Thank you. Welcome all to Mullen Groups quarterly conference call.

Today's call we will provide shareholders and interested investors with an overview of the fourth quarter financial results. We'll discuss the main drivers impacting our operating performance.

And we'll close with the Q&A session. So before I commence today's call, I'll remind everyone that the presentation may contain forward-looking statements which are based on our current expectations and are subject to a number of risks and uncertainties.

And as such, actual results may differ materially. Further information identifying the risks, uncertainties, and assumptions can be found on the disclosure documents which are filed on SEDAR and at www.mullen-group.com.

So with me this morning is the executive team. I have Stephen Clark, who is our CFO, Richard Maloney as Senior VP, Joanna Scott, Corporate Secretary and VP of Corporate Services.

And I have Carson Urlacher as our Corporate Controller. First thing what will start with a review of the Q4 financial results and operating performance.

And when I'm going to do is give you a bit of a high level overview of it. And then Stephen will get into the details a little more granular.

With the release of the 21 annual financial review in today's call, we will officially put 21 in the history books and as I said, today what we're going to do is focus on the fourth quarter, we'll provide insight and commentary on our results. A complete and full disclosure of the fourth quarter and full-year results can be found in the annual financial review, which has been prepared, reviewed, and approved by the auditors and the audit committee.

This document can be found on SEDAR and on our website, www.mullen-group.com. So a huge thank you to the entire team that worked just tirelessly to prepare this detailed document, so thanks team.

So clearly the number one highlight that anyone can glean out of the quarter has to be the 48% increase in revenues. And you'll recall that we completed a number of acquisitions earlier in the year, six to be exact.

So we had a -- the full benefit of these acquisitions during the quarter, 136 million of incremental revenues come from acquisition. So Stephen will talk more about the numbers in a minute.

So let me share with you a few comments about what these acquisitions actually mean to our company. First off, each of the companies we acquired last year will drive annual revenue.

So I think collectively they will drive annual revenues of around $500 million. So I'm always proud that when we're able to acquire good companies into our network, but bringing six onboard in a year is pretty amazing.

And let me tell you that these are all great companies. We got immediate access to new companies -- customers, new markets, excellent leadership teams, and a quality workforce.

And this is at a time when people are in the most difficult obstacle to any organization's potential growth. So am I happy, you know what.

So those business units, we have owned for over a year, let me talk a little bit about them. Let's call them our legacy BUs, business units.

They generated just over $305 million in revenues, and I just spoke about how the challenges to grow your business due to the current state of the labor market. So this shows up in our year-over-year revenue numbers which were up only $8 million after accounting for a drop up nearly $14 million at our Premay Pipeline Group, and I'll talk a little bit more about that later.

Certain market segments such as LTL had some growth, but overall there wasn't much growth in the economy, which if you think about it makes perfect sense. Because how can you grow on economy if there's not a lot of people available and with all the supply chain issues we had, so let me be clear.

What I'm saying is that this doesn't mean that the economy was bad, that's not what I'm saying. What I'm reiterating is that the economic growth is difficult to achieve given the current labor markets and supply chain challenges.

Because what we did witness, was that the overall consumer spend was still pretty robust, providing solid freight demand for our LTL logistics and warehousing on our newest segment, or U.S. and international logistics.

I think what we saw the big change that we started to see in emerging last quarter was in the capital investment part of the economy, especially the energy industry. As commodity prices have reloaded, the balance sheets of these companies.

If this trend continues, and I believe it will, then we we're in for some solid long-haul flat tech free demand, and we'll see some improvement in our -- in everything to do with the energy business in our drilling services side. Productivity and demand for pipeline services delayed us.

There was a lot of this last quarter. Lots of delays.

Delays after delays and the pipeline business got hurt. It is noteworthy that I should reiterate, and then in 2022, the pipeline business will most likely be about the same as what it is now.

We've got to finish those big projects. But they really started in Ernst and in 2020.

So 2020 was just really robust for our pipeline side. And thankfully it is because that is the impetus to fuel for the drilling services side, the drilling side, and all of our other ancillary services that we provide.

So in our business model, when one area falters, another steps up, that’s what we have in a diversified business model strategy. Stephen will be providing additional details by segment shortly, but before he starts his presentation, I'll comment on the newest battle for business event as the inflation trend.

No denying that it exists. The challenge that everyone has is trying to stay ahead of the curve on this emerging issue.

Our business units have raised pricing, which is why if you look at our margins adjusted for our U.S. and international logistics segment, which is a non-asset-based 3PL.

If we back them out, then you'll see that our business was pretty much in line with last year, which I think is pretty commendable considering the loss of the high-margin business we had in Premay Pipelines. So from my perspective, I'm very pleased.

Now, however, as I have reiterated to all of our business unit leaders, this inflation issue is not going away and they must raise prices. And I've had to be pretty firm on this, I don't want to have any debate on this with me.

So overall a very solid quarter which is precisely what I indicated on our last quarterly call, where I called for revenues to be strong and operating profits to track close to the Q3 results. So we were pretty spot on with that.

And Stephen, I think what I'm going to do is call upon you now to provide some additional details on the fourth quarter financial results. So with all the details, here's Stephen.

Well, thank you, Murray. And good morning, fellow shareholders.

Firstly, like Murray, I would like to thank the over 7,000 people that made these results possible. And a special shout out to all the people that joined our team this past year via acquisition.

I trust our first experiences under the Mullen banner have been rewarding. Again, thank you.

I'll get a little bit more granular, however, our 146 PGE annual financial review contains the details that fully explain our performance. As such, I will only provide some high level commentary on the quarter.

For the quarter we generated fourth-quarter results, record fourth-quarter results with revenue of $441.9 million. Again, this is a record revenue that far exceeded any previous Q4 by over a $100 million.

And it was achieved through acquisitions, and by modest, I'll call it same-store sales growth within our LTL and logistics and warehousing segments, but this was somewhat offset by the decline in the specialized and industrial services segment. Year-over-year revenue was up $144.2 million in total, acquisitions contributed $136.1 million of new incremental revenue to the quarter.

The remaining $8.1 million of growth was due to the net effect of about $7.8 million or about 0.9% of growth once adjusted for fuel surcharge fluctuations within the LTL section -- segment, sorry, and $8.7 million or growth of about 5.9% once adjusted for fuel surcharge fluctuations within the logistics and warehousing segment. And then $4.5 million of growth within our drilling related businesses within the specialized and industrial services segment, being offset by lower revenue from our construction divisions, namely Premay Pipeline which was down $14.3 million and Smook, which was down by $3.3 million.

That resulted in net segment declined for the specialized and industrial services segment of $6.7 million. Of course, this is excluding acquisitions.

Revenue also rose because of higher fuel surcharge. Consolidated fuel surcharge revenue increased by $20.9 million to $37 million in total as compared to $16.1 million in 2020, with acquisitions contributing about $10 million of incremental fuel surcharge revenue, and the remaining $10.9 million of increased fuel surcharge revenue being attributed to higher diesel fuel prices in our legacy businesses.

I will remind everyone, this flow-through of higher diesel prices is actually detrimental to margin, and I'll get into that a little bit more detailed later on. A bit more granular on segment revenue, the LTL segment revenue grew by $52.5 million to $168.8 million as compared to $116.3 million in 2020.

Acquisitions accounted for $44.7 million or 85% of the rise in revenue. The remaining increase of $7.8 million was due to increases at all business units due to the rebound in the economy and fuel surcharge, revenue increases on same-store basis.

Again, adjusted for acquisitions and fuel surcharge fluctuations. This segment experienced a 0.09% or nearly 1% increase as COVID, again, specifically Omicron variant slowed the economy again in December, and we had challenges in November with flooding in the lower mainland.

Revenue and logistics in warehousing segment rose by $35 million to a $131.8 million as compared to $96.8 million in 2020 due to the $26.3 million of revenue due to acquisitions, as well as the $3.2 million increase in fuel surcharge revenue. So again, our same-store sales basis adjusted for acquisitions and fuel surcharge fluctuations we were up by 5.9% during the quarter.

Specialized and industrial services segment declined by $2.8 million to $82 million as compared to $84.8 million in 2020, primarily, again, to lower revenue of Premay Pipeline Hauling that was down $14.3 million and Smook again was down, but it was partially offset by a returned strengthen in the drilling-related [Indiscernible] and the acquisition of [Indiscernible] in the spring of 2021. Again, more discreet numbers can be found on Page 61 of the MD&A for the breakdown by category in the S&I segment here.

As for profitability, operating income before depreciation and amortization, commonly referred to as EBITDA, increased by $13.6 million to 65.8. This however, is somewhat a misleading indicator as our results included $5.2 million of queues or government wage subsidies in 2021 in the fourth quarter, as compared to $5.3 million of queues in 2020.

We measure the success of our strategic goals by measuring the underlying business performance without queues. We included within our MD&A and non-GAAP measure we called adjusted EBITDA.

This definition and reconciliation for -- to EBITDA or OIBDA can be found on page 93 But essentially we adjusted OIBDA for Qs. The underlying OIBDA number adjusted for Qs was $60.6 million in the current quarter as compared to $46.9 million in 2020.

So how did we adjust -- how did we achieved growth of adjusted EBITDA by nearly 30%? From a high level, it was the $13.9 million in new incremental OIBDA from our numerous acquisitions being partially offset by lower profitability at Premay Pipeline and Smook.

More specifically on a segment level, LTL, the adjusted OIBDA increased by $8 million to $25.7 million as compared to $17.7 million in 2020. This increase again was really due to acquisitions which accounted for the majority of the increase or $7 million being somewhat offset by higher cost due to inflation.

As a percentage of revenue adjusted operating margin though remained stable at 15.2% in the fourth quarter of 2021 and in the fourth quarter of 2020. Adjusted OIBDA in the logistics and warehousing segment increased by $4.4 million to $23.3 million as compared to 18.9% in 2020.

The majority again of the rise of EBITDA or OIBDA was due to our recent acquisitions, as they added $4.7 million of incremental OIBDA, being again, offset primarily by inflation, but you would see that manifesting in fuel and purchase transportation costs because of inflation adjusted OIBDA margin decreased to $17.7 million compared to 19.5 in 2020. Again, 7.7 being a pretty respectable margin for trucking company though.

In the specialized and industrial services segment, adjusted OIBDA decreased by $2.3 million to $12.3 million as compared to $14.6 million, largely due to the $5.1 million decline in OIBDA generated by Premay Pipeline. Adjusted operating margin increase -- decreased by 2.2% to 15% as compared to 17.2%.

Again, this is without queue, so this is just comparing apples-to-apples. And it declined again due to that change in revenue mix.

Essentially the reduction of Premay Pipeline and Smook's revenue. But more specifically the $2.3 million year-over-year decrease in adjusted OIBDA in the specialized and industrial services segment could be attributed to a $3.5 million decrease relating to the business units providing specialized services, including Premay and Smook, a $0.3 million or $300,000 decrease in those business units involved in the transportation of fluids and servicing and wells.

But $1.5 million increase in the business unit’s types of the drilling-related activity. Looking at adjusted OIBDA as a percentage of revenue or adjusted operating margin as we've defined it within our document, it's down to 13.7% as compared to 15.8% in 2020.

Again, this is adjusted without Q, so trying to compare apples to apple. That appears to be alarmingly low, but we're comfortable with these results, given that $61.2 million of our revenue was generated by our new U.S.

and international logistics segment that achieved a 3.3% operating margin. But without the segment's lower operating margin, consolidated adjusted operating margin, again, without Qs, would have been, and without the us and international logistics segment, would have been 15.4% as compared to 15.8% in 2020.

So just a small decline in margin. And I would remind the listeners that our U.S.

and international logistics segment generated $4.9 million of EBITDA in the first six months of operations under our banner. That's not a bad return on a $49.6 million in fact -- investment.

In fact, it's about a 20% annualized return and we expect margin to improve over time. We have some work to do there, but that will improve over time.

So in other words, this segment has low margin but it's -- and it's pulling our average down, but terrific returns on capital. Again, without our U.S.

segment, our adjusted operating margin was a healthy 15.4 4% down just a little bit from the 15.8%. The other impacts on that margin though, was the detrimental effect of the operating margins associated with the $20.9 million increase in fuel surcharge that I mentioned earlier that resulted in a corresponding increase in fuel expense.

And that fuel surcharge now represented 8.4% of revenue that generates little or no margin as it is a flow through to compensate us for rising diesel fuel prices. Taking adjusted EBITDA and dividing it by revenue, excluding fuel surcharge revenue and the U.S.

-- and international logistics segment margin with 17%. Take those two anomalies out, 17% is actually pretty good on a historic basis.

This reinforces the underlying strength of our Canadian business. Further, the $14.3 million reduction at Premay Pipeline revenue that resulted in $5.1 million decrease in adjusted EBITDA.

You can clearly see that the margins there pulled us up in the past. But essentially this change in revenue mix had a large negative drag on our operating margin.

And I know this sounds like a lot of yeah buts and yeah buts, but these factors really explained the degradation in margin, it's not as bad as it appears. In fact, I would tell you that it's on par -- In fact, without fuel surcharge even better.

And some of these factors that I mentioned that helped bring the margin down, were offset by productivity improvements and the tireless effort by all of us to maintain and improved our margin in an inflationary cost environment. And if you make it the page 146 of our document, you will see without falling asleep -- you will see our geographic disclosure information.

And so that essentially carves out our Canadian operations from our new U.S. operations.

And you will see that our Canadian operations again -- you'll see that discreetly in the document where we achieved that 17% margin. So hopefully that's a good understanding on why margin is down a little bit.

Now looking at some other notable items, net cash from operating activities for the period was up $13.3 million to 65.8 million. So our borrowing on our credit facilities, though, did increase by $3.8 million to $89 million despite that great cash-generation.

But I would remind you all that we acquired direct IT for $9.2 million and we purchased another great facility in Edmonton for our apps -- newly acquired apps acquisition for $8.5 million. So essentially we would've been very cash positive and not -- and repaying that line of credit if we didn't make these long-term investments on our line of credit.

So we acquired another great company, another great facility, and really would've been cash positive without that. Bottom line is we generate a lot of free cash.

And lastly, our basic earnings per share was up to $0.21 as compared to $0.10 in Q4 of last year in part because of the reduced share count as we bought back $3.5 million -- 3.5 million shares in the last 12 months. But also, we finalized our purchase equation share in the fourth quarter and you would've seen a change in the amortization, so we reduced the amortization, we overbooked it in the third quarter.

But once we did the analysis and finalized those purchase equations, we had trued up our adjusted fourth-quarter down a little bit. So a little bit of an anomaly there when it comes to amortization, but nonetheless, a healthy pace where we continue to increase our earnings per share on a continuous basis, fourth quarter included.

Lastly, a quick word on ESG, which I've been summarizing quickly for everybody on the call here lately. I'd like to maybe just address our carbon intensity, so we've made these acquisitions apps being one of them, an inter-modal player, and we have inter-modal freight moving at Kleysen and others.

and try point. This has really resulted in our carbon intensity being down to about 20 grams per dollar revenue from about 23 grams per dollar of revenue in 2020.

Again, we are managing, averaging well profitability, and keeping an eye on ESG and reducing our carbon footprint, our carbon intensity, yet again, in 2021. So with that Murray, I will pass the conference back to you.

Thank you. Well, this is where Murray used to give us a nice summary of the quarter and opens up for Q&A.

It appears we've perhaps lost him off the call here. Here he is back.

I was on mute, sorry folks. So thank you, Steph for that.

As we look -- as I summarize this, there's a lot of granular information that has been given to us there. But if you look at 2020, 2020 was a year in which we were able -- COVID first hit and well, we slashed expenses, we didn't know what was happening, nobody knew it.

And this is across nearly every business, but specifically to ours. And so we did that and then we were very fortunate to have this really quality company called Premay Pipeline and they just did a fantastic job in 2020.

In '21, everything changed. We brought people back.

We normally brought people back. You started to see this inflationary spiral.

So really take hold. So what we took away up in 2020, it came back with a vengeance in '21 and I think that ends up being the -- I think the biggest step change, if you will, in between '20 and '21.

And then of course on the corporate side, we did a number of acquisitions. So I think that's really the two big themes that somebody can take away from the change on a year-over-year basis.

Now, if I take a look at the outlook, there's really not much I can add. I've got a lot of people on the -- a lot of questions queued up here.

So I'm going to be short on the outlook. There's not much more than I can add that's not contained in the press release in the annual financial report, or truthfully in our December press announcement, which referenced our '22 business plan, which by the way, included an increase in the dividend.

But I think what I'll just summarize the 2022 outlook as we're going to achieve record revenues. This is going to be driven by the full-year results from the six acquisitions we completed in '21.

In addition, I fully expect we're going to complete additional acquisition during '22 which will drive additional revenue growth. We're going to have record revenues in '22.

We have a balance sheet that has over a $150 million of available credit available. And then truthfully, when you think about the tightness in the labor market, acquiring good companies with great teams may be the best way that anybody can grow at additional capacity to service their existing customers.

And from that perspective, we will do acquisitions so we can service our customers. But, and I reiterate with the but, we need to see some pretty significant rate increases of customers on service.

And speaking of rate increases, I tell you this is how we're going to grow profitability. This message has been delivered loud and clear to all of our Canadian-based companies and I've deliberately mentioned Canada because rates here in Canada have lagged U.S.

rates by a significant amount. I'm thinking in the range of 20%, which explains why the U.S.

carriers have experienced such a great run over the last couple of years, strong earnings, outstanding stock prices. But in Canada, we did not see that same market adjustment.

So we live in MDI of our friends in the U.S. which ultimately means this is what to expect from our business [Indiscernible] here in Canada.

As long as the fundamentals of freak demand stay as they are and the labor markets remain tight I suspect that will happen. So we're going to have record revenues, and I can tell you, we're going to focus on raising prices because that's the step change that we fundamentally see happening in the Canadian marketplace, it's going to happen throughout '22.

And I think whenever you look at change, what's the change? Well, there it is.

If I look at it from the logistics business, it's going to be on pricing. If I look at it in the commodity business or the energy space, the step changes, pricing increases.

That's providing the impetus for the step change there. And I think exactly the same thing is going to happen in the Canadian logistics transportation business.

And our job is to manage that, and to make sure that we drive margin improvement for our shareholders. That's what we've got for the outlook.

Now, what I expect to -- what I'd like to do now, we've got some new opportunities that we're working on. And what I want to do now is call upon Richard Maloney to speak to the joint press release we have with our trusted business partner, Canadian National, here that we just did on Tuesday.

And Richard, I've asked you to kind of just give up give an overview of what that really means and some of our initiatives. What we're going to do on the inter-modal business.

Richard Maloney I will turn it over to you and then I'll finish with closing comments before we go to the Q&A session. Richard.

Okay. Thank you, Murray.

On February 8th, 2022, we announced that our apps Transport Group entered into a multi-year agreement with CN in which the railway would continue to provide intermodal service to apps. So why did we do this?

While it's about messaging and communicating to our shareholders and the investment community that this strategic shift we made a number of years ago to becoming a North American logistics leader is still Mullen Group's priority. To begin with, both Mullen Group and CN, believe that this announcement was important to emphasize the strong mutually beneficial working relationships CN and APS Transport have developed over many years.

It is also worth noting that a number of other Mullen Group business units have long-standing working relationships with CN as well. In addition, this announcement demonstrates Mullen Group's continued focus on building out our inter-modal capabilities.

Murray, calls it the long mile, which really started in 2006 when we acquired Kleysen and was greatly enhanced with the acquisition of APS Transport in 2021. In fact, concurrent with the APS signing the APS Transport signing the intermodal agreement with CN.

We approved the sizable capital request to order new intermodal containers to support this plan to work. This aligns directly with the capital expenditures we outlined in our 2002 business plan, specifically investments towards sustainability initiatives.

As many will know, intermodal transportation is an efficient and effective manner to move goods long distances. Something ideally suited for Canada an importing nation and particularly important as there are fewer and fewer long haul truck drivers.

Intermodal is also -- also greatly cuts down on fuel consumption, and more importantly, reduces greenhouse gases emissions, a cornerstone of Mullen Group's ESG initiatives that Stephen pointed out with our carbon intensity and our continued focus on reducing that. When you combine our extensive final mile LTL network that services well over 5,000 points of service in Western Canada and Ontario.

With the focused and deliberate build-out of our long mile service offering with the -- with the strategic partner like CN, we were able to provide a comprehensive service offering to our customers. Stay tuned, everyone.

Murray, I will pass it back to you now.

Hey, thanks, Rich. I really appreciate that update for our investors, shareholders alike.

Is that we've got dual purpose here, Stephen talked about it. We want to make sure that we're doing our part on climate initiatives.

And I think that's an important part of ESG unit that we're focused on. But the second part is, you've got -- we're going to have to be able to provide our shippers and our customers with a viable, multiple service offering, and then they can choose which one is best for their requirements.

I think we got some great initiatives. These are the things that you get that I spoke earlier about when you invest in really good quality companies.

And let me tell you, I couldn't be happier with those acquisitions we did in '21. We're ready for '22.

We've got a list of -- long list of questions, so I'm going to turn it over to the Operator and let's get right to the Q&A session.

Hey, good morning all. Congrats on a solid quarter and thanks for taking my questions.

I appreciate that it's still early days for the U.S. and international logistics segment, and we should probably expect margins to bounce around a bit as you add station agents and build that out.

But just wondering at a high level, what you saw there sequentially and maybe how you expect that to trend moving forward?

Well, I think it's certainly -- we've got -- first of all, we got a really good platform to build on there. A little bit of noise comes in that our costs are going up because we're still enrolled in the carve out process and get some additional costs that we've got to accrue as a result of getting the carve out of the technology from Quad Graphics into our own platform.

So it's a little bit noisy on the expense side. Revenue side, we're pretty strong.

The economy in the U.S. is pretty robust.

So on that front, doing well, it's on the cost side that we're going to have a little bit of noise in the cost side till we get that total carve out done. And then what we're going to do is once we get that done, we'll really go in to full throttle here and challenge that group down there to take this company to the next level.

So we're in the right space, there's no doubt about it. We compete -- they compete head-to-head with every one of the legit bigger logistics companies down there, and they do very successfully, including new startups like Convoy and Uber Freight and all the others.

So we've got a heck of a great team there and expect they will continue to expand their market share down there once we get finished. We think we'll be done most of the cargo by the end of June.

That was our original plan. And I think collaborating with our group down there, they're pretty comfortable that we'll be on that.

So all good from there. The U.S.

economy still remains strong [Indiscernible] still moving. And from that perspective, what they watch very, very carefully is what's happening with the trucking rates in the United States.

Because what they do is just they manage the spread between what the contract expense is to what they charge to their customer. So really, the margin should not change if the markets get a little competitive because then the availability of trucks becomes available and prices will go down there.

But we have not seen any degradation and pricing in the U.S. market yet.

Not at all. Still pretty robust and we watch that every month for sure.

It's [Indiscernible].

It's a great platform. We needed to get another growth opportunity outside of Canada.

This is just the start in its -- we're proving down there that you just follow the same platform we got up here, you invest in good companies with great management teams and turn them loose and reward them for their successes. So we'll probably continue to grow in the US as well as what we'll do.

But you got identify the right opportunity. There's no sense just growing to grow and then getting into a heck of a problem.

But we didn't get into a problem of this group. They're first-class.

Got it. Thanks for that.

You also noted in the release last night that you're focusing on a new differentiated pricing model to help support margins. I'm wondering what the bigger picture there in terms of what you think that might look like.

I think what we've done in the past. This has been throughout history.

You cannot charge the same price to everybody. And when I say a differentiated pricing model, we're saying to the customers, if you want guaranteed service, you got to pay hard price.

If you want to give us flexibility so that we can do it on our time and when we got additional capacity, it will sit on the dock or it will -- we'll get to it when we can, then that fits in our network will give you that. But it's not going to come with that guaranteed service.

If you want service and you want commitment from this group, your prices are going up pretty significantly. If you want to give us flexibility, if you have got ability on that, then we probably won't move our pricing quite as aggressively on that side.

That's what I mean by the differentiated pricing model. If you want service, you got to pay for it.

Makes sense. That's super helpful.

I appreciate it. Again, congrats on a solid quarter.

I'll turn it back.

Thanks, Michael. Appreciate it.

Bye.

Thanks and good morning, everyone. So maybe -- I wanted to ask you about the 2022 business plan that you rolled out in December and we didn't really have a chance to speak on that broadly.

So you mentioned, Murray, of last year's acquisitions are generating about $500 million in revenue, and that's up 119% from your Q2 disclosure. So if I simply take the incremental there, given they're done midyear last year, are you probably going to see your revenue grow off maybe $1.66 or so billion-dollar in 2022, just by both acquisitions and perhaps there is some organic growth across most of the segments.

How would you break up your 2022 business plan that you laid out in terms of revenue and margin outlook by segments this year?

Steph, I don't think we broke that out by segments. I don't recall us doing that.

Did we?

No, we never did give guidance to it. The previous year we said it would be a third and of course that didn't turn out to be right.

But it's going to roughly be probably -- again, looking at the trend on the quarter is you can just adjust your models. But you can see what the pace of U.S.

logistics is. You can see what the pace of LTL growth has been.

And again, I'll given with one caveat. You've got 1.6 billion to $1.7 billion in revenue, and again, you're out adjusting for any new acquisitions that we might do during 2022 here.

So again, that mixes -- we can get a little bit more granular, Konark, maybe after the call once you've done your [Indiscernible]

I think the thing as you've got new acquisitions are going to add about 500 million. So you take same-store sales in '22, you had 500 million or '21, sorry, annualized revenue supply of $500 million.

And then I'm telling you we're raising prices. So if you're raising prices by 10%, that's quite a bit of money on $1.5 billion, $1.6 billion company.

And, Murray, is this pricing coming along, this organic volume growth, or it's coming at a cost of one decline?

No, it's right now. We've never seen this cost curve like what we're seeing right now.

We raise prices and then your -- next thing your costs are going up just about as fast or even -- and higher. So it's a little bit like the fuel surcharge.

The price of fuel goes up; you raise your fuel surcharge. Cost go up, you raise your prices.

And we're -- I would suggest you were a little bit behind on that curve because our teams, we said ratio prices and they did. And then all of a sudden the costs, we -- it's very difficult to contain cost right now, so we're having to adjust rates.

We do it once a year before, and now we're going to have to do it. We're already talking about adjusting rates, second quarter.

I know for sure we're going to adjust rates to maintain margin. I know that for sure.

But our teams, I've said, we're going have this differentiated pricing model. I expect a higher margin in '22.

They'll have to raise above what the costs are going up for sure. Let's just ballpark it and say prices are going to go up by 10%.

That's -- on one six, that's $160 million. And then that's going to flow through.

The question then becomes, how much of that is going to flow through on the cost side too. And we tried to give you a reasonable guideline when we did our first blush at '22, which suggested that's what I think is going to happen.

I gave a bit of a small bucket. But every 1% margin improvement now is $16 million to $18 million of EBITDAs.

So the business units know the game plan. We expect prices to go up like because I think the Canadian marketplace has now changed and the U.S.

marketplace has already changed. That's already happened.

They're not going to get big, big rate increases any longer in the U.S. but in Canada, I suspect we're going to get it.

Some of the thing is that I'm seeing now are not 10%. Some of the stuff is -- you've got border closures, you've got blockage, you've got less drivers that can go to the U.S.

because of the new vaccine mandates. All of that reduces capacity.

And when you reduce capacity and demand stays strong, price goes up. Our job is to manage the price and I can tell you we're a 100% focus on that in '22.

Okay, that's a really good color. I appreciate that.

And then perhaps my last question before I turn it over. On the real estate, a lot of your shareholders wonder about what your strategy is with that real estate book value you have.

I think it's about $631 million. Also at this point, and I'm sure the two kind of inflation we are seeing over the last decade or so, the real estate market value has probably gone up significantly for you guys.

So a couple of questions, two-part question there. What kind of real estate do you own at this time?

And what do you see or what kind of plans you might have for leveraging the market value strength?

Well, we've got -- as you comment, I think Carson, Steph, you can chime in on this, but I think the book value, the stated value on our books is around $620 million, $625 million or something like that.

Yeah, $630 million.

Yeah, $630 million. You've got the real estate that we hold in the crazy markets in Canada, which would be Vancouver, which would be the GTA and some of those market.

It's through the roof. We're talking about multiples over our book value.

And then we've got some absolute strategic assets in Calgary and Edmonton that are tied to rail. Those are your replaceable asset.

So we've got lots of our book -- our market value of our real estate is higher than the book value. Okay.

I just don't know. We'll just leave it at that.

My strategy is really simple. We got one really, really great asset and it's called real estate.

You got to own real estate in a rising inflationary environment. And I suspect that when we go to renew our debt facilities that that's going to be a pretty darn good leverage that we'll be able to use with our debtholders to say this is a fantastic asset and I think we'll be able to add some additional liquidity to our business so we can grow through acquisition.

That's our strategy.

Okay. That's pretty simple [Indiscernible] Thank you.

Thanks for taking my question. Just on the re-pricing opportunity you mentioned here, Murray, just wondering like, how much of the book of business do you think today is maybe below a pricing level you think is acceptable and how much of that can you reprice?

In other words, do you have contracts in place than maybe put -- push out when some of that re-pricing can happen just because you're under contractual obligation to provide that service under a previous rate?

Yeah. I think we've got some of that.

You never -- I think in '21 Kevin, nobody that was pricing in Canada was factoring in an inflationary spiral that really happened, particularly in the last half of the year. It just absolutely exploded.

And by the way, we're not the only ones that are talking like that. Bank of Canada, everyone's talking about it.

And everybody is now -- inflation's now totally embedded within the Canadian landscape. So I think what we were is basically behind the curve on some of that, a little cautious on pricing improvement.

And you've got to remember, this is the first time in decades where you've had an inflationary environment like this. I don't think that's the case now.

I'm telling all of our business units don't be shy. And this is -- we expect pricing -- pretty significant pricing in increases to happen.

And by the way, we have to have that because driver salaries are going to go up quite significantly. We already know what's happening with fuel.

You can't get new equipment. New equipment is going to be up a bit to 20%.

We're not talking about five anymore, Kevin. It's got to be significantly higher than that.

And then our job then is to get a little -- is to get something higher than what the cost is. And that's going to be our job as a senior team is to improve the margin in '22 and then it’s going to come through pricing.

And then hopefully we can mitigate some of our costs by being smart. But you can't mitigate driver’s hours, that's a market-driven thing.

You got to pay, which you got to pay just like for fuel. So I think where you get some of our margin degradation, Stefan talked about this is we have moved our business away from owning the asset to being non-asset, to being really asset light.

In our asset-based businesses, we expect 20% margin plus. If we're buying the asset, the truck, the trailer, and everything, we expect 20% plus margin.

If you're using all subcontractors, well you're not going to make 20% because the contractor's going to make it -- make that. We in our -- in those where we have no assets, you have a much lower margin than when you would go on there.

And that's our game plan because what we do is manage the spread. We have a nice mixture.

I expect when we invest the capital, we expect 20% margin plus businesses. When we just have logistics or asset light then the margin goes down and we've been moving more and more towards asset-light business, where we're not making the capital investment.

We love to invest in real estate because it's long term. We love the intermodal business because it's long term.

Right. That makes a ton of sense.

You can still generate good ROI on a lower asset.

It's all about do we generate cash, in a return on the cash we invested. We're still [Indiscernible] disciples here, Mullen Group.

Makes sense. It's -- you made a comment a few times that you think there's a structural change in the Canadian freight industry.

It's been underpriced for a long time now, and maybe that's starting to change and maybe following what always [Indiscernible] to the boarder. Are you seeing any behavioral changes with your shippers or your customers?

To the extent that a crystal ball, they've seen how disruptive it has been to shipper’s south of the border if they did not secure capacity ahead of time. And if what you're calling for is something maybe similar to what we've seen in the U.S.

the past few years here that incentivizing shippers to maybe, as you mentioned, maybe lock in some dedicated capacity, lock-in rates, maybe at a higher level by knowing that there's consistency of service. Are you seeing any of that behavior changes if what you're calling for is really what's happening?

Truthfully, Kevin, I haven't seen that yet. At least in the Canadian marketplace.

By the way, no customer that I know of yet, and I've told this to all of our group, has come to us and offered [Indiscernible]. We got to go [Indiscernible], we got to get tell them.

If you want service, this is what you pay. So these are awkward discussions when you haven't had these discussions for a long period of time.

So you're going to win some, you're going to lose some, but net prices are going up. Some customers -- I think generally though; people are -- all the customers that we've had are receptive to the pricing increases.

What we are still involved in, nobody just accepts a huge increase. There's lots of debate and can you mitigate?

Can you do this? Can you do that?

And that's where I want to give our customers the option of what do you want. If you can give us time and you want to move it intermodal, that's probably going to be a much more cost efficient way for you than if you want truck and you want to deliver tomorrow.

That service is going to cost you a lot of money. And so we have to manage it, Kevin.

I know prices are going up. But the market will pay if they have to pay, not because they want to pay.

That's a very fair statement. I'll leave it there Murray and team.

Thanks for taking my questions and congrats on a solid Q4 there.

Yes. Thanks, Kevin.

Appreciate that.

Thanks. Good morning, everyone.

Murray, you mentioned that acquisition should continue to be a story here in '22. But when I look at your outlook section, your annual release there, you called out being uncomfortable with the current valuation expectations.

So how should I frame those two comments together?

Well, I think that's the tough call that we're going to have, David, is that if you think about it, a seller is now saying, what my -- I'm going to get pricing increases. So I want to hire evaluation and that ends up being the -- I think that ends up being the difference in between what we're paying for and what we expect.

So we just have to manage that. They've got to find a happy medium.

And so everybody tells me the raising prices. All these guys that are trying to sell the businesses while I'm going to raise my prices.

Well then go raise your prices and show me because I want to see how it works before I invest money in your business. Where we would invest, it is when we think we get a really quality company with a great workforce and great leadership just like we did last year.

We'll continue to look favorably at that acquisitions like that, but I'm not going to go -- some of these businesses just, they need to get their shift together in recent prices and get the margins up or they need to get out of the business. That's how simple it is.

Right. And as a follow-up, if you can't get anything across the line this year, how would you prioritize your free cash flow, is it paying down that dividends and buybacks?

Buyback shares. We already increased the dividend for this year, really comfortable with that.

And I can tell you right now, we're really, really comfortable in making -- buying this really cheap company, it's called MTL.

That's a [Indiscernible] the caller.

Thanks, David.

Yeah, thanks very much. Hey, Murray, how are you doing?

Good.

Good. So just on your outlook for December, just to recap what I think I've heard here is that you gave an outlook for December.

You highlighted that Canada was behind the U.S. We've heard from one-year key competitors here that was true, but now the gap is closing.

Canada is getting its act in gear -- getting its act together and now conditions have improved significantly that will allow you to drive price in Canada at a much better level than you saw in December. Is that fair to say?

I think that the expectation, Walter, is the gap was going to narrow between the two markets of Canada and U.S. I think that's exactly what's going to happen.

And I have not spoken with Mr. Bradar, but I can tell you gets the market.

So he sees it from his perspective, I see it from ours. So that tells me it's a market for us.

Is that prices are going up because they have to, and that gap is going to narrow. When that narrows then I think that what you're going to see is margin improvement.

So when people, what's going to change in our business, there's not going to be substantially more revenue of economic growth. The economy is kind of growing about what it can right now.

It's, you've got a tight labor market, you've got supply chain issues when you just can't grow much more. Where it is going to -- where we do see the step change is in the cost side and appropriate pricing levels.

So how much? I've just said -- I gave my best guess that we're going to improve margin.

We're going to strive to maybe improve margin by 1% or something like that. That's $18 million, but that was just my best guess in December.

And this is a very fluid market right now, like some of the stuff I'm seeing, this is not like 1% margins, this is quite significant. So we'll have to see how it plays out.

I'm just telling everybody prices are going up. I think there's a step change that's happening in the logistics and Canadian trucking business.

And our job is to manage that and drive margin. And it's going to come from pricing leverage.

Period. It's just that simple.

I think there's going to be a step change and then you'll be able to monitor us every quarter. How are we doing on that?

Now, you start the year, yeah, we got pricing improvement. And then you're sitting at the borders waiting, because there's backlogs, there's protests.

Whenever there's a protest, it didn't matter if it was protesting the pipelines, it didn't matter if it's this protest, that protest, when there's protests which are really labor disruption moves, then those are awkward times and you don't have good productivity and those kind of things during that period of time. But protests don't last forever, they'll go away.

What I'm talking about is the trend. And I think the trend is higher prices and I think that will be the friend for those people that know how to take advantage of that.

Okay. You highlighted your intermodal deal with CN.

As you know, and I know I've asked you this in the past. CN is currently examining how they're going to operate their intermodal segment from that trucking side, particularly with their transaction H&R and so on.

You appear to be getting a deeper and deeper relationship with CN on the intermodal side. Does it stand to reason that there could be further partnership here if they do indeed, go ahead with that kind of model that they've talked about.

Or on the flip side, if they didn't go with Mullen on the JV model and went with another player. Do you see that intermodal business that you've announced with CN at risk in the future, depending on who they go with if they do JV with someone else?

Well, I can't speak for CN I'll let -- you can talk with them. They've got their strategic plans and their initiatives, and I'm not privy to them and whatever.

Suffice to say, I'll look at any deal that comes up across our desk. I can speak of what we would look at.

And by the way, I looked at the H&R assets before, and I looked at the transacts assets before they bought them. So it's not as if this is new to us.

But if it comes our way, we'll re-engage, and we'll look at it, and we'll see does it make sense from Mullen shareholders and for our business and for our customers? Absolutely we'll do that.

Am I worried about we don't get it? No, because we don't have it now.

So all we're talking about, if it makes sense, then we will certainly put our best foot forward and whatever. But the steps that we're taking and Richard talked about it, we continue to get -- we're going to move more and more towards providing a full intermodal, long mile, service offerings for our customers.

Intermodal is the way of the future for the long haul, for the long mile. LTL, your regional network.

That's delivering to the customer. So we've built out an excellent platform in LTL.

Now we're building out the long mile and the intermodal will be a very, very critical part of it. CN -- we engage with our friends at CN because you can just say, look great.

They know that we're going to be a player. And they'll want to engage with us because we move a lot of freight with them.

They're a big subcontractor to our group. We're going to continue.

And then you saw we've already put some nice little capital addition, a lot more capital into intermodal trailers than into trucks. Trucks use fuel, trucks have drivers, trucks have repairs and maintenance.

All the three big costs and trucking, they're going through the roof, and intermodal, it's -- we'd signed long-term deal with CN, which gives us price stability.

And finally, just on technology here and the continued integration a little bit on the edges, at least on intermodal with trucking and so on. I noticed that Union Pacific, through its logistics has done some interesting moves here acquiring Transload facilities, but recently partnered with TuSimple to go down the path of autonomous driving and really taking what we all viewed as a conceptual down the road idea and really now, starting to invest dollars and test out equipment and so on.

What's your view on that whole path? Are you going to be -- await and see and see how it develops or is it possible that you start looking at some ways to integrate more with rail by investing in autonomous driving?

Well, I think there is a way for autonomous vehicles, but probably in my career, the rest of my career, the autonomous vehicles will be on use when they are on a specific site like in a modal yard where you can bring sense all the parameters in there. We already know that they are using autonomous trucks in a lot of the mining even in the oil and gas business -- up in the oil sands.

Some might be using autonomous vehicles on platforms where you just program it in and say here's what you do. Going over the road.

I'm not --that's not going to happen in my lifetime, I don't see that. Our autonomous truck is going to be that intermodal platform, that's where we're going.

Will we have autonomous trucks in our yards to move freight and equipment? Yeah, I can see that happening, but it's still early stage.

Right now what -- I will tell you what we're really focused on. I'm really focused on making sure we have the right strategic assets and facilities.

We're going to continue to invest in facilities. If you don't have -- if you don't have facilities, you are not going to be a player in this game.

Am I happy with our real estate portfolio? Take it to the bank, shareholders, it's fantastic.

Would do I want more intermodal? Yeah, but the way they're expensive.

We've got some good platforms now and we will continue to add where we can. But on the technology side, yeah, technology is just going to evolve.

We all know that. And it's whether it's going to be one big block chain where everybody in the world goes through one technology, I doubt it.

I think there's going to be just a continued evolution of technology and integration of service providers into one platform. If you want to call that blockchain too, go ahead.

But we'll be more integrated in with your service providers. No doubt about it.

Okay. I appreciate the time as always, Murray.

Thanks.

Thank you, Walter. [Indiscernible].

Murray, thanks for taking my questions.

Hello.

I wanted to touch first of all, you briefly mentioned disruptions from blockades and protests in that sort of thing in the business. I'm wondering if this is anything that's been material so far in the quarter or if you've for the most part unable to work around any blockades or disruptions of that sort?

Well, it's been a pain, there's no doubt about it. But as I said, we've endured many, many blockades over the last bit.

In the fourth quarter, we endured the floods blockades. You couldn't get through the road.

So this one -- the other one was mother nature. For this one that appears to be man-made, but it's also a disruption.

But you know you have to work around it and costs are going up. So you avoid those areas but you have to tell the customers you will avoid it.

If you're stuck in the middle of it, yeah. We've had some disruption there, but our business is totally diversified across so many different platforms.

And we've had some disruption and then we've had some gain. So net-net, I don't think you're going to hear me say, oh my God.

These things destroyed our quarter. I don't think you're going to hear that.

Are they a pain? Yes.

But as I said, most disruptions are a pain, so we just have to work around them.

Okay. Thanks, I agree.

I know one thing that happens. If we're taking that freight and you're going to and from the United States as an example, I can tell you the rates are up pretty significantly right now.

Okay. Thanks.

And speaking of rates and pricing, there's been a lot of talk on that today. So if I could just try and summarize it a little bit, would you say that overall demand remains strong in the business, but on the volume side, capacity is tight, so Mullen will be able to leverage pricing to meet the higher costs and potentially even leverage pricing increases over and above to capture incremental margin.

Is that correct?

Yeah, you've summarized it better than maybe I did more which is demand remains pretty strong, it's not growing. I want to make sure that I'm clear with everybody on that, I think it's not bad, but it's not growing.

Capacity is the thing that has tightened for the reasons we talked about. And so that tells me that price is going to go up.

Our job is to move the pricing over and above our cost push and myself and Richard particularly and even Stefan and Carson, we're on top of our business units all the time. You better make being sure that you move your pricing, don't come in with your monthly numbers to me that says, we were busy but we flopped, we didn't do well.

But you wouldn't want to have that call with Maria and Richard these days.

Okay. Thank you.

I appreciate that. And my last question is more macro.

I think if you look at the recent supply chain bottlenecks and inflation going on globally, it's highlighted some weakness in global supply chains and logistics networks. Would you say that this is positive for the business overall in the long-term when you consider the investment needed to bolster these networks, investments needed in technology, and on the 3PL side of the business and that opportunity as well?

I think that's a really good point, Matt, I think where you're finding -- where there's huge pricing leverage. It's really not because of a lack of technology.

What technology I think allows us to do is be more productive. Where you're having the bottleneck is, and let's look at ocean shipping.

Demand went up, but you couldn't add any supply. You don't go build a ship in a day, you don't build a new port.

And then things got bottlenecked. So those container ships were coming from Asia over to North America instead of being on the water and in port on total rounder being 45 days.

Well they're sitting in port waiting to get off loaded because it's bottlenecked, because there's not enough capacity to move it out of there efficiently. So they're sitting out on open water for 15 days on both ends.

Well, that adds 30 days that takes away how many rounds as you can do. So there was actually a capacity reduction of available ships because they weren't productive.

That is happening in trucking now, we're not as productive as we once were because there's all these new safety protocols. There's a vaccine mandates, there's this mandate, it's just another form of regulation.

And you cannot add capacity today in anything. There's nobody is building a new facility in trucking, it's to expense.

So I think it's the capacity -- we can't add supply, which means that if demand stays strong, price must go up.

Okay, thank you. That's helpful.

I think this is -- that's why I think it's a step change and this could be -- it could be a trend that's here for quite a while.

Okay, thanks. Absolutely.

That's helpful. That's all my questions.

I will turn it back.

Thanks [Indiscernible]

Thanks, folks. We've taken up enough your day-to-day.

Wish everybody well, and we've got a lot of work to do in '22, and I can tell you our team is totally focused and you've heard how -- what we're going to be focused on. Thanks so much.

We'll talk to you after Q1. Cheers now.

Bye.