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Earnings call: Badger Infrastructure reports growth amid market shifts

Published 2024-08-02, 07:00 p/m
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BDGI
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Badger Infrastructure Solutions (TSX:BDGI) Ltd. (NYSE: BADGI ), a leading provider of hydrovac excavation services, reported a solid performance in the second quarter of 2024, despite contrasting trends in its US and Canadian operations. The company saw an overall increase in revenues, gross profit, and adjusted EBITDA, with the US segment experiencing a 14% rise, while the Canadian market faced a 19% decline. The adjusted EBITDA margin improved to 23.9%, and the company added 114 trucks to its fleet, ending the quarter with 1,584 hydrovacs. Badger also announced plans for a normal course issuer bid on the Toronto Stock Exchange and discussed various operational and strategic initiatives during its earnings call.

Key Takeaways

  • Badger Infrastructure Solutions reports robust revenue growth, especially in the US market.
  • The company sees a 14% increase in US operations, but a 19% revenue decrease in Canada.
  • Adjusted EBITDA margin has improved to 23.9%.
  • Badger added 114 trucks to its fleet, totaling 1,584 hydrovacs.
  • Plans to moderate truck builds in Q3 and expects to be at the lower end of full-year guidance.
  • The company announced an intention to pursue a normal course issuer bid with the Toronto Stock Exchange.

Company Outlook

  • Delayed projects in Canada are expected to commence later in 2024 and early 2025.
  • Despite a slowdown in franchise agreements, the company maintains its strategic course.
  • Investments in data analytics and systems are anticipated to drive future growth and efficiency.

Bearish Highlights

  • Softness in the Canadian market, with revenue down by 19% from the previous year.
  • A slight decline in revenue per truck per month (RPT) due to the Canadian slowdown.
  • Slowdown in California and the Midwest attributed to uncertainty in administration and economic incentives.

Bullish Highlights

  • Successful storm response with power restoration within the first 7 to 10 days.
  • Confidence in renewable energy and oil and gas projects, expecting progression once there is more certainty.
  • Positive outlook on the ability to increase truck utilization without significant refurbishments or reduced manufacturing.

Misses

  • RPT slightly down from the previous year due to Canadian market performance.
  • Plans to be at the lower end of full-year guidance for truck builds.

Q&A Highlights

  • The company can coexist with both share buybacks and new truck builds.
  • Leverage is trending downwards, providing financial flexibility.
  • Investment in data analytics platform expected to positively impact operations and profitability.
  • Long-term investments in systems to continue for the next two to three years.

During the earnings call, Badger Infrastructure Solutions highlighted its operational successes and strategic initiatives aimed at driving growth and efficiency. The company's investments in data analytics and new systems such as sales quoting and fleet management are expected to enhance decision-making and improve profitability. Despite the current challenges in the Canadian market, the company remains optimistic about its growth prospects and its ability to adapt to market demands. Badger Infrastructure Solutions continues to prioritize operational excellence and shareholder value as it navigates through the evolving market landscape.

Full transcript - None (BADFF) Q2 2024:

Operator: Good day and thank you for standing by. Welcome to the Badger Infrastructure Solutions 2024 Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Lisa Olarte, Director of Investor Relations and Financial Planning. Ma'am, please go ahead.

Lisa Olarte: Good morning, everyone and welcome to our second quarter 2024 earnings call. My name is Lisa Olarte, Badger's Director of Investor Relations and Financial Planning. Joining me on the call this morning are Badger's President and CEO, Rob Blackadar; and our CFO, Rob Dawson. Badger's 2024 second quarter earnings release, MD&A and financial statements were released after market closed yesterday and are available on the Investors section of Badger's website and on SEDAR. We are required to note that some of the statements made today may contain forward-looking information. In fact, all statements made today, which are not statements of historical facts, are considered to be forward-looking statements. We make these forward-looking statements based on certain assumptions that we consider to be reasonable. However, forward-looking statements are always subject to certain risks and uncertainties and undue reliance should not be placed on them as actual results may differ materially from those expressed or implied. For more information about material assumptions, risks, and uncertainties that may be relevant to such forward-looking statements, please refer to Badger's 2023 MD&A, along with the 2023 AIF. I will now turn the call over to Rob Blackadar.

Rob Blackadar: Thanks Lisa and good morning, everyone and thank you for joining our 2024 second quarter earnings call. Before we get into the results, I'd like to take a moment to talk about safety, which is how we start all of our team meetings here at Badger. We're in the middle of our busy summer construction season and much of North America has been experiencing hot weather conditions in the field. Badger is mitigating this heat stress by having our operators focus on hydration, cooling periods, routine breaks and aligning our work hours with the coolest parts of the day. By doing so, we've been able to avoid heat injuries across our employee base and we appreciate our team's efforts to keep everyone safe. Now, on to the quarter results. We had another quarter of solid growth in revenues, gross profit and adjusted EBITDA. Our top line revenue of $186.8 million grew by 9%, driven by the strength of our US operations which saw a revenue increase of 14% year-over-year. In the US, our Eastern and Southern regions experienced strong growth, which was offset slightly by slower levels of growth in California and the upper Midwest. We continued to experience softness in our Canadian markets, with revenue down 19% compared to 2023 due to the delayed starts of some significant projects in Central Canada and lower market activity at our operating partner operations as we discussed last quarter. We continue to expect these delayed projects, which we have been awarded, to begin later in 2024 and into early '25 as we discussed on our previous call. Canadian revenues are likely to remain in line with this trend we experienced in the first half of the year. In my closing remarks, I will cover some of the key projects and industry sectors that Badger has been having success with across North America. We achieved RPT, or revenue per truck per month, of $43,161 in Q2, down slightly from the previous year due to the slowdown in the Canadian market. RPT in the US for the quarter was flat compared with last year. We also added a net 114 trucks to our fleet year-over-year, while holding RPT relatively stable and continued to make good progress on our commercial and pricing initiatives. We continue to see growth in adjusted EBITDA track higher than our revenue growth, up 14% year-over-year, driven by improved operating leverage in our G&A support functions. Our adjusted EBITDA margin was 23.9%, up from 22.8% in 2023. The Red Deer plant manufactured 59 hydrovacs this quarter and 111 year-to-date. Beginning in Q3, we are moderating our rate of truck builds and expect to be at the lower end of our full year guidance, which we previously announced to come in at 7% to 10% growth over the prior year. We retired five units in the quarter and 71 units year-to-date, within our range of 70 to 90 units for the full year. We refurbished 10 units in the quarter and 18 units year-to-date. We ended the quarter with 1,584 hydrovacs in our fleet, growing our fleet by 8% since Q2 of last year. Also of note, we announced our intention to pursue a normal course issuer bid with the Toronto Stock Exchange, to which Badger may acquire common shares for cancellation subject to approvals. I'll now turn the call over to Rob Dawson to discuss our Q2 financial results in more detail.

Rob Dawson: Thanks, Rob. As you saw, in our second quarter release, the team delivered another quarter of solid results. Revenue grew 9%, driven by our US operations which was up almost 14%. Our Canadian operations continued in line with the first quarter trend down 19% from last year due to the same reasons -- due to the reasons Rob mentioned earlier. As Rob discussed, Canadian revenues are likely to remain in line with the first half of the year, and we remain encouraged with the overall strength in our US business. Gross profit margins were largely unchanged from last year at 29.2% compared with 29.1% last year. The trend in our adjusted EBITDA margins continued to improve at 23.9%, up 110 basis points from last year. Our four-quarter trailing adjusted EBITDA margins continue to grow in line with our long-term objectives. Our trailing four-quarter adjusted EBITDA and adjusted EBITDA margins have now grown for 10 consecutive quarters. G&A expenses were $10 million, or 5.3% of revenue, down from $10.9 million, or 6.4% of revenue in the prior year. As indicated last quarter, overall, 2024 G&A spending is expected to be largely in line with last year's. Adjusted earnings per share was $0.45, up 18% compared to last year, with revenues up 9%, adjusted EBITDA up 14% and an adjusted earnings per share up 18%. We are encouraged by the continued scalability and growth in margins. Now on to the balance sheet. Our capital allocation priorities are unchanged to utilize our cash flows from operations to fund growth in our fleet and our hydrovac services operations. We continue to maintain a strong flexible balance sheet to support this organic growth in commercial strategy. In that regard, our compliance leverage ended the quarter at 1.5 times debt to EBITDA, down from 1.6 times a year ago. During the second quarter, we also completed some minor amendments to our syndicated credit facility, principally to convert it into a US dollar facility. With ample liquidity and over four years of remaining term, we have plenty of flexibility to execute our plans. And finally, and as Rob has already mentioned, we intend to initiate a normal course issuer bid in the near term. I will now turn things back over to Rob for some final comments.

Rob Blackadar: Thanks, Rob. So before we open up for questions, I want to add a few last comments. We are pleased with our continued performance to scale and grow across key markets in North America. Our commercial strategy execution continues to help Badger capitalize on various projects including data center construction builds, microchip manufacturing plants, energy and power grid hardening projects and several other infrastructure projects. We continue to bid and win light rail transit, wastewater treatment plant facilities and stadium projects all across North America. Badger is the only vertically integrated hydrovac services company that can simultaneously support all of these diverse projects while also supporting our local market customers. I am very proud of our local sales, our national accounts and operations teams who are helping to grow and make Badger and take Badger to new heights by chasing these projects. We are also very excited to announce Badger's new data analytics platform which will be launching this quarter. This new platform will act as a catalyst for revenue growth and margin improvement, driving the business towards our long-term targets which we set out at our recent Investor Day. So with those comments, let's turn it back to the operator for questions. Operator?

Operator: Thank you. [Operator Instructions] And our first question is going to come from the line of Yuri Lynk with Canaccord Genuity (TSX:CF). Your line is open. Please go ahead.

Yuri Lynk: Good morning, gentlemen.

Rob Blackadar: Hey, good morning, Yuri.

Yuri Lynk: So, pretty good quarter, all things considered. Just wanted to dig in a little bit on the gross margin. The progress you've been making there, driving year-on-year improvements kind of stalled out in Q2 despite you taking some price. So what were some of the offsets in the gross margin line and how do we think about your ability to continue to improve that number going forward?

Rob Dawson: Hi, Yuri, it's Rob Dawson here. I can add a little color to that one. I think when you see that we're cutting our -- not cutting, but we're moderating our truck builds, our utilization was a little lighter in Q2 and as a result of that we did have slightly elevated labor and some M&R, maintenance and repairs as a percentage of revenue in the quarter that we think we can get back to growth and gross margins going forward with a little higher utilization going forward. I think utilization is the main driver there. And as well there are some other initiatives that we have underway that we think will return that to growth as expected.

Yuri Lynk: Okay. And then last one for me. Should we anticipate any disaster recovery work in the third quarter? I know there was a pretty large hurricane that went through the US.

Rob Blackadar: I'll take that one, Rob. So Yuri, we had some response to Hurricane Beryl which had gone up through Texas and hit Houston pretty hard. And it was kind of a normal course storm response for the company. Nothing kind of extraordinary or outsized. Certainly, the forecasters talk about how warm the Gulf of Mexico is and how this should be an active season as well as some other emergency response work that we're all the time doing somewhat normal course across the business in many various markets, we respond to forest fires and other natural disasters, and the team is always ready to amp up on that. We're thinking it's probably going to be a pretty active season. But that storm we just had, even though there was a lot of noise regarding the storm and the storm response for about the first seven to 10 days, it wasn't a very long-lasting storm response. The customer that we had down there was able to get the power back on in that seven to 10-day period. But we anticipate this year should be active, but we don't really forecast that into our numbers. Anything that happens along those lines is we actually look at as kind of an upside. The last couple of years of emergency response have been somewhat muted. And so it allows us to not try to live off of non-recurring type work like that.

Yuri Lynk: Okay. Makes sense. I'll turn it over.

Rob Blackadar: All right. Thanks, Yuri.

Operator: Thank you. And one moment as we move on to our next question. And our next question comes from the line of Frederic Bastien with Raymond James. Your line is open. Please go ahead.

Frederic Bastien: Good morning, guys. You highlighted a slowing rate of growth in California and the Midwest. Just curious how relevant these markets are for Badger currently and whether you're seeing signs of potential slowdown or investment delays ahead of the presidential elections. Thank you.

Rob Blackadar: I'll cover that, Rob. So, Frederic, it is somewhat tied to the change or potential change to the administration and the presidential election. Those are good markets for Badger, but in the US, they are one part of our entire opportunity and portfolio. The way it works in the US, especially in regards to some of the construction projects, the government typically will give some kind of an economic incentive or some technology that the government wants to support or the current administrations in support of. For example, the CHIPS Act that the US Federal government recently did to really drive US chip manufacturing plants to be onshore into the states. Those markets, specifically -- the slowdowns were tied to some projects that were both renewable energy and oil and gas related, and upper Midwest was more oil and gas related and Southern California more on the renewables side. Both those technologies, depending on which administration comes into play, we believe certain economic incentives will be driven by whatever administration gets in. The good news is, Frederic, we are agnostic. We support both those technologies and we love working on both those types of projects. The one thing we feel very comfortable with, no matter which party gets in, will be that the technology sector, think in terms of like data centers and some of the chip manufacturing plants, but the technology sector, they over time always have been gravitating toward that renewable energy. So we believe over time these projects will go just whenever there's more surety in whichever administration is going to be in play. So that's the world in which we're operating.

Frederic Bastien: Okay. That's helpful. Thanks. And with the new truck builds guided down slightly. Can we expect a bigger ramp of the refurbishment program? Maybe an update on that would be super helpful. Thank you.

Rob Blackadar: Yeah. So our plan is -- as we look at the truck fleet overall, we added 114 trucks year-over-year. And the trucks as we've been building the new Gen 5s actually operate. They're the most efficient Badger truck that's ever been built. We believe we can actually drive more utilization into the fleet, and not have to ramp up at the same pace and still be able to achieve and attain our revenues. We don't necessarily need to drive up refurbishments and offset it with a ramp down in the manufacturing. We believe that we still have some opportunity in our utilization. And that's what Rob was talking about in some of his comments earlier. You want to add anything on that, Rob?

Frederic Bastien: Thank you.

Rob Dawson: No.

Rob Blackadar: Okay. Thanks, Frederic.

Operator: Thank you. [Operator Instructions] And our next question is going to come from the line of Krista Friesen with CIBC (TSX:CM). Your line is open. Please go ahead.

Krista Friesen: Hi. Thanks for taking my question. I was just wondering on these delayed Canadian projects. I'm assuming at this point they're all still delayed. There hasn't been any sort of cancellation of any of them. And I was also just wondering if there's any form of compensation that you're able to kind of extract from it given the impact that it's had on your business, if that's been built into those contracts.

Rob Blackadar: No, Krista, we're not able to. There's no penalty clause of a late start or delayed start in our contracts. And if we had done some specific ramp ups only for those projects, then we probably would have structured the contracts a little differently. But we don't have that type of clause in there. As far as, are they actually getting canceled? Moving from a delayed mode to cancellation mode. We're not seeing any of that anywhere. It keeps kicking to later in 2024 and now beginning of 2025. Some of the things we're seeing. So.

Rob Dawson: If anything, Krista, the awarded contracts that are in our pipeline have not been canceled. But there is positive signs for even further large CapEx and infrastructure projects being announced with FID, particularly in Western Canada. No coastal gas link is complete, TMX (TSX:X) is complete. But there's now two new LNG facilities, one in construction already and another one announced. And then a number of these infrastructure projects and public transportation projects in San Francisco are continuing to proceed. So we remain pretty optimistic about Canada.

Krista Friesen: Maybe just on that last point there, over almost the past year, we've seen the non-destructive units decline in Canada while it builds in the US. Do you expect to kind of hold it at this level in Canada, or continue to prioritize sending them down South?

Rob Blackadar: Yeah. So we're going to flex the trucks to where the demand is and where we can get the return. So we look at both the return profile of the branches or the projects that we're feeding the assets to make sure that it's being additive to our returns and they're not diluting our returns. And then the second thing is, where do we have the demand. If there is lower demand in Canada, or we can handle or support our customers through increasing our utilization with less trucks, we're going to do that every time. It gives us a much better return profile. But obviously, we don't want to keep pushing trucks into a market that doesn't have as much demand if the return profile is not there. So those are things we look at whenever we make the allocation decision of where the assets go.

Krista Friesen: Okay. Thanks. And just one last one for me. Is there anything to be said or read into just about the decline in the franchise agreements in Canada and the US this quarter?

Rob Blackadar: Do you want to take that, Rob?

Rob Dawson: I don't think there's anything specific to be read into that at all. You would have seen a reduction of two this quarter, two very small, single digit unit franchises that were more or less dormant. And so, we just canceled the agreements and made an amicable departure with EOP partners in both of those cases.

Rob Blackadar: Yeah. And Kris, I'll also share, from time to time with franchises, it doesn't matter what industry or what business you're in. Franchises, like any small business owner, they have different periods of their life cycle. And there's periods where they are starting into franchises. They are investing and growing. And then there's periods when people come up and say, hey, we want to retire, or I don't have a succession plan. At that point, we as a company look at those franchises and say, does it make sense for us to continue with another franchisee? Does it make sense to retire out the current franchise and turn it into a corporate store? What's the existing market, et cetera. So, we do all those evaluations, but as Rob suggested, these two were pretty normal course, but there's no change in our strategy on the franchises, generally speaking.

Rob Dawson: If anything, Krista, profitability of our Canadian fleet is, and we've talked about this in previous quarters, it's a key focus of ours, and particularly in Ontario, where there's a good mix of franchise and corporate store operations. If anything, there's an increased level of coordination and cooperation, sales and business development to ensure that we're the not only getting the utilization up across the whole fleet, including within our franchises, but we can offer a seamless customer experience in a separate market.

Krista Friesen: Okay. Great. Thank you. I'll jump back in the queue.

Rob Blackadar: Thanks, Kris.

Operator: Thank you. And one moment as we move on to our next question. And our next question is coming from the line of Ian Gillies with Stifel. Your line is open. Please go ahead.

Ian Gillies: Morning, everyone.

Rob Blackadar: Good morning, Ian.

Ian Gillies: As you think, with the slower truck build program this year, and as we start thinking about '25, the mechanism to get to 12% to 14% revenue growth next year, obviously changes a little bit. Are you having enough success on the pricing side? And with respect to some of these, I guess, customers starting up again later this year, that you think next year you can get back into that 12% to 14% range based on what you know today?

Rob Blackadar: Yeah. So, we feel comfortable, and we do a lot of modeling on the fleet throughout every single month. We're all the time evaluating fleet levels where we need to move our assets. And because it's -- our business is both an asset and a labor intensive business, we're all the time evaluating both. Ian, from our perspective, our pricing -- we're very pleased with what we've been able to achieve on pricing so far the first half of the year. Again, don't really release what the pricing margin improvement has been, but we're pleased with what our targets were and how we're achieving to those. If anything, as we've added 114 trucks year-over-year, I would suggest that we have opportunity to drive more revenue through stronger utilization. The utilization is not bad, it's not down significantly, but there's opportunity to drive more utilization, because it's an asset intensive business alongside of our labor. Obviously, the better utilization you can get, the better returns you can get on the assets. And driving utilization really does improve the return profile. So, for us, we feel like we have upside on our utilization of the trucks. So, we're not concerned at all on if we're on the lower end of that truck build. As I said, in my comments and Rob reiterated of us hitting growth targets next year. Anything you want to add Rob, or.

Rob Dawson: I think that covers.

Rob Blackadar: Yeah. Okay.

Ian Gillies: That's very helpful. Maybe switching gears a little bit. This one's probably more for Rob Dawson. How are you thinking about the toggle between usage of the NCIB and building trucks and the relative returns, et cetera? Because obviously this NCIB is a bit of a new mechanism for this management team.

Rob Dawson: They're obviously quite connected. But I don't think there's likely going to be a decision between should we build this next truck or should we buy back stock. I think the two can coexist quite well together. The announcement of an NCIB, one, it's just a regular return of capital to shareholder mechanism that we -- in normal and due course, I think we'll have it on here and it's likely to remain on as a return function. There is -- our leverage is starting to trend downwards, even with us independently assessing what our build and growth in our fleet should be. And as our leverage, relative leverage is trending down, we have capacity on our balance sheet, I think to do both. And then finally, I think as we see 10 consecutive quarters of strong growth across all of our relevant metrics, and we see -- we just want to be very supportive and indicate our strong support, stand beside our shareholders and invest alongside them in our share price if we view the value of the business as perhaps lagging a little bit, the value that's being created. So all of those things, I think can exist without having to make that capital allocation decision between a new truck and buying back a stock. The returns that we're generating on trucks, even if you were just to model today's RPT of $42,000 and today's margins with no change in margins, these trucks are delivering very strong returns on capital and our plans and our trends and our expectations are for those returns to continue to grow. And the market is growing as well. So, we're not necessarily at a stage where it's one or the other. We think it's both ends.

Ian Gillies: And perhaps along those lines, Rob, just as a reminder for us all, could you maybe talk a little bit about where you think the target debt metric should be and whether you're willing to put that net debt to EBITDA trend up to use the NCIB.

Rob Dawson: I think we've disclosed in the past, we guide to a one to two times, and so, we're at 1.5 times today. So, we'd be heading into the lower half of that range, which gives us that flexibility. Whether or not we would be wanting to post a target and try to manage to that target. I think we still have some discussions internally with management as well as with our Board on what those things would be. But we're heading into the lower half of that range for sure. At the same time, we're seeing the breadth of the business, the depth of the business, and the diversification of all of our revenue streams across both geographies and different segments widen. So, the volatility of the business is definitely lessening. So, the debt capacity that our business can carry at one to two, I think if anything over time is going to get even more, not less. So, lots of flexibility. We're heading into the lower half of that range that we've disclosed, but we're not thinking of pegging ourselves to saying we're going to be at one and a half, and if we go below that, we'll manage back up there. We're definitely not saying that.

Ian Gillies: Okay. Understood. Thanks very much. I'll turn the call back over.

Rob Blackadar: Thanks, Ian.

Operator: Thank you. And one moment for our next question. And our next question is going to come from the line of Trevor Reynolds with Acumen Capital. Your line is open. Please go ahead.

Trevor Reynolds: Hey, guys. Just a couple questions here. Most have been asked. You're at 71 retirements already for the year. Maybe just provide some commentary, like do you think you'll be right at the high end, or were the retirements accelerated at the beginning of the year?

Rob Blackadar: So, if you remember, we accelerated the Q1 retirements very, very strong because we were having these projects that were being delayed. And we decided instead of carrying the additional fleet through the year, normally you would want to spread out your retirements throughout the year with trying to hold on to the fleet as much as you can to get the most -- extract the most value out of the revenue producing assets and then toward the latter, let's say, one-third of the year is where you really start to accelerate up on those retirements. And this year we basically pre-built or pre-structured the retirements. We feel comfortable with where we are on that original range, and I believe the range was 70 to 90, and we'll be within that range. I don't see us -- if we're at 71 today, I don't see us being, having to go back and go higher than the 90 as we sit today. So, feel pretty comfortable with that right now.

Trevor Reynolds: Got it. Thanks. And just on the data analytics platform, maybe, is there any more costs associated with that in kind of the timeframe that you expect to that to start having a positive impact or being able to collect and utilize the data from that.

Rob Blackadar: You want to talk a little bit about the cost and I can…

Rob Dawson: Yeah. I would say, Trevor, it's Rob Dawson here. The costs of these largely IT system projects are relatively nominal. This one in particular be sub $1 million. I think the message is that we are making steady improvements to our system such that we can build efficiencies and in this case actually increase our level of intelligence about a wide range of subjects related to utilization of our trucks, revenue trends, profitability of our customers, and so that we can drive decisions both into operations, into business development, and to a variety of other things to help us continue to increase our margins on a consecutive quarter-over-quarter basis like we've done over the past 10 quarters. And so this project -- there's a very small operating cost related to this with a team of three to four individuals. But other than that it's a very high return and we're just very excited about it. We're just at the point of going live here in the next several weeks, and there's lots of potential that we might not have identified yet that I think is going to come out of it.

Rob Blackadar: Yeah. I'll add to that, too, Trevor. We're fortunate. Rob and I-- I joined three years ago last month, and Rob joined about a year and a half ago. But we're fortunate. The company had already pre-invested into the Oracle (NYSE:ORCL) ERP system in 2019-2020 timeframe. And so -- but we never really had a data platform to speak of. And so, now we're able to leverage that with little money, as Rob suggested, roughly $1 million, maybe even sub $1 million, or right there, close to that. But for that investment, we're now going to be able to have the data analytics that can start to say, these are the projects that are the most profitable. This is the contribution margin. Right now, anything we do along those lines is very manual in nature, very excel based, and requires a lot of labor and heavy lifting. And the way our new system is set up, it's actually going to be doing both push reports and dashboards for all of our team members to know. This is really good and this is great, and we want to drive more toward that. Or in the case of, let's say, it's a cost line or an expense line, this is actually driving poor behavior or poor returns. But our teammates having that real time, the whole company is pretty excited about this because in the past, again, it was very manual in nature. And now we're actually going to be pretty proud of it. But into the 21st century with this system, and we have some team members that are leading this effort that are world class. So, we're pretty excited about it.

Rob Dawson: The real value, and we're going into a little more detail here. You can sense that we're pretty excited about it. Last year we spoke a lot about the new sales quoting system that we implemented. It's gone very, very well, particularly in our drive to improve pricing over the entire fleet and the entire geography. This -- first half of this year we went live on a fleet system. So now all of our entire fleet has now got central data source that can help us to observe maintenance and repair work locations, utilization levels. We're in the middle of going live with a human resource system. So, now we can do company-wide workforce planning and see trends in that regard. And this data platform aggregates all of those, so you can see all of the counter dependencies and counter relationships between all those things. It's the culmination of a lot of systems all coming online at the same time. And it's been -- a lot of this has just been happening behind the scenes with these small amounts of capital on the steady. And it's going to continue to happen probably for the next two to three years.

Trevor Reynolds: Great. Thanks for taking the questions.

Rob Blackadar: Thanks, Trevor.

Operator: Thank you. And I would now like to hand the conference back over to Rob Blackadar for closing remarks.

End of Q&A:

Rob Blackadar: Thank you, operator. So, I'll close with, on behalf of all of us at Badger, thanks to our customers, our employees, our suppliers and our shareholders for your ongoing support that helps to drive Badger's success. Operator, you may end the call.

Operator: This concludes today's conference call. Thank you for participating and you may now disconnect. Everyone have a great day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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