Dexterra Group Inc.

Bob German – President and CEO Scott Matson – VP, Finance and CFO Rod Graham – SVP, Corporate Development and Planning

Dana Benner – AltaCorp Capital Greg Coleman – National Bank Financial Kevin Lo – FirstEnergy Steve Kammermayer – Clarus Securities Greg McLeish – GMP Securities Jeff Fetterly – Peters & Company Andrew Bradford – Raymond James

Okay, thank you everyone for joining us this morning. With us today, as usual, Scott Matson, our VP Finance and CFO and we’re also joined today by Rod Graham, our Senior VP of Corporate Development and Planning.

We’ll start up with legalities and then we’ll get into the comments momentarily.

Okay. So, before we begin, I just like to remind everyone that this call may include certain statements or disclosures relating to Horizon that are based on the expectations of management as well as assumptions made by and information currently available to Horizon which may constitute forward-looking information under applicable securities laws.

All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Horizon anticipates or expects may or will occur in the future should be considered forward-looking information. We caution listeners that many factors could cause the performance or achievements of Horizon to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward looking statements.

Thanks, Scott. So, I’ll open up with some comments.

We’ll have Scott review the numbers in a little more detail and then we’ll have Rod speak to things we’re working on to into the future and what some of those prospects hold. So, following up on that legal disclaimer, I’ll speak right to the point in terms of our quarter.

Certainly relative to Q2, we improved across all fronts in terms of revenue growth and margin growth. Although, I got the numbers and volume of improvements incorrect as everyone has seen today or last night.

On the camp and catering business, our large camp business just came in pretty much as expected. However, our rig camp business was substantially below what we had anticipated in terms of utilization.

Overall, our margin in the camp and catering business had improved from 21% in Q2 up to north of 26% in Q3. On the manufacturing side of things, again, up substantially from Q2, both revenue and margin wise.

But in terms of the absolute value of the revenue increase, certainly below what we had anticipated. We’re slower at getting started on the large camp contract that we’re working on now due to finalization of customer designs.

And we wanted to get that finished up before we got into it in earnest. That slower ramp up delay somewhat getting it to our peak efficiencies, so we won’t get there until little bit later down the road.

As well, on that project, we can anticipate our margins are going to be squeezed a little bit as we went through the final designs of turnover costing and on both materials and labor have gone up. In the matting business, again the rentals etcetera was pretty much on track.

Revenue certainly did increase a little bit as margins did as well. Where we just fall short was on the service side of the business that we anticipate much more on that front.

So, with that I will turn it over to Scott to talk a little bit more about the numbers in the quarter. I will come back and speak a little bit more to the fourth quarter and little bit in terms of capital spending in ‘15.

Scott?

All right, thanks Bob. So, I’ll walk through kind of various points of our business on maintenance side quarter-over-quarter but also a little bit relative to what our expectations for the quarter were which were reflected in our previous discussions.

So, overall revenue is up about 27%, $120 million versus $96 million with a nice lift in EBITDA, about $26 million versus $15.5 million, and percentage wise that’s about 21% of revenue versus 16% in Q2, about $0.07 of earnings per share versus $0.01 in Q2. Capital spending wise, net of proceeds was about $17 million in the quarter bringing our year-to-date total to about $84 million, the majority of our capital spending for the year.

I’m talking detail in terms of little bit of the cap rental and catering operations itself, you’ll notice a bit of an update on the presentation just breaking the components out a little bit, so close a bit better. From the large camp perspective, revenues were up slightly driven by a similar utilization on a bit larger fleet, mainly the addition of 400-bed operator’s camp that we added during the quarter.

We’ve added a new KPI revenue per average available bed basically a factor of both utilization and price which somewhat normalizes for how we account for bed rental fees versus our large camps and should make it little bit easier to predict that number going forward. Debt revenue per average available bed is down slightly quarter-over-quarter but our revenues did pick up slightly as the average bed count increased above 5%.

So, certainly our Q3 results for large camps were in-line generally with our expectations but for Q4 we expect those numbers to be a little bit stronger as those 400 beds camp is running for the full quarter. And occupancy at some of our larger facilities picks up as we move into the winter.

From a drill camp perspective, it’s probably the two certainly better quarter-over-quarter, came out of breakup. We attend both on average about 10 camps working during the quarter versus an average of about four during Q2.

And this is one part of the business that we’re a little bit disappointed, and we expect it to have more like 15 to 20 camps running on average during the quarter, and that was really based on the indications we were getting from customers as we came into Q3 and some of that work just did not come true for us. For Q4, we expect the activity level to be somewhat similar to Q3, maybe a little bit stronger as we move into the winter drilling season.

From a catering only perspective where we do catering and housekeeping services in someone else’s camps, revenue levels were up a little bit quarter over quarter really just driven by the activity levels, again depending on an exit of camps that are working in the quarter over the jobs that we’re working on in the quarter. And from a service revenue perspective which is the transportation, installation and start-up of camps for customers that number has come down a little bit quarter-over-quarter.

And again it really depends on which projects are being worked on or underway in a given quarter. So, from an overall perspective, camp rental and catering operations, revenues did pick up slightly, margins were up slightly.

But we were a little bit disappointed in terms of where we stood in the drill-camp business. From a manufacturing perspective, Bob already touched on this as well.

That revenue has really increased quarter-over-quarter, due to the amount of hours that we dedicated towards our projects. And it was really focused on closing out a few smaller projects at the beginning of the quarter and then starting on the 1,250-bed project that we announced earlier this year as we exited the quarter.

And I said, performance was better in the quarter but we certainly anticipated this number to be a bit higher as that project was slated to begin pretty early in the quarter but there was customer and final design sign-offs really delayed us until kind of mid-towards the end of August before we got things rolling into class. And that slower ramp up as we pushed the first few units through the plants, certainly affected us.

That will push some of this project revenue into the first half of ‘15 out of ‘14, and so as Bob mentioned those design changes will put some pressure at our margins from that project. From a re-locatable structures business, office units, labs, mine drives, etcetera, that revenue stream was relatively stable a little bit up, as our utilization improved quarter-over-quarter.

It’s really focused on the BC market today, but we’ve built some equipment into that business and anticipate moving some of that equipment into the Alberta market driving better margins and better returns there. Focusing on the matting business, so, again I’ll talk about the various parts of that business as we go through.

From a mat rentals perspective, revenues were relatively flat quarter-over-quarter similar activity levels and pricing, holding in fairly well. Utilization of our owned mat rental fleet was a bit lower than we were expecting, as we continue to build from mats in anticipation of releasing some more of our third party mat rentals.

But as you know that takes a little bit of time and we weren’t quite as quick as we thought we were going to be. To give you a perspective today, the number of owned mats in our rental fleet is about 22,000.

And the mats that are on rents are own mats on rent today out of that 20,000 and third party mats on rent today is about 1,900 so that percentage has come down as we moved into the fourth quarter. From a sales perspective, our mat sales were down a bit quarter-over-quarter really driven by the number of mats sold which offset a bit of a lift in the revenue per mat as we sold more new mats this quarter versus used mats, but it’s really volume driven.

This part of our business has really been impacted by bit of an increased cost structure, particularly as the hardwood we sourced from the U.S. has become a little bit more difficult to get, with the emerging market in the U.S.

looks stronger and the moving exchange rate over the last year. So and that certainly impacted and squeezed our margins here a bit.

On the service side, a nice lift quarter-over-quarter, really from the transportation installation, mat management and all the area services we performed for our customers. If we have mats under management for customers it’s about 125,000 or so mats.

So, overall we saw a nice lift from matting but we were expecting to see things stronger across the board here. Sales were little sluggish and the margins were all compressed, rentals were solid but we are looking for better utilization and the service line certain was strong than the top-line but the margins there were skinny even than we were expecting.

From a balance sheet perspective, outstanding debt balance has increased since year-end certainly our trailing debt EBITDA ratio at about 1.8 times. This is certainly the highest we’ve been in our history and something more pretty keenly aware of.

We do expect this to come back in line as we move through the end of 2014 and then to 2015. And we’ve got a couple of stronger quarters ahead of us that will replace a couple of softer ones from last year and early this year.

And a good chunk of our expected 2014 capital program is already complete. Our outstanding bank balances, bank debt balances today are about $150 million on our available credit facilities of $175 million, so we have some reasonable flexibility there in terms of where our financial position looks.

That’s a bit of a nutshell in terms of the specific parts of the business. And I’ll pass back to Bob, to follow-up with some comments.

Thank you, Scott. I’ll turn it over to Rod now to speak a little bit more in terms of things that we’re working on taking it further – a little bit further down the road.

Rod has been with us now about nine months, he’s been a great addition to the team in terms of broadening out our perspective and our pursuit of different opportunities. So, Rod, I’ll turn it over to you and then once Rod’s done, I’ll come back and speak a little bit to Q4, and a little bit in terms of capital spending in 2015.

Thank you, Bob. As Scott and Bob alluded to camps and catering orders are very much in line with kind of our expectations.

But there was a missing manufacturing and there was a miss in our matting group. So let’s talk a little bit about kind of where we’re going here over the next 6 to 18 months, that should satisfy our expectations and market expectations for what our business can do.

Lots has been going on the last six months behind the scenes, we’re acknowledging as a sales cycle for the nature of the products we’re offering. And so, a lot of this will bear fruit in 2015.

Going forward here, we will look to incorporate kind of key 3, 6, 9, 12-month type milestones in 2015, so you can continue to keep the report how we’re doing. Three items to discuss, one is the tool of our business development strategy.

We do have a robust field model I know that was laid out for many of you in our release. We have four new additions to our business development team over the past three months, very capable individuals.

We’re shifting to one brand strategy, Horizon North is the brand. Across marketing our offering for camp’s catering, re-locatable structures and new addition called permanent modular construction production rentals, matting and soil stabilization.

We’re reinforcing our full turnkey capability we believe this out-performance strategy one nectar grab is the right one. Our 18 plus First Nations relationship our industry leading safety statistics and our strong position in the Province of British Columbia.

We’re getting much more calculated in our approach to account coverage, more scientific approach to doing this, to develop more opportunities in the energy end markets and we’ll talk more about that in 2015. We’re also dedicating attention to diversified end markets that are in Western Canada, which we believe is our focus area of Western Canada and Alaska.

And we’ll talk more about Alaska in 2015. And finally, how do we make sure that we’re able to do a quick turnaround on design and estimating, we’re expanding our design estimating engineering capabilities to more speedily support our business development efforts and turnaround time.

We’ll talk more about that as we progress forward as well, that’s item one. Item two, permanent modular, we talked a little bit about this.

With our manufacturing capability, it’s a wonderful business I’m glad that we’re in it. It does come at a fixed cost, so how do we pay attention to that?

We’re progressing forward in a strategy for permanent modular we brought on a couple of very capable individuals they will be focused on building out that business. We see an opportunity with an infrastructure deficit in some of the more remote areas of British Columbia, Alberta Saskatchewan and into Alaska for hotels, affordable living, senior centers, office buildings, casinos.

And we are targeting near-term regional developments in places like Terrace, Kitimat, Prince Rupert, Fort St. John, and then in Alberta Grande Prairie and some of the smaller areas of Northwest Alberta.

So, permanent modular is one that you’re going to hear more from us in 2015. Final comment is on LNG, obviously it’s in the press on a regular basis.

We believe we’re well positioned with owned lands and land auctions in two of the key proposed LNG hubs. We’re very prideful that we’re a large BC employer 800 plus BC employees and feel we’re well positioned there with our First Nations capabilities and our BC platform as to take advantage of business in that area, the province.

We have more than adequate land position in those two items that we talked about before to build an optimal camp platform. And finally I believe that we’ve built very, very strong relationships with very supportive town officials in the town of Kitimat and in the town of Prince Rupert.

And so, as we progress forward in time, we look forward to talking more about the quantitative side of all three of those elements. Thanks Bob.

Great, thanks Rod, a really nice summary of the – some of the new initiative that we’re taking thanks to Rod coming onboard. Many of you know Rod from his past history and a very strong addition to the team and we look forward to continuing to work with him as we go forward.

As I mentioned, I want to speak a little bit about Q4, we did allude to in our press release in terms of what we’re expecting in Q4, which is quite frankly flat EBITDA relative to this quarter. It’s not what we had previously guided to.

Manufacturing revenue will be fairly consistent quarter-over-quarter although mark-to-market will be squeezed a little bit as we have mentioned in terms of some of our cost estimates on the project that we’re working on going out. Camp and catering, as we’re moving into winter season, both revenue and margins will see improvement but that will be offset by the manufacturing and again mat, seasonality of the matting business as it moves into the winter season and things frees up, that will slow down so, overall, fairly flat.

As we look into 2015, certainly not going to take a shot at forecasting cash flow at this point in time, we’re certainly working through our budgets and our forecasts right now. But in terms of capital spending, in the absence of any large multiyear contracts that we will be getting, we are bidding on some of those.

I can certainly see our net capital spending in that $30 million to $40 million range. As I mentioned before, our maintenance capital remains in between $15 million and $20 million, we generally sell assets under fairly regular ongoing basis, somewhere in that $15 million to $20 million range.

So, overall I could easily see our capital spending in that $30 million to $40 million range, again as I say in the absence of some large contracted projects. And as I said, so with that we’re really confident in the stability of our dividend given that we can manage our capital spending as well.

So, with that, I will open it up for any questions. Lisa?

Good morning, guys.

Hi Dana.

I wanted to first serve with Q4 actually and I understand what you’re trying to convey with respect to whether it’s a repricing or maybe a re-margining of the big camp order you’re working on right now. But for your guidance to come down that much, when it looked like one of the major issues of Q3 was simply a delay in the startup of camps.

So by virtue of that, one would think that would move into full production in Q4 or close to it that you would see EBITDA guidance or whatever, coming down as much as you’re discussing right now. So, I’m trying to get a better understanding of that?

It’s only – it’s a matter of – the degree of throughput that we can get into plans which is not quite what we thought it was going to be as well as some costs that quite frankly when we were doing our estimates we missed a couple of things that we’re going to have to pay for. So that squeezed our margins.

Now, is that – is that the primary reason why you’re trying to add more people in that space or what have you?

That’s a big part of it. I mean the primary reason to add people in the engineering and design and estimating component is to support our continued efforts on the sales side so that we can get quick turnarounds.

But certainly to improve our position is another element as well.

Right. I guess, long-term callers of the story would say that you’re not new to this business that you’re veteran to this business.

And for realization of something like this to happen now given all the experience you’ve got in this space, it would probably be a little hard to understand. So, I guess that’s really what I’m trying to get, how does the company win the type of veteran presence in the space like you have not have this figured out quite?

Well, as you have, we have been successful in the past in terms on working on large projects. Part of the – this is the – and quite frankly it was just, quite frankly a mistake.

And we are working to improve that, adding people to the mix and more of a not necessarily just people but improving the process as well with which we approach debts and RQs and that kind of thing. That’s about all I can say to that.

We are working to improve that.

I guess, the other way to think about this, I’m sure most of us are which is what should we read into the competitive balance in this space right now. It’s obviously that ‘14 is going to sound three year counts for everybody not just few, and there is a right-sizing manufacturing and lots of things that happen in an environment with that we may be in front of the big LNG expansion, so it’s tough to right-size in midst all that.

But is there something that’s happening beyond all of that which is a greater overall competitiveness of that LLC what is pushing pricing and margins down such that you’re having to recalibrate everything amongst that?

Right at this present time, I think I’ve talked about this before. Yes, the manufacturing side of things is getting, is more competitive.

We are as we’ve mentioned and that Rod has mentioned that we are working on broadening out. And I’ve said that many times in terms of broadening out the markets and end-customer base that we are pursuing.

And looks like we have some fairly good prospects on that front but there is no doubt that the manufacturing space is more competitive, has gotten more competitive over the last couple of years. And therefore that’s why we’re sharpening our pencil and refining how we do things to be more competitive.

And the other element Dana is that the nature of the proposals that are coming through the door are more complex, they’re broader and more labor intensive to try to turn which we do believe will become a competitive advantage as our group broadens and gels.

Okay. I guess moving to the oil sands with oil trading on either side, on any given day right now.

It naturally strikes a little bit of Europe there in terms of what demand for that next step oil sands is? And I’d be curious to get your updated senses to how your customers are thinking about new and existing projects and whether that puts further pressure on your margins or maybe on digital over the next 12 to 18 months?

Well we haven’t, I mean, the price that we’ve been working over the last number of months, we haven’t seen any changes yet. There have been changes alluded to in terms of couple of projects slowing down.

And really what that does is maybe take a break and some utilization add some caps that would be extended out a little bit longer. Numbers go down but extended out a little bit longer.

We recently had an extension at one of our camp projects that was due to end here mid next year, it’s been extended for another year as they continue to work on that project. So there is no doubt that software prices could have an impact on spending both from an operating and capital perspective.

Right now we haven’t seen a whole bunch of that yet, but I’m no better profit than all you guys turns yes, that could have an impact.

I guess one last question. And again, I view my role in these calls is as trying to ask questions that I think are on the minds of other people, which I think a lot of people would like answered in a form like this.

And it’s been a number of quarters in a row now where things have been again, not only softer in this space but even just a sense of guidance and understanding ones business. And I wonder has Horizon North has grown, whether you think you still have the internal controls and systems to handle the type of growth that you may have seen in that part of the issue that you’re now facing as a larger company with more complex projects maybe the proximity to the operations and to the numbers is maybe not there like it was as you were a smaller company.

And that’s one of the reasons why getting a little bit more difficult to, no company likes to give formal guidance but when you do, you better be right. And is this to be more difficult in terms of internal controls?

I’ll split that into a couple of things Dana. And certainly, you’re absolutely right in terms of, you know me fairly well and how nervous I get giving guidance.

And this is just proven a tough note. But in terms of our internal controls in terms of producing numbers, I have ultimate faith in that.

In terms of our forecasting and budgeting capabilities, it’s more constant to a little bit of the attitude and how much optimistic or pessimistic you are at any given point in time. Certainly now, we – our pessimism meter has switched, I would say from little bit less optimistic to more pessimistic.

So really it comes down to that. We are chasing opportunities all the time on a regular basis.

We are being more cognizant of how we risk the potential of those opportunities coming to fruition. And we’re spending more time in doing that.

Okay. Well, thank you for quantifying.

I’m good thank you.

Hi Bob.

Hi Greg.

Just on the comments you’re making about margin compression for the manufacturing contracts as the design changes within the – sort of what you refer to as a mistake. Are you willing to quantify that at all what do we see versus sort of historically what we’ve estimated to be manufacturing margins previously as the amount shake out at – would it be as bad as kind of half historic margins or is it just shaving off couple of hundred basis points off the top?

No, I would say, as it is going from high teens on project to lower teens, so 17 to 13.

Okay, that’s great. Thank you for quantifying that.

The second part, and certainly lead on to that would be, just to dive a little bit deeper. Is this indicative of some activity, decisions, choices made regarding this specific contract or is it in any way indicative of us to how we should be thinking about maintenance margins for construction in general going forward?

No, this is project specific at that end. Yes.

Okay. And that’s actually all I had.

So thanks very much.

Thank you.

Hi fellows. I know Dana had asked one question with respect to pricing, I just didn’t get a fore sense and maybe just because I wasn’t listening straight.

But what is your sense of pricing today on new projects how is that shaping up?

In terms of full service camp rental and catering projects, as I mentioned before, it has slipped over the last couple of years. We’re probably I used to say we’re in four-year payback, that’s probably closer to four and half year paybacks now.

And yes, on the manufacturing side, again, a more competitive marketplace, margins I used to say, we’re in the 20% range, now we’re kind of in that 16% to 17% range over bidding. And then on the matting side, again a competitive marketplace, prices have come down a little bit and in terms of mat sales, as Scott mentioned it in our cost of going up with respect to lumber, that is putting a little bit of pressure on margins as well.

And then, is there any ageing hinges in the peer catering cycle and that is very labor intensive and I don’t think that’s probably gone down in terms of your cost rate?

No, no that’s…

That stays stable?

Yes.

Okay, okay great. That’s all from me.

Thank you very much.

Thank you.

Hi guys.

Good morning.

Just on the – just on Q4 specifically here in the camps and catering division. So is there any contracts that are rolling over in the quarter that could reduce that guidance from what you’re seeing right now or are we pretty well contracted on the fleet right now through the quarter at least?

Yes, no, we don’t see anything coming off at this point.

Okay.

And Steve, I think when we – in our outlook that we also – we mentioned our contracted revenues will be there on the books.

Yes, so that 272, I’m just wondering, is that for the next 12 months you have that contracted or how long is that actual contracted revenue go out?

That’s really over the life of our contract stream, so it’s not specific to next year or the year after, it’s kind of at a point in time, looking forward that’s the number we’ve got so.

And you report that over the quarters and you’ll see a difference as it grows and moves straight, giving you indication of really the backlog that we’ve got on that sort of it.

Okay. And just in the press release you also talked about 2015 cash flow sufficient to cover stable dividend and your CapEx whereas in the past you may have talked about wanting to increase that dividend annually.

So, I’m just wondering if an increase for 2015 is off the table or maybe a look at a reduction now just given where the yield is currently, I think that’s around 9%. How do you think about that going forward?

Well, in terms of dividend, I think what was getting to when I was talking about capital spending and the dividend is that we’re in addition to continue to pay a stable dividend. Certainly I would not look at any increases and I have mentioned that before as well.

Okay. And then, maybe just one final question on the permanent modular structures.

How big can that piece get going forward, I mean, it’s obviously not maybe going to grow as quickly, as we can see. I mean, how big can that get and how do we see the rollout strategy going forward?

Do we see some of these starting to come in, in 2015 or is that a little further down the road?

No, I think that’s probably the right timeframe for 2015. The hotel concept that we have targets a revenue number, I’ll stay away from margins.

But targets or revenue number between $5 million and $10 million, just given the sizing of the hotels that we’ve kind of put into our design group. And at office buildings, again if it’s all for square-foot type concepts, it’s somewhere between $3 million and $10 million will be the range for those office buildings as we progress forward.

There are some early adopters that are working with us for 2015. So, I feel quite comfortable that we should see something for 2015 before they kind of reach, kind of three to six months before we start get putting some better numbers around that.

Okay. So, if I understood that correctly, it would be at least later in 2015 numbers?

I mean, I would say second half.

Yes.

Okay, okay that’s all I had. Great, thanks guys.

Thank you.

Hi guys, I was just wondering if you could help me out. When you take a look at your rentable beds, how much of that would be leveraged to oil sands on a percentage basis?

Somewhere about between 4,500 and 5,000 beds in the oil sands, deployed in the oil sands space.

And of those now, how many are leveraged towards mining versus ID?

Off the top of my head Greg, it’s just about probably about two thirds ID, one third mining of those 4,500 to 5,000 beds, yes.

Great. And then taking a look at your 2015 CapEx, if you were to look, if you were to go back to the beginning of the year, what do you think – I know that market conditions have changed but what do you think your CapEx would have been at the start of 2014 for next year?

At the start of 2014 for 2015?

Yes.

I think we would have been talking in terms of adding another 1,000 to 1,500 beds to the fleet, which would get you to probably an $80 million capital spending number all-in with maintenance capital etcetera.

Okay. So, when you’re taking this number down, there were two numbers that you put out there, $30 million to $40 million and $15 million to $20 million in maintenance CapEx.

Is the maintenance CapEx buried in that $30 million to $40 million?

Yes.

Okay. So, what you’re seeing is that, you’re less optimistic on large contract awards going into ‘15?

Again, the optimism and pessimism meter is being a little bit conservative here, Greg.

Yes, I know, I deal with that every minute looking at my screen here, so.

Yes. And I just want to clarify on the capital spending number that $30 million to $40 million and we always refer to net capital spending.

We generally sell $15 million to $20 million of assets on a regular basis. So that would be net of those proceeds.

Okay, that’s perfect. And just, there is a lot of data points on LNG positive, negative.

You guys must be talking to these guys on a regular basis. What is your gut telling you on LNG, is it – are you optimistic that is going to proceed first of all?

And secondly, if it does proceed, do you think that it’s FID by yearend or FID by H1 15?

I’m less somewhat optimistic that all the parties are going to get things right in terms of fiscal structure etcetera. My view is that probably two projects would proceed.

I don’t think anything more than that. I think there is going to be some more partnering up going on.

I’m less optimistic about a final investment decision this year, but as it gets into moving into second half of – first half of next year, I think we’re going to get there.

And if you, if so, the CapEx number you put out, does not include any LNG from what I see here or?

Yes.

So, hypothetically if LNG goes forward in H1, and let’s say it’s PETRONAS (ph), how would that change your CapEx?

Well, it could change it substantially. But again, we wouldn’t be changing without a contract in hand.

And that would ramp up if there is an investment, if pick a date June 30, champs not going to hit the ground July 1, right. So it’s going to ramp up.

No, I understand that, I’m just trying to see again, the first people on the ground are going to have to be the camp guys?

That’s correct, yes.

The camps are going to move pretty quickly when this thing happens so that all of a sudden will create an immediate torque to anything you’re doing?

Yes. So think in terms of $40,000 and $50,000 a bed, to put that’s on the ground.

Perfect. All right, I’ll get back in the queue.

Thanks guys.

Thank you.

Good morning guys.

Hi.

Few random questions. You talked briefly earlier about bed rollovers.

How many beds do you have coming on contract over the course of 2015?

Maybe 15% rolling off, something like that. We don’t have a whole bunch of big contracts that are rolling off.

And based on your gage of the market today, how do you expect pricing assuming those are re-contracted in existing projects to change?

No, I don’t think it changes much from what has changed over the last couple of years that I alluded to in terms of payback periods changing. I don’t see that changing.

You commented earlier about paybacks for camps and catering having moved from 4 to 4.5 years, you don’t think that applies to the 15% that rolls over next year?

I really don’t, I don’t think so, no.

Okay. Can you sort of, do you like to just characterize them why you think those are exempt to it?

No, I think. Yes, as I’m just judging by the bidding activity in the projects that we work on, and opened up recently.

I don’t see that changing over.

Okay. The $30 million to $40 million of CapEx, in that, how many incremental beds do you expect that would likely result in?

That wouldn’t, that would maybe be like 500 in that neighborhood.

Okay. And line of sight of those 500 based on bidding or tendering activity, how does it look today?

I mean, our bidding activity over – from the last quarter I think the number of things that we’re bidding on has changed that much, so in terms of adding new beds to the fleet, right now, not – the line I say is not that strong right now.

Okay. For $30 million to $40 million program, do you expect the business to generate free cash flow when you include the dividend on that basis next year?

There would be something out.

Okay, so. I guess, Scott your comment earlier about the leverage ratio is starting to come down from 1.8, part of just denominator base but you expect to have the ability to repay debt in 2015?

Given that capital spending level, yes.

Okay. And I know you’ve touched on this a couple of different ways so far.

I’m just, I’m trying to get my head around and reconcile. The guidance you guys gave in the latter part of July in terms of $30 million to $35 million of EBITDA for Q3 and $35 million to $40 million for Q4, what changed in the span of three months both in the context of Q3 and also in the context of Q4.

Like, I understand your commentary for Q4 about the change in the manufacturing project and as you said, the lower margin expectations there. But is that the biggest data point that’s moved or are there other factors in the market are in the performance that have impacted how you see Q4 EBITDA today versus three months ago?

Really, what it comes down to is the optimism and pessimism meter changing quite frankly, all right so some of the things that we are more optimistic on rig counts than we probably should have been. So we’re turning that back.

And that sentiment I think comes in across the board.

Would you guys have previously made some assumptions in terms of incremental project wins or capital deployment or was that guidance previously on to the context of the existing asset base only?

This should be more in context of the existing asset base win and the shorter term oil sands.

Okay. Thank you.

I appreciate it.

Thank you.

Good morning guys.

Good morning.

With respect to the 15% of the beds that are rolling off contract in 2015, that’s – you kind of take a (inaudible) number, but it should be reasonably in that range right?

Yes.

Can you characterize where those camps are?

Well, there is, I’d say there is a small portion of that that comes through some of the infrastructure projects we’ve got in BC. And then there is always a few shorter term projects in terms of oil sands, conventional, etcetera and unconventional that are moving and shaking.

Shorter term oil sands projects, it would be evenly split between those two segments?

Yes.

Yes.

And these are all small camps?

Yes, they would be smaller in 200 to 300.

Okay. Is it your anticipation that some of your contracts would simply roll with the existing customers?

No, because that’s primary, they are primarily project based.

Okay, okay. So, that means that of the beds that you’re using 15% or so are going to have to be redeployed.

And I’m kind of curious about a statement in your press release here, you alluded to the idea that revenue per bed was moving a bit lower as you were shifting the gradual shift from open camp to dedicated camps. Ordinarily you’d expect to see utilization because utilization be guaranteed at a dedicated camp, that would the (inaudible) right, utilizations should go out?

Yes, that’s year-over-year, yes.

Okay. So, does that mean then, to kind of put this in the context of relatively small capital spend plan for next year?

Yes.

And should we anticipate, is it reasonable to anticipate that you’re going to see more efficient allocation to your capital or your camp capital between what we saw in the third quarter now and say mid-point next year?

I think that is yes, and that’s something that we’re certainly focusing on.

And what sort of, just as so we can put some reasonable parameters on trying to estimate what that might be. How do you see that changing, not how – by what magnitude do you see that changing?

I’ll give you an example of something that we’re working on, we haven’t signed anything yet. But we’re working on redeploying a 600 person count from what it’s currently an open camp situation to what would be a closed camp situation.

So it’s that kind of thing that we’re working on right now.

Okay. Well, okay, well, I’ll leave it at that then.

Thank you very much.

All right.

All right. Thank you everybody for joining us.

As always, if you have any further questions we are available and you have our number. So thank you everybody.