Titan America S.A. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Third quarter performance: Delivered solid performance with 6% revenue growth, adjusted EBITDA and net income growing 18% and 45% respectively, and free cash flow reached $68 million. These results reflect the strategic benefits of the vertically integrated business model and effective execution in a challenging environment.
• Segment performances: Florida segment had strong results driven by strategic capacity investments, and Mid - Atlantic region returned to growth supported by project backlog release, improved pricing, and favorable weather.
• Strategic milestone: Announced certification for precast lintel designs, paving the way to expand precast solutions, with engineering phase for the first lintel manufacturing plant underway.
• Market environment: Markets served are resilient supported by infrastructure and private nonresidential construction, and manufacturing reshoring, but residential markets are challenged by high mortgage rates and housing affordability.
• Team recognition: Recognized the outstanding performance of team members in operational excellence, safety, and customer service.

Segment Performance

• Florida segment: In the third quarter, revenue grew 4.3% to $263 million, and segment adjusted EBITDA increased 16.2% to $81 million. For the 9 months ended September 30, 2025, Florida segment revenue was $777 million, up 2% from the prior year period, with segment adjusted EBITDA of $214 million, up 8.7% compared to the prior year period, and segment adjusted EBITDA margin improved to 27.5% from 25.8% in the prior year period. The performance was driven by strategic capacity investments, especially expanded aggregate production at Pennsuco.
• Mid - Atlantic segment: In the third quarter, revenue grew 9.4% to $174 million, and segment adjusted EBITDA was $37 million, up 10.6% from the third quarter of 2024. Year - to - date, the Mid - Atlantic segment revenue was $481 million, flat compared to the prior year period, while segment adjusted EBITDA was $88 million compared to $101 million in the 9 months ended September 30, 2024, with segment adjusted EBITDA margin of 18.3% compared to 20.9% in the year - ago period. The improvement was supported by higher volumes from infrastructure and private nonresidential construction projects and improved weather conditions.

Guidance

• 2025 outlook: Now expects full - year revenue growth in the 2 to 3 percentage range and continues to expect modest improvement in adjusted EBITDA margins compared to 2024.
• Price increases: Announced price increases across all product lines in Florida and Mid - Atlantic regions effective January 1, 2026.
• 2026 outlook: Directionally expects improved conditions across key markets, but details on 2026 outlook to be provided when reporting fourth quarter and full year 2025 results.

Risks

• Residential market challenges: Residential markets continue to be challenged by elevated mortgage rates and housing affordability, with a rebound in single - family construction not expected before the second half of 2026.
• Market competition: Competitive nature of the markets poses risks to pricing and market share.

Question and Answer

Q: Can you just talk about what project backlogs look like today across your footprint more broadly? And then anecdotally, is there still some kind of uncertainty weighing preventing some projects from getting released still? Or is that kind of largely lifted?

A: On the project backlog, in the Mid - Atlantic, it's the realization of some things described earlier. Without getting into specifics of individual projects, there were general comments about data centers, major infrastructure projects like roadways, bridges, and airport work. This is what is described when describing release of backlogs.

Q: Are you guys able to walk through maybe the cadence of cement and aggregates volumes through the quarter? And then just sort of remind us what weather cond maybe looks like in 4Q compared to 3Q?

A: The business is more cyclical. In terms of quarters, 3, 2, 4, 1 in terms of profitability and revenue given weather impacts. Last year's fourth quarter had significant weather impacts like hurricanes. Expect strong improvement in the fourth quarter in Florida given the impacts last year.

Q: Strong quarter. The margins were impressive, good operating leverage. How much of that is just cost deflation, or it's really driven by some of the operational excellence and just pricing and all that good stuff you guys are working on to kind of drive profitability?

A: On cost inflation - deflation, there are offsetting things. Cost improvements come through from mitigating impacts like labor, energy, fuel, and tariffs through operational excellence and cost reduction initiatives.

Q: So I was hoping if you can give more color on the product ramp for the precast lintel. So when is the plant going to be operational? How are you thinking about the growth outlook for the product line over the next, like, 3 years? How big could this business be? And then just how to think about the profitability contribution?

A: We are on the engineering phase. We expect to have our first state - of - the - art plant towards the end of 2026 or the very beginning of 2027. We expect fast scale - up due to technology, locations, complementary products, and channels to market. This is going to be an addition to the vertically - integrated portfolio and complementary product mix strategy, and we expect substantial improvement in revenue and profitability in the long run.

Q: Could you quantify the impact in the third quarter? And what are you embedding as we go into 4Q?

A: Year - to - date through the third quarter, the impact was probably in the order of $6 million, give or take, and for the full year, something in the $7.5 million to $8 million range. Tariffs have gone from 0 to 10 to 15 during the course of the year, and the run rate gets a little stronger as we go in, although seasonal impact comes down in the fourth quarter.

Q: Looking at incremental margins, they were quite strong in the third quarter. And based on your guidance, it looks to be similar in the fourth quarter. What should we think about as a normalized flow - through going forward in 2026 and beyond given that we'll be lapping some of these spin - off items?

A: Q4 is always going to have a slightly different margin profile relative to Q3. We expect modest year - over - year margin growth, in the 30 basis point range. When talking about normalized margins, we are operating with softness in the residential markets which represents roughly 1/3 of the industry. Once the residential sector rebounds, we should expect substantial margin expansion.

Q: I just want to come back to the segment margins and particularly on Florida, you called that aggregates expansion plan. I just wanted to get a sense of how much further there is to go on that, both in terms of the expansion and kind of how far you are through it, but also in terms of the additional margin benefits you could get from that?

A: The aggregates expansion is step - wise. We increased capacity in aggregates with investments, especially in Pennsuco. The next increment could be step - wise, and we expect the next incremental margin around 2027. There could be inorganic initiatives as well.

Q: You mentioned the price increases that you've sent letters. I don't know if you'd be willing to give us some indication of the level that you guys are asking for. And also, at the beginning of this year, obviously, there was a delay in getting those price increases through. I don't know if you shave any insights on what some of your competitors are doing and if there's a risk to getting those through at the beginning of January.

A: For cement across all areas, $12 per ton as of January 1. For ready - mix concrete, between $10 and $12 per cubic yard. For aggregates, $3 per ton. Fly ash about $6 per short ton. For common block, $0.08 per block. Success depends on continued trends in demand in infrastructure and private nonresidential. Rebound of residential will allow more momentum, but at this point, hard to make prediction.

Q: It's been about a year since you guys first talked about some of the green cement targets to the Street and some of the adoption expectations there. Just curious how you're seeing adoption unfold relative to some of those initial expectations.

A: We are proceeding according to our plan. We have already qualified through the Department of Transportation, 1T cement with different cementitious materials and for different applications. We are approaching a level between 3% and 5% of our total production on an annualized basis that is coming from 1P. We are utilizing these products on high - performance concrete products and testing them across different high - performance applications. Adoption is happening on the end - use level through downstream products with strong adoption in the marketplace.