high 20% range organic growth. What do you attribute that to?

Is it a demand surge on the back of the inflationary energy price environment that's typically a tailwind for this platform, or are you seeing maybe some early payoffs from your M&A cross-sell synergies and new product launches? Just give us your thoughts on that growth attribution for hearth.

I think what we saw, we had a really strong take-up in our early buy program this year. We have a program, just given the seasonality of that business, where we go to market with an incentive program designed to capture order activity that helps support manufacturing activity throughout what would traditionally be slower sales periods.

I think the performance in that, especially in Canada, actually, for the North American business, was really strong. That I think drove some of that activity.

I think we saw better performance at ACR as well. Is it directly a result of war and energy prices?

It's hard to draw a straight line between the two, but we've done the correlation math around that. Higher energy prices and that type of uncertainty drives stronger revenue in that.

It has to be an element of the contribution we saw there, for sure.

Got it. I'll pass the line for now.

Thank you. Thanks, Kyle.

Thanks, Kyle.

Good morning, and thank you for the questions. Maybe first on BeFire and the integration.

Understanding you just closed it, you noted that the first priority is cross-selling in Europe and in the UK. I'm wondering if you can elaborate on the other growth opportunities in front of you and rank order them in terms of timing.

Can they be pursued more or less in parallel with the initial cross-selling effort, or do you need to do them sequentially just to manage resources?

Yes, it's Chris Goodchild speaking here. I'll take this question.

I think it's a matter of prioritization. Obviously, we want to focus on levers that can have some immediate near-term impact.

When you have a regulated product like we do, being able to cross-sell within regions that share those regulations helps us accelerate those synergies. We're primarily focused on introducing products of ACR into Belgium and France markets that BeFire represent, and inversely, some of the BeFire products into the UK.

In parallel, we are working on a product strategy and go-to-market strategy that would bring BeFire product over into the North American market, but it will be a longer period of time. There is some product redesign that's required and revalidation and testing before we would be able to introduce that.

That's really a function of a very different regulatory environment, including the test measures are totally different between North America and Europe, and that's what drives the required redesign.

Got it. Thanks for that color.

That's great. Maybe just a question just on the M&A strategy.

BeFire is the largest to date, I believe. To what extent do the integration needs effectively sideline you perhaps from meaningfully sized acquisitions in the near term?

Should we think about your bias perhaps being towards smaller tuck-ins, or could similar-sized targets still be pursued at this point?

Yeah. No, Russell, it's a great question.

I think what I would say about BeFire is that acquisition is into the industry with our strongest performance as in our portfolio from a returns perspective. We have good teams in place around that who have specific industry expertise, product expertise, and knowledge that are really instrumental in driving the execution around that, and regulatory, I should say, very very deep regulatory knowledge and expertise in those sectors as well.

They're very hands-on with respect to the inner workings of deploying the resources to set ourselves up to execute on these cross-selling opportunities across these different markets. That's huge.

We're supporting them and engaged in that, but that does leave us with some additional capacity to take on more acquisitions. I would say the acquisitions of the size of BeFire more materially move the needle.

It takes time for that to ramp into our payout ratio as an example, for sure. I think the benefit over the medium term and then long term with respect to those larger-sized acquisitions is very meaningful.

We continue to look at those sized opportunities. Then within the verticals, some of the smaller opportunities are more easily to generate through I'll call it non-competitive deal processes as well.

As our business leaders in the different spaces traffic in the market and talk to competitors and suppliers and all those types of things, that's often where the source of non-broker-led processes comes from, but those tend to be a little bit smaller as well. Those can be really a good opportunity.

We'll continue to look at them as well. I think what we're looking at is a mix of both types of deals that you described, but really all focused within the five industry verticals that we're operating in.

Got it. Maybe if I can sneak in one more just on the five verticals.

You've been pretty consistent in talking to that. I'm wondering how much variation is there in terms of valuation expectations from target to target within each vertical?

Is one vertical categorically more expensive than the others? Any color there would be great.

Thank you.

I think in recent activity, what we're seeing is probably higher valuation expectations in the wear parts vertical, which you could develop the thesis around why that is pretty quickly. You have these recurring streams of revenue, typically pretty low-capex businesses.

We're seeing some stronger and more competitive valuation levels in that space that we're operating in. I think if you're looking at lumpier, more project-type of manufacturing businesses, businesses producing products that are deployed in more lumpy kind of larger contract sizes, you're seeing some softness in multiples, right?

I think, yeah, it definitely does differ by vertical that we're seeing for sure across the different deals we're looking at.

That's great color. I'll hop back in the queue.

Thank you.

Thanks, Russell.

Oh yeah, good morning, guys. Thanks for the time.

Jeff, I was just wondering if you could just maybe dig into or provide a little additional color on some of that pressure you were seeing in the wear parts in the extended supply chain, and where that's sort of deriving from. Just curious to get a sense for how long that might last and where the ultimate source of the pressure is.

I think just with some of the uncertainty as the market was waiting to see what would happen in July with CUSMA, there was definitely some pullback in complete or actual order activity. There was a lot of quoting activity, but customers were a little bit reticent to pull the trigger on the order.

We've seen those orders start to come through now, and Jeff mentioned that we do have a higher backlog at this point this year than we did last year. What we're expecting is a bit of softness in Q3 for that cast steel wear parts business, but are seeing some pretty good activity levels into Q4 just based on the long tail on those orders.

That's helpful. Just on the flip side, ag was called out as sort of one of the stronger categories.

I know IHT's been strong for a fair bit of time now, but just curious if it extends beyond that into the other parts of the platform as well.

I think we saw fairly material ramp-up in sprayer sales in the quarter here, and that's on the back of some extended work by the team at Slimline to really expand and broaden our dealer relationship network. We now have reestablished a presence in Georgia that had gone pretty quiet for a period of time, as well as in the California market.

I think we definitely strengthened our positioning in the California market, which has always been a source of weakness, which is the largest orchard and vineyard market in North America and the world. A huge market opportunity in that.

There's very focused efforts on kind of improving our positioning in that market, and we've seen some early wins there. That's really what's been driving.

I would say the Pacific Northwest market has continued to be a real challenge, which has been historically the biggest driver of activity for Slimline and the sprayer business. That's on the back of some oversupply in the apple markets, some regulatory and trade-related issues in the apple market as well, and the slowdown, I would say, in deployment of some of the government support resources in BC that farmers have traditionally used to buy sprayer products in this market.

A few factors that impact that business, but really pleased with the progress in some of these markets that are really large orchard and vineyard markets, especially California. That's really important there.

That's very helpful. Just one last one, if I may, is just around the energy business.

I know there's been some challenges there. Is it the absolute pricing backdrop, the volatility in the pricing backdrop, that's driving things?

Is it a product shift that's happening? Energy prices have been elevated recently, and I know there's been a lot of volatility out there, but I'm just trying to get a sense for where the source of weakness is coming from in the energy spot patch relative to your product set.

I think with that, the market we operate in is third-party manufactured machine product work. I would say there's overcapacity in that market, which drives a high level of competitiveness.

Really it's just kind of about spindle time, that availability of that and what's the cost of that. More capital-intensive space are bidding at rates to keep their machines turning and cash flow supporting the purchase of the assets that they've purchased, right?

The competitive nature of that market is a major challenge. I think that's part of the vision around having Capital I and Hawk work more closely together is that we do have a really highly differentiated, high gross margin product that faces less of that kind of competitive threat just from additional capacity with a proprietary product that drives some of our efforts and having those businesses work more closely together.

I think that's a big part of it is kind of the competitiveness and oversupply of the type of service that we offer. Then, I think there's customer-specific stuff, right?

Having a large group of customers, it really depends on that demand or take-up for their product that drives some of the fluctuation in demand, and we've seen some softness, especially from some of Hawk's largest customers who have really pulled back in their activity levels. That's the other— Or moved manufacturing, like Jeff said.

Or moved to some of the other competitors. Combination of all those factors is what's driven some of the outcomes in that space, in spite of what you would think with the backdrop of commodity prices would drive higher levels of activity.

That's actually very helpful. Thanks, guys.

Yeah.

Thanks.

Good afternoon, guys.

Hey, Yuri. Hey, Yuri.

Hi.

Just as I think about trying to model the back half of the year, you had a real strong fourth quarter in the component manufacturing segment. I think there was some belting and mining orders in there.

How do we think about the revenue comps in component manufacturing in the back half of the year?

There definitely was the impact of that large order that we highlighted in Q4, and then that carried into Q1 that was with the cast steel wear parts business that drove some really strong activity in component manufacturing. I think overall for the quarter, we're seeing improved finished product activity that should offset a lot of that.

Like I mentioned, Unicast is seeing strong order flow, not a huge order like we saw with that particular order, but is seeing strong order flow for Q4 as well. Overall, I think we should be pretty comparable to what we saw last year, if not better.

I think the other thing I would mention with respect to the industrial and even energy type of work that we were just talking about is we're also coming through a period of really challenging comps. The first half of that year, for those products, was really, really strong, right?

As we move into a softer comparative period, relative results should see some strengthening around that just given that factor, also. Yeah.

Maybe the distribution between Q3 and Q4 won't be as pronounced as it was last year? Would that be a fair statement, while overall being kind of close to last year's back half performance?

It'll depend on timing of some of those approvals we talked about with EPA as well.

Yeah.

As to if we can get those into Q3, that allows those products to be sold kind of right as heating season starts. Those sales kind of start in August when we talk about heating season and wrap up through the fourth quarter.

A lot of that will depend on the timing of those. Yeah.

I think if energy prices continue to remain as high as they are, especially in Europe, it's been a very hot summer in Europe. It's not a prime heating appliance buying season in that marketplace, but the continued strength of energy prices in that market could be a real tailwind for that business as well.

If those prices remain in place, which signs seem to indicate they might, I think that's very supportive of something that's a bit hard to forecast right now, but traditionally has driven strong results out of those businesses. Now with our European exposure, it kind of amplifies our exposure to that as well.

Okay. Some of the efforts and expenses that you've noted about sales force and product development and stuff like that, how much of that is targeted to the industrial segments that have been struggling a bit and trying to reposition those into different markets, and is a lot of it tied to that, or is this more tied to, say, the finished products segment?

I would say it's kind of across the board. There's been some additions that have been a result of some turnover and succession planning.

There's some additions that have been a result of looking to really enhance capability and bring in industry expertise. I would see more of that in the finished goods area, specifically.

We've also been focused on adding resources in some of our component manufacturing businesses to ramp up, in pursuit of new contract work and things of that nature. It is very much across the board.

I'm talking of the 12 operating businesses, we've added sales personnel in eight of them, right? Kind of across-the-board effort, very focused on driving sales growth.

You see some of the decently strong, kind of top-three quarter ever in terms of our sales production in what typically is a softer seasonal quarter. I think we're definitely seeing some results out of that, which as they ramp up and stabilize and kind of get their feet underneath of them, we hope to see even more benefit from that.

Okay. Last one for Rick, just a clarification question.

The 3 times leverage ratio that you're quoting in the MD&A, that's not a pro forma number, right? If I pro forma BeFire, I'm getting closer to 2.7, right?

The leverage would include TTM pro forma BeFire. The payout ratio does not, but the leverage ratio does.

Okay. Maybe we'll take that one offline.

I'm not getting that number,

but— Yep.

Okay. Thanks, guys.

Thanks, Yuri.

Thanks, Yuri.

Hello, again. A couple of your platforms have been seeing revenue declines the last four quarters, Hawk and Northside.

You already talked about Hawk, but on Northside, I think you're now through four quarters of declines that were originally customer-specific for Northside. Is that headwind now all fully lapped, and Northside should be back to stable footing in the go-forward quarters or maybe even into growth mode?

Give us some color on that, please.

The lapping is a really good point, Kyle. Northside had a very strong first two quarters of 2025 on the back of kind of ongoing strong demand in the heavy commercial vehicle space that softened pretty significantly in Q3 of last year.

Yes, we're in a period where we're lapping that. I think this is where this sector seems to be where we're seeing a lot of impact from trade uncertainty with respect to demand for the vehicles, which obviously impacts the demand for the products and components that we supply for that space.

It's customer-specific too. We're seeing some stronger demand from certain of our clients in that space, we're seeing some softer demand than we expected from certain clients in that space.

I think the lapping point is key, but I also don't think that we're into significant growth mode at this point in time, just because of some of those customer-specific factors related to economic volatility and uncertainty that's giving people pause around investing in equipment. I think that's something we're seeing there.

What I would also say is this period actually has coincided with a lot of operational activity there. We've consolidated our facility over this period of time.

We're now moved in to our new consolidated facility, which is important. We were operating out of two separate spaces, there's going to be definitely cost benefit associated with that that we're going to be able to start seeing.

In addition, we are just now about to finalize—the move hasn't quite been completed yet, but we're in the throes of combining the Pro-Cor facility into the Northside facility, which will also, I think, really prove out the ability to enhance the efficiency of that manufacturing process, share resources as demand shifts between different parts of the plant there, and deploy some of the really strong operational expertise the Northside team has in operating processes to enhance efficiency there, while allowing the team there to really focus on driving sales basically, rather than just kind of having to manage an overall stand-alone shop. I think that's going to be really beneficial, kind of moving forward, for those two combined businesses.

Actually, we saw really a nice quarter from Pro-Cor as well, with some decent profitability coming out of their performance in Q2, too. I think that's important, and I think this will increase their capacity as we make this move to produce more, also.

I think that would hopefully cover some of the points in your question there, Kyle.

I would just add too, Kyle, Northside has a really strong operational team, and the way they onboarded their new customer in 2025 has kind of opened the eyes of other manufacturers as well. They are pursuing work with other OEMs.

It just takes time to land the contracts with these OEMs because they have very integrated supply chains, but there is ongoing work to add more customers into that space because of the expertise that we've built there.

All understood. Appreciate the color.

That's it for me.

No problem, Kyle.

thanks, guys. Just a quick one.

I just wanted to go back to the M&A pipeline, Jeff. You've made a few comments earlier.

Do you feel like there's an urgency to push ahead with deals in the current backdrop? My reference is just, of course, the USMCA and all the different volatility that's going on.

Do you feel like it's still a good environment to push forward under this current framework, or do you think it's better to wait into next year? How do you feel about the current opportunities and how quickly you can pull the trigger?

Thanks.

Yeah. I think I think if you're looking to add additional cross-border exposure, it's a challenged time, right?

Like how do you know what you're do you know what the environment looks like that you're buying into? I I think for, what we would look at, yeah, I kind of I've mentioned it before, and I'll kind of reiterate the point here.

I think, where we would be focused on buying is is, the Canadian in a in a Canadian domestic type of supply environment, where we're where we're doing work within in the country. I think there's good opportunities there at still attractive value levels.

I think opportunities in the US in our spaces where we can actually add manufacturing capacity or or customer customer relationships in the US is important for us as well, because that can help maybe, offset the the risk of, tariffs for us if if we're buying a US-based supplier. Then, non-Europe non- non-US, non-North American opportunities, call it like like like a BeFire, that that increases our exposure outside of this marketplace.

Those would be, that if I think about kind of the the the things that we're working on from an M&A perspective, they carry those types of characteristics, which, to me, means, we should press forward, because I think it it it reduces our or it doesn't introduce additional exposure to trade uncertainty, which which, I think, at this point in time, yeah, it it causes a bit of, concern or if you if you were going to kind of step into something that had significant cross-border revenue profile.

That's actually super helpful. Appreciate it.

Yeah.

Yes, thank you all for attending our Q2 2026 conference call. We continue to believe that Decisive's business model, grounded in the acquisition of profitable, low-capital-intensity manufacturing businesses who produce low-obsolescence products distributed through channels that support recurring revenue at disciplined valuation levels, supports long-term stewardship and positions the company well for sustained growth and yield performance.

We look forward to updating you on our progress continuing into the next quarter and beyond. Thank you very much.