Joe Lambert: Yes, I think there is always opportunities. Again, with low share price and things like in these positions, it’s very hard to find accretive deals. But certainly, if there is another MacKellar deal like available, we would certainly pursue it. We are predominantly focused in North America and Australia now but we’ve also considered South America as a potential, in particular, Chile. So if there was an opportunity there, we do see that market as having become more stable and having some growth opportunities going forward, especially with their strong copper and gold markets down there. So we keep an eye out for those. And if the opportunity comes, it’s another deal that’s highly accretive like that, we will certainly pursue it. It likely — like I said earlier, they don’t develop overnight. They’re usually 1.5 years to 2.5-year kind of processes. So we really wouldn’t have expected anything even if it was on our desk today to affect anything this year.
Operator: Your next question comes from the line of Karthi [ph], a private investor.
Unidentified Analyst: Thank you so much for this conference call. It’s been a fantastic run with you folks so far. Just had a question when I look at Joe’s letter, he’s mentioning about the contracts becoming more about time and material. So just wanted to understand what is the implication on your EBITDA margin or any of those margin metrics that you want to talk of when you move towards contracts which are more of time and material in nature.
Joe Lambert: Yes. I was in particular, I think I went into even more detail on the year-end stuff that the — the work in the oil sands that was typically more weighted towards unit rate work and unit rate work, we got paid a fixed price per BCM material or set unit of material we move but we were all the operating productivity and weather risk. We have a lot more equipment rentals, maintained rentals maintained and operated rentals and time and material work than historical. I’d say just rough numbers historically, we were probably 75% unit rate work. Now we’re probably more like 25% to give you a scale of things. And when you go into the rental side and it actually — we don’t have the longer-term commitments and we don’t have the upside potential but we’re also going to have the downside potential.
So typically, what you’re going to see is higher EBITDA margins and lower risk. The net margins have been the same. But because you don’t have operators, labor in some of the stuff and you’re not wearing some of the operating costs, your EBITDA as a percentage of the overall rate is higher. Does that make sense to you?
Unidentified Analyst: Sure, Joe. Thanks for this, very helpful. Thank you.
Joe Lambert: No worries.
Operator: Your next question comes from the line of Tim Monachello of ATB Capital Markets.
Tim Monachello: Yes, just a follow-up here. I’m wondering if you can help us contextualize the guidance range relative to your utilization targets? Like what’s embedded in your guidance on the top and bottom?
Jason Veenstra: Well, our — we’re expecting to get — when we talk about 75% and 85% [ph], we’re expecting to be above those marks at the end of the year. So if you want to know how it ramps up, I would just follow how we put the EBITDA split in there and follow that on utilization and with it ending at 75% or 85% [ph] in Q4. So I expect we’re ramping up to probably a — or Q3 peak and then it fairly levels off in Q4 or a slight dip in Q4 but we expect to be right there in that range.
Tim Monachello: Okay. So like the midpoint of your guidance would include you achieving those utilization targets? Is that the right way to think of it?
Jason Veenstra: By the end of the year, yes. So it’s not — we’re not going to be at 75% in Q2.
Tim Monachello: Like you won’t do 75% on average in Canada in ’24?
Joe Lambert: Not on the average, we will get to 75% by the end of the year and we would expect to be able to hold that through next year.
Operator: No worry. Your next question comes from the line of Phil Goodrich of Goodrich & Company.
Phil Goodrich: So the tax rate gets — seems to move around a fair bit. What could you say just for modeling purposes, a reasonable nominal run rate for taxes would be? And how much would you call out as the cash tax versus deferred?
Jason Veenstra: Yes. Great question. We’re at about 30% in Australia, 25% in Canada. So you could use a modeling rate of 27.5% if you wanted to put it blended. And about half of that is cash taxable. Australia is cash taxable given their history and their — they don’t carry loss, carryforwards in the Australia regime maxes out their tax depreciation. So we do pay cash taxes in Australia but we don’t have any cash taxes in Canada this year. We expect to pay some cash taxes in Canada in 2025.
Phil Goodrich: Okay. And just review — I know you’re a different beast in your word fix or 9 months ago. So help me understand the seasonal pattern that we should see play out quarter during — over the course of the year.
Joe Lambert: It’s — I guess, it’s a unique year. We would expect when we get into next year, we’re going to be a lot more consistent quarter upon quarter because of the transition and the way the contract was awarded to equipment movements in oil sands, we’re actually — Q1 is our low this year and we ramp up to a Q3 and with a slight drop in Q4. And we’ve provided quite a bit of information around 45% in front half of the year, 55% of our EBITDA in the second half — and then I’d say that going forward in 2025 and I don’t have those exact numbers but my expectation is that it’s a lot more consistent quarter-from-quarter and we’re not going to see 10% variances between quarters. We’re going to be seeing single digit.
Phil Goodrich: Great. Thanks. So pet the picture of long-term capability growth capability for the company going over a number of years. And clearly, you have some vision to this, especially given your large backlog. How do you see the company being able to grow organically and whatever tuck-ins you have in mind over the next 4 or 5 years?
