Exchange Income Corporation Aktie

Good morning, everyone. Welcome to Exchange Income Corporation's Second Quarter Conference Call to discuss the financial results for the three and six months ended June 30, 2026. The corporate's results, including the MD&A and financial statements, were issued on August 11, 2026, and are currently available via the company's website or SEDAR+.

Before turning the call over to management, listeners are cautioned that today's presentation and the responses to the questions may contain forward-looking statements within the meaning of the safe harbor provisions of Canadian provincial securities laws.

Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the quarterly and annual MD&A, the Risk Factors section of the annual Information Form and EIC's other filings with Canadian securities regulators.

Except as required by Canadian securities law, EIC does not undertake to update any forward-looking statements. Such statements speak only as of the date made. Listeners are also reminded that today's call is being recorded and broadcast live via the Internet for the benefit of individual shareholders, analysts and other interested parties.

I would now like to turn the call over to the CEO of Exchange Income Corporation, Mike Pyle. Please go ahead, Mr. Pyle.

Thank you, operator. Good morning, and thank you for joining us in today's call. With me today are Richard Wowryk, who will highlight our financial results, along with Jake Trainor and Travis Muhr, who will expand on our outlook.

Yesterday, we released our second quarter results for fiscal 2026. Our performance was incredibly strong and again demonstrated the resilience of our business model. We set second quarter records in all our key metrics, including revenue, adjusted EBITDA, net earnings, adjusted net earnings, free cash flow and free cash flow less maintenance CapEx.

Those results, coupled with our outlook for the remainder of the year, have necessitated us to significantly update our guidance.

We now expect adjusted EBITDA to be between $890 million and $920 million for the 2026 fiscal year. Our accelerating performance has also resulted in records in our net earnings per share of $1.01 or 29% higher than the prior period and adjusted net earnings of $1.13 or 23% higher than the prior period.

Along with very strong metrics in our payout ratios, our free cash flow less maintenance CapEx payout ratio of 55% was near an all-time low, while our adjusted net earnings payout ratio was an all-time low of 65%.

The strong results, coupled with our confidence in our outlook, which Jake and Travis will talk about shortly, has allowed our Board of Directors and management to increase our dividend from $2.76 to $2.88 on an annualized basis.

We have consistently communicated with our shareholders that we only intend to increase the dividend when we can reduce the proportion of our cash flow and profitability being directed toward the dividend. We have been able to make strong progress in this initiative, and we expect even with the increase announced that the payout ratios will continue to fall.

During the quarter, we announced several highly strategic contracts. Our Aerospace business line has finalized the scope of the services under the Future Aircrew Training program. While the definitive agreements will be papered and signed, we anticipate that the modifications of the aircraft will begin in 2027, with the bulk of the modification and missionization services occurring in the first five years. The duration of the contract will be focused on training and in-service support.

This was an important milestone for both PAL Aerospace and the SkyAlyne team. During the quarter, we also announced a contract with Air Greenland and the government of Denmark for the modification, configuration and integration of two ISR aircraft owned by Air Greenland. The Aerospace business continues to be very busy in fielding inquiries and responding to requests around the globe.

Our Essential Air Services and Aircraft Sales & Leasing business lines continued to see strong demand trends. In our Essential Air Services, we saw broad-based strength in our scheduled cargo, charter and medevac services. With the Air Canada contract expanded and extended starting in the third and fourth quarter, we expect to see continued strength in that business line.

Our Aircraft Sales & Leasing business line is continuing to see robust demand for its leasing business, along with its parts, aircraft and engine businesses. We have put significant growth capital investments in that business, and it is yielding the returns anticipated when we made the investment.

Lastly, the integration of Mach2 has gone very well, and management teams are working very closely. Mach2 has also been integral to working with Canadian North to secure spare parts and components to ensure Canadian North can meet the significant demand they are seeing for their northern routes.

As I mentioned during our first quarter conference call, we saw accelerating momentum within three of our business lines in our Manufacturing segment as we exited the first quarter. That momentum continued through the quarter and was highlighted by strong results in both our Environmental Access Solutions and Precision Manufacturing and Engineering business lines. We are continuing to see significant demand for our composite mats and continuing to see pardon me, for our composite mats and our output from our existing plant has exceeded our own high expectations and were, in fact, records during the quarter.

We are continuing to see market share transition to composite mats in the Southern U.S., hence, the excitement for our new plant in South, which is on time and on budget. And we hope we will be able to see the plant operational later in 2027.

In our Canadian operations, we are seeing significant demand for our wooden mat solutions with the number of rentals continuing to significantly increase quarter-over-quarter. With large linear projects commencing in the latter part of 2026, we're expecting to see strong results by the business line. We continue to see encouraging booking trends at our Multi-Storey Windows.

The second quarter bookings for our order book were the strongest quarter over the past several years. In the first quarter, I spoke about a positive book-to-burn ratio, and that continued. However, I would say we are early innings of the game as two positive quarter does not mean a longer-term trend as we still see market softness in Southern Ontario.

Overall, this was a very solid quarter, coupled with our outlook has led us to a significant increase in our 2026 guidance, a dividend increase while anticipating further reductions in our payout ratios and maintaining our strong balance sheet.

Jake and Travis will focus on the outlook for our segments for the third quarter and the remainder of 2026. I will now pass the call over to Rich, who will talk about some of the key highlights in the MD&A and the financial statements.

Thank you, Mike, and good morning, everyone. I'll provide some highlights from our quarterly key performance indicators and focus on our balance sheet, investments in capital expenditures and pipeline of acquisition opportunities.

As Mike mentioned, we set second quarter records in all of our key performance indicators, including net earnings and adjusted net earnings per share amounts. Those per share records are even more impressive when you consider that shares outstanding were approximately 10% higher over the prior year due to the conversion of convertible debentures in the prior year as we completed our goal of simplifying our balance sheet.

From a balance sheet and cash flow perspective, we had further investment in working capital during the quarter, highlighted by some significant investments in prepaid and inventory at our Aircraft Sales & Leasing business line.

In addition to purchases of whole aircraft for resale and growth in parts inventory to support future growth in parts sales, deposits were made for future asset acquisitions that will occur over the back half of the year. Consistent with the seasonality of EIC, we expect that the third quarter will require a further investment in working capital as the third quarter is our seasonally strongest quarter. And then we anticipate a normalization of working capital in the fourth quarter, which is generally an average quarter for the fiscal year.

Aggregate leverage remains near historic lows with total leverage at 2.82x. With over $2 billion of additional available liquidity, we are well positioned to pursue acquisitions and invest in our existing businesses while maintaining our established disciplined capital allocation.

The investments we have made over the past number of years have started realizing the returns envisioned when those investments were made. There is always a lag in growth capital expenditures between the outlay of capital and the ramp-up in operations and the generation of the free cash flow, and we are seeing the impact of those investments in our current year results per share metrics and payout ratios.

In the current year, growth capital expenditures were $120 million on a year-to-date basis. The Manufacturing segment growth capital expenditures are primarily related to the Spartan state-of-the-art facility in Saltillo, Mississippi, which will be an important growth engine and provide significant operating leverage to that business line to meet market demand.

The growth capital expenditures within the Aerospace & Aviation segment were primarily focused on the Aircraft Sales & Leasing business, which accounted for about 15% of the investments with the vast majority of the growth capital expenditures focused on our essential Air Services with investments in our BCEHS contract, finalization of our full motion King Air simulator, which is now fully certified and operational, investments in aircraft for the Air Canada expanded and extended commercial arrangement, investments in the Canadian state-of-the-art cargo facility, which is now operational in Ottawa and various growth investments in our air operators for additional capacity to meet scheduled service and charter growth.

These investments will drive cash flow in future periods. Maintenance capital expenditures were below our internal expectations in the first and second quarters.

In the second quarter, investment and maintenance capital expenditures were $76 million for Aerospace & Aviation and $10 million for Manufacturing. The increase over the prior year comparatives were due to the acquisition of Canadian North and increases in the utilization of the Aircraft Sales & Leasing fleet. Jake will provide further guidance for Q3 and Q4.

The cost of significant increases in growth and maintenance capital expenditures will result in increases in depreciation over the back half of 2026 when compared to the first six months as the net book value has increased over the period.

Our M&A pipeline remains strong. Adam and his team continue to work on a number of opportunities across both segments. Generally, the more advanced opportunities are those that are tangential to our existing businesses and are in high-growth areas. We have a great foundation of businesses. And to the extent that we can find ancillary opportunities to support our competitive moats, we are always interested in those accretive opportunities.

I will now turn the call over to Jake, who will provide an update for the third quarter and the remainder of 2026 for the Aerospace & Aviation segment.

Thank you, Rich. As we expect another strong year of growth in Aerospace & Aviation as the trends both Mike and Rich discussed continue through 2026. Growth investments already made, including ISR assets, the acquisition of Mach2, the start-up of the Newfoundland and Labrador medevac contract and the expansion of the Air Canada commercial agreement should support higher revenue and profitability.

In Essential Air Services, the largest driver will be continued strong load factors and strength in cargo, charter and medevac services, coupled with the expanded Air Canada commercial agreement as aircraft come online in Q3 until full operational tempo is achieved.

We continue to see expansion in contracts, including growth in our BCEHS contract, which will necessitate the purchase of two additional new King Air aircraft, which we anticipate receiving in 2028 and 2029, respectively. Offsetting some of these gains is the continued inflationary pressures on labor, aircraft parts, consumables and overhaul costs.

In Aerospace, we expect continued strong flying tempo of all aircraft in our fleet, along with the commencement of modification services on the two Air Greenland aircraft, which will start in the third quarter and will continue through 2027. Therefore, we expect that the third quarter profitability will be slightly higher than the comparative and the fourth quarter is expected to be in line with the prior year comparative as our Training business is transitioning between some legacy contracts and new contracts in '26.

Looking forward, the finalization of the scope of services for SkyAlyne FAcT contract is expected to impact the operating results starting in fiscal '27 with minimal capital investment required. We remain engaged on several additional opportunities in Canada, Europe and the U.S. in the Aerospace Business line.

Aircraft Sales & Leasing is also expected to grow as aircraft and engines acquired during 2025 and the current year are placed with customers along with increasing rental rates. Regional One and Mach2's demand remains robust through their various lines of business, including parts, aircraft and engines.

As Mike had commented on the integration of Mach2, it's exceeded our expectations, and they're actively working with Canadian North on supply and for their operations. Maintenance capital expenditures are expected to be higher year-over-year due to growth in our fleet along with the planned maintenance events that were pushed to the right earlier in the year. Additionally, we'll continue to see continued investment in Canadian North spares and engines and year-over-year increases in our Aircraft Sales & Leasing business due to increased utilization of leased aircraft and engines.

Growth capital expenditures are expected in Q3 and through the balance of 2026 including in the last of the initial order of King Air aircraft for BCEHS, which is expected in September '26. Aircraft modifications for the Newfoundland and Labrador Medevac contract, aircraft for the expanded Air Canada agreement and opportunistic purchases in Aircraft Sales & Leasing to meet robust demand.

I'll now pass it off to Travis to provide commentary on the Manufacturing segment.

Thanks, Jake. From a manufacturing perspective, we expect Q3 revenue and profitability to continue with the momentum built during the second quarter with that trend continuing through the balance of the year.

Environmental Access Solutions is expected to generate stronger returns in Q3 and throughout the remainder of the year. The number of mats on rent continued to strengthen as we exited the quarter, along with expansion in rental rates. Composite demand remains robust, and the plant continues to run at full capacity with all of our 2026 output already sold.

We continue to see encouraging medium- and longer-term demand drivers for our transmission distribution pipeline and oil and gas activity and are very bullish on the business line and its operating prospects throughout North America. Multi-Storey Window solutions continues to see strong inquiry levels and booking levels.

As Mike had mentioned, in the second quarter, bookings were the highest quarterly bookings over the past several years. We're encouraged by the results. However, the strong book-to-burn ratio experienced in the first and second quarters are not necessarily indicative of an industry-wide recovery as we still see softness in the Southern Ontario condo market, which was our largest market in the past.

The team has done a great job in diversifying geographies and end markets, whether it be hospitals, long-term care homes, student housing or government institutions. The revenue and profitability were in line with our internal expectations, and we expect that trend to continue throughout the remainder of the year. We anticipate in the third and fourth quarters that the profitability will be consistent with the prior period, including the impact of tariffs.

Precision Manufacturing and Engineering is also expected to continue to improve in Q3. However, we'll have a slightly lower profitability compared to Q4 last year, where our Hydronic Heating Solutions subsidiary had a very strong quarter due to the shipping of the vast majority of the production in the fourth quarter, whereas the business was much more even from a sales and delivery perspective in fiscal 2026.

We'll continue to see strong inquiry and booking trends with the exposure to attractive end markets such as aerospace, defense, telecommunications and data farms. On the tariff front, we noted in our report that Multi-Storey Window solutions continue to be negatively impacted by the aluminum tariffs and our Dry Air subsidiary could be negatively impacted by the recently announced 338 tariffs. However, we're undertaking active mitigation strategies in both businesses.

Maintenance capital expenditures are expected to be above the prior year, primarily because of timing and the anticipated demand across the business lines in the back half of the year. We also expect growth capital expenditures across the manufacturing businesses to be broadly consistent with 2025, except Environmental Access Solutions, where spending will support the new composite mat and additional Canadian rental fleet investments due to our strong outlook on that business line.

I'll now pass the call back to Mike.

The first and second quarters for 2026 were a very strong start for the year, and we're excited to communicate to the market our significant increase in our guidance for the year. I'm extremely confident in the future of our company.

EIC is at the intersection of a number of critical themes and trends. We have remained true to our principles and our business strategies, and those will continue to drive our long-term success.

Thank you for your time this morning. We'd now like to open the call for questions. Operator?

[Operator Instructions] Your first question comes from Steve Hansen from Raymond James.

Mike, I know you've described the matting business is starting to improve and some of the project activity picking up. I was hoping you could maybe just give us a broader lens as to how you see the industry shaping up because that supply-demand backdrop for mats does matter. Effectively, it sounds like it is tightening up. But can you just give us some context around how you see matting supply out there today after a couple of years of slack supply and how you think that's going to play in your favor or not?

Sure. In the Canadian marketplace, when a couple of larger jobs were completed in late '22 and '23, there was a lot of used mats that came back into the marketplace, things that came from the Trans Mountain and other things. And so some of our competitors were heavily discounting to get these older mats into service.

The natural life cycle of these mats has brought that trend sort of to a close at the same time as we're seeing a rebound in the number of long linear projects. Just in the last 60 days, we've seen two major new pipelines announced they're going ahead. We're bidding for RFPs and the number of our mats that are on the ground is growing significantly and regularly. And the advantage to us is twofold.

As the market tightens up, these discounted market mats leave the market and prices increase at the same time as our utilization rate increases. And we've increased the production in both of our matting plants, and we continue to expect to make as many mats as we can to meet what we see as a new long-term cycle in the matting business.

These long linear projects aren't something that are done in weeks or months. They're in years. And so we're really bullish on the Canadian market. The U.S. market is, I would say, more of the same. It's been very busy since we bought Spartan, and that's continued largely because of a migration from wood mats to composite mats in the United States. and strong demand in the utility sector.

So we are so excited about getting our new plant up and running to take advantage of opportunities in North America, but not only North America. During the quarter, we had a significant sale of mats into Europe and opportunities in Australia. And right now, capacity constraints really preclude us from attacking those the way we'd like to. So I think once that plant is up and running, you'll see an increase in the geographic diversity of our sales out of our Spartan subsidiary in the U.S.

Super helpful. Just one follow-up just around the ISR business. There's obviously been a lot of volatility out there geopolitically in the Middle East, Europe and otherwise. But I just was curious around your thoughts about long-term contract opportunities. And then as a sort of adjacency to that is the idea of having another force multiplier sort of for spot availability. I don't know if that's something you want to build again upfront, but just how do you think about the balance of chasing those long-term contracts with easy firm commitments relative to some spot capabilities?

It's a really good question, Steve. We don't view that as an either/or. Building another rental aircraft will occur. It's really just a matter of when we have gaps in production. Right now, we're really focused on our new Greenland project and getting those aircraft ready and in service for the customer. So that's where we're focused today.

We've talked a lot in the past about opportunities in Europe. I'm pleased to say that we're very close to another one there that we're in final discussion talks and hopefully, we'll have something to announce later this year. And opportunities, whether it be in Canada, the Middle East, our marketing teams are very busy in that business. So it's hard to predict which is going to come first and where. But I think it's important to know that long-term contracts won't stop us from refilling the short-term rental fleet.

Your next question comes from Matthew Lee from Canaccord.

So by all accounts, the Canadian North business is performing well ahead of expectations. Given that progress, can you help us understand why the province and Nunavut maybe opt the equity option?

Sure. It's always dangerous when you answer a question on behalf of someone else. So what I'm going to give you is my impression. This isn't something that we know in some writing they gave to us. They had an option really to ensure that when they put it all in our hands, the government took risk that we were going to deliver on what we said we were going to do in terms of service and looking after the people in Nunavut.

I'm very pleased to say that we've done a really strong job of that, and the government has come to a realization that they don't need to own the business for us to do a good job of that. So I think part of the reason to invest went away. And I think secondarily, while they were comfortable with the level of investment they had to make for their participation in the company, we were pretty clear that we intend to put more money into the North, whether we'd be adding extra aircraft or building additional crew quarters or hangar as the market expands.

The focus on Canadian North means there's going to be more passengers and more passengers requires more fixed assets. And I don't think the government really wanted to sign up for an investment now and other investments in the future, given that they were comfortable with the level of service that we were providing. It clearly wasn't a financial decision because the results we were generating were above what we had anticipated when we bought the company.

In fact, it might be because they think you are doing a good job, they don't have to actually step in and kind of guide you anyway.

Again, that was similar to what they put in their press release, Matt.

Yes. Understood. So organic EBITDA growth this year, when you take out from the acquisitions has been in the mid-teens momentum in the business right now, just given the tailwinds you're seeing in the new contracts coming online, is there any reason to believe that cadence will slow as you kind of look in the back half of the year and '27? I know you haven't given guidance yet, but just trying to get my head around it.

Well, as long as you're not trying to trick me and to give you my 2027 number yet because I'm not ready to do that, there's no reason to believe there's a slowing in the organic opportunity. sometimes those are a little chunky as an example, like the Spartan plant. We're putting up money and you won't see that until the back half of next year, but that's going to generate significant growth in revenue and profitability. We see the increase in the Air Canada contract as we put those aircraft online later this year, and so we'll have the benefit of that next year.

The Newfoundland contract as those go into service and even the BC Medical contract where the government has asked us to put additional aircraft into place to grow that contract. So very excited about what we're facing. And the sprinkles on the sundae as we're starting to see life in the window business. And again, with the cycle of that business, when we get orders now, it's 18 months before they show up in the financial statements. And it's only been a quarter or two of positive book-to-burn. But in particular, the U.S. market is showing real signs of life and growth. So, I don't see any reason for our organic growth rate to decline.

Your next question comes from Cameron Doerksen from National Bank.

I guess I wanted to maybe follow up on some defense opportunities. I mean you talked a little bit about some of the ISR opportunities, your opportunity perhaps close. Is there any update, I guess, on the potential for the Canadian in the North surveillance opportunity? Is there any actual, I guess, RFP out there? I know you have been in some discussions with the government. So just any update there would be useful.

Sure. There's no real RFP. It's discussions about what exactly they want, when they want. And the biggest challenge with the government right now with all the things they're doing is having people to manage these various programs. And so we're in discussions with the government about where this would live, who would run it. Jake, maybe you want to jump in here, you're closer to this than I am.

Sure. Thanks for the question, Cam. And yes, there's continued engagement. But as Mike pointed out, you've got to keep in mind, these are the same people that are wrestling with the future fighter decision with the naval shipbuilding, the submarine decision, a lot of the large capital asset decisions are being run through the same office. So again, we're just trying to make sure that we keep top of mind, and we're continuing to engage because the need has not gone away.

Okay. That's helpful. And if I could sort of follow up on the same theme. Obviously, as you mentioned, Jake, there's an awful lot of investment going on into the military and assets. I'm just wondering if sort of we look beyond surveillance opportunities, what other defense opportunities are you seeing that might emerge for your companies I'm thinking about in-service support type contracts. We obviously got a few of those already. Is there anything that's kind of on the horizon that has emerged in the last few months that is a potential opportunity for you down the road?

Well, there's some of the things that we've talked about where it may be perhaps assisting in the installation of Canada's over the horizon radar system, where we'll look to participate in that when they're ready for bids. We'll be looking at providing services to the government as they expand military bases and build a deepwater port in the north. One of the things important to understand, if it's not going on a barge in the summer, it's going on one of our airplanes. Those are really the only way things get there. And so you'll see growth out of defense that will show up in our scheduled and charter businesses. Those would be the main exposures. Jake, have you got anything else you want to add there?

No, I was going to make the point. It's very valid that regardless of what's happening in the north, there's going to be increased activity, whether it's construction or actual capability being delivered. And that's going to be reflected in enhanced charters, enhanced demand for cargo, enhanced demand for passengers, and we're seeing some of that now. So again, we're going to be the beneficiaries of both direct and indirect activity.

The next question comes from James McGarragle from RBC Capital Markets.

I wanted to ask a question on the 2027 framework for EBITDA guidance. You committed to providing the '27 guidance with Q3 results in November. But just given the momentum that we're seeing across your segments, obviously, Aerospace remains strong. It seems like Manufacturing is starting to turn a corner. Can you just give us any preliminary or directional commentary on how you're thinking about that growth trajectory into next year?

Yes. I mean we saw a big growth this year even with our original guidance of the $825 million to $850 million, $875 million, I'm sorry, midpoint, $850 million. Now our midpoint is a little over $900 million. To get to that $1 billion framework we've talked about is 10% growth. I don't think that's an unreasonable thought, although we're not prepared to commit to that quite yet.

The one thing I would say is within our range we've given you, to get to the very top of the range, we're going to have to execute on some things that may be are planned for next year, but we get them done earlier, so improvements in performance and those kinds of things. So for us, if we perform above our midpoint of our range, it will be things that otherwise might have been done next year.

So I want to be careful that if we if we get to the top of our range, people don't take exactly the same growth rate because we'll be pulling forward some of the things we think we can do in 2027 to get to the top of that range. But the other thing is that we've really increased our guidance 3x already this year.

And that even for us is pretty rare going from $825 million to $875 million to mid- to upper to the top end to the new guidance. And so I'm reticent to look too far into the future. But if I were to prognosticate if that's a word, I would say that our continued growth rates are reasonable and achievable, particularly if Adam is successful on some of the things he's looking at on the acquisition front.

Yes. And just to follow up on that and some of the things that Adam is looking at. You have over $2 billion of liquidity. You kind of alluded to there being a good pipeline in the press release. So can you just kind of talk about that pipeline? Is there a size of geography bias and what you're seeing? Just any color on how we should be thinking about that into next year? And I can turn the line over after that.

Yes. I don't really think there's a bias geographically. There is a bias to finding expansion opportunities in some of the businesses we're already in. Things that are tangential to our matting business. We're very active looking in things that are tangential to our Precision Metal Manufacturing. Most of the things we're looking at now wouldn't be described as new segments or even new sectors. They'd be things that would add on to our capabilities we already have.

Your next question comes from Jeff Fenwick from ATB Cormark.

I want to ask one here on Canadian North. You're coming through the one-year anniversary of that deal. One of the things I know that was on your list was renegotiating some of the charter contracts that were there. So I think we're seeing maybe a little bit of inflated revenue there without a lot of earnings contribution. So just maybe an update on the progress on that front.

We're making progress on a couple of the contracts. I'd maybe hand this over to Jake to talk about what we're prepared to disclose that's been done to date.

Sure. We're working our way through some of the contracts and some of the renegotiations. You got to keep in mind as well, the next phase of the LNG contract, which not commenced, will be another driver, we hope. And again, we're looking at just continued activity and strong activity even on an ad hoc basis. For example, Canadian North did all the FIFA security charters. So we're in a position where we can be very opportunistic and seek out higher-margin opportunities there and look to continue that trend moving forward. So it's something that we're certainly putting some attention to.

And we are making progress on the extension and renegotiating some of our oil sands work.

That's helpful. That's helpful. And then I wanted to ask one on the precision manufacturing. We don't often talk a lot about that, but it sounds like there's certainly been some uptick, and you mentioned some of the areas there were like telecom and data centers where there's obviously a lot of opportunities.

Could you just comment on what you're seeing across those businesses? And when those opportunities come, are they sort of a relatively short-run one-off contract? Or is there some things getting baked in here that might offer a little maybe longer runway to pursue those kinds of opportunities?

That's a good question, Jeff. We are very focused on maintaining our core relationships in those businesses. When new things come, sometimes people chase them very hard. And then when that wave ends, they've lost their core business.

So our first thing is looking after our core businesses. But for example, in our tank manufacturing business, we're very active building cooling tanks for data centers. Our business there is literally sold out for 12 months. I don't remember the last time we had a 12-month order book at SFI. Our folks in Southern Ontario at Ben Machine are looking at opportunities with other players in the satellite business in the space business, in the defense business.

So order books are growing, and they're not one-offs. They're things that have the potential to be customers for years. So while we're early days in the cycle, there's reason to believe that will continue to grow in the future. Our guys at WesTower dealt with some of the strangest weather in Saskatchewan and Alberta this summer, which slowed their numbers, but that only delayed the work. It didn't make it go away. So we'll see a rebound in that business in the back half of the year as well.

Your next question comes from Razi Hasan from Paradigm Capital.

Maybe just following up on your comment on what gets you to the top end of your guidance range. You mentioned the pull forward of projects. Is there anything that's at risk this year where you reach the bottom of the range that could result in that?

To be honest with you, we don't see any flies in the ointment at this point. A lot of times, you don't see when those things are coming, but the demand in essential air service remains strong. Our forward ticket sales are strong. The cadence of our flying in the maritime surveillance world is strong. Our order book in the manufacturing business is good.

The biggest challenge we're going to face in the environmental matting business is keeping up and making sure we have enough demand, enough product to keep up with the demand. The forest fires in BC make it a little harder to get lumber than it normally is. So we're working hard to make sure we have enough lumber to keep our plants running two shifts a day. But at this point, I'm pretty confident that the growth trends that we're seeing are sustained and that will be within that range we provided.

Okay. That's helpful. Maybe just on the matting business. You've spoken in the past about potentially starting to rent out mats. Obviously, there's a lot of backlog there. Does that become a back half of '27 story when you kind of see the cadence there? Or is it more of a 2028 when you're able to start rolling out the rental side of things?

It's hard to answer that question at this point. I mean the first thing we're going to do is make sure we take care of our customers from a sales point of view. And we aren't anywhere near being able to keep up with one plant. So once that's up and running, that will be the first thing we're going to run with. And we're very excited about what we've seen on the international marketplace. So building mats for ourselves, while that is in the long-term plan, that's not in the near-term plan.

Okay. Great. And maybe just lastly on Medevac, is there any further room for expansion within Canada? Or are you kind of reached the full extent of the available contracts available at this point?

In which area, sorry?

Just in Canada, I mean, provincially, are there any other contracts that are coming up for bidding? Or are you reaching the maximum.

On the medevac business, you're talking of Razi?

Yes

There's nothing major in the next little bit. Our joint venture subsidiary in Ontario is working on some medevac work with Ornge. So there are some opportunities. But right now, we're largely just focused on finishing off the fleet for BC, getting the extra aircraft for the enhanced stuff they'd like and getting Newfoundland up and running are our near-term focuses.

I guess in response to one of the other questions earlier, the only other thing, I guess, that could be a speed bump would be depending on what happens with tariffs. I mean we got a pretty good idea of what happens with the tariffs that are announced now, but no one saw 50% tariffs coming under the 338. So I need to be clear that if there's something happens that we don't know about now, that could cause challenges, although we really don't sell that much stuff across the border. So it's not ever going to be a huge problem for us.

Your next question comes from Michael Goldie from BMO Capital.

With the strength that you're seeing in Aircraft Sales & Leasing, can you provide an update on the supply chain for engines? And to what extent you have visibility into continued demand momentum?

Yes. That's a really good question. We don't see any end right now in the supply shortage. The MROs can't keep up, even our engines for our own businesses that are in for normal overhauls. I think we've got correct me if I'm wrong here, eight or nine of them sitting that we're waiting to get back, Jake. And while our particular instances are just anecdotal, that's what we see across the business. And so our ability to take full aircraft and monetize the airframes as parts and then lease or sell the engines is creating the opportunity for margins.

So I think one of the things I'm fairly confident you'll see in the back half of the year, Michael, is continued investment by us in growth opportunities in that business where we can buy one or two or three aircraft at a time and then figure out the best way to monetize them. I think one of the advantages we have is that we're prepared to take an operating aircraft and treat it as a supply of parts and a supply of engines as opposed to just a single operating entity.

And I think you'll see us invest some more money there in the back half of the year. And it sounds like Mach2 running ahead of expectations. Can you unpack that a bit more and specifically where that outperformance is, be it revenue, margin, commercial collaboration with Regional One? Anything there would be much appreciated.

Yes. It's really like to take credit that the acquisition by EIC is driving it. It's really not. It's the core business of Mach2 that's doing well. They specialize in certain parts of 737 aircraft, thrust reversers as an example, they're a leader in the sale and leasing of thrust reversers. And so that market is strong. we're looking to invest further into that marketplace.

But what you will see in future quarters, not in the next one or two, but over the next couple of years, you'll see us investing in more parts inventory, bigger acquisitions as we fit their data into Regional One's proprietary asset management system, which will help us decide what to buy at what price. I always come back to in Regional One's model, the secret sauce is we know who we're going to sell it to and what we think the price of the parts are. So when we buy things, we're not taking market risk.

It's a matter of digesting all the information we have, first of all, from Canadian North as someone who's operated the 737s for decades and then the information that Mach1 has and then having our two management teams work together for where we're going to invest the capital. So coming back to summarizing your question was most of the outperformance has been in the core business of Mach1, Mach2 that they had before we bought the company. The things we're going to do to make it better are still to come.

Your next question comes from Gary Ho from Desjardins Capital Markets.

Sorry, I jumped on the call late. So Mike, I think you mentioned you're looking at some of the tuck-ins to expand some of your existing business. Maybe talk about some of those competitors that you run into. Any concerns in terms of competition bureau if some of these businesses is a bit niche?

And then maybe just a second part to that, and thanks for the details on the tank business, I think it was kind of Jeff's question there and data center tailwinds. And then on the M&A side, if valuation makes sense, could you look at kind of more businesses to tap into those trends?

You may have to remind me, that's a lot of questions for me to remember all at once. On the first one about the tuck-ins, we're always careful of the competition, Bureau. Most of the things that we're looking at in a tuck-in basis aren't of the size that they would generally attract the attention of the Competition Bureau. We're very careful on how we treat customers and how we deal with things. The easiest way to prevent problems at the Competition Bureau is to be competitive, and we will continue to do that. So I'm not overly concerned there.

In terms of opportunities, if we can find things that are in the price we're prepared to pay and have management teams and have market niches with $2 billion of capital sitting there, I wouldn't pay the standby fees if I wasn't excited about opportunities to put that money to work. So the answer to that is we're definitely looking for those opportunities. I think I missed your middle question. Could you remind me of what that one was?

No, I think you answered it. It was specifically on the M&A side, but like tank business and data center tailwinds. Are you specifically looking at some of those silos?

Yes. Those are more growth in our existing business. One of the things that we've learned from previous cycles is to make sure we don't jump too hard into new areas that can change rapidly. The example I'd give you on the tanks is if you go back a decade, ethanol was a huge deal and nobody could get enough tanks and the demand for it was insane.

Then it very came to end very quickly. We have been careful not to abandon our normal customers during that cycle. And so we didn't get hurt by that. I would say the same on the data center business. We are going to look after that. We're going to service the heck out of the orders we take, but we're not going to move away from our core customers in pharmaceuticals and beverages to take care of new customers.

[Operator Instructions] Your next question coming from Konark Gupta from Scotiabank.

Sorry, I joined in late, so apologies if this question has already been asked. But I was curious, I mean, with Regional One, you guys have invested a lot of money recently on acquiring assets. With Mach2, I think you're also ramping up. What sort of inventory of aircraft and engines do you have sitting on your books right now? And what do you plan to do with that?

Well, what we have on the books changes regularly. In our MD&A, we spell out the number of assets. I don't have that in front of me. But as a general trend, we've seen a slight increase in engines and aircraft over time. Some of those are more expensive aircraft and engines as we moved into the ERJ platform in the 170s, 190s, 195s. And I think you'll see us continue to invest in those. A lot of the things, the engines and stuff, aren't in production.

So, as those planes keep flying, it's overhaul and recycling of those aircraft. And given the tightness in the MRO world, the demand for our services are very strong. So you're right that we've made investments there, and I think you'll see us continue to make more investments, and that's driving the performance we're seeing in Regional One, where we're getting large increases in EBITDA returns quarter-over-quarter.

The other thing I'd point out quickly is just like when you look at the disclosure in the MD&A over the last number of quarters, and it really comes back to a question that was asked previously. The number of engines in our lease portfolio has continued to increase and the size of those engines has continued to increase, which is really driving the book value of our lease portfolio.

There's such a demand for rental engines at this point in time that we've been able to, in many instances, buy whole aircraft and just lease up the engines and part out the airframe. So not only within the capital assets, but the other thing that we pointed out within the disclosure documents is that we've made significant investments in whole aircraft that are parked in inventory because we plan to sell them in future quarters. So when you look at the portfolio as a whole, the book value of whole assets either for sale or for lease has increased, and it's always been our intention to grow that portfolio over time.

Yes. And last point I'd say is it is important to say we are going to continue that trend because both from a perspective of attractive opportunities, but also because we're getting into bigger engines, so the routine cost.

Okay. No, that's really helpful, guys. And if I can follow up on the Spartan second facility you're building. I think it's still coming online in '27. I'm curious how you're planning to manage advanced orders for the mats as well as raw materials ahead of that facility coming online.

Really good question. We talked about that internally at our Board meeting. We're going to be careful about taking new orders until we're sure of when it's up and running. We've tweaked our technology in that new plant. So we want to make sure that it runs exactly the same way as our new stuff. So we'll be cautious in the early stages of opening that plant about how much customer demand we take.

But I'll be able to give you a lot better clarity on that perhaps as we report our year-end numbers in February. We'll be a lot closer to opening the factory and be in a better place to say, hey, we'll take orders for October or whatever the case may be.

There are no further questions. I'll turn the call back over to Mr. Pyle.

Well, I really want to thank everybody for joining us on this call. It was an exciting quarter to report. We've been consistent to our strategy, and it's generated great returns. I look forward to speaking to you all in November. Thanks for calling, and have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, everyone, and welcome to the Annual General and Special Meeting of the shareholders of Exchange Income Corporation. It's great to see so many here, particularly those who have been shareholders since the establishment of our company. My name is Don Streuber and as Director and Chair of the Board of Directors, I will act as Chair of this meeting.

Before we begin, I would also like to take a moment to review some important safety information. Emergency exits, please familiarize yourself with the nearest emergency exit. The primary exits are in the north corner not over the wings, but in the north corner or the door that you entered in from over there. In the event of an evacuation, please proceed calmly to the nearest exit and move to the designated muster point outside. The muster point is on the corner of Ferry Road.

Fire alarms and equipment. If the fire alarm sounds, we will stop the meeting immediately and evacuate the building. Fire extinguishers are located at every exit and only personnel trained should use them. No smoking or vaping are permitted indoors at any time. If you notice any hazards or unsafe conditions, please report them right away to any staff member. Your safety is our priority. Thank you for your attention and cooperation and do not look for an oxygen mask to drop from the ceiling.

Before we begin, I would like to also take the time to acknowledge that this meeting is taking place on the indigenous ancestral lands on Treaty 1 territory. The Red River Valley is also the birthplace of the Métis. We acknowledge that our water is sourced from Shoal Lake 40 First Nation and we respect and give honor to the Indigenous People's history on this land and recognize First Nations, Méti, Inuit Peoples' ongoing contribution in our neighborhoods and communities today. I will lead us through the formal part of the agenda, and then we will have a presentation by our CEO, Mike Pyle, on the company's progress during the past year, after which we will have an opportunity to answer questions from registered or beneficial shareholders.

For those of you attending virtually instructions on how to use and to ask questions and the voting procedure will appear on your screens. As with any technology, unexpected glitches may occur, but our service providers for this platform at Lumi are very experienced at running this type of meeting and will help us out, if any, issues arise.

I would like to offer a very special welcome to the mentees from, I believe, it's 16 of our businesses that are coming here to join us today. And I would also like to offer a very special thank you to the team at Perimeter as well as Custom Helicopters for getting this room ready and providing us with some show and tell for after the meeting. Please take the time to ask the questions and to just look at some of this new equipment that's been out for your enjoyment and information.

The meeting will now come to order, and I will ask Dianne Spencer to act as Secretary of the meeting; and Kristine Calesso and Jennifer Villareal of the TSX Trust Company to act as scrutineers. Everyone present in person should now be registered with the scrutineers and all proxies should have been deposited. If not, please do so now.

The Secretary has confirmed to me that the notice calling this meeting of shareholders was filed on SEDAR+ on March 6, 2026, and the record date for the determination of shareholders entitled to receive notice of and to attend and vote at the meeting was March 31, 2026. The scrutineers have provided the chair with a report and the Chair adopts the scrutineer's report confirming that there are present by proxy of a sufficient number of persons holding a sufficient number of shares entitled to sufficiently vote at the meeting to constitute a quorum.

Voting delegates and any other person attending a meeting of the shareholders may address the meeting when there is a call to discuss a motion before the meeting. Should you wish to address the Chair on any motion, please raise your hand and the Chair will call upon you. Or for those attending virtually, please type in your question or comment in the message section and the moderator will read the question aloud.

Notice having been mailed as required and a quorum being present, I declare that this meeting is duly constituted for the transaction of business, and the polls are now open for all resolution matters with voting required for 4 of them.

We will conduct the votes on the matters before us by poll. On a poll, every shareholder entitled to vote on the matter has 1 vote in respect of each share entitled to be voted on the matter and held by the shareholder. The poll will be open for all resolutions at the same time. This will allow you to choose to vote on each resolution immediately or wait until conclusion of discussion on each resolution prior to casting your vote. If you have already voted in advance of the meeting and do not wish to change your vote, you do not need to vote again during the meeting.

Finally, we would like to remind you that our answers to your questions and our presentation may contain forward-looking information. By its nature, the information contains forecast assumptions and expectations about future outcomes, which are subject to the risks and uncertainties discussed more fully in our public disclosure filings.

We will now go through each of the items on the agenda in turn. The first item, financial statements, is to receive and consider Exchange Income Corporation's consolidated financial statements for the period ended December 31, 2025, together with the auditor's report on these statements. The financial statements and auditor's report on them were included with the material sent out giving notice of this meeting and available on SEDAR+ and the corporation's website.

Nicky Murray of PricewaterhouseCoopers audit partner for the EIC audit, is in attendance here today. Unless there are any questions of management or the auditors, we will take the financial statements and auditor's report as received and considered.

The second item of business is to appoint the auditors of Exchange Income Corporation for the ensuing year and to authorize the directors to fix the remuneration of the auditors. Would a voting delegate please make the motion.

Mr. Chair, I move to resolve that PricewaterhouseCoopers LLP be appointed auditors of Exchange Income Corporation to hold office until the next Annual General Meeting or until their successors are duly appointed and the directors be authorized to fix the auditor's remuneration.

Mr. Chair, I second the motion. You've heard the motion by Richard Wowryk, seconded by Travis Muhr. Is there any discussion of this motion?

No. Mr. Chair, there is no discussion at this time.

Thank you, Madam, operator. As there is no discussion, I will now call for a vote on the motion before the meeting. All those in favor, please signify by raising your hand. Any contrary? Would all virtual voting delegates please enter your votes in Lumi.

The third item of business is the election of directors of Exchange Income Corporation for the ensuing year. As we did not receive any other nominations in compliance with our advanced notice bylaw, I declare the nominations closed. And I will now entertain a motion to consider an ordinary resolution to elect 11 directors to hold office until the next general meeting of the shareholders or their earlier removal or resignation. Brad Bennett, Gary Buckley, Polly Craik, Barb Gamey, Bruce Jack, Duncan Jessiman, Carmele Peter, Michael Pyle, Melissa Sonberg, Donald Streuber and Edward Warkentin have been nominated for the election as directors of EIC. Would a voting delegate please make the motion?

Mr. Chair, I move to resolve that Brad Bennett, Gary Buckley, Polly Craik, Barb Gamey, Bruce Jack, Duncan Jessiman, Carmele Peter, Michael Pyle, Melissa Sonberg, Donald Streuber and Edward Warkentin be elected as directors.

Mr. Chair, I second the motion.

You have heard the motion by Richard Wowryk and seconded by Travis Muhr. Is there any discussion of this motion?

Mr. Chair, there is no discussion at this time.

Thank you. As there is no discussion, I now call for a vote on the motion before the meeting. All those in favor, please signify by raising your hand. Any contrary? Would all virtual voting delegates, please enter your votes in Lumi.

The fourth item of business is to approve the fifth amended and restated shareholder rights plan of the corporation. A summary of the key features of the fifth amended and restated shareholder rights plan of the corporation was included in the corporation's management information circular dated April 6, 2026, and a copy of the fifth amended and restated shareholder rights plan may be obtained by contacting the corporation at the address set forth at the end of the Management Information Circular or on SEDAR+ at www.sedarplus.com. Would a voting delegate please make that motion?

Mr. Chair, be it resolved that, as an ordinary resolution of the shareholders of Exchange Income Corporation, the shareholder rights plan of the corporation be continued the fifth amended and restated shareholder rights plan agreement to be made as of May 12, 2026, between the corporation and TSX Trust Company as rights agent, which amends and restates the fourth amended and restated shareholder rights plan agreement dated May 10, 2023, be and is hereby authorized and approved. And any one director or officer of the corporation be and is hereby authorized for and on behalf of the corporation to execute, deliver and file such documents and do all such things as such persons considers necessary or advisable to give effect to the foregoing resolution.

Mr. Chair, I second the motion.

You have heard the motion by Richard Wowryk and seconded by Travis Muhr. Is there any discussion of this motion?

Mr. Chair, there is no discussion at this time.

As there is no discussion, I now call for a vote on the motion before the meeting. All those in favor, please signify by raising your hand. Any contrary? Would all virtual voting delegates please enter your votes in Lumi.

The fifth item of business is to approve on an advisory basis, the corporation's approach to executive compensation. As described in the corporation's management information circular dated April 6, 2026, the corporation's compensation policies and procedures are based on the principle of pay for performance. The Board believes they align the interest of the corporation's executive team with the long-term interest of shareholders. Would a voting delegate please make this motion?

Mr. Chair, be it resolved that on an advisory basis and not to diminish the role and responsibilities of the directors of Exchange Income Corporation, the shareholders of the corporation accept the approach to executive compensation disclosed in the management information circular delivered in advance of the Annual General Meeting of Shareholders of the corporation.

Mr. Chair, I second the motion.

You've heard the motion by Richard Wowryk and seconded by Travis Muhr. Is there any discussion of this motion?

Mr. Chair, there is no discussion at this time.

As there is no discussion, I now call for a vote on the motion before the meeting. All those in favor, please signify by raising your hand. Any contrary? Would all virtual voting delegates please enter your votes in Lumi.

We will now take a short pause to answer any questions that have been submitted and to permit any registered shareholder or proxy holder who has not already done so to record their votes on Lumi on the motions before the meeting. Having received no questions, I will close the poll in 30 seconds. Can somebody sing the Jeopardy song?

I have now received the preliminary scrutineers' report. With respect to the election of directors, I'm advised by the scrutineer that each of the proposed nominees has been duly elected. With respect to the resolutions to appoint the auditors, approved the fifth amended and restated shareholders' rights plan of the corporation and approve on an advisory basis, the corporation's approach to executive compensation, I am advised by the scrutineer that these resolutions have been duly carried. The detailed results of this meeting will be announced in a press release and will be included in a voting report to be filed on SEDAR+ as soon as practical after this meeting. Is there any further business to be conducted at this meeting? If not, I will entertain a motion to terminate this meeting.

Mr. Chair, I move to terminate the meeting.

Mr. Chair, I second the motion.

You have heard the motion by Richard Wowryk and seconded by Travis Muhr. Is there any discussion of this motion?

Mr. Chair, there is no discussion at this time.

Your turn. Please welcome Mike Pyle, CEO of Exchange Income Corporation.

We'll start with a brief video Pam has put together about the company, and then we'll talk a little bit about last year. what's happened in the first quarter of this year and some of the things that have helped us get there.

[Presentation]

Before I start, this popped up on one of the LinkedIn pages of one of our employees. And kind of jumped off the page, someone's put together a list of the 25 largest airlines in the world by market cap. When we started in 2004 with our purchase of Perimeter flying metros into Shamattawa or St. Theresa Point, I really didn't think that there'd be a day where we would be the only Canadian company on the list and in the top 25 airlines in the world.

Now the shareholders in this room know we're a lot more than an airline. But to be grouped with the biggest in the world shows you what's been accomplished here over the last 20-plus years as we've added great companies and then the teams there have grown those businesses. It's something that we're really proud of that we're on that biggest stage while sticking to exactly what we promised our shareholders back when we started in 2002. So what have we accomplished? 18 dividend increases over the life of the company. And I think that's significant because we've been giving lots of advice from our investment bankers and that help us to say what we should do in the flavor of the day.

There's times when dividends are sexy. There's times when growth is sexy. There's times when deep value is where you want to be. We've been the same thing for 20 years. That's a company that delivers a reliable, growing dividend to our shareholders, but not just the dividend, we give you growth beside it. So you could see that chart, it doesn't go straight up because there are some periods when things aren't very good, like you could see during COVID, we didn't increase the dividend because it wasn't prudent to do it. And then '22, '23, when we came out, we were rocking and we increased it more than once a year. And so the Board is very cognizant of raising dividends when we have the money to be able to do it.

But having our shareholders be able to know that's a core value to us as a company, and they can rely on that check every month and the fact that next year, that check will probably be a little bigger. Interesting numbers. We've now paid over $1 billion in dividends to our shareholders.

If we were only going to have one chart to show you, I think this is the one I would use. This shows our returns for -- since we started 15, 10, 5, 3 and 1-year period. And you could see that it's typically right around 20%. But more importantly, compare that to the TSX or the Aristocrat fund. And the Aristocrat fund is one of the highest profile dividend funds in Canada, which has remarkably successful companies. I'm proud we're a part of it. But in -- we're at least 2x in most periods and a lot of times closer to 3x the return of that index. And by doing that over the long period we have, it shows you that it's not one great decision that's been made or one big contract somebody's won or one really good decision. It's a business model where we buy great companies and empower management teams and then stay out of their way.

You could see some of the CEOs in the room here. I hope you get a chance to say hi and talk to them about their individual businesses. But the magic of EIC isn't what we do to the companies when we buy them. It's what we don't do to the companies when we buy them. We don't think that all of a sudden because we own a matting company that we know more than the stars and the matting companies we own, we clearly don't. Our job is to provide capital, provide support and then let our superstars control the game. And this chart, I think, tells you that, that business strategy works.

This is another way of looking at the same sort of thing. If you had thrown $1 into our stock in 2004, it would be worth slightly less than $6,000 at the end of last year. Comparatively, if you've throw it into the TSX, you'd have $6. And if you were to run this chart now, it's closer to $7,000 than it is to $6,000.

So just going quickly over our results for last year. You could see a big jump in our revenue. That was largely driven by a few key contract wins and the acquisition of Canadian North. I'm going to come back to Canadian North in a bit, but I would tell you that is longest acquisition process in the history of Man. We started talking to them in 2007, and it only took us 18 years to get the deal done. But we're so proud of that as part of EIC because now we are the dominant player in the North. And with all the great things that are happening in Canada's North, the commitment of the new government to the north, if you want to go there, I don't know which EIC plane you're going to fly on, but you're going to fly on one of our planes. And so what we're doing now is a fraction of what we'll be doing in the future.

You could see our EBITDA has grown pretty much on the same track. If you look at 2020, the trough during COVID, about just under 300, and we're now 3x that size. That's a pretty dramatic growth in 6 years. This shows the same thing on a per share basis. It's not as dramatic because we've always invested in our balance sheet and making sure we've got equity so that our leverage stays reasonable, and that it's reliable, and we don't have to worry about our banks changing their mind, at all-time highs last year in EPS and in free cash flow per share. And when we pop forward to the next quarter, you're going to see a much more dramatic increase in that.

So here's Q1. Last year, we had revenues of $668 million. This year, $200 million more than that. Adjusted EBITDA moved from $130 million to $166 million. And what I would point out just as an aside is if you look at 2020, we made $67 million in EBITDA in that first quarter. Our increase this year was half of that. And so the rate of growth isn't slowing down. It's, in fact, accelerating.

Here, you see -- remember, I talked just a few minutes ago about how on a per share basis, the increases were smaller, and it's because of the investments we made in our balance sheet where we converted all the convertible debentures into equity, bumped up our equity box by $400 million, and that increases the number of shares. But the profitability of our growth is such that we've made twice as much in the first quarter in terms of earnings as we did last year. And we're up about almost 50% on the free cash flow basis.

But where the rubber hits the road with these numbers is what's our payout ratio look like? We always talk about how we want to reduce our payout ratio while at the same time as increasing our dividend. Shareholders in here will know we bumped it by about 5% in November at the same time as we took all that equity on. So we increased the number of shares outstanding, increased the dividend per share. And I'm ecstatic to tell you that our adjusted EPS payout ratio is the lowest it's been in the history of EIC. We're down to 67% payout ratios.

And on a free cash flow basis, not quite the all-time record, we're going to need another quarter or 2, but we're down to 57%. That's just a couple of quarters after we increase the dividend and after we added the equity. So that puts us in the spot where come November, management might suggest to the Board, we do it again. And if we keep performing like this, I'm pretty confident we'll continue to have the support of the Board to do those things. And it's really about the earnings and the growth come first, and then we share the rewards with our shareholders.

So let's talk a little bit about what we're going to do this year that's going to drive us to our guidance we've given the market of $825 million to $875 million. I should point out that on our conference call this morning, I told the market that originally, we had said $825 million to $875 million. And then in February, we bumped it to kind of the mid-upper range, which was $850 million to $875 million. And on our call this morning, we said we now believe we're at the top end range, which is significant growth off of last year's $750 million.

What's going to fuel that growth? How are we going to get there? Well, it's growth of our medevac program. In Manitoba here with the highly acute medevac program that we signed with the province of Manitoba that's now fully operational. It's the Newfoundland medevac program, which will kick into full force sort of midyear here. It will be the growth of our Nunavut contract and an expected long-term extension of that. And in addition to this, it's what's going on with our BC program. Notwithstanding challenges we had in getting all our airplanes from our manufacturer. Our team at Carson has found a way to keep our government customer not just satisfied but happy, and we will be taking our final delivery this summer and have the full ramp of that project as well. And so medevac, which is the most -- one of the most reliable sources of revenue we have, it's not affected by inflation. It's not affected by unemployment. It's not affected by fuel prices. It's just a strong, reliable source of revenue where we do a great job.

Northern routes are going to be a big part of this. We've added Canadian North. And so in the first and second quarter of this year, we don't have a comparative for Canadian North. So that gives us a big jump in our numbers. But beyond that, with the investment in Canada's North, we've seen passenger numbers growing significantly in our Nunavut business, not just in Canadian North, but in Calm Air as well.

And so we're just on the description I used in our conference call, we're not even in the first inning of that growth where they just threw out the honorary first pitch of that game. And that growth is going to grow, and you're going to see that over the next decade as the Canadian government invests in new runways for the F-35s to land on new military bases. Private enterprise invests in new mining and critical mining opportunities. And so we're just at the beginning of this. You're going to see that northern routes on listing for the next 3 or 4 years as we talk maybe longer than that, but as we have this meeting every year.

Maritime Surveillance continues to grow. The demand for this around the world is remarkable. The uncertainty that's been created by the change in policy in the American government, where they're less reliant on NATO, less reliant on partners, more stand-alone has made other countries step up and say we're going to look after ourselves. And we've been the benefactor of that, particularly with new operations in Europe. A couple of years ago, we won in the Netherlands. We won in Great Britain. We announced that we've been selected to work with Greenland, and we're in discussions in other countries.

I want to deal a little bit with -- we announced that we weren't the winner in Australia. I don't know why we didn't win. And we frankly, we don't even know who won or if anyone won. They just told us it wasn't us. And the idea that this should be dramatic or a big problem, I really think is incorrect. We've talked about the growth of maritime surveillance, and we're not going to win every contract that's out there.

But the proof is we won one already, another one, and we're going to win more. And this is a long-term, highly profitable part of our business. And we're excited about it. We're not going to get everyone. And if we do get everyone, we're probably not bidding the right price. There are competitors who are good at this, but we're really good at it. And with the expansion of our stuff in Europe, the potential to do it in Northern Canada, I think you'll see us in other European countries in years to come.

Aircraft sales and leasing. Our Regional One business is booming. It's grown dramatically because of investments in aircraft we've made in prior years. Our leasing revenue is way up. Hank and his team have been in front of the curve in terms of buying things before everyone realized we need them. The shortage of engines and the shortage of certain types of aircraft is going to continue to drive this in the future. We've got our eyes on the horizon because of the crazy oil prices and more importantly, potentially fuel shortages has had no impact on Hank's business so far. But we're -- we have our eye on it.

We've also got the checkbook for Ritchie that if there is uncertainty in the business and there's assets become available, the best deals we do are in uncertain times. I've told a number of you about Hank came to me during the middle of COVID and said he wanted to buy a fleet of Q400 aircraft, which weren't exactly in vogue at the time. And I kind of looked like, do we really need to do this? And Hank said, "No. We got to do this." And so I listened and unfortunately, all those aircraft are gone. And we bought them for the price of about half an engine today. And so it's what you can buy in bad times that drives this business in good time. So hopefully, the market doesn't slow down. But if the market does slow down, we're going to be super active and take advantage of it.

We added MACH 2 to the family earlier this year. We've talked about for a long time that we'd love to expand our portfolio outside of regional jets and big turboprops. MACH 2 is in that market. They're a small player, but they are similar to Regional One in that they are very good at buying older aircraft, parting them out and earning special returns.

With Regional One's model, the market information on bigger jets from Canadian North and from MACH 2, it's going to give us the second booster of our rocket as we move into other types of aircraft over ensuing years. Now like Regional One, we're not going to jump into this boldly and take on too much risk. We want to make sure we know exactly what the value of the things we're buying is. So it will be a slow steady climb. But many of you are long-term shareholders will remember in the late '20 teens, we weren't really in the ERJ market. We are a Bombardier company. So sold CRJs. We dipped our toes into that. And today, we would do at least as much business in ERJs as we do in CRJs. I think you'll see that as we move into the 737s and ultimately, the wide-body jets in the future.

Finally, matting solutions. The Northern Mat acquisition in 2022 has been amazing for EIC. They're the dominant player in Canada. We bought them just as we are heading into the back end of a super cycle with long linear projects in the company greatly outperformed what we bought it off of. The last couple of years have been more in quotation marks normal and that there weren't a ton of long-run linear projects. That has turned. We've heard everybody talk about how the utilities are investing in new distribution capacity and new production capacity to look after driving electric cars and to look after data centers. Well, every one of those new distribution lines needs matting to -- for the construction equipment to drive on. So we're ecstatic about what Canada looks like.

And a little over a year ago, we bought Spartan, the composite manufacturer in the U.S. The U.S. market is a little ahead of Canada in that the electrical projects are well underway. Not that they're nearing completion. There's decades worth of work in that business. And we've essentially been sold out since the beginning of last year. And so I'm excited that we're building a new plant. It's on time, on budget. We're building it in Saltillo, Mississippi. If anybody has been there, I think you're the only one. But it fits us for what we do access to raw materials and access to the people we need and we're ecstatic that, that will be open next summer.

Finally, it's not on here, but we've really seen an uptick in our -- in the balance of our manufacturing business. Early in the year, it was slow, and I was a little concerned that we might be going through a lull. And in February, it was like someone turned on a light switch, whether it's our stainless steel tank business in Springfield, Missouri, where we took the biggest order in our history to build the cooling system for a data center at over USD 20 million for a single project or whether it's our precision metal manufacturing businesses, Ben Machine in Ontario, where we're doing incredible high-tech tool work for space projects for the F-35 spike fighter or our manufacturing businesses in Southern B.C., where we're building racking and things for data centers or our WesTower business, doing a full bunch of laying of the cable for these data centers or our pressure system business in Alberta.

The backlog is at record highs and growing. And so the future truly is bright. And I say that with one of our segments is -- has gone through a tough time, our Windows business. Darwin and my team out in Toronto have done a great job of realigning our costs, streamlining our production. And we know we're going to build apartments. We know it's the cheapest place for people to live. So it's a matter of time until that returns.

And when it does, it's going to add $50 million or $60 million more to what we're doing here with no investment because we already own the equipment, we own the buildings, and we've kept the people. So it's kind of our ace in the hole. One of our founding directors, Dunc and I have a running joke where Dunc says, "Wouldn't it be great if we could get them all going at the same time?" And then I tell them, well, the business model is designed that they don't all go in exactly at the same time because then they could all not go at the same time. So it shows you we're hitting record results with one cylinder not firing. And that cylinder will come back, and it will add to the growth in the future.

So I'm going to talk 2 or 3 really quick case studies and then I'll answer any questions if you have them. Canadian North is the dominant player in the east part of the Arctic and the West part of the Arctic. Calm Air was the dominant player in the central part of the Arctic. And Canadian North went through a challenging merger with First Air, sorry, I've got a brain tumor just before COVID. And COVID made that merger even more difficult of the pressure on companies to keep their employees and do things like that. And so it was a great opportunity for us to pick up an airline that has great people, a great tradition and wonderful market share, combine it with Calm Air to cover the whole north. And I think the proof of that was our customer, the government in Nunavut most would be concerned that, hey, these guys are consolidating the business.

Now we've got one big supplier. They were so happy that we had accomplished this and put 2 great airlines together that we got a new 10-year contract on a negotiated basis, which solved some of the aviation inflation challenges we had and put us on the path to grow. We're working on streamlining operations, seeing what we could do between the 2 airlines to continue to make them more profitable, but it's very clear in our in our financial results that Canadian North has been a huge part of our growth and is a huge part of the future as the North takes greater precedence in Canadian economic development.

So Canadian North was an acquisition. These 3 are examples of making investments into businesses we already own. We talked about Spartan, which my management team has done a phenomenal job of keeping that plant going 24 hours a day, 7 days a week and eking out every composite mat they can. But we're nowhere near meeting the demand of our customers. So we're building this new factory, which will more than triple our capacity. It's an investment that's about $60 million, if I remember correctly the budget. And we expect that it will be up and we'll be testing product next summer, and we'll be in production by the end of the year. And with the demand we have there, that's going to fuel our '27 and '28 growth.

PAL, you see it across the board. PAL is actually a mini EIC. And when I say mini, they're bigger than we were for most of our history. But they're involved in the scheduled airline like Calm and Perimeter and Canadian North. They're a feeder for Air Canada, where we do stuff on a tariff basis for them. And we're big players in the aerospace business.

Well, we've invested in that company consistently. It's 5x the size it was when we bought it and growing. And we bought planes for the Air Canada contract. We've invested in new maritime surveillance aircraft. I can't wait to win another maritime surveillance contract and buy some more planes there. But it shows that if you put capital in the hands of people who know what they're doing, you reap rewards.

And then finally, MACH 2, I talked about already. It's really -- it's an acquisition, but it's really buying capabilities for Regional One. Regional One needs that knowledge of the parts, the knowledge of the product and put it into the engine that it is and how it attacks the market. And so that's going to give us the ability to grow that business in the future.

If you walk away with a couple of things out of this is our business model works. We're not changing our business model, and our business model is based on putting money into the hands of people that are smarter than the people at head office.

Finally, one thing I want to touch on before question and answers is most of the stuff I've talked about is dollars and cents and finance. What we've accomplished at EIC is way more than that. A few years ago, we started the program of digging First Nations children in to the reconciliation game at the [ Bomber ] Stadium. And we brought in 1,000 kids. And I still remember when Wade Miller, the President of the Bombers came to me and said, "Mike, you guys got to step up. We haven't played for a year." And in the past, we had brought in one community a game. So 20, 30, 40, 50 people to a game, not too hard to manage logistically. And I boldly shot off without thinking we'll do 1,000 for that game. I walked back to my office and I told Pam and she looked at me and said, we don't have enough capacity to move 1,000 people.

But we found a way the airlines brought in extra planes. We shared it, and it is a testament to what we do in terms of investing back into our communities. And it's a proud moment when you look at that orange end to the stadium with all those kids in orange Bomber gear, which is kind of an oxymoron for a team that was blue, but it shows up in the stadium.

Well, we kind to put the rest of the CFL to shame. My real job was being the chair of the Bombers. And so I was chirping at some of the other teams that they needed to step up their game and follow us. And over the ensuing 2 or 3 years, every team now has some version of what we do for Reconciliation Day. And it's different with every team depending on what the First Nations component is of their fan base, where they get them from.

And this year, with the acquisition of Canadian North, I'm so proud to announce it's not just a Winnipeg story anymore. We're going to do it in Edmonton, and we're going to do it Ottawa. Canadian North is going to bring the people down from those communities, and we are going to make a difference in people's lives.

And then that is -- we've taken one step further into economic reconciliation with Atik Mason program where we're now graduating 30 or 40 pilots a year, which are going into our base. And on one hand, we're giving opportunities to First Nations people who didn't have that chance before. But on the other hand, it's incredibly selfish because we're getting pilots that get to service their own community. They don't run away to go to a job at Air Canada. They're proud to fly the St. Theresa point or Goose Bay or Rankin Inlet. And it's a big investment. I'm really thankful that the Board backed us on investing. We're spending north of $5 million a year on that program, but we're graduating pilots and we're making a difference.

And the reason I wanted to close with this is that being socially responsible and being profitable don't compete with one another. They go together. And I'm really proud of what we've done at EIC. So if there's any questions, glad to answer them. If not, we can have a sandwich and chitchat.

Last word? Okay. Thank you very much, people. We'll see you soon.

Good morning, everyone. Welcome to Exchange Income Corporation's First Quarter Conference Call to discuss the financial results for the 3 months ended March 31, 2026. The Corporation's results, including the MD&A and financial statements, were issued on May 11, 2026, and are currently available via the company's website or SEDAR+.

Before turning the call over to management, listeners are cautioned that today's presentation and responses to questions may contain forward-looking statements within the meaning of the safe harbor provisions of Canadian provincial securities laws. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements.

For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the quarterly and annual MD&A and the Risk Factors section of the Annual Information Form and EIC's other filings with Canadian securities regulators. Except as required by Canadian securities law, EIC does not undertake to update any forward-looking statements. Such statements speak only as of the date made.

Listeners are also reminded that today's call is being recorded and broadcast live via the Internet for the benefit of individual shareholders, analysts and other interested parties. I would now like to turn the call over to the CEO of Exchange Income Corporation, Mike Pyle. Please go ahead, Mr. Pyle.

Thank you, operator. Good morning, and thank you for joining us in today's call. With me today are Richard Wowryk, who will highlight our financial results, along with Jake Trainor and Travis Muhr, who will expand on our outlook. Yesterday, we released our first quarter results for fiscal '26. Our collective performance for the period was incredibly strong. The results continue to demonstrate the importance of our resilient and stable business model. And looking at the macro environment, the quarter was marked by volatility, high geopolitical activity and trade uncertainty and rapidly rising fuel prices, and yet our businesses set records in every key metric.

What is even more encouraging was the momentum that was generated within our business lines as we exited the quarter. We saw significant strength against -- across virtually all our business lines. Having a strong Q1 with accelerating momentum gives me significant confidence in updating our guidance. While we did not change our goalposts for the quarter as they remain from $825 million to $875 million, we now anticipate that we will be near the upper end of the range, which is a very positive signal. Should current strength continue, we may revisit the top end of the range in future quarters.

On the balance sheet front, we advanced key initiatives that further strengthened our balance sheet. During the quarter, we announced our investment-grade corporate credit rating and issued $600 million of 4.324% secured -- unsecured notes. Originally, we had planned to do an issuance of $400 million. But due to strong demand, we upsized the offering to $600 million. The notes were also issued on March 13, which was right in the middle of the geopolitical conflict with Iran. The timing of our issuance, coupled with the demand is external validation of our business model, the dependability of our results that we talk about each quarter and the year-end. At the end of the year, we had over $2 billion in available liquidity.

Liquidity is important in our business model as it allows us to act decisively when attractive opportunities arise, both on the acquisition front or for organic growth capital investment. I don't want Adam and his team to be constrained by market conditions or have deal execution risk. However, to be clear, this additional capital does not change our conservative view on leverage or change our disciplined acquisition metrics and strategies. Rather, the available liquidity allows us to be incredibly opportunistic in the marketplace.

Our leverage continues to be at or near 15-year lows and having 5-year unsecured notes provide us with significant real cash interest savings when compared to available swap rates. Further, based on today's yield curves, the savings are even more material.

EIC is a shining example of how a diversified and resilient business can navigate periods of uncertainty and continue to thrive. Our overall results were driven by a 30% increase in revenue to $867 million in the quarter. Adjusted EBITDA increased 27% to $166 million. The increases are even more impressive when you consider the translation impact of U.S. dollar results declined by approximately 5% when compared year-over-year. In our Aerospace & Aviation segment, the increases were driven by the acquisitions of Canadian North and Mach2, stronger passenger loads, solid medevac performance, growth investments in the fleet, stronger tempo flying under our ISR contracts and the addition of a second aircraft to the U.K. Home Office contract.

Canadian North has continued to meet our expectations of profitability and culturally is a great fit with our other air operators. Our maintenance capital expenditures continue to be elevated in the first quarter and will remain elevated for the next quarter or 2. However, that was expected and previously communicated to the market.

Our Aircraft Sales & Leasing business continues to see robust demand and increasing rental rates for leased aircraft and engines. Parts sales and whole aircraft sales continue to be very strong with significant aircraft monetization occurring during the first quarter based on opportunistic sales.

There has been a lot of news about airlines adjusting schedules in response to the price of jet fuel, which was driven by the supply-related uncertainty tied to Iran and other geopolitical events. The customers leasing our aircraft and engines have not been materially impacted to date. Management is proactively monitoring the market and engaging customers to manage any risk. That being said, market volatility also creates several opportunities for our business line, and we remain ready to execute on any opportunistic transactions that may result from parts purchases or the purchase of engines or aircraft.

Lastly, we continue to receive a strong level of inbound interest from governments around the world regarding our world-class ISR capabilities. We recently announced that our proposed ISR bid in Australia was not selected. We have not received detailed feedback regarding our submission or received confirmation who was the successful bidder. As I previously commented, the Australia contract is just one of many that we were actively pursuing. That being said, we are very excited to announce that Air Greenland contract for 2 missionized surveillance aircraft is nearing completion.

This contract was directly sourced opportunity and the PAL Aerospace team had been working hard at securing the project based on a long-standing relationship with Air Greenland. The contract with Air Greenland is one of many solutions that our team has been actively pursuing. We continue to pursue other multiple opportunities in Canada and Europe. We remain confident in our solutions and put forward nationally and internationally, and we'll provide updates as information becomes available.

Our Manufacturing segment declined from a revenue and profitability perspective. However, when you look beneath the hood, the real story emerges. The first quarter for the Manufacturing segment was all about momentum, and that was gained in both the Environmental Access Solutions and Precision Manufacturing and Engineering business lines.

Towards the end of the quarter and after the end of the quarter, we saw customer inquiries being booked into firm fixed orders and record amounts of orders in some of the individual businesses. For example, our stainless steel tank manufacturer recorded its largest ever order for stainless steel tanks for a data farm in the United States. The order was in a magnitude of twice their previous largest single order in their long successful history.

Our Environmental Access Solutions business continued to see step-based improvements in the number of mats on rent in the Canadian operations as we exited the quarter. The demand backlog for our U.S. operation's composite mats remains extremely robust with the majority of our existing production capability being sold out for 2026. The second state-of-the-art plant in Saltillo, Mississippi is progressing on time and on budget. The facility will significantly increase our manufacturing capacity so that we can meet demand for the best-in-class composite mats. From a broader industry perspective, there have been numerous announcements regarding transmission and distribution expansion along with potential new pipelines and oil and gas development. In the medium and longer term, we see significant tailwinds for the business line and remain very bullish about the business returning to historical highs like we experienced in 2022.

Our Multi-Story Windows business line moderated consistent with our expectations. We are seeing some positive indicators at various levels of government when they talk about speeding up approvals and reducing development fees. The demand for affordable housing continues, and we are seeing some successes in various geographies around North America. However, the supply and demand imbalance hangover -- the supply and demand imbalance hangover driven by investor-focused condo development in Toronto and Vancouver continues. We have also been impacted by tariffs in the year-over-year comparatives. Although the quantum of tariffs is not material to EIC overall, it is less than $10 million on an annualized basis.

During the anticipated moderation in our business, our teams have executed on key initiatives, including reducing the physical footprint of our manufacturing and improving efficiencies within the plants and aligning our capabilities in Canada and the U.S., all of which are now virtually complete. So when the demand inevitably rises, we will be in a position to produce more windows at a lower cost. I remain very confident in this business line. As we return to historical norms in the future, the increase in revenue and profitability will fall directly to the bottom line as all of the investments have been made with the exception of investment in working capital when sales rise.

Rich will highlight the key metrics for the 3 months ended March 31. But before I turn the call over, I wanted to talk to the additions at the C-suite level at head office. My mantra for EIC has always been that culture isn't the most important thing. It's the only thing. The culture at EIC is very unique and maintaining that culture long into the future is important for our continued success. The additions to the executive team of Carm, Marly and Garth are important as they understand what makes EIC successful, and they will help us grow and expand. All 3 have been with EIC for a number of years and are top performers. We welcome them to the executive ranks, and they will continue to drive the EIC culture as we continue the growth trajectory that has made us successful in achieving a 20% return per annum returns for our shareholders over the past 21 years. In addition, Travis and Darwin have expected -- have accepted expanded roles within the C-suite. Jacob Travis will focus on the outlook for our segments for the second quarter and the remainder of the year.

I will now pass the call over to Rich, who will talk about some of the key highlights from the MD&A and financial statements.

Thank you, Mike, and good morning, everyone. For the first quarter, revenue was $867 million, adjusted EBITDA was $166 million. Free cash flow was $120 million. Free cash flow maintenance CapEx was $41 million and adjusted net earnings and net earnings were $34 million and $28 million, respectively, which represented increases of 139% and 287%, respectively.

Earnings and adjusted net earnings per share were $0.50 and $0.61, respectively, which were increases of 257% and 118%. Free cash flow per share increased by 33% to $2.14, while free cash flow maintenance CapEx increased by 46% to $0.73 per share. The per share metric increases were even more impressive as the weighted average shares outstanding increased by 11% compared to the prior quarter primarily due to the conversion of convertible debentures in 2025 and acquisitions executed.

All the absolute key performance indicators were first quarter high watermarks. The Aerospace & Aviation results were driven by strong profitability at each of the business lines due to the acquisitions of Canadian North and Mach2, strong load factors at our various air operators, strong demand for leases, parts and whole aircraft and engines at our Aircraft Sales & Leasing business line and the impact of the second aircraft for the U.K. Home Office in Aerospace that started in the fourth quarter of 2025, along with higher tempo flying under various ISR contracts.

Our Manufacturing segment revenues and profitability decreased. But as Mike noted, it was a period of accelerating momentum as the quarter closed and continued strengthening after quarter end. In our Canadian Environmental Access Solutions operations, we saw strong results from math on rent. However, profitability was similar to the prior year as 2025 had strong demobilization and mat movement operations, which were unusual with the normal seasonality of the business. In our U.S. operations, there was continued robust demand for our composite matting solutions. The accelerating demand trends being strengthening Canadian rentals and strong U.S. composite sales continued subsequent to quarter end. During the quarter, we incurred $2.5 million in growth capital expenditures on the new U.S. composite mat manufacturing plant. The project is on time and on budget based on the estimated $60 million budget.

Our Multi-Story Window solutions business line continued to moderate as expected. The moderation of the business is related to our past project delays and deferrals associated with developer uncertainty. Our teams have completed initiatives, which will increase the efficiency of the plant. Affordable housing continues to be a theme. And when volumes ramp back up, we will be in a position to produce more windows at a reduced cost compared to our prior operations. Precision Manufacturing Engineering had a first quarter whereby results and activities gained more and more momentum as we exited the quarter. While first quarter results were relatively consistent with the comparative, the positivity amongst the group is as high as it has ever been due to the significant customer orders at the end of the quarter and into the second quarter.

Maintenance capital expenditures for the first quarter were $79 million and were higher than the comparative period by $23 million due to the addition of Canadian North, increased utilization of the Aircraft Sales & Leasing fleet and general increase in fleet size within our Aerospace & Aviation segment. Growth capital expenditures during the first quarter were $40 million and were primarily driven by 3 King Air's aircraft deliveries for the BC EHS contract in our Essential Air services, coupled with investments made by Air Canada -- made for the Air Canada expanded commercial agreement and aircraft modifications and other investments for the Newfoundland and Labrador medevac contract.

From a cash flow and working capital perspective, we had a very strong result as the investment in working capital was nominal when compared to the growth in our financial results. Corporation's aggregate leverage remains near historic lows. During the quarter, we announced that EIC has achieved an investment-grade corporate rating with a BBB low rating and a stable outlook from DBRS.

We issued $600 million of bonds, which were significantly oversubscribed at an interest rate of 4.324%, which provides significant interest savings compared to other financing products, including 5 years money through interest rate swaps at the time of issuance. With the further increase in risk-free rates, the savings today are even more significant. With over $2 billion in available liquidity, we have significant dry powder to execute on acquisitions and invest in our current businesses for future growth. Having available liquidity is critical for EIC as it lets us to be an opportunistic acquirer while minimizing deal execution risk for Adam and his team.

Our philosophy for acquisitions and growth capital investments has not changed, but having a strong balance sheet and available financing means that we can execute on sizable transactions when the opportunities arise. Our M&A pipeline remains very strong. Adam and his team executed on a strategic investment in the first quarter with Mach2. We've always wanted to diversify our cash flows and provide another avenue for growth for Regional One. Regional One has built the data infrastructure and architecture that is capable of scaling into other aircraft types. And now with the Canadian North 737 data and the narrow-body and wide-body data for Mach2, along with the experienced personnel at Mach2, we can realize on significant opportunities in that space.

The 737 and narrow-body business is the world's largest aftermarket parts and leasing business, and therefore, we have a unique opportunity to leverage the strengths -- leverage our strengths to create meaningful returns for that business line long in the future. In terms of other acquisition opportunities, our pipeline includes opportunities in both segments, which are similar to our existing businesses. We have a great foundation of businesses and to the extent that we find ancillary opportunities to expand our competitive moats, we are always interested in those accretive opportunities.

As a reminder on the seasonality of our business, the first quarter is our seasonally slowest quarter because of the impact of winter roads and weather-related impacts for our air operators, coupled with reduced demand for our Environmental Access Solutions business line in Canada as the ground is frozen and doesn't require the same level of matting protection. The third quarter experienced the highest level of activity across our businesses and the second and fourth quarter would approximate the average for the year. The first quarter set a solid foundation for the remainder of the year.

I will now turn the call over to Jake, who will provide an update for the second quarter and remainder of 2026 for our Aerospace & Aviation segment.

Thank you, Rich. Overall, we're expecting another strong year of growth from our Aerospace & Aviation segment as the trends highlighted in Mike and Rich's sections are expected to continue through fiscal 2026. The growth investments made in the past, including the second aircraft for the U.K. Home Office, the acquisition of Mach2, the commencement of the Newfoundland and Labrador medevac contract midway through 2026 and the expansion of the Air Canada commercial agreement will all contribute to the increase in revenues and profitability.

I will specifically focus on the growth factors by business line. Our Essential Air service business line will see growth driven by a multitude of factors when compared to the prior period. The most significant impact will be the inclusion of Canadian North in the second quarter with no comparative in the prior year. We also expect that the strong load factors experienced in Q1 and growth across our network will continue into the second quarter and throughout the remainder of the year.

Other increases include the expansion and extension of the Air Canada commercial agreement, which will see the aircraft starting to fly midway during the year. Lastly, we expect continued growth in our medevac business, including the start of the Newfoundland and Labrador medevac contract, which is anticipated to start operations in mid-2026. Offsetting some of these gains is the continued inflationary pressures on labor, aircraft parts, consumables and overhead expenses.

The Aerospace business line is expected to see growth due to the continued strong flying tempos for the second quarter and for the remainder of the year, along with the financial impact of the second aircraft for the U.K. Home Office, which will have quarter-on-quarter effects as that aircraft started operations in the fourth quarter of 2025.

As Mike mentioned, we're excited about our work with Air Greenland and the Danish government. Building on our relationship with Air Greenland, we have been selected as their missionization partners. There are still some details to be worked out with the Danish government when it forms, but we're planning a 2-aircraft surveillance program complete with an integrated ground center based on CarteNav's AIMS-C4 mission system. Obviously, subject to sovereign negotiations, this creates an exciting opportunity where we now have much of the Arctic and North Atlantic covered by nations using the CarteNav system. I'm trying to paint a picture here where we have Canada, Greenland, the U.K. and the Netherlands in the North Sea environment, covered by the CarteNav operating -- CarteNav system operating for friendly nations. This concept falls directly in line with our Prime Minister's message of collective defense, shared security and resilience with other Arctic and Nordic nations. Separate and aside from this, we're also actively engaged with a number of opportunities emerging in Canada, Europe, the U.S. and Asia.

Our Aircraft Sales & Leasing business is also expected to experience growth as the investments made in aircraft and engines during 2025 are leased to customers. As Mike commented, there is a potential risk of fuel shortages impacting our lessees. However, to date, we're not aware of any material impacts. Wherever there is volatility in the aviation market, history has shown that it does not -- it does create unique opportunities. Aircraft Sales & Leasing remains an opportunistic buyer and stands ready to complete transactions that are accretive to our portfolio. The demand for Regional One and Mach2 remains robust as evidenced by increasing lease rates and shortages of critical parts across the industry, and we expect that trend to continue.

On a long-term basis, we expect maintenance capital expenditures to increase consistently with the increases in the adjusted EBITDA in our Aerospace & Aviation segment, which is the biggest driver of our consolidated maintenance CapEx. We anticipate an increase over Q2 2025 due to the inclusion of Canadian North, coupled with increased flying due to our recent investment in aircraft over the past few years. Lastly, we continue to invest in deferred maintenance at Canadian North and anticipate those investments to continue for 2026.

Growth capital expenditures are expected for the second quarter and for the remainder of fiscal 2026. We anticipate receiving the last King Air for the BC EHS contract around June or July of this year. There will be CapEx related to the modifications of aircraft for the Newfoundland and Labrador medevac contract, along with the acquisition of aircraft for the Air Canada expanded commercial agreement during the second quarter. Regional One is always working on opportunistic aircraft and engine acquisitions, which may result in growth investments being made in the Aircraft Sales & Leasing business.

I'll now pass it off to Travis to provide some commentary on the Manufacturing segment.

Thanks, Jake. So looking at the second quarter and the remainder of 2026 from the manufacturing point of view, we saw significant momentum in our business lines as discussed by Mike in his introductory comments. We expect that Q2 manufacturing results will be stronger from a revenue and profitability perspective, and that trend will continue for the remainder of the year. Our Multi-Story Windows business line continues to experience strong level of inquiries. As we expected, performance has moderated during 2026, and that will continue throughout the year on a relative basis with the comparative periods.

Tariffs impacted Q1 2026 versus the 2025 comparative. It's important to highlight that the recently announced U.S. government changes about how tariffs are calculated will add additional costs for goods shipped from Canada to the U.S. Previously, it was based on aluminum content and now it is computed based on the value of goods shipped. We're able to mitigate the tariffs with our capability to manufacture windows in the U.S. We're starting to see positive commentary from various levels of government to encourage development of affordable housing through reduced or frozen development charges and faster approval processes. Further, we continue to see positive signs in various regions around the U.S. and in Western Canada. However, developers remain on the sideline due to excess supply of small investor-focused condo units, especially in Toronto and Vancouver.

Our Environmental Access Solutions business line is expected to generate stronger returns for the second quarter and for the remainder of the year. We saw continued step-based improvement in the number of mats on rent as we exited the quarter and the demand for our composite matting remains robust, and the plant continues to operate at maximum capacity with the vast majority of 2026 output already sold. Our Canadian operations are expected to be a major driver for the business as we started to see strong results in the fourth quarter from a rental perspective, and that continued during the first quarter of 2026 and will continue into the second quarter.

Further, we anticipate that long linear projects will commence in the latter half of 2026 or into early 2027 across several industries, including transmission and distribution, pipeline and oil and gas. The medium- and longer-term prospects of the business are very robust as there will be material investments in transmission and distribution across North America due to growing electricity demand from homes, vehicles and more importantly, AI and data farms.

The Precision Manufacturing and Engineering business line is expected to improve from a revenue and profitability perspective for the second quarter and for the remainder of the year based on significant momentum achieved. This business line is very diversified with exposure to the defense industry, technology industries, including data farms and telecommunications, and those specific industries are driving the growth vectors of this business line. As Mike had mentioned, we've been receiving record forward bookings in certain of the businesses, and that will drive the year-over-year results for the remainder of 2026.

The anticipated maintenance capital expenditures are expected to be higher than the prior year due to the timing of replacement activities because of the demand profile for the business line. We're also anticipating growth CapEx to be incurred for each of the business lines, but they should be relatively consistent with 2025 with the exception of Environmental Access Solutions. Growth capital expenditures will be outlaid for the new state-of-the-art composite plant as well as further investment in the Canadian rental fleet based on expected market demand. I'll now pass the call back to Mike.

Thank you. The first quarter of 2026 was a very strong start to the year and has allowed me to update our guidance to be near the high end of our previously disclosed range. I'm extremely confident in the future of our company. EIC is at the intersection of a number of critical themes and trends. We remain true to our principles and our business strategies, and those will continue to drive our long-term success. Thank you for this time -- your time this morning, and we would now like to open the call for questions. Operator?

[Operator Instructions] And your first question comes from the line of Matthew Lee from Canaccord Genuity.

I know it's a bit early to have this conversation, but just given the momentum you're seeing in A&A and the fact that it sounds like manufacturing should improve sequentially each quarter, did you guys have any conversations about raising that guidance beyond the $875 million range? Is that just conservatism or maybe something I'm missing?

You got bugs in our office, Matt? Yes, there was a lot of discussion about what the right number was for our guidance. And at the end of the day, we decided to move our sort of guidance to the top end of the range and not move the range. And the reason for that was really simple. The uncertainty in Iran is causing jumps and starts with oil supply and with oil prices. And while it has had no impact in our Regional One business to date, and we see no -- nothing imminent, we didn't want to increase our target and then have something dramatic happen there and then have to back it back down. So you're bang on, the trends you're seeing with our business, it's not hard to add up to a number that's higher than $875 million. We we'll promise that once the world situation settles down just a little bit.

Okay. That's helpful. But in my understanding, that you guys generally pass across fuel costs. So if that's the case, kind of what's the biggest area of risk that could prevent you from reaching that $875 million or exceeding that? And then maybe what businesses do you think could be most impacted?

Yes. You're bang on, Matt. We really don't have much of an impact on our business from increasing fuel prices. We have the ability to pass those on to our customers. And the fact that we're an essential service, demand doesn't change much with fuel price surcharges. I think our biggest concern would be if fuel shortages got so bad in certain parts of the world that they stop flying or flew less, that would reduce demand for parts. So it's really more a matter of fuel supply in certain parts of the world.

North America really doesn't have a potential fuel shortage. We make enough in North America to look after ourselves. So we don't see that as an issue. It's more just of a worldwide aviation potential issue if there were a shortage of fuel.

Yes. Matt, it's Jake. Keep in mind, Regional One leases aircraft across the globe. So that's the exposure.

And to be clear, we've had no issues thus far.

Exactly. There's no indication. But again, just out of conservatism.

And your next question comes from the line of Steve Hansen from Raymond James.

Mike, I wanted to go back to your comments around the accelerating momentum on manufacturing. I think you and Travis had some good commentary there, and there's some mention of record orders. I mean I just wanted to ask specifically, like what do you think is driving that? And I think the bigger question is, do you think that's a sustainable thing through the balance of the year? The outlook commentary seem to suggest that, but I'm just trying to understand the underlying drivers a bit better. And maybe if you could just give a little bit of additional context around how you're seeing that from the customer side of things.

Yes. I mean the interesting thing, Windows aside, we're seeing it across the board in all of our manufacturing. In the matting business, in the U.S., it's clearly driven by transmission and distribution. The utilities needs to increase capacity. And we're just in the beginnings of that. That's going to go on for years, if not decades. And so I have no concern about the long-term nature of that. In Canada, we're probably 1.5 years behind the Americans, and we're starting to see those projects, particularly in Eastern Canada. And there isn't a day that doesn't go on without discussion of a new pipeline, whether it's the President of the U.S. talking about expanding the pipeline there or us going to the coast with natural gas or bitumen. So that's very strong.

And then when we look at some of the other manufacturers, like our stainless business, that's never really had a role in data centers before. All of a sudden, the farms they're building are so large that they need actual refrigerant and they used to cool them with air, now they're cooling them with water. We're getting massive orders to deal with that. We're actually at a stage where we're sharing production capacity because we can't keep up in our existing plants. And so the window companies have shared some space, both in Canada and the U.S. with our manufacturing guys to allow us to keep up with the demand.

You also see it in our precision metal guys in Ontario, Ben Machine. They're building some stuff that's super high precision driven by space demand, if you can believe that. We're building satellite equipment. It's across the board. And the interesting thing is it's accelerating, not -- it's not like it's been good. To be honest with you, in January, I thought it was a little bit slow, and I was a bit concerned about our manufacturing business with the exception of matting. It's been strong all year. And since then, it's just one thing after another, and we're busy trying to find enough equipment and enough geography to put the equipment into.

And maybe, Steve, I'll add on top of that. So we've talked over the last year or so about the strong level of inquiries. And what we were just seeing is customers were punting that decision down the road. And I think recently in the U.S., there was a small and large business survey where you saw capital goods orders increased in March. And to be honest, that's what we really saw. So those historical inquiries and decisions are now coming to fruition. And we believe that it's going to continue throughout 2026 because there is a built-up pent-up demand for the goods and services provided by those business lines.

And Steve, we've got a couple of other dynamics driving this. One of them is, I call it reshoring of some of the production, and that's in line with what Mike was talking about, some of the space work we're doing, but it's also with some of the aircraft manufacturers. We're making more aircraft parts domestically than we had in the past. And then the second driver is, again, we've mentioned about the data centers and some of the manufacturing. But part and parcel with that is some of -- with our wireline services, we're seeing more uptick in ploughing fiber and putting -- installing long-distance fiber, which again is the connectivity between the data farms.

And your next question comes from the line of James McGarragle from RBC Capital Markets.

Also Carmine and Marly, great to see the promotions for you guys. I just wanted to ask on how you're thinking about growth into 2027. I'm not asking for 2027 guidance, but on the aerospace side, we have Skyline, Greenland, further Canadian North integration, higher returns from the BC aircraft. So can you just kind of help us frame how should we be thinking about the growth there?

And then on the manufacturing side, we've got the new plant, new projects in matting, a potential recovery in windows. Just trying to piece all those things together and just trying to frame how we should be thinking about the 2027 outlook.

Yes. I'll do my best to avoid numbers here because we haven't given 2027 guidance. But we're really bullish on '27 simply because of the capital we've already invested. You're going to see, as an example, the Newfoundland medevac contract give us a full year of revenue. You're going to see the continued growth of the matting business. I think that's super exciting in Canada. We have great visibility when you start to bid the projects in advance. And we're a big player in the market. We don't win all of them, but we win -- we certainly win our fair share. And with the amount of stuff we're bidding, I'm highly confident we'll have more mats on rent in '27 than we do in '26, and we'll have more in '26 than we did in '25. So I see growth there.

You've got the [ fast ] business, that will add in the future in '26 or '27, I'm sorry. The continued integration of Canadian North is going to continue to help as we move forward with our combi aircraft model and the things we're doing there. And I think the other thing that maybe we should talk a little bit about, and I'm a bit surprised we're seeing it already, but our passenger loads in Nunavut are growing, and they're growing faster than the birth rate, which is not normal. And I think that's the very beginnings of -- as the government is investing in the north that people are traveling up, whether it be professionals or construction workers or all those things. The way up there is on our aircraft. And so we're seeing a bump there, and I anticipate that will continue on.

And then we've expanded our work on the medevac business. So as that grows, we'll have all the planes in place in BC. We're in discussions with them to grow the number of routes we're flying for them in addition to what we're already doing. And so there's a whole bunch of things. And then, of course, the Air Canada contract as well. Those routes will all be flying by then. So we're in a position where there's a whole bunch of what I would call structural growth that's already paid for. And Adam doesn't sit on his hands for very long. So I'm pretty sure we'll have some other stuff come from that. So while I'm not promising anything, that $1 billion number isn't far away.

I appreciate the color. And then just one quick follow-up here. On the contingent consideration gain from Canadian North, can you just kind of talk about what drove that downward revision to the earn-out estimate? Anything there from the growth trajectory change versus your original deal assumptions? I guess we usually see that when something is going wrong. So any color you can provide there?

Yes. I really appreciate the question because unequivocally, the progress at Canadian North is well in excess of our -- even our most rosy forecast when we bought the company. Things are going great. We had an earn-out number based on resigning a contract for the Northern Charter business related to the natural resource part of their business. One of the projects has been delayed. And as a result, the company wasn't able to enter into the new contract, which meant that we didn't have to pay out under that piece of the earnout. It was something that our acquisition team identified as a risk.

Now I don't think that business has gone anywhere. We talked about when we bought the company, we weren't -- we had to make sure we were making money in the charter operations and say we've made great progress there since we started. But the gain relates to one payment we don't have to make simply because there was a contract that couldn't be signed within the time frame it needed to be signed within for us to have to pay the vendor. So it was a pickup based on the delay of that contract. In no way does it reflect a disappointment or any underperformance of the acquisition, quite the opposite.

And your next question comes from the line of Krista Friesen from CIBC.

I was just wondering if we could dig in a little bit more just on the jet fuel side. Based on the contracts that you have where you can pass it through, what's the sort of lag that we should expect there?

Yes. It's less than a month. In places like Manitoba or the Maritimes where it's largely done at market, we can pass it on as quickly as we can go tell with the customer. And there's presold tickets. So there is some impact, but it's nominal. In most of our medevac contracts or our Nunavut contract, this month's fuel is next month's price. So you get a 30-day lag on some of that stuff. But conversely, when it stabilizes or ticks down, we get a 30-day pickup. You could see in the first quarter, even though fuel ran up pretty hard in the back end of the period, like from the end of February to the end of March, the margin compression was minimal.

And on the ISR business, most of that is billed straight through to the government. We don't even actually pay the fuel bills. The government pays the fuel bills direct. So there's zero lag on that.

Okay. That's helpful. And then maybe just wondering if you can give us a little bit more color on the integration of Mach2. It seems like it's been off to a pretty good start despite you having only acquired it very recently. So any additional color there and the demand that you're seeing?

Yes. We built -- we just finished, in fact, yesterday, an expansion of our offices at Regional One, which will allow Mach to join them in the same facility. We're busy entering Mach's data into Regional One's proprietary database that we've built, which will help us pick our spots. And it's really important to understand as we dip our toes in the 737 market, we're not getting into leasing long term, those kinds of things. Those are finance games for banks.

We're taking aircraft at the edges that are nearing the end of their life, and we'll start by parting them out. And ultimately we'll lease out pieces of them. But it's Regional One's model combined with Mach's industry knowledge and EIC's access to capital. Plus, we're a natural consumer for some of those parts with our Canadian North business. They fly 737s. And so the more we buy from ourselves, the more we learn the market.

And your next question comes from the line of Cameron Doerksen from National Bank.

Mike, you talked a little bit earlier about starting to see a pickup in some of the passenger activity into Nunavut. So my question, I guess, is how you see things evolving there over the long term as far as demand for air and aviation into the north. I mean we've seen the federal government, I think, since the last call announce a fairly significant investment in new infrastructure. We've seen some support for some new resources projects in the north. Are you at the stage yet where you're actually having some conversations with governments or with potential resources customers about supporting some of the growth there? And do you have any kind of like time line where you might see more of a pickup in activity? I mean, obviously, you're seeing it already, but maybe a more substantial pickup in activity based on some of these investments that are going into the North.

Yes. I mean there's a wide range. The government stuff is underway. We're in discussions with them on a number of things, whether it be surveillance work, whether it be other projects. There's going to be things that we don't directly do, like building military bases, those kind of things. We've seen an increased demand for charters up there already. We're in discussions for the iron ore development in Baffinland. There's increased exploration for critical minerals on Baffin Island out of Iqaluit. It's pretty pervasive across. It's hard for me to give you a -- well, this is the second quarter of 2027 or anything. There'll be things -- it's building.

I'm shocked that we saw it in our passenger numbers this fast. We did not anticipate this. Because we fly in enough different places where it's an essential service, we can take a look at its volumes compared to, say, the First Nations in Manitoba. And when we see a marked difference in increase in revenues, we know what it's tied to. And so we're at the beginnings of that. They haven't started building the new runways they promised. They haven't started building the new buildings they promised or the military bases they promised. So we're not even in the first inning. They might have thrown out the ceremonial first pitch, but that's about where we are in the baseball game.

Okay. No, that's helpful. And if I could just quickly follow up, I guess, just on the executive appointments and some of the realignment with roles at the senior management level. Obviously, congratulations to everybody for that. I'm just wondering, I guess, what -- from a realignment of roles with Darwin and Travis, like I guess what's the objective? What's their mandates with, I guess, the sort of the new roles that they have?

As we grow, there's more and more -- as we add new businesses, there's more financial oversight required on budgeting, forecasting and those kinds of things. And Travis has a remarkable background in that area. So he'll take on additional responsibilities on that part. And Darwin is really our acquisition whisper, bringing people into EIC and teaching them how to function in a new conglomerate.

He has been remarkable in his period here, and he will continue to focus on that. He'll still have operational responsibilities. But we're asking him to do more on the integration side, and Travis will do more on the numbers, budgeting, forecasting side. The bigger we get, the more Ritchie gets grumpy if he gets numbers he doesn't expect. So we're working on the forecasting to keep Ritchie happy.

And your next question comes from the line of Jeff Fenwick from ATB Cormark.

Mike, I wanted to start off first on the CapEx, maintenance CapEx. You provided some good commentary there at the beginning of the call. But when I looked at the last couple of quarters here, a bit of a step down into Q1 versus where you were at Q4. I'm just trying to get a sense of what's the right -- maybe those are the goalposts we should be looking at for this year? Have you kind of settled into maybe a more normalized maintenance CapEx now that Canadian North is more settled in the mix now? Or how should we think about that?

Yes. I would say that Q1 was lower than I would have anticipated. The slots we could get for engines and some of those things resulted in less stuff getting done in January. I think that's a little bit of an anomaly. The rolling 12s are really the better forecasters of what's going. Q4 was higher. Q2 is going to be higher again.

We do have some stuff that will roll through this year that was kind of deferred things in Canadian North. But that's -- it will remain elevated through the balance of the year. And Q1 was just probably abnormally light just because there were a couple of engine events that got pushed because we couldn't get slots. So they're sitting on our floor waiting to get them overhauled.

Okay. That's helpful. And then I just wanted to ask about the Air Greenland agreement there. You said that you had a pre-existing relationship with them. Was that on the leasing front? Or maybe you could just characterize that for us? And was this like a cross-sell opportunity because of that relationship?

Thanks, Jeff. It really was a cross-sell opportunity. PAL, just given the proximity to Greenland on the East Coast, has done the heavy maintenance for Air Greenland Dash-8 fleet for years. So with that preexisting relationship and whether it was our technical expertise over time, and that's how that conversation started.

Okay. And then I did want to ask, I saw an announcement on PAL Aerospace's website about receiving some funds from the Regional Defense Investment Initiative. It wasn't a huge amount, but maybe you could just articulate how that fits in with the ongoing discussions what the dollars there were for and how that was -- how that came to be.

Sure. That was through the -- as I said, the Defense Initiative, and that was really to support the research and development with regards to CarteNav, some of the modifications to the Dash 8-400 that we're looking at, obviously, within Canada and some other jurisdictions around the world. So again, that's the federal government's efforts to try to develop capacity in our country, both for internal and export purposes.

And I guess we should read that as a strong indicator that they want to work for you on larger contracts going forward, fair to say?

Well, absolutely. They recognize, obviously, we're -- PAL is a huge employer in Atlantic Canada, a world leader in technology. A lot of positives that the HAL Dash-8 obviously is a Canadian aircraft. So tons of Canadian content in there, Pratt & Whitney engines. So again, it's just that global attempt at the Canadian government to reinforce Canadian competitiveness and generate the capability at home.

And I think the other thing I just want to jump in here on is, I'd be honest if I didn't say I wasn't a little bit frustrated when we announced, Australia, that we weren't successful there, but we had won in Greenland. And I think there's a few people who didn't understand -- the ISR market is huge. We're not going to win everyone we bid on, but we're going to win some of them. And we're building a beachhead in Europe and the Nordic countries that provide tons of growth with us working now with the Danes in Greenland, in the Netherlands in Great Britain, hopefully in Canada.

There's other countries that are going to be tied into that joint defense and Canada's new tighter relationship with Europe. And while I'm -- we are in discussions. Now that I'm under NDAs that I can't describe who with. I think there's very much a trend emerging here as us as a leader in that marketplace and working with different parts of the government. I mean the irony is, in Canada our contract is with the fisheries department, notwithstanding most of the work we do isn't for the fisheries anymore, or in the Netherlands we're working with the Coastguard and the marines. In Britain, we're working with people trying to limit illegal immigration through Homeland Security.

It's different departments in each of these governments. But as they start talking more and more, the ability to have software that talks to one another and then share their data with their partners in other countries puts us in a great spot. And that's why I'm so bullish on the longer-term version of ISR, not what we win this month or next quarter. We might do something like that, but it's more about the longer-term market we're developing where we are now compared to where we were 5 years from now is remarkable, and that's going to continue to grow.

Yes. That's great color. And then maybe just one last one, bigger picture here on the M&A front. With so much balance sheet capacity now, does that change the lens or the focus of where you're targeting opportunities? I mean you can obviously write much larger checks on the back of that. Do you start to look outside of even North America, if you saw like an interesting airline that fit your parameters or something like that? Like how is that evolving now?

The short answer to that is yes. The slightly longer, I think, more relevant answer to that is that one of the -- we're not the highest payer for acquisitions. We're competitive. We never pay enough to convince someone to sell just because of what we're going to pay. We pay market. But we want to make it easy to deal with them. So liquidity has always been a huge part of our strategy. Rich has done a great job with our bond deal and with our new bank deal. So we've got the capital available.

But I want to be clear that we're not changing our parameters of what we're paying. The ability to pay doesn't mean you should pay more. The fact that we're trading higher doesn't mean we should pay more.

Now if we found a great company that was really large, was accretive, something we wanted, would we pay right down to our 15% return? Sure. But we're not going to do 12% deals just because we have capital. I want to assure people that we've gotten a 20% return for 20 years by sticking to what we do, and we'll stick to what I do. We do.

We've added people to Adam's department, and it probably means we got to do more $100 million deals. I'd love to do $500 million deals. There aren't that many of them. So we will remain active, and we'll stick with what's made us successful. Hopefully, just do more of it.

And then the other piece, quite frankly, is investing in our business. If we had won Australia, that could easily have been $0.5 billion investment. If we win in Canada, that could be in the hundreds of millions. And so you got to have the liquidity to be able to back your opportunities.

[Operator Instructions] And your next question comes from the line of Konark Gupta from Scotiabank.

Congrats on everybody's appointments here. Maybe the first one, I guess, going back to the matting business. In the first quarter, it seems like the U.S. matting business was up from last year. The Canadian demand was flattish, but the EBITDA in that business line, matting, was flat. I'm trying to understand what is the real mix issue here.

It's even a touch more nuanced than what you talked about. But let's start with the U.S. It did about the same as it did last year in round numbers, but that is actually a stronger performance than you think because coming into 2025 we had material inventory on the ground of finished goods. This year, we had no inventory going into the year. We had sold it all in Q4. And so we were able to reach the same number simply by tweaking the plant and getting a little more production out of it.

The team at Spartan have done a remarkable job of maximizing what we can produce. And the redetermining step right now in Spartan is just how many mats can we make. We can sell everything we can make. We can sell more than what we've got now. I can't wait to open that second plant so we can keep up.

In Canada, while the number -- the aggregate return looks similar, that's very misleading. We had a bunch of decommissioning work, which by its nature doesn't continue. So it strengthened Q1 of last year. But the number of mats on rent was much lower than it is now. So we know where our revenue is going forward. And we know the other stuff we've bid going forward.

And so while we -- the quality of earnings is what I would say is, in Northern Mat was much better this year year-over-year, even though the numbers are very similar and makes us bullish going forward because if -- and I'm not going to use real numbers for competitive reasons, but say we had 20,000 mats on rent at the end of last year -- in the last first quarter, and I had 40,000 now, day 1 of Q2 starts much stronger than where we started last year. And so that's why we're confident in talking about growth.

Now there's lots of room to go. We got lots of mats. And where we talked in our outlook that we're probably going to build some more, we think we're going to need more inventory for our rental pool. And I think you'll see us invest in that in Q2 and beyond. But when you look at the results, notwithstanding EBITDA is flat, the business isn't flat.

I think the other thing to point out is that the U.S. -- the Canadian dollar was materially weaker this year -- sorry, yes, materially weaker this last year. So the translation of Spartan's results, which make up a larger portion because of the seasonality for the Canadian operations in Q1 were impacted this year by foreign exchange rates.

Which was millions of dollars just in that business.

Okay. That's very helpful color. And just on the guidance for this year, I want to understand the key puts and takes, I guess. This $25 million increase from the midpoint to the high end, call it, is it mostly coming from the large asset sales? I mean, it seems like they are doing very well. And obviously they are lumpy too, right? So how would you parse out the large asset sales versus underlying strength in some of the other areas of the business?

Yes. I would say that the -- I think the large asset sales disproportionately affect your revenue and they give you some EBITDA, and it's a part of our -- of how we make money. But the core parts of the business are parts and leasing. And our leasing revenue is -- makes up most of the growth in terms of EBITDA. And that's why it's a higher quality growth. I always caution people about worrying too much about revenue in the aftermarket business because of large asset sales. The key driver of the business is parts sales, which are remarkably predictable and our leasing revenue. And the reason the leasing revenue is going up is because we invested a bunch of money last year. And so we're putting those planes into service, and we anticipate them staying there.

And quite frankly, if there is any uncertainty in the business going forward, we've told Hank the checkbook's ready to be aggressive and go get the stuff because it's very hard to buy equipment in a bull market. And so if there are any slowdowns in certain parts of the year, we'll be glad to step in and build our company on that weakness.

Okay. That's clear, Mike. And last one, if I may. On the S232 tariffs, I just want to understand it a little bit more. The change that was implemented by the U.S. government on April 6 was there will be a 25% duty on full customs value of derivative products. Previously it was just 50% duty on the metal content. What parts of the businesses would be subject to this tariff? I think it seems like window business, you have some transaction cross-border. I don't think you have much stainless business cross-border from Canada to U.S. at least. Any sense on the S232 implications for your business?

Yes. I think I can really simplify this. The basic thing is Windows is the only business that's impacted by it. Virtually everything else we do is CUSMA. And so they transfer back and forth on a tariff-efficient basis. In Windows, there's no doubt that change cost us money. We used to be able to ship windows across the border and pay tariffs based on the metal part of the window. Now under the new rules is we pay the tariff based on the entire value of the window. And so it makes it virtually impossible to make money manufacturing in Canada and selling in the U.S.

Now fortunately, for us, we've got plants in both countries. So we just have simplified our production. American windows are built in the U.S. and Canadian windows are built in Canada. But even with that, that tariff program creates some challenges because virtually all of the aluminum starts in Canada and gets extruded in Canada. And so whether we build a window in Canada or the U.S., the extrusions come from Canada, not because we are have an aversion to buying aluminum in America, it's because they don't have any. And so when it crosses the border, even when we build in the U.S., we're still paying tariffs on our raw material, the aluminum.

Having said that, so does everybody else. It's not a competitive disadvantage. We actually have a competitive advantage against our Canadian competitors like State who are big sellers into the U.S. Well, they got to manufacture it in Canada. So they have a way bigger problem than we do. But all that being said, the tariffs still cost us money, and they still make the business less efficient. So we're looking forward to when that gets straightened out, even though it does give us a competitive advantage in the U.S.

And your next question comes from the line of Gary Ho from Desjardins Capital Markets.

Sorry, I jumped on the call late. So I just want to put a finer point on the data center discussions, and we're seeing data center build-out green shoots across multiple industries. There's some mention in the MD&A and I think Q&A so far. Maybe can you elaborate on what you're seeing across the portfolio companies? And do you see this as a bubble at all? Or is there long-term opportunities that you can potentially pursue on the M&A side?

I'll take the last question first about whether it's a bubble. I think unequivocally, it's elevated. We've gone through surges in businesses before. And I think at some point, whether it's 5 years from now or 7 years from now, we will see this business mature. And that's why I think it's so fundamental. We see some of our competitors abandoning their core areas to jump both feet into this. And while we're growing and taking advantage of the data center business, in each of our businesses, we're making sure we don't lose track of our core customers.

In terms of the areas we're seeing the opportunity, there's 4 main areas we're seeing it other than the growth of the electrical grid because the growth of the electrical grid grabs our matting business. That notwithstanding because the growth in the electrical grid is more than data centers. It's electric cars, it's all kinds of things. And that's going to keep going. We don't see that as a bubble at all. So excluding the matting business, we are doing cooling systems for these massive server farms.

And I said earlier in the call, we had an order, the biggest we've ever had in stainless fabrication, north of USD 2 million for one facility. We're doing fiber ploughing where we're digging and burying big, massive fiber cables, not like the sort of baseball size cable you see going into people's houses and those kinds of things. These are a foot or more wide, and we're building long trenches of these and burying the stuff from Northern Alberta down to the U.S. border. We're building racking to put computers on. And we're also, strange enough, they're actually using some of our FODS at the construction sites, some of the matting. So we see it across a number of our businesses.

Guys, did I miss anything there?

Yes. And maybe I'd add on like, it also creates opportunities for our hydronic heating company as odd as you may think that is, but for concrete curing as well as commissioning the chillers. You have to test the chillers and so you have to put a load on the chillers. So that creates opportunities for that business line.

As Mike had mentioned, we also see others putting -- realigning their customers and focusing on data centers, which creates ancillary opportunities for us to continue grabbing market share in more traditional areas as well. So it's a net positive we see from an overall perspective across our portfolio of companies.

Yes. There's also, we're actually doing a job for the first time. I think it was the first building cladding that we're doing, the Window guys are doing but without glass. So we're putting up obviously metal cladding on buildings, which again is just pivoting a little bit our Windows team into other lines of business, but we're seeing that as well, so.

That's part of the technology we've put into our window factories that let us build. It started with high-rise apartments or condos where they've got to make things interesting, they're using aluminum largely or ceramic cladding to make the building look interesting instead of using stone, Well, we could take that and actually clad an entire building in it.

Right.

So it's one of the new areas we're working on.

Okay. Great. And then my second question, AI has been very topical. It's now even trickled into industrials and manufacturing companies. Management teams talking about AI helping with dynamic pricing, et cetera. Just curious if your team has spent time on this and how we can improve operations and/or efficiencies, whether that's in head office or within your portfolio companies?

We have groups of teams within our various businesses looking at how it's applicable. I would say that we probably have at the lower end of most companies of what we can do with AI. It's very human being centric, whether you're flying a plane, doing maintenance, building pipelines, building, like the things we do all require people. Where we do see some of the AI capabilities is in places like CTI, where we can build better, faster training systems by utilizing AI to help us do it, or in our ISR systems, there's a lot of stuff where AI can provide better, stronger, faster data. So it's buried inside.

So really what we see AI as in most of our cases is improving the quality or the speed or the capability of our product. It's not the cost reduction that you see some other people talking about. I mean, you could fly airplanes today without pilots. That technology exists. But we don't think that's happening anytime soon. And so it's really not impacting the operations.

Do we use AI to work on parts and what things we could change the schedules for repairs and stuff? Absolutely, but it still requires people to go turn the wrenches. And so for us, it's not as big a driver as it is in some businesses.

I would say it's not disrupting our businesses. It's improving our businesses sort of at the forefront on the administrative side, whether it be in the Windows companies with quoting and making things more efficient. But our businesses are durable, and they will not be disrupted by AI. It's an ancillary and a net positive for us. But we are looking at it from an administrative perspective and how to do things more efficiently and better.

Yes. I mean it's the first time I think one of the investing acronyms has really hit us, but the whole halo investing idea of high assets, low obsolescence really, really speaks to almost everything we do outside of ISR and training.

And essential demand, all 3.

Yes.

I think an area where we see the benefit of it, and we've been doing it for a number of years, just using the predictive abilities of AI to help with safety and developing our own internal safety management system on the aviation side to really ensure that we're doing everything we can, and we're at the forefront of safety and making sure that anything that we can do to make sure our people are safer, we're investing money in. So that was probably our first foray into it.

And your next question comes from the line of Tim James from TD.

My first question, just regarding the M&A environment. Mike, I'm just wondering if you could comment what you're seeing in terms of competition out there for M&A. Is there any sort of retrenchment in the number of companies that are competing for businesses? Are buyers more inclined to pay up here? Or are they -- is the opposite happening and they're getting a little bit less aggressive? I'm just wondering sort of from a pricing standpoint, what you're seeing in the market.

It's hard to make this comment across every segment because it's very product area specific. Generally speaking, we still see less deals than we saw pre-COVID. There's less lower quality transactions. And so the top of the funnel is smaller. But having said that, the quality of the things we're looking at is better. And I think Adam and his team have done an exceptional job on improving our capabilities, working with our subsidiaries to kind of find our own acquisitions, looking at competitors, looking at suppliers, looking at geographic expansion and approaching people who may have thought they were for sale and working on transactions. Mach2 is a good example. Canadian North is a good example, where those are businesses that we found determined were a good fit with us.

Where the issue of pricing really comes in is when we get something that's unrelated to us. And private equity is aggressive, but I would say no more or less aggressive than they have been for the last 2 years since we've come out of COVID.

Okay. My second question, just turning to Multi-Story Window solutions. It's a long lead business. Can you look towards 2027 and just provide any kind of early thoughts on -- with the book of business you've got today, and I realize that the kind of interest rate environment and everything can kind of impact things. But as you look at that year, given what you know today and what's in the backlog, I mean, could 2027 be another down year? Could it be flat? Could it be up? Just what are your early thoughts there?

I think it's most likely to be flat to marginally better. This year or this last quarter, if you strip out the difference in the exchange rate, we -- our book-to-bill was flat, and that's progress. We're really starting to see little pockets of strength in the U.S. It's getting better faster than Canada. And so I think we will see improvements in the bookings. We'll talk again in 3 months and we'll see whether we're above even on the book-to-bill, which is the best indicator for the future because bear in mind, like when we take an order, it's generally 12 to 18 months before it's in our numbers in terms of revenue.

The slower part, quite frankly, is still Toronto. Like the glut there is slowing development, but there's still big demand for multi-bedroom apartments. And so the developers have to get their head around how they build those. And we're really bullish about the government's plans with HST and development fees because you can get -- that can add up to a 20% difference in their building costs. And that's a real difference in building a long-term asset.

And the one other thing you're seeing, and we mentioned that with the data centers, is just a mix of both the moving towards more commercial and institutional style buildings plus some product mix in terms of -- we talked about the panels for the data centers. So again, we're diversifying away from pure residential high-rise build into some other areas that is certainly gives us a little bit more brighter horizon.

And your next question comes from the line of Razi Hasan from Paradigm Capital.

Most have been answered, but just 2 quick ones here. On the aerospace side, Mike, could you maybe just talk about other contracts that are up for bidding? I think in the past you mentioned Great Britain. So any color on anything that's actively up for bidding at this point?

This is difficult now because there's, a lot of the countries are trying to avoid the Australia situation where it's very public and they are comfortable with that process, particularly in places where they aren't RFPs. So what I would say is that there's opportunities. The greatest spot is in Europe. It's not the only spot, but I would say the most active and the farthest along discussions would be European and Canadian, although there is some stuff in Asia, but less developed.

Jake, anything?

Yes. You mentioned just briefly about the U.K. Home Office, and that's something we have disclosed. We responded to an RFP in 2025. We're expecting the results of the RFP in kind of mid to later part of '26, and we're the incumbent there. So again, that's -- we've got a great partnership with the U.K. Home Office, and we're, again, feeling good about our position, but anything can happen.

Okay. That's great. And then maybe just one for Travis. I just want to confirm, I think the growth CapEx for '26, did you say it was going to be in line with '25 levels? Just want to get that right.

No, likely to be higher, and that's really driven by -- in the manufacturing side by the new Spartan plant, the composite plant in the U.S. And then as we talked about with the accelerating demand profiles for the Canadian operations for Environmental Access Solutions, there'll likely be investment in the fleet just because of the demand signals we're seeing.

The growth CapEx in the aviation, there's less projects than there were last year. We've got the Air Canada project where we're buying planes, but we're coming finally to a close on BC medevac contract. I wish I was in the plane manufacturing business where I could deliver things 3 years late and people would still love you, but we're coming to the end. So those CapEx have ended.

And I don't know if everyone noticed, but we put out a press release in Kuwait a few days ago. They finally were certified on all types of King Airs in our full movement simulator. So that's going to be great for our own pilots, but also for other Canadian pilots that they don't have to go down to Texas or Kansas to get their training done. And it's also great for CapEx because I get to stop paying for installing it. So that's exciting for the future piece as well.

And your last question comes from the line of Michael Goldie from BMO.

To the extent that you can, can you unpack Australia a bit more and share what you learned through that process? Were there any capabilities or solutions that you realize could be valuable to add to the portfolio over time?

I think you were in my Board meeting yesterday because I got the exact same question from my Board Chair. The short answer is I can't because they haven't even made it public who won yet or what they've awarded, whether they awarded a whole contract, part of the contract, whether they extended a piece of it, we just don't know. So by the time we get to our Q2 meeting, I'll be able to answer that a lot more intelligently because all -- what we've gotten from Australia, and this is not exaggeration or hyperbole, is a 3-line letter saying, "Thank you for your bid. We will not be proceeding at this time. If you'd like to meet with us, please let us know." And so we've let them know. And that's really all we know.

We believe we know who won, but it's conjecture. It's not fact. So it's hard for me to answer that for you. We will know, and we will share the issue once we have it, but I don't want to guess.

Okay. And then for my second question, within R1, has the macro started to impact the value of assets yet? And how much longer do you think energy prices need to remain elevated for discounted opportunities to start appearing? And then how have asset values performed in past energy shocks?

So far there's been no impact. We've seen nothing. There's a worldwide shortage of engines on many of the planes we use, the CF34 and stuff, and that has not changed at all. And as airlines like United want to move into the 550 model and things like that, the demand is super high. So I don't see anything in the near term. I think you'd have to see fuel shortage. I don't think prices will do it. I think it's fuel shortages that would cause a problem where people can't fly and then levered airlines have trouble and then that would create asset purchasing opportunities. We're not there yet. And it's part of the reason we're still bullish on the rest of the year. We've seen no deterioration in our lease portfolio at all.

And just to make one comment, in the past, historically, energy shocks will typically drive or shrink purchases of new aircraft, which drive demand for used aircraft, which is our portfolio, used aircraft, solutions for engines and whatnot. So again, that further adds color to Mike's comments here.

And maybe one other thing. So in this market, it is also a very relationship-driven market. So Hank has very strong relationships with numerous fleets around the world. And coupled with, as Rich and Mike talked about, our liquidity that we have available, like we're able to execute on transactions on a moment's notice, which gives us a massive strategic advantage compared to some of our other competitors in that regional market. So we're...

And we're prepared to buy without knowing what we're going to do with them yet. One of the great trades the company made was during COVID, an airline wanted to get rid of all their Q400s. And Hank brought me the deal and I went, during COVID, I think, "We really want to put this much money out during this much turmoil?" And he talked me into it, we bought them. I only wish I had told them to go find some more. We bought planes for the price of about half an engine today. And so when those opportunities come, that's where that liquidity risk provides, helps a ton.

And if I can squeeze in one more. Like are you using AI yet in R1 data? I imagine there's just so much information and there's an opportunity to better sort through it with this technology and find opportunities.

Yes. I mean the key -- the whole piece on AI is you have to have the right data to mine. And it's not a third-party process with them. We've built a massive, our own proprietary system, which is -- I mean, it was -- we didn't call it AI, but it's effectively AI that we built where we build the data. I mean our guys literally know where every engine on a Bombardier 700, 900 is in the world. We know roughly when they're going to need to be overhauled. We know where all the ERJs are and what the parts value is. And that is what drives why we can get the returns we get in Regional One.

And it's also the reason why we bought Mach1 -- Mach2, I'm sorry. They've got access to information on other models that we have never been smart enough yet and didn't have the data to participate in. Well, that will let us grow ourselves into those and grow the effective size of the swimming pool we can compete in.

There are no further questions at this time. I will now hand the call back to Mr. Pyle for any closing remarks.

I'd like to thank all of you for joining us today. It was fun to talk about a quarter like that. And I really hope I get to see a lot of you in a couple of hours at our AGM, a couple of videos and some fun stuff to talk about. So I'll either see you this morning or we'll talk again when the second quarter is done. Have a great day.

And this concludes today's call. Thank you for participating. You may all disconnect.

Good morning, everyone. Welcome to Exchange Income Corporation's conference call to discuss the financial results for the 3 and 12 months ended December 31, 2025. The corporation's results, including the MD&A and financial statements, were issued on February 24, 2026, and are currently available via the company's website or SEDAR+. Before turning the call over to management, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking statements within the meaning of the safe harbor provisions of Canadian provincial securities laws.

Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. For additional information about factors that may cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the quarterly and annual MD&A, the Risk Factors section of the annual Information Form and EIC's other filings with Canadian securities regulators.

Except as required by Canadian securities law, EIC does not undertake to update any forward-looking statements. Such statements speak only as of the date made. Listeners are also reminded that today's call is being recorded and broadcast live via the Internet for the benefit of individual shareholders, analysts and other interested parties. I would now like to turn the call over to the CEO of Exchange Income Corporation, Mike Pyle. Please go ahead, Mr. Pyle.

Thank you, operator. Good morning, and thank you for joining us on today's call. With me today are Richard Wowryk, our CFO, who will highlight our financial results, along with Jake Trainor and Travis Muhr, who will expand on our outlook. Yesterday, we released our year-end results for 2025. Our annual performance in 2 words was incredibly strong. Our results set historical records for revenues, adjusted EBITDA, free cash flow, free cash flow less maintenance capital expenditures, net earnings and adjusted net earnings, both on an absolute basis and more importantly, on a per share basis.

We also exited the year with no convertible debt on our balance sheet. We strategically wanted to simplify our financial structure, and we were able to redeem all outstanding convertible debentures during the year, with the vast majority of the convertible debentures being converted into equity, leading us to our lowest leverage levels in 15 years. Per share records and a delevered balance sheet in the same year is a difficult task.

We are proud of this accomplishment. Furthermore, last week, we announced an investment-grade credit rating. This is an impressive achievement as it is a confirmation by DBRS on the stability and the diversity of our business. We now have the capability to issue long-term fixed rate bonds as a layer in our capital structure, which will provide a more permanent form of fixed rate financing at generally lower interest rates. However, I want to be perfectly clear, this does not change our conservative view on leverage.

Rather, it is another tool for us to utilize debt effectively as we continue to grow EIC via either acquisition or growth capital expenditures. As I look back over 2025, these record results were generated during a year where global growth was subdued due to rising trade tensions and political uncertainty.

Monetary policy was adjusted in both Canada and the United States to stimulate growth as inflationary pressures have begun to subside. Supply chains experienced significant disruptions due to United States tariff actions, international shipping delays due to geopolitical events and several climate-related disruptions, including significant wildfire activity in Northern Manitoba and elsewhere.

There was also economic bright spots, including the surge in artificial intelligence investments and businesses with strong fundamentals and competitive moats showed their value. EIC is a shining example of how a diversified and resilient business can navigate periods of uncertainty and continue to thrive. We executed on our strategic initiatives and the proof is in the pudding with our annual results.

Our overall results were driven by 20% increases in adjusted EBITDA in each of our segments. In our Aerospace and Aviation segment, the increase was primarily due to the highly strategic acquisition of Canadian North on July 1. Canadian North continued to meet and, in fact, exceed our expectations of profitability and culturally has been a great fit with our other air operators.

Our maintenance capital expenditures experienced in the first 6 months were elevated. However, that was expected as we increased the anticipated increased maintenance capital expenditures for the first 12 months of ownership and then a return to normal maintenance CapEx in the future.

The Aerospace and Aviation segment was also driven by strong yields in our passenger business, even though there was a temporary reduction in revenue and margins in the second quarter due to the significant wildfire season. We also saw overall strength in our rotary business with fire suppression work, coupled with continued strong performance in our medevac businesses as the scope in our contracts continues to expand.

Our aircraft sales and leasing business continues to see robust demand and increasing rental rates for leased aircraft and engines. Parts sales and whole aircraft sales continue to be very strong as well as the demand for regional aircraft remains robust. Lastly, our aerospace business line saw the impact of the second aircraft commencing operations in the U.K., which led to strong Q4 gains over the comparative period.

We also continue to see numerous inquiries from various parties around the world for our ISR experience. Recently, Canada released its defense industrial strategy, which aligns greatly with the activities of EIC and our aerospace business. EIC has pitched a Made in Canada solution for Arctic security and sovereignty, which aligns with this industrial strategy.

Our Made in Canada team spans multiple provinces and territories with existing indigenous partnerships. We continue to have active discussions with various leaders and decision-makers and are hopeful that our proposal will be successful. I also want to provide an update on the status of the Australia ISR bid. We recently extended our bid for a second time to early April as the bid would have technically expired this month.

We continue to believe that we submitted a very strong bid and are waiting for the government of Australia to finish their analysis and come to a conclusion. Our Manufacturing segment had a strong fourth quarter results from both a revenue and profitability perspective. Our Environmental Access Solutions business had a strong finish to the year with net rentals and sales driving the results in Canada. Canada also has strong growth prospects in the later part of '26 as large linear projects are anticipated to need matting solutions.

Our composite matting business in the U.S. continued to have favorable customer feedback on the System 7XT mat. During our due diligence, we were very impressed with the testing and the capabilities. However, real-world experience has even exceeded those high expectations. Due to the significant demand signals and the overall confident matting business taking more market share from the traditional wood mat business in the U.S., we announced a state-of-the-art plant in the Southeast U.S.

I'm pleased to announce that the plant will be built in Saltillo, Mississippi, and we anticipate the plant will be operational in the mid- to later part of 2027 so that we can execute on our strategic objectives for the North America wide matting business. Our multistory window solution business had somewhat of a stronger quoting season and booked some sizable projects in various jurisdictions in the U.S. and Western Canada. However, 2025 remained a difficult year.

As we anticipated and previously disclosed, the reduced profitability was due to the competitive pressures and lower bookings experienced in earlier years. However, the team made progress on reducing our overhead and combining the physical footprint of the business, which will serve us well in the future. We will also continue to retain our experienced staff.

When the business turns, we will be ready to capitalize and meet the pent-up demand that exists for affordable housing. Our Precision Manufacturing and engineering business led a strong first quarter as we continue to see positive demand signals within numerous underlying businesses. Business sentiment continues to improve. We see that our customers have accepted some uncertainty as the new normal and have been releasing purchase orders, resulting in increased sales activity in the back half of 2025, which drove strong results for the fourth quarter. Rich will highlight the key metrics for both the 3 months and the full year ended December 31.

But before I turn the call over, I wanted to talk about the recent recognition of our business model and our share price. During the year, our market capitalization has increased substantially and today stands at well over $5.5 billion. The market capitalization and the underlying results are lagging indicators of the sustainable, resilient business model that we have built.

We have a fantastic foundation of underlying subsidiaries with cultures and people that contributed to achieving these results. Our business model and principles have not changed for over 20 years. We know that we are set up for an accelerating growth profile in the future, and our head office and management teams could not be more excited. Jake and Travis will focus on the outlook for our segments for 2026. However, before I pass over the call, I wanted to speak about our 2026 guidance.

While we have not changed our guidance range issued at the end of Q3, we announced 2 contracts since the prior guidance was issued, that being the Air Canada commercial agreement and the acquisition of Mach2. Both are accretive to our shareholders. And accordingly, we have updated our guidance by telling people we have a bias from the mid to the upper end of the $8.25 to $8.75 guidance range.

I will now pass the call over to Rich.

Thank you, Mike, and good morning, everyone. For the fourth quarter, revenue was $930 million. Adjusted EBITDA was $216 million. Free cash flow was $165 million. Free cash flow less maintenance CapEx was $68 million and adjusted net earnings and net earnings were $58 million and $52 million, respectively. Earnings and adjusted earnings per share were $0.94 and $1.06, respectively, which were increases of 62% and 33% over the prior period.

Free cash flow per share increased by 30% to $3, while free cash less maintenance CapEx increased by 38% to $1.24. The per share metric increase is remarkable because the weighted average shares outstanding increased by 14% during the fourth quarter compared to the prior period due to conversion of convertible debentures during the year, shares issued from our acquisitions.

All the key performance indicators were fourth quarter high watermarks. These results were driven by both segments with 27% and 38% period-over-period increases in adjusted EBITDA for our A&A and Manufacturing segments, respectively. The Aerospace and Aviation results were driven by strong profitability at each of the business lines due to the acquisition of Canadian North, strong load factors at our various air operators, strong demand for leases and parts at our aircraft sales and leasing business line and the start of operations of the second aircraft for the U.K. home office in Aerospace, along with higher tempo flying under various contracts.

Our Manufacturing segment profitability was driven by strong rental and mat sales within our Canadian Environmental Access Solutions operations, along with continued robust demand for our composite matting solutions in the U.S. operations. Lastly, Precision Manufacturing and Engineering had a strong fourth quarter, driven by underlying strength in telecommunications, data center and hydronic heating solution sales.

Construction has commenced on a second state-of-the-art manufacturing facility for our U.S. composite matting business. Growth capital expenditures of approximately $4 million were made in 2025, and we anticipate that production should start up in mid- to late 2027. Estimated cost for the new facility is up to USD 60 million, and the expected returns are significantly above our required return threshold.

We are seeing significant demand for our System 7XT mat, but further noting that composite mats are replacing traditional wood and mat market share in the U.S. is driving excitement within our management team. Maintenance capital expenditures in the fourth quarter of 2025 were $97 million and were higher than the comparative period due to the acquisition of Canadian North and the timing of maintenance events in our Aerospace and Aviation segment.

Growth capital expenditures during Q4 were $134 million and were primarily driven by acquisitions of engines and aircraft in our aircraft sales and leasing business line to increase their leasing portfolio, coupled with King Air aircraft deliveries for the BC Medevac contract in our Essential Air services business line.

From a cash flow and working capital perspective, we had a strong finish at the end of the year with a reduction in our net investment in working capital and a positive impact on our cash flow from operations, driven by efforts from our subsidiary management. Last year, we highlighted that certain government receivables were uncharacteristically behind historical collection patterns and those were resolved within 2025.

Further, due to the reduced level of output within our multistory window solutions business line, we were able to return significant working capital during the year. We actively manage our working capital and worked with each subsidiary team to convert working capital from 2024 into cash, and we're very happy with the performance throughout 2025. The corporation's aggregate leverage is at historic lows. We had the goal of simplifying our capital structure and achieved that goal during 2025, which looking back was an incredible feat.

More than 90% of the convertible debentures were converted into equity of the corporation. For 2026 and beyond, the only dilutive instruments on our balance sheet relate to deferred shares, which will simplify our dilutive EPS. After year-end, we announced that EIC has achieved an investment-grade credit rating with a BBB low rating with a stable outlook from DBRS.

With the credit rating, we can access bond markets in the future and could utilize bonds as a fixed rate long-term form of financing. Based on the rate environment today, this would also reduce interest costs. We exited fiscal 2025 with an overall leverage ratio of 2.73, which is the lowest it has been in approximately 15 years. This also does not include the pro forma impact of growth capital expenditures for which a full year return has not yet been fully reflected in our financial statements, such as the U.K. Home Office second aircraft is one example.

We've previously discussed that there is a time lag between making those investments and the timing of the adjusted EBITDA increases. With over $300 million of capital deployed by year-end, we anticipate meaningful returns in the years to come, which have been incorporated into our 2026 guidance.

Our M&A pipeline remains very strong. Adam and his team executed on a strategic investment in the first quarter of 2026 with Mach2. We have always wanted to diversify our cash flows and provide another avenue for growth. We had looked at a number of narrow-body and commercial businesses. However, none of them met our stringent investment criteria based on their management teams, their niche focus or financial metrics.

Fortunately, we found Mach2, which met all of those criteria. Regional One has built the data infrastructure and architecture that is capable of scaling into other aircraft types. And now with the Canadian North 737 data and the narrow-body and wide-body data for Mach2 and experienced personnel at Mach2, we can realize on significant opportunities in that space.

Mach2 is situated very near our Regional One business and the management team is well known to our Regional One management team. 737 and narrow-body business is the world's largest aircraft aftermarket parts and leasing business. And therefore, we have a unique opportunity to leverage our strengths to create meaningful returns for that business line long into the future.

In terms of other acquisition opportunities, our pipeline includes opportunities in both segments, which are similar to our existing businesses. We have a great foundation of businesses and to the extent that we can find ancillary opportunities to expand our competitive moats, we're always interested in those accretive opportunities.

As a reminder on the seasonality of our business, the first quarter is our seasonally slowest quarter because of the impact of winter roads and weather-related impacts for our air operators, coupled with reduced demand for our Environmental Access Solutions business line as the ground is frozen and doesn't require the same level of matting protection.

Third quarter experiences our highest level of activity across our businesses and the second and fourth quarters would approximate the average per annum results. Collectively, 2025 was a foundational year for EIC. We simplified our capital structure and executed on all of our strategic initiatives. We added Canadian North in a highly strategic acquisition.

And after year-end, we announced Mach2 and our investment-grade credit rating. We are confident that our balance sheet is in a position that allows us to execute on future transactions and the foundation has been laid for future accelerated growth.

I will now turn the call over to Jake, who will provide an update for the 2026 outlook for Aerospace and Aviation.

Perfect. Thank you, Rich. Overall, we're expecting another strong year of growth from our Aerospace and Aviation segment as the trends highlighted by Mike and Rich are expected to continue into fiscal '26. The growth investments made in the past, in addition to the contractual wins, whether it be the second aircraft for the U.K. home office, the commencement of the Newfoundland and Labrador Medevac contract midway in 2026 or the expansion of the Air Canada commercial agreement and increased routes that we've been experiencing will all contribute to the increase in revenues and profitabilities.

I will specifically focus on the growth factors by business line. Our Essential air service business line will see growth driven by a multitude of factors when compared to the prior period. The most significant impact will be the inclusion of Canadian North for a full fiscal year.

Other increases include the expansion and extension of the Air Canada commercial agreement, which will see aircraft starting to fly midway during the year. We also anticipate stable load factors across our network when compared to 2025.

Lastly, we expect continued growth in our medevac business, including the start of the Newfoundland and Labrador medevac contract, which is anticipated to start operations in mid-2026.

Offsetting some of these gains is the impact of continued labor shortages and supply chain challenges. Although we're not seeing a worsening of these dynamics, the challenges still remain specifically on aircraft parts, consumables and overall costs, which are experiencing significant inflationary pressures.

The aerospace business line is expected to see growth due to strong flying tempos for our surveillance and aircraft going into service for the U.K. home office, which will have year-on-year effects as that aircraft only started operations in the fourth quarter of 2025. Our aircraft sales and leasing business is also expected to experience growth as the investments made in aircraft and engines are leased to customers. There is always a lag between investment and cash flow generation as such, aircraft have to be readied and the lease contracts executed.

Regional One remains an opportunistic buyer and stands ready to complete transactions that are accretive to the portfolio. The demand for Regional One and Mach2 remains robust as evidenced by increasing lease rates and shortages of critical parts across the industry, and we expect that trend to continue in 2026.

On a long-term basis, we expect maintenance capital expenditures to increase consistently with increases in adjusted EBITDA in our Aerospace and Aviation segment, which is the biggest driver of our consolidated maintenance CapEx. We anticipate an increase over 2025 due to the full year inclusion of Canadian North, coupled with increased flying due to our recent investment in aircraft over the past few years.

Lastly, we continue to invest in deferred maintenance at Canadian North and anticipate those investments to continue in the front part of the year. Growth capital investments -- or excuse me, expenditures in 2025 include the 3 remaining new King Air aircraft for the BC EHS contract. Regional One is always working on opportunistic aircraft and engine acquisitions, which may result in growth investments being made in the aircraft and sales business line.

Before I pass it off to Travis, the other theme that I've been speaking about at external events and conferences, which is EIC's exposure to the defense and security as well as dynamics within that industry. The recently released Canadian defense industrial strategy is a clear and welcome call to action.

When government focuses on an outcome it needs such as capability, readiness, availability or serviceability, industry will do what we do best: invest, integrate partners, manage risk and deliver. That's a model that we've proven around the world, and it's a model that Canada is now rightly setting out to use here at home. The strategy named 10 sovereign capabilities to be prioritized, of which many of these align with our EIC core competencies. These include aerospace, digital systems, in-service support, specialized manufacturing and training and simulation, among others.

The defense industrial strategy aligns with our communications with officials within the government over the past year. And EIC obviously has defense and security ties within our aerospace activities, including in-service support and our ISR operations. However, we do have a number of other opportunities, which may not be as obvious.

Our specialized manufacturing companies are already engaged in providing parts for defense and space-related applications. Another important capability that EIC can bring to bear is our unique infrastructure in the North. We are the leading experts in Northern aviation and operating in harsh Arctic climates. As people and goods are transported to the north to support enhanced defense activities, it will be a positive tailwind to our air operators.

And finally, EIC and its training capacities, including MFC training and CTI can help solve training and development gaps. CarteNav, which is PAL's mission system, has a fully developed command and control digital system capabilities, which are world-class and utilized by several countries around the world for security purposes.

I'll now pass it off to Travis to talk about some of the commentary on the manufacturing segment and some of the other opportunities within defense and security within manufacturing.

Thanks, Jake. Our Manufacturing segment is also uniquely capable of providing solutions to the government. As the north is developed, there'll be a need to expand the transmission and distribution along with opportunities for long linear projects as resources get developed, which will provide further tailwinds for our Environmental Access Solutions business line.

Our Precision Manufacturing and Engineering business line has several subsidiaries which have positive exposures to defense and security. Our West Tower business has over 35 years of installing towers and infrastructure into remote and demanding areas. There are numerous opportunities to install radar towers and other infrastructure across the north, and we have unique capabilities due to our scale, manufacturing capability and industrial technology benefits experience.

Ben Machine already provides its precision CNC machining and welding of high-precision short-run critical components for defense and space companies across North America and around the world. Our hydronic heating company, DryAir, provides solutions for hydronic heating and hot water applications, which should also be critical for concrete curing and heating alternatives in the north.

Looking at 2026 from a manufacturing point of view, we're anticipating materially consistent results overall when compared to 2025 due to changes within our business lines for 2 reasons. Firstly, we see the continuation of the strengthening business environment for many of our Precision manufacturing and engineering subsidiaries, coupled with a positive outlook for our Environmental Access Solutions business line.

All the businesses within our Manufacturing segment were experiencing a strong level of customer inquiries in 2025, and we saw that strength converted to sales when looking at the fourth quarter results for both Precision Manufacturing and Engineering and Environmental Access Solutions.

Our multistory business -- windows business line has also experienced strong level of inquiries. Performance was as expected in the fourth quarter with period-over-period declines due to the type of projects, production gaps and tariffs.

Of note, the recent Supreme Court case on tariffs does not impact that business line as the primary source of tariffs were the Section 232 tariffs on aluminum and steel, which remain in place today. The business line for 2026 will continue to be impacted by project gaps and reduced margins due to the demand environment in prior year bookings because of high interest rates and developer uncertainty.

We're starting to see some improvement in various regions around the U.S. and Western Canada. However, developers remain on the sideline due to the excess supply of small condo units, especially in Toronto and developer cost uncertainties.

Our Environmental Access Solutions business line is expected to generate higher returns in fiscal 2025. Demand for our composite matting remains robust, and the plant continues to operate maximum capacity consistent with 2025. Our Canadian operations are expected to be a major driver for the business as we start to see strong results in the fourth quarter from a rental and mat sales perspective.

Further, we anticipate that long linear projects will commence in the latter half of 2026 across several industries, including transmission and distribution, pipeline and oil and gas. The longer-term prospects of the business remain very robust as there will be material investments in transmission and distribution across North America due to growing electricity demands from homes, vehicles and more importantly, AI and data centers.

The Government of Canada major projects office is focused on strategic nation building investments, which provide significant tailwinds in the longer term. This will result in continued strength for the business line into 2027 and beyond. The Precision Manufacturing and Engineering business line is expected to improve from a revenue perspective, but due to changes in project mix, profitability is expected to be materially consistent with 2025.

The fourth quarter was a very strong quarter for the business due to product mix and delivery of hydronic heating units, which were deferred from earlier in the year, and we continue to see a strong quoting environment across the various companies. This business line is very diversified with exposure to the defense industry, technology industries, including data centers and telecommunications.

The anticipated maintenance CapEx are expected to be slightly higher than the prior year due to the timing of replacement activities. We're also anticipating growth CapEx to be incurred in each of the business lines, but they should be relatively consistent with 2025 with the exception of Environmental Access Solutions where growth capital expenditures will be outlaid for the new state-of-the-art composite plant as discussed by Rich as well as investments in Canadian rental fleet based on market dynamics and anticipated projects.

I'll now pass the call back to Mike.

Thanks, Travis. 2025 and our strategic initiatives have been -- have set the foundation for EIC for the future. 2025 was an incredible year for our business as we set records in all of our key metrics. I am extremely confident in the future of our company.

EIC is at the intersection of a number of critical themes and trends. We have remained true to our principles and what has made us successful for the past 20 years plus will continue to accelerate that success in the future. Thank you for your time this morning, and we would now like to open the call to questions. Operator?

[Operator Instructions] Your first question is from Steve Hansen from Raymond James.

First question, it relates to the matting business. It sounds like it has inflected here from previous levels. Just given some of your commentary about rebuilding the fleet in Canada and the growth CapEx, is it fair to say that visibility is improving through the balance of the year and into '27? I'm just trying to make sure we didn't have sort of a onetime or 1 quarter sort of bump in the business or just trying to understand that it's got better visibility going forward.

It's a good question, Steve. The matting business -- our comments are sort of the sum total of 2 things. We had some abnormal project delays during the first part of 2025, particularly on integrity digs and some pipeline work that are regular things we do every year and didn't get done earlier in the year. In Q4, we returned to normal in that area. So that generated some improvement in this quarter and will help us into the beginning of next year. We have more mats on rent now than we did at this point last year.

But I think the real story is in what's coming. We have a number of T&D projects in Eastern Canada that we're bidding on, and we will win our share of those. And the number of pipeline projects that are at the bidding stage or being awarded to general contractors. And while it's unlikely those generate revenue in the first half of next year, you'll start to see that in the back half of '26. And I think in '27, we're hitting back into a super cycle of the business, much like we did when we went -- when we originally purchased it in 2021 or 2022.

Okay. Very helpful. And just a quick second one for me is just on the Mach2. I was just hoping you could maybe frame sort of the size of the market opportunity that you're stepping into here, recognizing that it's obviously a much larger set of aircraft out there. But then I guess, secondarily, how do you expect to approach that market from sort of a cadence perspective and tipping your toes in or growing more aggressively? How do you envision the growth profile evolving there?

That's a really good question, Steve. The Mach2 is part of our strategy. It's not our whole strategy for moving into the narrow-bodies and wide-bodies. Just to back up, Regional One's secret sauce and the reason they're so phenomenally good at narrow at the regional jet turboprop market is they understand who the customers are, what products they need and the value of those assets. So when we're buying aircraft, we buy them with margin in before we lease them, before we do anything.

And so we've always coveted the 737 market in particular because it's so huge relative to the regional jet market. But it's important to understand that most of the 737 market is an OEM market. When you're talking about a 737 MAX or those things, those are bought from the manufacturer. They're leased by finance companies. What we do when we lease aircraft is we're burning up green time. We're not a finance lessor. And so most of that -- the newer versions of those aircraft really don't apply to us. Where our opportunities lies as those aircraft age, the value of parts may exceed the value of the plane as pieces. And the knowledge with the team at Mach2, the skills of the people that work there, combined with the knowledge we're drawing from Canadian North's experience in the 737 business will let us dip our toe in there.

I think it's safe to say that we're going to walk before we run here. There's a big comparison that if we went back 8 or 9 years in Regional One, we really didn't participate in the ERJ market, the Embraer market. And we were given a couple of opportunities. We slowly dipped our toes in. And now we do almost as much work in the ERJs as we do in the CRJs.

I think you'll see a similar movement in the 737s where we'll invest in greater parts inventories, greater depth, develop our knowledge and then slowly move into it. It's not something that you should anticipate a light switch. I think it's a slow, steady growth and bringing in the expertise we got from Mach2 will accelerate that from what we could have done on our own.

Your next question is from James McGarragle from RBC Capital Markets.

Congrats on the strong Q4 here. I got one for Jake here though on the Canadian defense opportunity. So obviously, some pretty big announcements recently. So can you just kind of give us an update on some of the conversations that you're having in Ottawa and what you see as the opportunity set for exchange here over the next couple of years?

Sure. Thanks, James. A couple of things you got to keep in mind. Some of the big procurements that the government is working on are kind of generational when you're looking at shipbuilding, submarine acquisition, wrestling with the fighter jet issues. So again, there's some of those massive procurements that obviously, that's not our wheelhouse of activities. But what is, is defense and security in the North. And we're seeing -- in terms of opportunity sets, obviously, the ISR capability is one that, as we've announced, we've engaged with the Canadian government.

But more broadly beyond that, there is -- and we're seeing it now in just terms of some of the volumes of the logistics support, the travel, the support to greater attention for folks in the north. They're traveling up to the north. That's certainly one. Some of the resource development that, again, comes with enhanced attention on defense and security around the critical minerals. We're seeing that.

And then the last piece, and Travis touched on it briefly, was looking at some of our other subsidiaries where there's a general sense of renewal of infrastructure. So whether it's additional towers or maintenance of towers, and that's not only defense and security, that's with our air navigation provider, our ATC system. There's just, as I said, a general overview or a requirement to continue investing in infrastructure that we're going to see touch a number of our businesses across the portfolio. So again, something that we're truly excited about.

Appreciate the color. And then on -- just on the projected return thresholds for Canadian North, when you acquired it, you mentioned the returns would be a little bit below into '26. We should see those things improve. We saw the update on the -- you have to help on the pricing side, given that agreement you signed last year. But can you just give us an update on how things are tracking operationally against some of those return targets that you guys have internally? And then just a little bit more generally, what's the opportunity, what's the capacity in Canadian North to kind of take advantage of some of this Arctic sovereignty investment longer term? And I'll turn the line over after that.

Thanks, James. When you look at Canadian North, I think it's safe to say that we had ambitious goals for the company. We had great faith in the management team there and that when teamed up with EIC, we could create some impressive results. And it's clearly exceeded our internal expectations. The EBITDA we're generating, we've made more changes and accomplished more than we anticipated at this point in the process.

And so when you look at what we need to do from an earnings point of view to get to our 15% return, we're ahead of where we thought we would be. The part that will still take us through next year is the deferred maintenance stuff where we're catching up on some of the overhauls and stuff where they have used rentals as opposed to overhauls. And so that will continue through this year.

In terms of capacity, there's room for year-over-year growth, which we expect. But if we get to the point where we're building a military base or there's a new mine or there's those things, the incremental investment in a couple of extra aircraft is modest relative to the returns because we own all of the fixed base infrastructure. Canadian North is well underway to building a new freight hub in Ottawa, which is nearing completion now. In fact, that was the majority of the growth CapEx we incurred in that company last year. It's nearing completion. So I would say that the infrastructure of the business to grow is there. As it grows more and more, we'll add aircraft to meet the demand.

The one piece I would say that's a little bit different than that would be on the charter business. The first phase of liquid natural gas plant business is complete, and that you saw that come to a close in Q4. The balance of the charter business continues, although as I said several times, that's at much tighter margins that we're really interested in participating in. So we're in great discussions with our customers.

If we're successful on renegotiating those contracts at their maturity, we'll continue in that. If not, we won't. And just as a reminder, we didn't pay anything for that part of the business. Those are the only aircraft in EIC that are leased, and we bought the Canadian North business for asset value. So we may be able to redeploy some of those leased assets into the core business if we needed to, to augment our capacity.

And Mike, it's -- one other point I'd just like to add to add a bit of color is the other critical angle that we've got is the human capital. We're one of the largest employers in the north. We have incredible relationships with the Inuit and the indigenous partners out there.

And again, just understanding the time and space constraints, building a workforce that is able to perform in a harsh environment is a significant -- one of the moats that Mike was talking about earlier. That's a significant challenge for anybody. So again, that's something that we can continue to scale, and it's a big opportunity for us.

Your next question is from Cameron Doerksen from National Bank Financial.

So I guess maybe my question on the balance sheet. Obviously, you've got the investment-grade credit rating, which is great. But I'm just sort of wondering, big picture, how you'd sort of like to see the structure of the balance sheet longer term. I mean, obviously, there's an opportunity to do a fixed interest rate debt deal here. But I guess, how would you like to see the split of the business kind of longer term between raising some debt in the public markets versus the credit facility? And maybe a corollary to that is what sort of interest rate savings do you think you might be able to achieve if you do tap the capital markets for debt?

I'll take most of that, and then I'll give Richie the hard part, which is the savings part. I think it's really important to understand why we're excited about the bond market. We have tons of liquidity. Our current facility is $3.5 billion, and we've got about $1.25 billion of dry powder. So even with Adam's capability and investing money that we're in good shape there.

What the bonds bring us is a fixed rate piece to our balance sheet. We've always had convertibles since our inception, and those served as a big part of our fixed rate exposure. Now with bonds at a far lower rate than convertibles ever were and quite frankly, at a lower rate, depending on term, of course, than our floating rate, I think you'll see over time, bonds make up a significant piece of our capital structure.

In the past, we've used interest rate swaps to give ourselves exposure to fixed rates. The bond market is far cheaper than the swap market today. And so I think you'll see us grow that. And one of my personal phobias is when you get into refinancing risk when you have big pieces of paper. And so I like to stagger those over a number of years. And I think over time, as our bond part of our financing matures, you'll see us doing that with different lengths of bonds to make sure that we are unduly impacted depending on what's happening 5 years from now when a bond comes in.

And I guess the other thing that's really important that our shareholders rely on us for is we've maintained a very consistent level of debt since our inception. Bonds don't change that. It reduces our reliance what we used to have on convertible debentures and it reduces our reliance on our operating facility, but it doesn't change the aggregate level of debt we're comfortable carrying.

Yes. I think, Cam, just to answer your question on savings. It really depends kind of where you're anchoring to. So if you're anchoring obviously to kind of the convertible debenture market, those savings are very meaningful, especially when you include kind of the amortization of the cost of that transaction. So you're 1.5%.

If you're comparing it to our credit facility on a variable basis, that suggest that's less comparable in that it's a 4-year facility versus in the bond market, something that's 5 or 7 years. But even on a 5-year fixed basis versus a 4-year floating basis, you'd have some savings on the fixed side. But I think where the comparison versus the credit facility is more meaningful is, as Mike noted, as the debentures we completed those redemptions, but also we have 2 interest rate swaps that are maturing in April of 2026.

We've started to ramp up our review of extending those. And when you compare the interest rate swap market versus the bond market, those savings when you're thinking about something of term in 5 years in the bond market versus the swap market, you are saving -- it's not as large of a delta versus the convertibles, but it is still meaningful savings for that certainty of term. So we're excited about it. And we'll still pick up some savings versus the floating, but it's really versus the other capital alternatives that we have to achieve a portion of fixed rate debt where the savings are more material.

When you look at the fact that we basically carried about a turn of EBITDA on average over our history in convertible debt. And those were in round numbers, the low 6s in terms of interest rates plus the cost of raising versus a bond probably in the very low 4s with very little cost of raising. You're talking about something in the range of 200 basis points versus our historical capital structure, and that's a meaningful difference on our cost of capital.

Okay. No, that's super helpful color on that. And just maybe one quick follow-up for Richard. Just, I guess, on the working capital, you had a big, I guess, positive swing in Q4. It looked like a big change in the accounts receivable. Just wondering what that was. And I guess maybe any thoughts around working capital expectations for 2026?

Yes, for sure, yes. So this is consistent with kind of the messaging that we've been giving throughout 2025, but also with the messaging that we gave for 2024. There were a number of government accounts that were kind of well behind our collection patterns in 2024, and we rectified those by working with our partners throughout 2025. And as we always do, we work to develop processes to make sure we don't end up back there. So that was significantly successful during the period. We talked about kind of the multistory window solutions. There's some drawdown of working capital there because of business volumes. And the other thing that we talked about throughout 2024 and early 2025 is just Regional One taking advantage of certain buying opportunities and finding the right place to sell those assets. And just the size of assets that we had purchased throughout 2024, late 2024 and early 2025, the timing of those sales resulted in kind of temporary bumps in working capital. And it isn't something that we apologize for. Regional One will be opportunistic. And if the intention is to resale the assets relatively quickly, those will sit in inventory. And we'll continue to undertake those types of investments as they generate the returns that Regional One does. So -- and to your question on 2026, we haven't provided something formally, but we would expect marginal increases in working capital throughout 2026 just based on the growth in the business. We'll continue our laser focus on working capital throughout the year as we've shown successes throughout 2025 and try to parlay those into other wins. But I wouldn't expect a repeat of 2025. It was driven by a couple of things that we've talked about for kind of the last 12 to 18 months.

Your next question is from Matthew Lee from Canaccord Genuity.

Maybe we can start with the step-up in manufacturing margin we saw this quarter. Can you maybe just break down how much of that mix or how much of that is mix versus the performance of the individual businesses? And then just maybe some guideposts as to how you're thinking about margin expansion in '26 and then '27?

Sure. In the fourth quarter, it's more driven by product mix than a major change in the business. Fiscal 2024, the fourth quarter was a very tough period for DryAir, our heating systems company. Conversely, 2025 was a very good fourth quarter. So you've got a delta of a better-than-normal year versus a worse-than-normal year that helped support margins. We had increased rental activity at our Canadian matting business, which is strong for margins.

And when we look at that, taking that forward, it's not dramatic in the first half of next year. But as the year progresses, as the rental, the fleet gets more and more deployed, the rental business is higher-margin business, which drives the aggregate margin across the segment. The other thing I'd point out is that the composite matting business ran flat out in the fourth quarter, and we did -- we had just got it the year before, and it wasn't quite running at the same level. So that strengthens it.

There's not much of a delta coming up in that. The business is selling every mat it can make, and we anticipate that for the balance of '26 until the new plant opens in '27, which again should be good for margins as we go forward there because the SG&A with the business won't ramp at the same rate as revenues will when the new plant comes online.

So if I'm understanding that on a holistic level, kind of further margin expansion from efficiencies in '26 and then '27 further ramp as the capacity comes online and of course, Quest starts to recover.

Quest recovers and the -- I think we're heading into the beginning of a new super cycle in the Canadian matting business. The amount of bidding we're looking at on the pipeline business, but more so the transmission and distribution business, I think we're going to see that business being very busy as we head into the back end of next year and into 2027. So I think that's also very bullish for margins as we go into '27.

Understood. And then maybe on the ISR front, obviously, a lot of talk about Australia amongst investors. But can you maybe talk about the conversations you're having with other countries and how those conversations have changed as the geopolitical environment has evolved in the last couple of months?

I think what's changed in the geopolitical environment is 2 things. And Canada is kind of a poster child for it. One is, in the past, there was kind of do I really need to do this and the reliance on the group of NATO and a reliance on the Americans, the position of the U.S. President telling countries they need to help look after themselves has been great for this business. And the uncertainty politically. You can see it, as an example of Greenland. I mean, the talk that NATO partners dispute area of land is not something we've seen in a long time.

And so the demand we're seeing from countries wanting to look after themselves is very heightened. And it's across the board. We're in discussions in a lot of places that I'm not at liberty to discuss. But I can say it's like countries to what we do.

In the last 5 years, we've added work in the Netherlands. We've added work in Great Britain. We've expanded and lengthened our contract in the Caribbean. We're in discussions. I said we've talked to Greenland about their opportunities. We've been very public on the fact that we've had discussions with the government of Canada in providing them with a northern surveillance solution. So it's pretty pervasive and across the board.

Wins tend to be choppy. You don't know exactly when a government is going to come to conclusion. Australia is a great example of that. The Australians are very sophisticated from a bidding point of view, and this process has been going on for over 5 years. We're surprised that it hasn't come to a conclusion yet, but it's going to. And we certainly aren't going to win every opportunity, but we are going to win some of them.

And the magnitude of these projects, whether it's a hypothetical 10-plane deal in Australia or something smaller than Canada or something in that 2 or 3 plane range in European countries, all of those fit directly into our sweet spot. And if we're having this call a year from now, I'm pretty confident that we're going to announce some exciting stuff by then.

Your next question is from Krista Friesen from CIBC.

Maybe just to follow up on Matt's question there. As you think about the number of opportunities for your ISR business over the next 12 to 18 months, would it be fair to say that as you think about the opportunities for debt, it's mostly going to be prioritized towards future potential contracts? Or are you still very much open to other M&A?

I think if I said to you that I was prioritizing my capital for ISR, Adam would beat me up when I got back to the office. We're kind of -- because they're driven by different parts of our company and different people, they don't really compete for capital so much as if we're successful on both the acquisition front and on earning new contracts, our leverage will creep up. And if it creeps up, we'll use equity if as and when we need it. But we're in a spot right now, Krista, where our leverage is the best it's been since like 2010, I think, at 2.73x and with $1.5 billion -- $1.25 billion, I'm sorry, of dry powder and maybe the opportunity in the bond market. I think we're in a great spot from a liquidity point of view. But I really want to be clear, we're not going to trade off opportunities. We're going to take them all, and we'll just make sure they're appropriately financed.

One of our great strengths is if you look back over history, we've always had a balance sheet that lets us thrive in bad markets. So whether it was in 2009, where we were a $60 million market cap company, and we did a $60 million deal right in the middle of the markdown or when we had some silliness with a short attack during 2017, we grew dramatically or even in COVID, we maintained our dividend and did a couple of acquisitions and pay down debt.

So we're fixated on maintaining the right level of leverage. And Rich's job is to make sure we have the right level of liquidity. And so we aren't really trading off one against the other. Acquisitions are a little harder to predict when we're going to be successful. But we typically get a couple of them across the line, and I see no reason why this year would be any different.

Okay. Great. And then maybe just on the Air Canada announcement earlier this year, clearly, a strong vote of confidence in PAL Airlines. Are you able to share a little bit more detail on the cadence of deploying these additional aircraft with Air Canada?

Jake, do you want to take that?

Yes, for sure. Thanks, Mike. Great question, Krista. Again, you got to appreciate that we're -- as we continue to expand that offering, we've got to bring crews in. We've got to train. We're buying aircraft because we don't have them sitting on the shelf.

So from that announcement, our intent is mid-2026 is when they're going to start being reflected in the scheduled operation. So -- and the other point I want to say is this is a significant vote of confidence as you stated, because it's only an extension -- it's not only an expansion of the number of aircraft, it's an extension of the entire package of aircraft with Air Canada by a further 4 years. So again, tremendous stability and again, strength in partnership.

Your next question is from Konark Gupta from Scotiabank.

One. It's Nate Britto, actually filling in for Konark Gupta. Just have a couple of questions. Are there any areas within the EIC portfolio where you are in advanced stages of AI adoption? And are there any subsidiaries that may significantly benefit from AI investments around the globe?

We don't have kind of quantum AI projects that are materially changing the business. There is incremental investment being made in things, everything from airplane maintenance, airplane security and other things like that. But there's nothing that's really a quantum leap from AI. We do tend to use our head office team to help our subsidiaries deploy when they see an opportunity.

Maybe one of the biggest benefactors from AI would be our CTI training business in the U.S. We spend a lot of time utilizing AI in the training and then training our customers on the use of AI in their business. And so probably the biggest impact would lie at CTI.

Okay. That's very helpful. And just as an addition, I would just ask, in terms of your M&A pipeline, how are sellers' expectations these days? And do you think the manufacturing end market has more opportunities than aviation?

I think it depends on how you look at that. The -- because there are rules in aviation about where you could operate, what ownership you can have in other countries. So by definition, aviation is more limited than manufacturing because manufacturing doesn't have those.

Having said that, the areas where we're active in aviation have tremendous growth opportunities in the medium term. We've talked a lot about what's happening in Canadian North. We've talked about in ISR. We've talked about our continued desire to grow our air ambulance medevac business. We're already the biggest in Canada, and we intend to continue to grow that business. So if we talk about the overall macro, I would say there's more opportunities in manufacturing. But if you look sort of closer to home and the things that are bolt-on and things that are close to what we do, I would view them as very similar.

I think you'll see a significant continued growth in the matting business. The opportunity in the U.S., the movement towards composite matting is real. It's long term. It's worldwide. And our product is quite simply the best. And so we're going to get that plant up and running, and we'll start taking on, whether it be rental opportunities, selling outside of the U.S., expanding our geographic coverage.

We were ecstatic that we had a number of our mats used in the oil patch. And typically, the oil patch are the hardest on mats, and that's why wood matting has historically been what's used there. And we've had great success with our mat on a couple of projects there.

Your next question is from Razi Hasan from Paradigm Capital.

Can you maybe just talk about the margin implications for the Aerospace business, training versus ISR? And going forward, do you expect the Aerospace business to have a higher contribution than it did in 2025? And if so, just what are the puts and takes there?

So the big macro you brought up first is bang on is that the margins in anywhere where we own the aircraft are always higher because of the capital deployed. So our training business is a very low capital business. Our return on investment is great, but our EBITDA margins are much, much lower. As we grow the ISR business, it tends to be the highest or near the highest of our aviation businesses from a gross margin point of view. So the growth of that will be good for margins. For competitive reasons, I'm not going to get too detailed about what those are, but they're commensurate with the risks and the capital we put forward on those aircraft.

Okay. That's helpful. And then maybe just switching gears just on Canadian North. As much as you can speak to, can you just maybe walk through the revenue contribution from Canadian North? It looks like the segment was much stronger than we had estimated. So I just want to make sure we're modeling it properly. Any color there would be helpful.

I don't have those numbers in front of me. What I would say is that maybe one of my guys can grab and see if they can pull up while I'm talking. But the -- you have to break Canadian North into 2 pieces, the regular business in the North, which is very similar to what Com Air does, which would have very similar margins to the balance of our Northern aviation. And then you have the charter business. And I'm not talking about the charters within the far north. I'm talking about the charter business servicing the oil patch and servicing the natural gas projects. In those cases, those margins are much lower.

So as we make some of the changes in the Canadian North business and merging some of the purchasing capabilities and those things with EIC, you will see a continued improvement in gross margins at Canadian North and the margins continue to improve with the full price increase that was in the new contract with the government of Nunavut taking effect because when we took the contract, we signed the contract, there's a whole bunch of tickets that were already outstanding under the old pricing. And so the full impact is just showing up now. So that's part of the reason you saw increases in margins in that period.

And just -- while we don't normally disclose subsidiary by subsidiary financial information within our ICFR disclosure within the MD&A, there is a note that aggregates revenue for Newfoundland Helicopters and Canadian North from a revenue perspective. So you can pull what the 6-month impact was for those 2 entities. Canadian North is materially all of it based on the size of the deal. The one thing I would caution, though, is when you just think about projecting that into the future is that as we've noted, the LNG contract wound down in the fourth quarter of 2025 here. And so just multiplying that by 2 and saying that's what revenue is going to be in 2026 would be overstating the impact of those charter revenues because of where that contract is.

[Operator Instructions] And your next question is from Amr Ezzat from Ventum.

Congrats on a very strong year. I've got just one very maybe conceptual question for you guys on guidance. So you guys reiterated 2026 with a bias to the upper end following Mach2 and Air Canada. But as I think about the defense and sovereign themes that you guys discussed in your prepared remarks, can you help us distinguish what's structurally embedded in your current 2026 run rate versus what would represent an incremental upside. And I do understand that you guys don't include any sort of ISR wins. But specifically, are you seeing stronger activity levels in defense adjacent parts of the portfolio that support the base case independent of ISR contract wins?

Yes. It's a really good question. The simple way to look at it is our guidance is always based on what we know. So it's based on contracts we've won, investments we've made. And so when we looked at our guidance after the 2 things we've announced, the Mach2 and the Canadian North acquisition, we thought do we change our guidance based on this. And because neither of them were full years in the current year. And if you added what the portion of the year that we had to our internal budget, it would get us over the top of the range that we have, but closer to the top of it. We decided to move within the guidance we've given as opposed to replacing the guidance.

In terms of opportunities and things we're seeing in defense, we haven't really included anything in there other than what we either have or very highly confident we will have in that guidance. So as we succeed on some of these defense initiatives, whether it be ISR or maybe it's West Tower building radar towers in the north or any number of those things or quite frankly, the development of a critical minerals mine in a Callaway.

Those things would be additive to what's in the budget. We try not to predict what's coming in, and then you can get very choppy results versus your guidance. We want to make sure people can rely on what we predict. And so as a result, we really don't put much in there for positive wins that we aren't sure of yet.

Understood. What I'm hearing is it seems conservative.

Those are your words, I'm not...

Yes, these are my words, exactly. If you allow one more follow-up, and I'm not sure you could answer this, like can you -- do you guys like quantify or can you quantify how much of your manufacturing, whether it's revs or EBITDA are exposed to defense and probably very hard to answer, but...

It's really hard to quantify that. What I would say is when you take defense/investment in the north because the investment in the North is going to be much more than just ISR or a military base. The investment in the north is going to be developing in critical minerals. It's going to be work on the Northwest passage. It's going to be nation building. There's discussion of pipelines across there to Churchill. All of those provide dramatic opportunity for us. We are the north to steal the Raptors statement in terms of we now -- with the acquisition of Canadian North, we own the infrastructure to do whatever people need us to do up there. And that's something that we're -- to be honest with you, we're just cutting our teeth on. When we bought the company, we bought it based on what we knew it does, not what we think it can do in the future. And so I really believe the opportunity in Nunavut and the Northwest Territories in Yukon, we're just starting.

The only thing I'd add...

Go ahead, Richard.

The one thing that I'd add is that it's a growing part. And we're leveraging the collective expertise across all of our organizations to work through bidding processes with our manufacturing folks who may not have the same experience going through large government procurement processes. So we are cross-leveraging resources and experiences from subsidiaries that have that experience to increase our exposure to the kind of the defense world on the manufacturing side.

Yes. I was just going to -- I was going to expand the fact that while some of our businesses don't have direct defense exposure today, every one of our businesses had the opportunity to, whether it's the exposure to the infrastructure that is going to need to be built, whether it was the services provided to enhance defense and security or direct activity on behalf of the various government agencies for defense and security. So again, it's probably less about what specific percentage exists today and more about the roadmap of opportunities we're looking at moving forward.

Understood. And I do agree. I think it's a very underappreciated part of your business.

There are no further questions at this time. Please proceed.

I want to thank everyone for joining us this morning. I don't generally comment on stock price and those kind of things, but this is an exciting morning as the early trading has pushed our stock over the $6 billion market cap for the first time. So it's a good way to start the week. Thanks, everybody, and I look forward to talking to you with our Q1 results and at our AGM in May. Have a great day.

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may now disconnect your lines.

Good morning, everyone. Welcome to Exchange Income Corporation's conference call to discuss the financial results for the 3 and 9 months ended September 30, 2025. The corporation's results, including the MD&A and financial statements, were issued on November 6, 2025 and are currently available via the company's website on SEDAR+.

Before turning the call over to management, listeners are cautioned that today's presentation and the responses to questions may contain forward-looking statements within the meaning of the safe harbor provisions of Canadian provincial securities laws. Forward-looking statements involve risks and uncertainties and undue reliance should not be placed upon such statements. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements.

For additional information about factors that may cause actual results to differ from expectations and about material factors or assumptions applied in making forward-looking statements, please consult the quarterly and annual MD&A, the Risk Factors section of the Annual Information Form and EIC's other filings with Canadian securities regulators. Except as required by Canadian securities law, EIC does not undertake to update any forward-looking statements such as statements speak only as of the date made.

Listeners are also reminded that today's call is being recorded and broadcast live via the Internet for the benefit of individual shareholders, analysts and other interested parties.

I would now like to turn the call over to CEO of Exchange Income Corporation, Mike Pyle. Please go ahead, sir.

Thank you, operator. Good morning, and thank you for joining us on today's call. With me today is Richard Wowryk, our CFO, who will speak to our quarterly financial results, along with Jake Trainor and Travis Muhr, who will speak about our outlook for our two operating segments.

Yesterday, we released our third quarter results for 2025, which were very strong overall. We set all-time quarter high watermarks for all of our key financial metrics, including revenue, adjusted EBITDA, net earnings, adjusted net earnings, free cash flow and free cash flow less maintenance capital expenditures. We also set highs for our basic and fully diluted share metrics for virtually all of our KPIs, despite the fact that our share count has significantly increased during the past 12 months due to the redemption of 3 classes of our convertible debentures, coupled with the shares issued for our acquisitions. This demonstrates the performance of our underlying businesses.

Subsequent to quarter end, we called our last remaining convertible debenture, which was originally due in 2029. And by the first week of December, we will have no convertible debentures in our capital structure. In short, our balance sheet is simplified, delevered and very liquid with total leverage near all-time lows. Rich will talk to the record financial metrics later in the call, but I wanted to delve further into the more significant quarterly highlights along with some of the forward-looking remarks included in our 2026 guidance.

The third quarter was the first period which included the financial results from the highly strategic acquisition of Canadian North. The acquisition cemented our position as the foremost expert in Northern aviation, and the results during the quarter were consistent with our expectations. The profitability and the passenger cargo business of Canadian North are reasonably similar and will ultimately match that of Calm Air and our other air operators. As I previously communicated, Canadian North also has a large charter operation that flies on paved runways and utilizes 737 aircraft with a much lower margin profile than the Northern Air operations, which explains some of the outsized increases in revenues.

The majority of the aircraft serving up the business are leased. And therefore, as these contracts wrap up, we will be evaluating that specific business component to assess its returns and see whether they meet our requirements.

Taking a step back, the integration of the business is proceeding consistent with our plan that was developed during the due diligence process. The new long-term air services agreement provides future profitability and certainty as the contract is modified both up and down for aviation-specific inflation factors. Significant process has started in adjusting the cost structure of the underlying operations, including the renegotiation of buyer arrangements. Our other air operators and aircraft sales and leasing have been working with Canadian North to identify operating efficiencies along with the purchase of spare parts and engines to improve the liability of the fleet long into the future.

The inclusion of the 737 fleet provides Regional One an opportunity to attend 737 university, learning about the value of its parts and may provide it with another engine and parts business-like an opportunity in the future. Overall, I'm very happy with the progress made to date, and we expect by the latter course of 2026 the profitability and free cash flow returns of Canadian North will meet our requisite requirements.

The remainder of our Aerospace & Aviation segment had a very strong quarter. The second quarter did have some challenges associated with wildfire activity in Manitoba and Ontario. However, the load factors returned partway through the third quarter and the underlying business was performing very strong during the quarter and as we exited the quarter. We remain very positive about each of the business signs within the segment. And our aircraft sales and leasing continued to see step-based improvement in their aircraft and engine leasing portfolio, and we made some significant investments into the fleet that we'd signaled during the second quarter call.

The business line also had a number of opportunities to sell whole aircraft and engines during the third quarter. Those large sales are generally at higher dollar values but with lower margins than our traditional part business, and it provides further evidence of the demand for aircraft sales and leasing single-aisle turboprop jet niches. Our Aerospace business continues to see significant demand signals both domestically and internationally. We are at the intersection of a number of megatrends in Canada.

The focus on meeting NATO defense spending targets, coupled with Northern sovereignty means there are tremendous opportunities for EIC as a whole. Our infrastructure in the North is second to none. And as we already perform ISR services for the federal government along the East and West Coast, we believe there are opportunities to expand these services into the North. We know that the government is facing human capital and infrastructure shortages. With our relationships with indigenous communities, coupled with our Northern aviation expertise and infrastructure, we believe that we are uniquely suited to provide a solution to the government.

We are excited about this opportunity along with the opportunities immediately before us with other countries. Our Netherlands and U.K. operations have positioned us as a global expert in ISR, and countries are actively calling us to inquire about our services.

The megatrends are also providing us with tailwinds in our other business lines. Focus on critical minerals, resources and precious metals is anticipated to drive demand for fly-in, fly-out services in our air operators, coupled with the demand for our Environmental Access Solutions business line as companies will be required to build access roads to protect ecologically sensitive areas. Furthermore, the focus on artificial intelligence and data center is driving demands within the transportation sector.

Our North American electrical grid system requires significant maintenance, improvements and enhancements to handle electrification requirements of the future, whether it be from data center demands or from households or transportation. This is a tailwind for both the Canadian wooden and U.S. composite operations in our Environmental Access Solutions business line.

We continue to see significant demand in composite matting. We have effectively sold out all of our production into 2026 because of the demand of our best-in-class System7-XT mat. We're in the final stages of selecting a location and are actively negotiating with a lessor for the installation of a new state-of-the-art plant. We anticipate the plant will be up and running in about 18 to 24 months and will require an investment of approximately $60 million. The demand for composite matting is ever increasing due to its advantages over wood mats and transformation at distribution sector. coupled with increased transition from wooden mat users across the United States.

Lastly, data centers and AI are also driving demand in our Precision Manufacturing and Engineering businesses as we provide ancillary products, including cooling stainless steel tanks, hydraulic load cell testing capabilities, chip and wireline services.

We have been transparent that our Multi-Storey Window business continues to be the most challenged business line due to the impact of aluminum tariffs, deferrals and projects and our strategic decision to retain skilled workers and staff over the shorter term. We are still seeing elevated number of inquiries. However, developers remain uncertain in booking projects as they're awaiting government clarification on interest rates and anticipated reductions in development costs. Capital exists developing these projects. However, the capital remains on the sidelines until these uncertainties further abate.

The long-term economics demonstrate the need for affordable housing across North America, and we are seeing a shift from condo projects to apartments in Canada. We are still bullish on the longer-term trends and we are seeing positive developments in certain markets across the continent. These challenges in this business line are included in our current financial results and are also included in our 2026 guidance.

Looking back at the quarterly record results, these were generated while there continue to be significant uncertainty in various markets. However, EIC as a group of company is at the foremost of a number of emerging trends. When Adam and team buy companies, we focus on the sustainable niches and their management teams. Our secret sauce at EIC is maintaining the culture at these companies and unleashing the entrepreneurial spirit that made these companies successful prior to joining the EIC family. Because of that, I'm excited that our future opportunities as each management team is energized to execute on the many strategic opportunities that are before us.

I will let Rich focus on the financial results for the operating segments. However, before passing off the call, I wanted to update you on contract opportunities. During the fourth quarter of 2024, we submitted our proposal to the Australian government for their maritime surveillance contract. We previously anticipated here in the results by the end of the third quarter as their May election delayed the bid evaluation process for a period of time. We have recently been advised that the evaluation process is not yet complete.

As I previously commented, we believe we put together a very strong bid and we expect to have as good a chance as any other bidder. Due to the timing of getting the assets ready for the contract to start in 2028. We still anticipate the government will have to make a decision by early 2026. As I mentioned, this contract would be a home run of sorts. However, in my prepared remarks, there are a number of other opportunities that would approximate the size of Australia. I'm happy to report that our second aircraft for the U.K. Home Office has been fully modified and has started flying missions in the fourth quarter.

Flying with a strong tempo, we have received great feedback from the U.K. and other countries who have utilized the aircraft. We crossed another milestone of being a $4 billion equity market cap during the quarter. As we continue to grow and tell our story, investors will see the immense amount of opportunity before us. We are still the same company. We will be very disciplined in our acquisition and organic growth investments. I'm very proud of the progress made by our various teams, and I'm excited about the future of EIC.

Due to the strength of our underlying results and per share metrics, we have made the decision to increase our dividend from $2.64 per annum to $2.76 per annum. This increase in dividend is consistent with our stated commitment to our shareholders to provide stable and growing dividend and is ultimately driven by the increases in profitability and free cash flow, along with our outlook for the future.

The dividend increase of 5% continues to represent a lower proportion of our earnings as our earnings and adjusted net earnings grew by approximately 25% on a year-to-date basis and grew by 17% on a year-to-date basis on a per share basis. As such, less than 1/3 of the capital generated by this profitability was directed to increased dividends, thereby reducing our payout ratio. Lastly, the dividend protects the purchasing power of our shareholders due to inflationary effects held by all.

The demand for our services and products is robust. Jake and Travis will focus on the outlook for our segments for the balance of 2025. However, before passing the call over, I want to speak about our 2026 guidance. We anticipate that our adjusted EBITDA will be between $825 million and $875 million for fiscal '26. This estimate is based on the portfolio of companies that exist today and do not include any new acquisitions, significant contracts or significant growth capital expenditures other than what exists today. We have a track record of executing on our strategic initiatives in the past and we are confident in the future. I also wanted to reconfirm our guidance for 2025 with an adjusted EBITDA range of $7.25 to $7.65 with a bias to the midpoint of the lane.

I will now pass the call over to Rick.

Thank you, Mike, and good morning, everyone. For the third quarter of 2025, revenue of $960 million, adjusted EBITDA of $231 million, free cash flow of $171 million, free cash flow less maintenance CapEx of $88 million, net earnings of $69 million and adjusted net earnings of $76 million were all quarterly high watermarks for EIC's quarter. Almost all of the third quarter per share metrics were also quarterly high watermarks, which is even more impressive when you take into account the additional shares that were issued over the past 12 months for the convertible debenture conversions and acquisitions.

Revenue in our Aerospace & Aviation segment increased by $247 million or 57% to $680 million. Adjusted EBITDA increased by $46 million or 30% to $202 million. Revenue growth outpaced adjusted EBITDA growth due to changes in product mix at our Aircraft Sales & Leasing business where they monetize certain large aircraft and engine sales during the quarter along with the inclusion of Canadian North's charter revenue, for which adjusted EBITDA margins are lower than our Northern Air operators passenger and cargo businesses.

Looking at the Essential Air Services business line, the improvements were driven by a couple of key factors: the acquisition of Canadian North, increased demand, contract scope and price increases in our medevac contracts and improved load factors after the wildfires subsided and operations normalized. Our Aerospace business line revenues were consistent with the prior period and profitability was slightly lower due to changes in product mix.

Our Aircraft Sales & Leasing business line increase in revenue and profitability was driven by continued improvement in leasing activity and robust parts demand. We also saw significant increases in large asset sales compared to the prior period. As a reminder, those assets are generally lower margin and lumpier than our traditional parts business.

Revenue in our Manufacturing segment increased by $3 million or 1% to $279 million. Adjusted EBITDA decreased by $6 million or 12% to $45 million. Our Environmental Access Solutions business line had increased revenues and adjusted EBITDA driven by the acquisition of Spartan, which continues to have a significant demand for its composite mats. As previously discussed, the Spartan team is in the final stages of designing a new plant as the longer-term secular demands have demonstrated our need to increase capacity.

In the Canadian market, we saw a decrease in adjusted EBITDA due to customer deferrals and projects into the fourth quarter and into 2026. As expected, our Multi-Storey Window Solutions business revenue and profitability decreased due to customer deferrals and related production gaps. Profitability was further negatively impacted by aluminum tariffs. We are continuing to see significant activity. During the quarter, we booked a number of projects. However, the geography and pace of bookings continues to be sporadic as there's developer uncertainty to anticipated changes in government regulations and further clarity on interest rate environment, including mortgage rates.

Our Precision Manufacturing and Engineering business line had another solid quarter from a revenue and profitability perspective. It was driven by customer demand across several industries, including telecommunications, technology, resource and data centers.

Overall, net earnings were $69 million for the third quarter, which was an increase of $13 million or 23%. The higher EBITDA partially offset by increased depreciation and amortization through the Canadian North acquisition, which was expected due to the significant asset backing and growth in capital investments made over the past number of periods. Earnings per share increased to $1.32 per share compared to $1.18 in the prior period.

Adjusted net earnings were $76 million compared to $61 million in the prior year with an increase in adjusted net earnings per share from $1.29 to $1.46 per share. Free cash flow was $171 million compared to $136 million in the prior year. Free cash flow per share increased from $2.86 to $3.30 per share. Free cash flow less maintenance capital expenditures was $88 million compared to $81 million in the comparative period. Main capital expenditures during the third quarter of 2025 were $83 million compared to the prior year of $55 million.

On a 9-month basis, main capital expenditures were $205 million compared to $142 million in the prior year. Q1 the prior year was an anomaly on the low end due to the timing of maintenance events. The increase in the current year is due to three parts: first, the elevated maintenance capital expenditures at Canadian North as we expected and previously disclosed; secondly, the timing of events occurring; and lastly, the changes in the policy based on utilization of aircraft and engines in Aircraft Sales & Leasing as a discussed in the first quarter, which saw us switch to a more conservative policy as fleet utilization increased.

Growth capital expenditures during the third quarter were $128 million compared to the prior year at $93 million. The third quarter growth CapEx primarily related to Carson Air, the construction of an Ottawa hangar for Canadian North and the execution of growth capital purchases at Aircraft Sales & Leasing. We noted during the second quarter, a significant amount of deposits were made, and we executed on certain of those transactions during the quarter, which more than offset negative growth CapEx from the second quarter.

From a working capital perspective, we had a recovery of approximately $3 million and investment of $37 million for the 3 and 9 months ended respectively. Subsequent to quarter end, we collected two large receivables totaling approximately $25 million. We are actively managing our working capital and working with each subsidiary team to convert working capital into cash. Our corporation aggregate leverage, assuming that the convertibles of interest called subsequent to quarter end materially convert, would be 2.89x. Our aggregate leverage ratio remains historic lows and well within our target.

We continue to have significant liquidity available to us. Our balance sheet is very strong and including cash on hand and the accordion feature within the credit facility, we have approximately $1.2 billion of capital available to be deployed. This allows us to execute on growth opportunities and acquisitions that are accretive and meet our disciplined financial metrics. Our view of leverage and our disciplined approach to acquisitions and organic growth investments have been constant over the years and they will continue to serve us well into the future.

Within our third quarter results, the preliminary purchase equation for Canadian North has been included. As discussed previously, the acquisition is significantly asset-backed. Preliminary goodwill that is recorded is entirely attributed to deferred taxes. Hard assets account for more than 100% of the purchase price. This level of asset backing drove depreciation up materially in the quarter.

I will now turn the call over to Jake who will provide an update for the 2025 remaining outlook for Aerospace & Aviation.

Perfect. Thank you, Rich. Travis and I once again split up the outlook section. I'll focus on Aerospace & Aviation segment and Travis will provide context on our Manufacturing activities.

Overall, we're expecting a strong last quarter of growth from a revenue and adjusted EBITDA perspective from our Aerospace & Aviation segment for several key reasons. The most significant driver is the acquisition of Canadian North. The Canadian North operations met our internal expectations for the third quarter, and we anticipate continued performance during the fourth. Our integration activities have been progressing in accordance with our plans and timelines. We should start to see further improvement in operating margins as we move into 2026.

There will be further investment in maintenance capital expenditures on the fleet, including spare parts, engines and overhauls during the next few quarters. Secondly, we anticipate further strengthening of results due to growth capital investments made for the contractual wins announced over the past few years, including contributions from the U.K. Home Office second aircraft, which has started operations early in the fourth quarter. The operating returns associated with the fixed wing Newfoundland & Labrador medevac contract operations will start becoming evident in mid-2026.

Our Essential Air Services business line will see growth driven by a multitude of factors when compared to the prior Q4. The first and most significant will be the addition of Canadian North. We also anticipate strong load factors and growth across our network. And lastly, we expect continued growth in our medevac business because of strong yields, coupled with increased scope and price compared to last year. We have received 7 of the 12 new King Air 360s to date with another aircraft expected in the fourth quarter, and we'll use the previous BC aircraft to redeploy through our other operations, including the Newfoundland & Labrador fixed-wing medevac operations, which will further enhance our returns.

Offsetting some of these gains is the impact of continued labor shortages and supply chain challenges. We're not seeing a worsening of these dynamics. However, the challenges still remain specifically on aircraft parts and consumables.

The Aerospace business lines revenue and EBITDA are expected to increase in the fourth quarter relative to the prior year driven by the second aircraft deployed onto the U.K. Home Office contract and continued strong tempo of flying for other owned ISR assets. Our Aircraft Sales and Leasing business is also expected to experience growth as we start to lease out assets acquired during the quarter. When we deploy capital in this manner, it does take a period of time to ready the aircraft and enter into lease contracts with customers. Furthermore, we continue to see very strong demand for parts sales and whole aircraft and engine sales. The environment for Aircraft Sales & Leasing remains.

Taking a step back, I want to focus on the strategic benefits of Canadian North transaction for the longer term for EIC as a whole. We believe that the Canadian North infrastructure and aviation assets, coupled with our existing operations provide us with a unique offering to meet the development needs of the North. As the Canadian government renews its focus on development and security at North, EIC's comprehensive portfolio, including advanced aerospace capabilities, sovereign Arctic aviation, medevac solutions, defense enabling infrastructure and in-country defense manufacturing as well as our extensive network of partnerships with indigenous communities uniquely position the company to lead and support these critical initiatives. We're having discussions with the government and our customers about how EIC can support them.

We expect maintenance capital expenditures to increase for a number of reasons. Firstly, due to the addition of Canadian North, we noted that the first year returns are expected to be muted due to higher-than-normal maintenance CapEx expenditures required. When we negotiated the purchase price, we took into account the projected maintenance capital expenditures and it ultimately was factored into our purchase price.

Secondly, maintenance capital expenditures are expected to increase in line with increases in adjusted EBITDA for our Aerospace & Aviation segment. Additionally, increases in maintenance capital expenditures related to our Aircraft Sales & Leasing business due to continued strengthening of utilization in our lease portfolio and the impact of the more conservative change to the calculation of maintenance capital expenditures adopted in 2025.

Lastly, this quarter's maintenance CapEx expenditures in Essential Air Services were below our internal expectations due to the timing of certain maintenance events.

Growth investments in the remainder of 2025 include capital expenditures for one new King Air aircraft, which we use in the BC medevac contract. The remaining aircraft for this contract have been pushed into 2026 due to the manufacturer delays. Regional One has placed deposits on certain aircraft assets and anticipate executing on aircraft and engine transactions during the fourth quarter.

I'll now pass it off to Travis to provide some commentary on the Manufacturing segment.

Thanks, Jake. We're anticipating continued growth in our revenues and profitability for the Manufacturing segment for the fourth quarter compared to the prior year. This growth is expected for two reasons. Firstly, we're seeing our customers normalizing the fact that uncertainty will continue to persist in the economy. However, investments and purchases will be required to maintain industrial capacity and, therefore, we anticipate the recognition of sales that were pushed from earlier in the year. The second is the continued strong results from Spartan in our Environmental Access Solutions business line as Spartan was acquired in early November 2024 and they continue to see significant demand for their products.

All of the businesses within the Manufacturing segment continue to experience strong levels of customer inquiries. The impact of the tariffs has resulted in reduced business confidence, which has deferred customer investment purchase decisions throughout 2025. To be clear, we have not been directly impacted by the tariffs, except for the aluminum tariffs impacting our Multi-Storey Window Solutions business line during the second and third quarters. The vast majority of our products that we produce are compliant and therefore, the broader risk of tariffs relates to the declining business confidence and supply chain changes, which do take some time to effect.

Our Environmental Access Solutions business line is expected to generate returns higher than the comparative periods for the fourth quarter. Spartan continues to experience very strong demand for its composite mat solutions, and we are anticipating that they will continue to sell into their manufacturing capacity based on feedback received from their customers on their System7-XT and FODS mats. Due to the strong demand for its composite mats, we are finalizing a location and final pricing to build the second state-of-the-art plant, as discussed by Mike. We see long-term positive trends in the composite mat industry as the geographic and sector usage continues to expand and take market share away from the traditional wood map industry in the United States.

We've seen some deferrals and project start dates in Canada, and we anticipate those projects commencing in the fourth quarter and into 2026. We've talked a lot about our bullish view on the transmission and distribution sector as electric grids have to be expanded and hardened for the new electricity demands, whether it be from data centers, vehicles or homes. With the Build Canada mantra of the federal government and fast tracking of nation-building projects, we also see several tailwinds for the traditional oil and gas and pipeline business within that business line.

As expected, our Multi-Storey Window Solutions business line revenues and adjusted EBITDA will be lower than the comparative periods. The period-over-period declines are expected due to the heightened interest rates in 2023 and into 2024 that resulted in reduced project manufacturing for 2025. Secondly, for the project scheduled for 2025, we anticipated margin pressures due to the type of projects booked coupled with production gaps. We've integrated the manufacturing capacity in Canada by combining manufacturing facilities and have made the strategic decision to retain skilled staff during this downturn. We also highlighted that the business line was negatively impacted by tariffs during the quarter.

As discussed in our reporting, we cannot alter the supply chains in the short term. In the longer term, we'll be able to mitigate the tariffs and optimize production. Quoting in Canada and the U.S. continues to be very active across several geographies. As discussed at last quarter's call, we were successful in booking well over $100 million of new projects across various geographies and project types within the business line. We remain very bullish on this business line as the longer-term fundamentals, which drive demand being an acute shortage of affordable housing, remains very strong across several geographic regions in Canada and the U.S. This shortage has been highlighted by several government officials on both sides of the border.

The Precision Manufacturing and Engineering business line is expected to improve from a revenue and profitability perspective for the fourth quarter compared to the prior year. We're seeing strength across various sectors, including telecommunications, technology, resource and data centers industries along with sector tailwinds in the defense industry. We're anticipating growth capital expenditures to be incurred. So the growth capital expenditures in the Environmental Access Solutions business line will depend on the market dynamics. However, we do anticipate investments due to the demand expectations in 2026 due to the revised project start dates and anticipated opportunities.

I'll now pass the call back to Mike.

We're very encouraged about the state of our business. EIC lies at the intersection of a number of positive and sustainable tailwinds in the Canadian and global economy, which will drive our results long into the future. Our 2026 guidance represents the collective investments we have made in our business. However, to be clear, it does not include any amounts related to future acquisitions, new contracts or significant growth capital expenditures for new contracts. EIC will continue to be a company characterized by resiliency and stability as the core of who we are we buy great companies and help unlock entrepreneurial power within those businesses.

Thank you for your time this morning. And we would now like to open the call to questions. Operator?

[Operator Instructions] And your first question will be from Steve Hansen at Raymond James.

Frankly, it feels like there's a couple of ways for you to benefit from Canada's new focus on North, be it military or otherwise. How do we think about, though, the government overlay with all this and the timing? What I'm trying to understand is ultimately is like where do you think we'll start to see the benefits first and over sort of what time frame?

That's a tough question to start the morning, Steve. We do the maritime surveillance for Canada on the East and West Coast. Canada has historically not felt the need to surveil the North. That's clearly changed. All 3 political parties in Canada have talked about the need for military bases and the need to look after the North. With our acquisition of Canadian North, we now have the infrastructure across Canada's arctic to enable us to move very quickly to stand up maritime surveillance operations.

We've met with the government. I would say that the discussions have been very positive. I would suggest that there's support across the government, whether it be in the PMO, the Defense Minister, the Procurement Minister or I think, more significantly, in the Canadian military. They acknowledge that they're stretched with all the other things they're doing, the future strike fighters, the Canadian -- the search and rescue planes. They can't take on new project. And so the advantage we bring on this is we will bring them a service. All they've got to do is tell us how much and when.

And so while it's difficult for me to make a prediction for a government, I think this is something that's actionable within weeks or months, not years. And so for us to be able to announce something next year, I think, is a reasonable time line. Again, this is dependent on the government. So we're not sure we're active working with them but we're excited about the opportunity. And quite frankly, one of the things we love about it is we've built all the information technology conduits to deliver the data to the government and to the departments of the government.

So our ability to stand this up would be much easier than, for example, when we went into the Netherlands or when we went into Britain where we had to build that infrastructure or if we will win in Australia. It's really just a bolt-on in Canada. So the next year, I think, is a reasonable target to hear something on that.

But the other thing I'd point out is it's much more than that. It's not just the IFRS. We're going to build -- we don't have anywhere to land the F-35s up North. We need to build runways. We need to build military bases. Well, as the people and professionals that are going to go into those communities, they're going to be coming in, whether it be on Calm Air, if they're building in Rankin or in Canadian North if they're building in Yellowknife or building in [indiscernible]. And so we're going to see part of the benefit of this through our scheduled airlines.

You're also going to see it as more and more development of particularly critical minerals that exist in Nunavut. The charter operations to bring employees in and out of those are also going to be done through our bases and our dominant position in the North. I would like to say that when we started discussions with Canadian North over a year ago, closer to 2 years ago, we saw this coming with the movement towards a much greater investment in defense. But we did -- we saw it just based on the pure business, the pure stuff that we're used to doing for the last 50 years up there. The addition of this turns what was a good deal into a great deal for us.

Steve, it's Jake. One other comment I think just outside of the defense and security initiatives by the Canadian government. You hear a lot of discussion in the budget about infrastructure and nation building. Again, we have very positive exposure whether that's pipelines, whether that's port infrastructure. A lot of the building that's related to, let's call it, the nonspecific defense matters, we have positive exposure to. So again, we're feeling very good about a number of the initiatives and working with the Canadian government and obviously the provincial governments as well.

Appreciate the color. And hopefully, we can get going on building some stuff. Just one follow-up for me is just around the Regional One. It's been active there's constraints in the system still and you've made some additional investments there. Is that a business that will continue to have opportunities through next year? It sounds like the broad thematics there are quite strong. But I just want to get a sense for how your thoughts are in the '26 on that business specifically.

Yes. Regional One has become such a player in the market it's in. Their growth in terms of whether it's part sales, which are very predictable and reliable quarter-to-quarter, whether it's leases which are also very reliable quarter-to-quarter, or whether it's the stuff that's a little bit more lumpy like we had this quarter. Maybe I'll just touch on something here that our revenue in Regional One in this quarter was up about 70% year-over-year because of sales of full aircraft. And those bounce around but the margins on those kinds of sales are lower. And so when you look at our overall margin profile for the whole company, margins aren't down in aviation. It's just product mix.

We're selling -- in this quarter, we happen to sell more full aircraft, which have good profit in them, but they're lower margins than if I sell the planes in pieces. And so when you look at Regional One, don't extrapolate that kind of revenue growth. But the core EBITDA growth, which takes into account earnings in all 3 segments, is going to continue to grow. Our market position is going to grow. And while I wouldn't promise you this for 2026, it will start there.

The ability to trade the 737 marketplace is coming. We just bought 20 years of data from Canadian North about the value of every part on those planes and we're now selling parts to ourselves. Canadian North is taking Regional one to 737 University, very similar to what we did when we moved into the Embraer portfolio about 10 years ago. You're going to see the opportunity for a massive amount of growth in the future in Regional One as we internalize the knowledge required to be a trader in the parts of the 737. And we'll use the business model that's proven so successful in Regional One over the last 10 years.

I'd point out for the people who don't know it, we bought Regional One in 2013, and it was doing about $16 million in EBITDA. We'll be close to 10x that this year in Canadian dollars, and we'll continue to see that grow in the future.

Next question will be from Cameron Doerksen at National Bank.

I guess I want to have, I guess, a little more detail on the 2026 guide. I mean, obviously, you've got very good visibility. So I would say, high confidence, not to put words in your mouth, high confidence in the low end of that range. I guess, what gets you to the higher end of the guidance range? Like what has to happen with the various businesses to get you to that 875 level?

It's really the high end would be driven probably by acceleration in the Canadian environmental matting space. We see a whole bunch of very positive trends there. There's a super cycle beginning, formatting with the things that need to be done for T&D work, and -- so the T&D, transmission and distribution of electrical power. So there's earnings power there. There's also massive earnings power sitting in the window business. The window business, it's essentially breaking even.

It's not making a material contribution. That business will make $50 million plus just in a normal market, not in a strong market. And there's easily another $20 million or so available in the Canadian matting business. So just those two things would take you above the top end of the range. And continued improvement and wins in contracts because, quite frankly, we fully anticipate winning things that aren't in the guidance we give. We tried to be consistent and not guessing what we're going to win before we get it.

And so to get beyond that, more contract wins, whether it be an ISR or in medevac or even more charter work in our Aviation business could push us up and beyond that.

And the other thing that Jake talked about in his prepared remarks is just the timing it takes between acquisition and deployment of certain leased assets, the Regional Ones. So as that -- if you deploy those assets sooner than you expected, that would help. And as we've seen over the last 18 months, step-based improvements in our lease occupancy rates at Regional One. If you had continued improvement in that above what we're expecting, that would also drive you closer to the top end of the range.

Next question will be from James McGarragle at RBC.

So just on the '26 outlook, you mentioned it doesn't include M&A, any contract wins or any incremental growth CapEx, but you alluded to a lot of those things in the press release and in your prepared remarks. So just following up there specifically on M&A and some of Adam's comments in the press release. Can you just talk about what the pipeline looks like now? And anything that we could expect early in '26 that could potentially represent some upside to the guidance you gave?

Yes. I mean, I'm really a little disappointed in Adam. We closed Canadian North and he hasn't done anything since. So we'll get them off his a** and working again. I'm, of course, being fictitious. We've got a couple of interesting things ticking in aviation, things that are tangential to what we do. I think if we're successful, they would be kind of like the market's reaction to Canadian North or that makes a lot of sense, we should have saw that coming. Nothing though, James, like we're going to close in the next 30 days. We're busy working on a couple of things. We're excited about it, but nothing imminent.

I think the other thing that's super exciting for us, James, is when you look at where our balance sheet is compared to where we were 12 months ago, we have significant capacity. Adam and his team do a really great job of finding really great deals for us, and we've positioned ourselves to be able to act on that quickly without needing to access the equity markets. Pro forma, our leverage is the lowest it's been in well over a decade, and we're very excited about the transformation of our balance sheet over the last 12 months and where that positions us to execute on the opportunities we see in front of us and the ones we hope we continue to uncover.

And I think just one more thing as it relates to the balance sheet, James. I appreciate this is a very long-winded answer. But with the reduction in leverage and the continued growth of the business, I think that puts us in a strong position to tap the bond market in the future should we want further funding beyond our banks syndicate. The interest rates in the bond market are lower than what we pay. And I believe that we would be viewed as investment grade. So that's something we'll work on in the next year about getting that in place.

But I would point out also that the strength of our performance has brought in international banks looking to join our syndicate, whether they be from the United States or even Asia. So our ability to grow the syndicate in line with our business is also there. So we're not dependent on the public debt markets to grow either. So it's a super exciting spot for us with our balance sheet because we have so many options to fund growth when the right contracts come like in Australia win, like ISR for the Canadian government, those kinds of things. We're in a position where we can pull the trigger so fast.

And just to follow up. You mentioned ISR. Obviously, the Australia, you talked about some opportunities in Canada and in the U.K. But can you just talk about the opportunity more generally? Because in the past, you've kind of flagged some other opportunities in Europe. So kind of where you see that going in the next couple of months and in the next couple of years and how you're positioned to maybe potentially have some wins outside of that Australia, outside of some of the Canadian opportunities that you've spoken about.

Yes. James, it's Jake, and I can take that question. Again, two parts. First, there's opportunities with existing contracts. In every ISR contract that we have, we're in discussions in either expanding scope or scale of those contracts in terms of duration. Secondly, we're in discussions and well down the path with a couple of European governments, one, I'd like to say that we're close. And again, as Mike said, when this comes out, hopefully announced, it will sit there in the markets, well, yes, this makes sense. Absolutely.

So we're excited about that. We're talking to folks in Southeast Asia as well. Unfortunately, the instability in the world drives demand for greater situational awareness and thus ISR activities globally. So we're well positioned for that, whether it's directly positioned with aircraft or with sales of our software system on to unmanned aircraft vessels, land vehicles. So again, we're excited about the opportunities broad-based across that sector.

Next question will be from Matthew Lee at Canaccord Genuity.

Maybe back on Manufacturing. Just it feels like margins have been a little bit lower this year than we're used to seeing, especially given the success in the high-margin mat business. And I'm not holding to anything, but when you think about the medium term, where do you think the EBITDA margins of that business should be? And what has to happen to get there?

I think over the medium term, you'll see material increase in the margins. It's really going to come from a couple of places. When the leasing of -- or the rental of mats in the Canadian market expands towards the end of next year, that's a very high-margin business. And so you'll see that drive margins. And then the other thing, quite frankly, is the window business. Right now, it has three big challenges. One, the work we booked in a couple of years ago, it's soft. It's at lower margins. Two, we're not efficiently running the plant at full capacity. And three, we're carrying people that we don't need based on today's level. So as that returns to normal, you will see us add tens of millions of dollars in margin EBITDA, and that basically flows through straight to the bottom line because there's no new capital required.

And so that drives the top line, drives increases in the margin line and it drives the EBITDA line. Those two things will be the main drivers, I think. When things were tough, to keep our people working, we took lower margin work in the window business knowing what was going on in the industry, wanting to keep our production. And people have left the industry. So as this turns back up, there's going to be less players and we're the best equipped one to deal with it. So -- and one of the things I really want to make sure people understand is EIC was built on the concept that not everything is going to be perfect at the same time. And so we're hitting targets. We're increasing dividends. I mean, we had 17% increase in earnings per share this quarter even with all the new shares from the conversion of the strengthening of our balance sheet with windows basically not in a position to help.

That's not going to be the same all the time. I can tell you at the beginning of COVID when the airline struggled, the window business carried us. And so you're going to see -- and you put on the window business, some more growth in the matting business drive the margins as we go forward. And whether that's -- that's likely not early next year, but it's coming out of next year into '27. And those lower margins in '26 are fully factored in to the guidance we've given.

Yes. And maybe just to add on the Access Solutions business. So that one is really, as we talked about, is like the deferral of projects that pushed out from Q3 into the fourth quarter and into early 2026. So we do anticipate sort of the expansion of margin as those mats go on rent. And then the long-term tailwinds about sort of the nation building and all that's going to require access matting. So very excited about the future.

Okay. That's helpful. And then maybe just a quick one, maybe for Rich. A philosophical question on maintenance and growth CapEx. When you think about refreshing the fleet for Canadian North, to me, it seems like it's to capture incremental revenue. So how do you think about that so that the new fleet of maintenance and growth CapEx?

Maybe I'll jump in, Rich is just calculating something. When you look at Canadian North -- he's pulling up our actual numbers. The Canadian North investment, we knew that under the previous ownership, they made the decision to defer cash investments. And so they were renting engines instead of overhauling engines. They were doing -- so their planes were fully safe and fully maintained but they weren't doing them on a contractive basis because of capital restrictions. And so we've got engines overhaul. We've got landing gear overhaul. And that stuff is, by our definition, purely a maintenance CapEx. Now it's actually absolutely, in an absolutely transparent world, it's maintenance CapEx that we would have done over the last 2 years, not now. We're going to catch up.

And that's why I said we're going to take a little bit of a period to get to our 15% because we're going to make those investments. When we bought the company, we knew those investments were required. And so there's not a surprise here, but it's part of the process. But you're also hitting on a key other factor. There's opportunities within Canadian North to switch to a more of a combi fleet, get rid of some pure freighter aircraft and replace those with combination passenger/freight aircraft. That will take some investment. And to the extent we do that, we would view that as a growth CapEx because it's going to generate new revenue because of that investment.

It's not big dollars and we're not -- because bear in mind, you're going to trade off pure freighter capacity to buy the combi capacity. So there will be the investment in some aircraft, but that would flow through our growth line in the future. That's not part of the maintenance CapEx that was really factored into the purchase price when we bought the company.

I think the one other thing I would just point out when we're talking about capital, that's really pointed to your growth and maintenance split that Mike has already talked about, but just certain investment decisions that they've made over a period of time because of their capital-constrained nature, specifically finance leasing certain assets, we'll buy those out and did that during the third quarter. And just deploying our balance sheet, having a lower cost of capital than they had provided us with the opportunity to be a little more efficient.

But to Mike's point, the growth versus maintenance split, when we look at that, we've looked at it consistently with how we've looked at our ongoing businesses and notwithstanding that we had to take it on the chin a little bit for 6 to 9 months here. We thought that was an appropriate way to disclose it so that folks didn't think there was additional growth coming out of something that was really getting their fleets into a spot to drive that consistent cash flow.

The next question will be from Krista Friesen at CIBC.

I just wanted to touch on, I mean, obviously, there's a lot in the budget as it relates to the North and to defense. But do you have any comments around the accelerated depreciation in the budget and if that's something that you guys are excited about?

Yes. I mean, the accelerated depreciation of the budget will let us maybe take on a couple of projects that might not have hit the threshold the way we wanted them to. So I'm not in a position to give you specifics yet. We've only had a couple of days with this and we've locked our rockstar tax department led by [ Marley ] into a room and they're working on a couple of these things. But it's very exciting for us that the government wants money to go back in to the Canadian economy and they want to be specifically Canadian.

And I just want to harken back to that ISR opportunity here because when you look at our ability to surveil, we would take a Canadian-made aircraft, the 2400. We put Canadian-made equipment on that aircraft. We'd adapted in Canadian facilities. We'd fly it with Canadian pilots out of Canadian facilities with investment from Inuit partners because this is taking place in the North. So I'm not sure we can have a better fit with what the government is trying to do than our ISR opportunity. And quite frankly, there is no one else in the country who could do this.

And I think one thing, Krista, just to point out, when we think about returns on an investment that we look at, we're always looking at a 15% unlevered pretax return. So while this won't change the way the returns that we're generating because we're going to continue to look at them the same way we always have since our inception, it will make the economics better for us to get the tax deduction faster.

Right. Okay. That makes sense. And then maybe just another one on the budget. I noticed there were comments there around Northern medical access. Is that something -- like will you guys play a role in that? Or are there conversations that you've had there?

The discussions thus far are preliminary. But to be honest with you, I wouldn't suggest that we play a role, I would suggest we play the role. We have been the sole provider of medevac services to the Government of Nunavut for decades. And we're in the midst of negotiations now on a new long-term contract with enhanced services, intense care for the Northern people. And so yes, we will be smack out in the middle of that.

I appreciate the color. Congrats on the quarter. .

Thank you.

Next question will be from Tim James at TD Cowen.

My first question around, again, Canadian North. And Mike, you talked earlier on about kind of the charter business and the contribution from that here in the third quarter. It sounds like it was fairly meaningful. How do you factor -- and it sounds like you're kind of going through a bit of a review on the plan for that business and how strategically it fits over the long term. How do you think about or factor that decision into your guidance for next year? Or not to say that it's maybe material, but when we think about the guidance range, it probably has enough of an impact on that. Could you just discuss what's factored into that when you think about 2026?

Yes. I mean, it's a really good question, Tim. The charter business in Canadian North is different than our charter business anywhere else. This is long-run 737 pavement-to-pavement that WestJet could do it, Air Canada could do it, Nolinor could do it. There's lots of people that could do it. And as a result, it's much more commodity-like. The margins are very small. And the contracts are old. And because the contracts are old, everyone knows what aviation inflation has been, the returns on the old contracts are very thin.

But at the same time, like the first LNG project is coming to a close. And so that means revenue from that will decline. That's factored into next year. But the margin impact is de minimis. Now we are in discussions with the people in terms of the second phase of LNG. And we could do that at a price that is acceptable, we will continue to do it. But the aircraft release, and if we can't do it at a return that matches what EIC wants to do, we don't need to do this business. We effectively didn't pay for it. And the reason I say that is we paid asset value and most of the aircraft that are utilized in this business are these aircraft.

So if we didn't win it at the right price, we would just move out of it. We'd have no losses and no write downs. There's nothing. But it's a big opportunity if our team is successful in negotiating new contracts to generate new EBITDA that isn't reflected. So it's got an upside, not really a downside. Did I answer your question?

That's helpful. That is helpful, yes. My next question, just want to confirm two things quickly here, actually. The 2026 guidance came up earlier. You're not assuming any M&A in there or any sort of incremental growth CapEx. But does that guide take into account EBITDA from currently planned growth CapEx? I'm assuming that's the case, but not any unplanned additional growth CapEx that you may kind of announce or plan in the future. Is that the way to think about it?

Yes. It includes the stuff that we're underway with this year. So we're just finished off our flight simulator for our King Airs in Winnipeg. That's going to generate revenue next year. So that's in there but it's paid for. It includes the Newfoundland contract of the medevac contract. It includes the additional aircraft that we've added to our leasing portfolio in Regional One, ones that are completed and the ones that will close during the fourth quarter. So there's nothing in there for growth beyond the start of the year. Whatever we add to that will be additive to the guidance.

One of the things we like to do, and this is very cultural within EIC, and I appreciate we might be a bit of an outlier on this in the public markets, is I don't want my team's feeling any pressure that we need to X dollars to get to our budget. We don't have to invest anything to get to our budget other than our maintenance CapEx and finishing the projects we've already started. So when we get, for example, the Spartan plant up and going, that's going to cost us $60 million or-so, but that's 100% additive to the guidance when it gets up and running. It's not a 2026 example.

Adam has no targets for acquisitions. He has returns he needs to generate when he finds one. But that way, when we talk to the markets, it's not about something we haven't done yet. And it's part of the reason I believe we've been quite reliable in hitting the numbers we've told the market about. It's because we base our promises based on what we know we have, not what we aspirationally think we will. Having said all that, we aspirationally expect we're going to do some things that aren't in this number.

I think the other thing, just we talked about it earlier in the call, but just for avoidance of doubt here. From a growth CapEx perspective, for next year, we still also have the 4 aircraft that will be delivered for the Carson Air contract. And those aircraft that they're displacing will be rolled into the Newfoundland contract.

Okay. I assume the EBITDA coming from that is in the guide for '26?

That is correct. That's in the guide because it's a project we already announced.

Okay. Very quickly, Mike, you cited earlier kind of a $50 million approximate sort of normal business for systems and $20 million for matting. This was in reference to a question earlier. Is that in reference to EBITDA? Is that those two dollar figures you were talking about in very round numbers, I realized, it was an EBITDA reference?

Yes. I mean, yes, but it's also effectively an EBIT number because we're already paying the dollar already. And there's really -- the only net cost would be your working capital costs because you're going to have receivables. But other than that, that ramp up -- and quite frankly, the number in the window business will ultimately be more than that with the synergies that have been created by Darwin and the teams at Quest and BV by streamlining production. You'll see that when those plants start running anywhere near capacity.

And just to clarify, those numbers are additive to where we are now, not the run rate for that business.

Okay. Sorry, I'm going to try and sneak one more in. Mike, you're highlighting kind of the opportunity that you see coming in trading in the 737 market for Regional One, Should we think about that market -- and obviously, that's a huge sort of potential market. How do you think about the margin profile of trading in that platform versus the regional platforms that you focused on to date? I mean, is it any different? Or does it not really matter in that type of business?

That's a great question. And the short answer is we're not there yet. We're going to sell to ourselves first, figure out what we can do. We're going to build up what we could buy, 737 that. This is not something we'll jump on. It's not like cliff diving, we're going to jump in and go all the way we want. It's more like stepping in the kiddie pool. We'll get our ankles wet first and we'll grow, and it's exactly how we did it with the Embraers.

The model we have at Regional One is going to work with the 737s. But the key thing that's made Regional One so good with Hank and the team is they make sure they know what the exit is before we get in. We always know we can make a profit by parting these things out. We're not there yet on the 737. But we now have a whole bunch of data we didn't have before. And quite frankly, the size of that market so big. The parts stuff will be more efficiently priced, which probably means slightly lower margins, but the ability to gain market share in a massive segment like that, is so exciting.

And I mean, quite frankly, Hank Gibson, the guy who runs Regional, once spent 15 years in the Boeing world. He had -- this isn't his first rodeo. So this is something I think you'll hear us talking about for the next 20 quarters as we slowly grow this business.

Next question will be from Jeff Fenwick of Cormark Securities.

I wanted to focus back on the ISR conversation. And maybe first, just, Mike, you offered up some commentary that it's relatively easier to put that effort to work with the Canadian government in a relatively short term. So I guess just help us understand that. Is it a case where this isn't about putting out another RFP, but maybe there's an opportunity just to amend the existing sort of contracting that you have with the government is kind of the key to moving it along?

Again, I got to be really careful that I don't tell the government what they're doing, but we have proposed something through them without an RFP. And there are certain ways the government could do new projects without RFPs if they hit certain thresholds, largely driven by how Canadian they are and whether there would be multiple people capable of doing it or not. And we think we hit most of the -- well, not most, all of the criteria to do this without an RFP. But to be clear, the federal government hasn't told us that's what they're doing. We're in [indiscernible]. I mean, you're closer to that than I am.

Yes. Keep in mind in the budget, it was just announced with the formation of the new defense investment agency, and that's the clear mandate of that organization, how to put capital to work faster than in previous practice. So you've got to appreciate that was only really formed 30 days ago. And obviously, we've been in contact with the bureaucracy and the government ministers responsible for that. So we're encouraged by the initial steps the government has made. They're making the right signals. But again, we're somewhat at the mercy of them as a pacing function.

Okay. That's helpful commentary. And then, Jake, I wanted to circle back just on the one comment you made reference to potentially providing some solutions in the ISR into the unmanned vehicles. So when I kind of survey the industry, there's clearly a big focus on the opportunity in drones as being a cost-effective solution for a lot of different countries around the world. So on the one hand, I guess you could view that as a competitor to the sort of solutions you've been putting out today. But I know that the CarteNav is a pretty flexible platform. So maybe there's an opportunity there as well. Like how do you kind of balance those two things in the context of that drone market?

Sure. So great question, Jeff. And I think drones are a solution -- is part of the solution. It's a tool in the box. And if I look back 10 years ago, there was a lot of commentary about the manned aircraft are going to be substituted by unmanned. And that's really not the case. What we're seeing today employed in a lot of regions is what's called a system of systems, that really is a woven network of satellite information of manned aircraft and of unmanned aircraft. And it's really taking the data of all the platforms, merging that data and taking the data and creating insights.

And that really is what CarteNav, our software product, is great at. We're using that in the U.K. Home Office, for example, where it's a layered approach to generating the insights needed for decision-makers. And so while we see each type of platform is good at certain things, they're not good at others. And that combination of things, particularly in a marine environment where you've got long space and time constraints or in Canada's North, the same thing. So it's going to be a combination of all. We're excited, again, by the employment of CarteNav on certain unmanned systems, but we don't feel necessarily any of the manned platforms are a threat. It's all part of the similar solution.

I think that a way to look at this is when you look at freight delivery. Within the cities, you've got couriers who are running around in Priuses handing envelopes. You've got the Amazon vans with the big high roof handling packages. And then you've got semi-trailers and planes moving it from city to city. One doesn't replace the other. They're all parts of the system. Drones and fixed-wing aircraft each have their area where they're better. When you're flying into a dangerous place, if you could do it without a person that's an advantage.

And I was just going to say the comment thread through it all is the information generated and the information handling system, and that's what CarteNav's creating at. And that's where we're seeing significant adoption across all segments.

Next question will be from Konark Gupta at Scotiabank.

I wanted to first clarify a few things on the 2026 guide. So good to see another ton, by that $100 million EBITDA growth back to back. Seems it's mostly driven by the Aviation segment. Is that a fair characterization? I mean, Manufacturing might grow a little bit but not too much as compared to Aviation.

That's absolutely fair, Konark.

Okay. And seasonality wise, do you think -- I mean, this year has been very similar to last year. '26, do you see any significant changes in seasonality?

The interesting thing is Canadian North is exactly the same cycles as Calm Air, Perimeter, PAL all the other one of our airlines. So Q1 is always going to be the weakest. Q3 is always going to be the best. The only thing that has changed that a little bit is Spartan, it doesn't really have a slow first quarter. If anything, they have a slower Q3, Q4 because it's so hot in the South, it actually slows some of the work. But with the exception of the Spartan, the seasonality of our business really hasn't changed.

Okay. And the windows business, I know and I appreciate the challenges I think you guys have been facing for the last little while here. I hate to be devil's advocate on this one. But when -- what will take you to make a tough call on this one?

What would -- I think tough calls, I didn't believe it. EIC is doing really well with windows not contributing, but they're not hurting us any. We're not losing money. It's not like we're feeding it. And if I wanted to shrink it down to make it even more cost-efficient, we can lay people off, we could do stuff. But the simple fact is if you look at the competitive landscape in that business, the number of companies that have left the business is dramatic. And we're not going to not build high-rise apartments for people in big cities.

In Canada, this is the result of a hangover of building 500 square foot condos that people were buying and renting out. The market didn't build what the users needed. They built what was easy to finance. And we have a hangover, and that hangover is not over yet. That hangover is not nearly as bad in the U.S. And that's why we see more life right now in the U.S. than we do in Canada. But ultimately, that's coming, Konark. And if I got to wait 12, 24 months to get there, the $50 million in EBITDA that I know one can make in that business is a big prize for no net investment.

I'm not going to trade out of it for the sake of not having to talk about it each quarter. Our business model is based on being able to carry things when it's a challenge. And I believe I've got the best management team there is in the window business. So I'm prepared to wait.

And maybe a couple of other things, Konark. So like we are strong believers in the business, but we are seeing positive demand signals in certain geographies, whether it's sort of in U.S. or certain cities across Canada, Oftentimes, we're very focused on the Toronto market, but there is a lot of positivity in some of the other markets across Canada, where we're seeing lots of opportunities in projects. So we are starting to see that turn. It's just a bit of a function of how fast it's turned. And can we get developer costs down. Interest rates are coming down.

So we are seeing some of the big demand drivers existing. And as Mike talked about in the call, we are also seeing in Canada a big shift similar to other geographies moving to rentals as opposed to condos, which is a different form of financing. But we think that the capital exists there. People are just waiting on the sidelines to book the projects because we're seeing a huge number of inquiries continue.

And ultimately, this just comes back to EIC's strategy and how we've conducted our businesses over 20-plus years. In the early days of COVID, no one was asking us whether we were going to sell our Aviation businesses because they were challenged and windows was carrying the day. And ultimately, we're at the low point of the market. It will come back. And we're excited when that when it does, we'll generate returns that fall right to the bottom line. And ultimately, there may be another challenge. At that point in time, we'll deal with it the same way we always have, focusing on the long term and making decisions so that we're profitable over the long term, not maximizing short-term profitability at the expense of the long term.

If you look at Calm Air in sort of 2011 and 2012 period, it was a lot worse than this is. We were feeding that business. And now it's amongst my best performing airlines. And so this really is part of the EIC model. Not everything is going to work at once. But quite frankly, it doesn't need to.

And the last point I'd make is the fact that we have confidence in the management team. As Mike said, we feel we have the best windows management team out there. And as we look at things like infrastructure build, schools, hospitals, we're seeing them pivot towards that direction. So again, we hired good management teams. We acquire companies with good management teams and expect them to captain the ship through a little bit of rough water. And we're there to support them.

Okay. No, those are very insightful comments, and clearly you have seen that strategy work. So all the best for that. And if I can just ask one more quick before I turn over. In the budget, obviously, there's a lot of great things, I think, for you guys to talk about. But one thing I kind of noticed there as well, I think these guys are also looking to build some sort of all-season roads up north. And I know you have a bunch of airlines doing sort of work and seasonality. This is more pronounced, right, during the summertime. But what do you think about that being a small risk to your business up there in the North?

There are certain places where they will probably build all season roads. It's exceptionally difficult. And it's not a project that's built in 1 year or 2 or 5. You're talking -- some of these are decade-long projects, where they're going to get built, how they're going to get built. Just as an example, and this is just an anecdotal example. There's been discussions of building a road to Churchill. Well, they're having trouble getting the rail line functional because the permafrost is melting and it's turned into a bog.

And so the railway keeps sinking into the ground. Building roads over that's exceptionally difficult. And so undoubtedly, if the government is committed to this, there will be some of that done. But we don't view that as being a material piece of our business. Some of the places we fly are so remote the cost per person of building a road is prohibitive.

And not to mention a very difficult environment, you can imagine snow clearing thousands of kilometers of roads between communities that, as Mike pointed out, have very low population density. It's something that we just don't see that will necessarily be a factor.

Next question will be from Amr Ezzat at Ventum.

Just to press on the guidance. I mean, you guys announced it shortly after the federal budget, and that included all the good stuff you mentioned, new defense spending, critical mineral spending and so on. Just to clarify, were any of these tailwinds embedded in your guidance? Or should we treat it as a clean base case with upside tied to procurement activity materializing?

That's the easiest question of the day. Yes. It doesn't include any of those things and that's the base case, that as these things become operationalized, they'll be additive to this guidance.

Love to hear that. And then if you'll allow, just one follow-up. On the Canadian North charter operation, I mean, I think we all know that the returns are thin like you guys mentioned, old contracts are rolling off. But can you walk us through the framework you're using to evaluate whether that business is worth keeping, especially how you weigh your return thresholds versus strategic access and customer stickiness.

It's a bit of an art form as it relates to charters because we don't own the assets. They're leased. So we're not putting the capital out. But quite frankly, we look at it the same way. If we own that aircraft, are we getting our 15% return? And that's kind of the way we factor lease payments in that. At the end, is that enough to do the work. I mean, the good part is within Canadian North, it provides good jobs. It spreads our overhead over more flights. So there's lots of good things about it.

But the advantage is in the way we acquire Canadian North, we said, look, we've got to fix this up so that the returns match their assets. And we knew that LNG 1 was coming to an end. We knew that. And it's quite clear LNG 2 is getting done. And we have great relationships with those people, and so we're very optimistic that we'll be successful in being able to do this. But as I mentioned earlier, this business is the most commodity-like of anything we did. We could be replaced by Nolinor, we could be replaced by Porter. We could be replaced by anyone who could fly a jet spot to spot. There's facilities in there.

It's not the hard business the Canadian North does everywhere else when they look after Inuit people in remote communities where it's an essential service. This is much different. It's much more akin to what Air Canada does than to what we do. Now we have some advantages because of our First Nations ownership of the communities and those kinds of things that help us. But quite frankly, it will be disciplined. If it makes economic sense, we'll do it. If it doesn't, we won't. And because of the way we bought it, there's no downside.

And then I think you could see it, it's not really a charter question but it relates to the Canadian North thing. It's very seldom that we buy something that's 100% asset-backed, including an adjustment for deferred taxes. And so that's why you see higher depreciation in the statements perhaps than some of the analysts are because we don't often buy things that have that much asset backing. But in the long run, that makes it way better because we own everything we've got. We don't need to make investments. We just maintenance CapEx, which we've talked to you about. So this Canadian North business is such a great fit for EIC. And whether we do the charter work or not, we'll see. We'd like to. We're going to try to. But if we can't, we still got everything we paid for.

Fantastic. No, I appreciate that color. Congrats again on the quarter and I'll pass it on.

Thank you.

Next question will be from Chris Murray of ATB Capital Markets. .

Just this is more of a, I guess, a semantic question or a thought process question around the balance sheet. So Mike, you mentioned that you're kind of working through getting to an investment-grade rating. Historically, I'm thinking about you guys have always been thought of as sort of a diversified financial company. What are the rating agencies telling you about what's going to be required for you to get that investment grade? Is it going to be kind of end markets you're supporting? Is it going to be leverage levels?

And really, how do you think about what that does? Because a lot of the time, what happens in the debt market drives what we're going to think about in the equity markets longer term. So just thinking about how to think about the company over the next 3 to 5 years as it evolves.

I got to be very careful how I answer this question because we have had discussions with the rating agencies. I'd start by saying we're confident that we will fit into the investment-grade window. I think the thing that really helps us with the rating agency is the percentage of our business that's tied to government contracts or to dominant-market positions where it's an essential service. You see our investment-grade argument is made in 2020.

When other people in the aviation space or the manufacturing space got crushed, our EBITDA fell by 10% and then was back up immediately in the following year. I think it's the resilience and the reliability of our cash flow stream. And then, quite frankly, we have a 20-year track record of discipline on the amount of leverage we place on those types of contracts. And so that, combined with the -- I guess, the way I can describe it is we've grown up and outgrown our convertible debentures. They've been great to us. We didn't get the Series N because I didn't like them. They were great. They want to sell equity at a future price.

The ones we're calling now are only, I think, 3 years old, and the stock price was in the $40s at the time we did it, low $40s. We're selling equity at $60. So they'd be good to us. But as we've gotten bigger, we will be able to access the bond market that are materially lower than what we paid for convertibles and give us a much more "traditional balance sheet" for a material public company.

Yes, I think the other thing, Chris, when we talk about having the conversations and what we need to make us successful in that endeavor is really telling the EIC story we tell every day anyway. We're not a traditional airline. We don't fly point-to-point in Southern centers where there's material competition risks. And that story moves you away from an airline's rating methodology into a different rating methodology, where our leverage profile is considered conservative.

And it's really -- to Mike's point, we have a 20-plus year track record of maintaining leverage in a band that is viewed as conservative or modest. And I think it's that track record and reinforcing that track record with the rating agency that we prefund things in the equity market if we need to do something. And we don't go slash and raise leverage to 4.5x and promise to pay it down over a period of time with cash flow. And I think it's really that track record that really drives equity story that will be just compelling in the debt markets as well.

Okay. To that point, and I guess, the next piece of this question is just even looking at the equity stack. I know you've always had the NCIB kind of as more of a defensive tool, looking at some of the history. But is there a point where you start just starting to buy back stock, expectations that if you do get that re-rating, maybe the stock you're buying back today is going to be less expensive than it would be in the future? Especially you've managed to put out a fair amount of dilution with all the converts. But with that being said, just any thoughts around that? And if you can also maybe talk about the DRIP as well and where that sits, that would be great.

That's a good question. And it's one, which is going to be weird for me, I have a relatively short answer. We look at buying back stock as the alternative to deploying the money on future projects. As long as I've got things I can do with the money, whether it be Australia, the Government of Canada, an acquisition for Adam, the plant for Spartan, that's the first place our money goes. If I don't have enough of those and I've got some left, we will use it to buy back, stock but only when I don't have the ability to use that as the base for my growth.

We are looking at the DRIP. It creates uncertainty every quarter because people short the dividend and play games with it to get to the 2% discount. Is that right, Rich? 3% discount. So we are looking at whether maybe we've outgrown that, maybe we don't need it anymore. No decision has been made at this point and not only me, until we get to our year-end Board meetings. But there's definitely at the very least a thought that maybe we've outgrown the premium that we pay on the DRIP.

Next question will be from Gary Ho at Desjardins Bank Capital Markets.

Just one question for me. So you talked about the build-out of a second facility for your composite mat business, $50 investment. Just any color in terms of the increase in composite mat production with the second facility? And what are your thoughts on offering these through a rental leasing model? And maybe talk about geographies that this new facility could open up/

I'll start with the last one first. We're going to be in that Southeast corner of the U.S., somewhere between the resin factories in Louisiana and Texas and Florida, where we are now. So I think you'll see us in Mississippi, Louisiana, those kinds of places. We're very close. I really had hoped to announce on this call where it was going. We haven't finalized a lease so I don't want to limit my negotiating capability by saying exactly where it is. But it will be somewhere because, well, those mats are used across the U.S. Our customer base is more East Coast driven. And so we want to stay close to the resource we need to make it, which is the resin and close to our customers because mats are heavy. And shipping them, I'd rather not.

In terms of the lease portfolio concept, that's part of the reason we're building this, as we'd like to eventually build out our rental mat business like we have in Canada. It's impossible to do right now because we're selling every mat we can make. And I'm not going to not sell something as we're the smallest guys in this business. In the U.S., there's really 3 manufacturers, and we'd be the smallest but we're also the fastest growing. We want market acceptance so we'll continue to put the product out.

And when we build this factory, it's quantum bigger. It's capacity will be, depending how many ships you assume, 2, 3x the size, perhaps even more than that. than our existing factory, although we certainly won't go from nothing to full blast in that factory. We'll phase it in over time. But we definitely would like to take some of the stress off our Florida plant. The people we have there are doing a phenomenal job of running the plant 24 hours a day, 7 days a week. That's not something that you do. And so the sooner we could get some additional capacity into the system, the better.

Next question will be from Razi Hasan at Paradigm Capital.

Just two quick ones. On Canadian North, can you disclose what percentage of the revenue comes from the charter business?

It varies period to period, but just let me -- I've got to see out here. It would be a 1/4?

Okay. Great. And lastly, if we think about the Aerospace business representing about, whatever, 11% of 2024 revenue. Given your comments on defense spending and all of the potential that can come with that, are you able to maybe frame how large a piece of the pie the business plan can become? Do you think it can double from where it is in terms of the revenue contribution? Or just any color on how big this can get.

Okay. This is a complicated question, Razi, because what we give you in guidance is based on what we know, not based on what we could do. If we are successful in a couple of the negotiations we're in, the revenue from this business could double easily. It could be more than that. Australia in and of itself would do that. The Government of Canada would be a huge piece, the discussions that we're in Greenland or in other European countries. And bear in mind, none of that's in the sort of $850 million number at the midpoint of the guidance we've given you. That's all additive if as and when we win.

And the one point I'd make is just keep in mind, depending on the nature of the contract and the types of assets that are required to service those, there might be a delay while we modify the aircraft. So again, as Rich spoke to the delay between deploying capital and seeing returns, Australia is a good example where we're deploying capital for a couple of years and the contract doesn't start generating revenue into '28. So you've got a bit of a delay and a lag until you see some of the material gains through that. And as Mike said, we've not put that in our '26 guide.

And just because you referenced the revenue disclosure that's in the MD&A, the one piece that I'll just point out is that that's a percentage of revenue at a point in time. Even if the revenue within the Aerospace side doubled, we don't find to stop growing our other businesses. So it's not like that's going to go from 11 to 22. You're going to see growth within the other businesses. In absolute dollars, it could kind of double as Mike said. But you would still see growth within our other businesses. So that percentage wouldn't grow at the same rate.

Next question will be from Michael Goldie at BMO Capital Markets.

On the Northern Canada opportunity, both from an Aerospace and Essential Air perspective, how much of this would be new aircraft versus increased utilization of existing equipment? And then for the new piece, like what would the time line be to get assets up and running?

Let's break that into the two types of business. So the ISR business would be all new aircraft. We don't have -- we just deployed the last one we built in England. So those ones would be all new aircraft. The timeline could be, depending on how many, could be as short as 12 months, could be as long as 24 or 30 months, depending on how many. We can build a lot of them but our system is basically built on 1 or 2 at a time, not 4 at a time.

So it depends on how big a contract would be. But I think on all but Australia world, it's 12 to 18 months to get them up and running, although your first aircraft may be flying before the other ones go in. It's probably a phased approach. It's not like we'll wait until we have all 4 until we fly anything. You'll start flying as soon as the first one is ready.

On the regular part of our traditional airline, we have capacity in that business to add volume without investing something. And then as it comes, it'd be kind of step, like we've got X number of ATRs. We add one more, we add two more. And so there's not a big investment coming in that. There's no investment coming in the near term. And then if we decide to make an investment to move towards the combi stuff that I talked about earlier in the call, that would be a new investment, but that would come with efficiencies immediately.

Yes. And the other thing I'd say is the benefit of scale as we have multiple airlines operating similar aircraft is we have that ability to start to smooth some of those step changes. And we've got examples where we've got two of our airlines involved in servicing a specific customer where, as it ramps up, we're employing smaller aircraft from one operator for the bulk of the contract, larger aircraft to another. And then as the shoulder hits on the downside, it reverts back to the original. That gives us a real advantage to other competitors as opposed to having to go buy a bespoke asset to engage, and it might not be optimized for the volume through the contract.

Okay. And then obviously, as you've added assets, D&A up 18% quarter-over-quarter. Can you remind us how we should think about that as we go into 2026, what assets will be coming online and how that could trend?

Yes. I mean, most of the stuff that's on is in. Now what's different is, as Rich mentioned, we got 4 more of the aircraft for the BC medevac contract. I think round numbers, those are about $10 million a piece, closer to $15 million after they're fully modified for medevac and stuff. So there's probably $60 million worth of assets there. And then the variable is quite simply how many assets Regional One buys to put into their lease portfolio. We describe them every quarter and how much we bought.

But it's highly variable. Earlier this year, we actually had negative growth investment for a quarter where we sold more assets that we purchased. And so that can bounce around. So you got to kind of look at the trailing 12 in terms of the investment to work on the D&A number of that. And I think where it was hard to do on this was we don't often do asset deals. Like the Canadian North was essentially we bought $200 million worth of stuff. And so it was all depreciable, and I think that was a higher number than people thought when they did it.

No any further questions, Mike.

Okay. Well, it sounds like we're done. We really appreciate everyone taking the time and listening to us today. We're ecstatic about what's coming. We've given good guidance for 2026, and I can't wait to increase it. So have a great day and enjoy it.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we ask that you please disconnect your lines. Have a good weekend.