Mattr (TSX:MATR) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.
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Summary
Mattr delivered sequential revenue and adjusted EBITDA growth in the first quarter of 2026, driven by strong sales in wiring cables and underground tanks, with improvements in operational efficiency.
The company expects progressively stronger margins as startup inefficiencies and modernization costs decrease, with a focus on operational execution and market share gains in mining, data center, and utility wiring cable markets.
Revenue increased modestly, but adjusted EBITDA was below the prior year due to less favorable margins in the connection technology segment, although improvements were seen compared to the fourth quarter of 2025.
The company’s strategic shift to a localized supply chain helped navigate US copper tariffs with minimal impact, and rising costs in materials like resins are generally passable to customers.
Mattr anticipates a gradual upward trend in North American drilling and completion activity in the second half of 2026, with promising demand indications in international markets.
The Xerces business set a new Q1 performance record, with strong demand for fuel and water tanks, and is expected to drive a 10% production increase year-over-year.
The company renewed its credit facility through October 2030, providing funding stability, and plans to resume share repurchases under its NCIB.
Mattr’s adjusted EBITDA outlook for full-year 2026 has improved, expected to be similar to last year after adjusting for prior year one-time expenses, with a long-term goal of a 20% EBITDA margin.
Full Transcript
OPERATOR
Thank you for standing by and welcome to Mattr first quarter 2026 earnings conference call. Currently, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. To remove yourself from the queue. You may press star 11 again. I would now like to hand the call over to Megan McCracken, Investor Relations, Investor Relations. Please go ahead.
Megan McCracken (Investor Relations)
Good morning. Before we begin this morning’s conference call, I’d like to remind listeners that today’s call includes forward looking statements that involve estimates, judgments, risks and uncertainties that may cause actual results to differ materially from those projected. The Complete text of Mattr’s Statement on Forward Looking Information is included in Section 4.0 of the First Quarter 2026 Earnings Press Release in the MDA that is available on SEDAR+ and on the Company’s website at mattr.com for those joining via webcast, you may follow the visual presentation that accompanies this call. I’ll now turn it over to Matter’s President and CEO Mike Reeves.
Mike Reeves (President and CEO)
Good morning and thank you for attending our first quarter conference call today. Megan and I are joined by our Senior Vice President of Finance and CFO Tom Holloway. Q1 saw Mattr’s talented teams deliver sequential revenue and adjusted EBITDA growth. Normal early year seasonal slowness was largely offset by strong wiring cable sales into mining and utility applications, underground tank sales into retail, fuel and water management markets, and sequentially stronger operational efficiency across matter’s newly modernized North American manufacturing network. I was particularly pleased with the sequential margin progression delivered by our composite technology segment where Xerces set a new first quarter performance record across matter. Our focus remains on what we can control operational execution, technology development and disciplined capital allocation, all of which strengthen the quality and durability of our earnings. We continue to build momentum within mining, data center and utility wiring cable markets where our unique products, delivery speed and technical support translate into accretive margins and defensible share gains across our manufacturing footprint. Startup inefficiencies and one time modernization costs that have weighed on results in recent years are largely behind us, and as volumes rise, mix improves and cost absorption increases, we expect to deliver progressively stronger margins over time. It’s worth noting that recent external events have had limited impact on our organization. Our strategic shift to a largely localized supply chain during 2025 has positioned matter to navigate recently updated US copper tariff rules with no incremental effect on our wire and cable businesses, and we have not experienced raw material availability issues tied to the Middle East conflict. While we have observed rising costs position, particularly in resins, we generally have the ability to pass these onwards. Tom will now walk us through some additional financial details.
Tom Holloway (Senior Vice President of Finance and CFO)
Thanks Mike. Revenue in the first quarter of 2026 modestly increased year over year and sequentially, primarily resulting from strong production and sales of Xerces fuel and water products within the composite technology segment. Adjusted EBITDA came in below the prior year period, primarily driven by less favorable margins in the connection technology segment. When Compared to the fourth quarter of 2025, adjusted EBITDA improved on the strength of composite technologies performance. Connection technology segment revenue in Q1 of 2026 was roughly flat versus the prior year quarter with segment adjusted ebitda declining by 20% versus the same period. This decline in profitability was expected and was primarily driven by a less favorable product mixed, most notably the absence of specific project driven mining and energy related revenues which drove particularly strong results within our wiring cable businesses in the prior year quarter. This was partially offset by share gains in utility and data center end markets. In addition, higher average copper prices slightly inflated Q1 wiring cable revenue with little corresponding benefit to adjusted EBITDA. Common the technology segment revenue during the quarter increased slightly versus the prior year quarter while adjusted EBITDA increased 15% year over year. Growth in revenue and profitability was primarily driven by increased productive output and improved operational efficiency within the Xerces business which dampened typical seasonal softness as fuel and water tank demand remained robust. Turning to cash flow Q1 is typically our largest working capital investment quarter and this year was consistent with that pattern as we supported operational scaling and late quarter revenue acceleration. Accounts receivable increased with strong finish to the quarter and inventories increased as we positioned the business for the seasonally stronger middle quarters. Cash used in investing activities was primarily made up of capital spending on property, plant and equipment which was $9 million during the first quarter. This cash outflow includes approximately $7 million that was previously accrued and then paid in the first quarter of 2026. We still expect full year capital spending to be in the 35 to 45 million dollars range. During the quarter, the company increased net borrowings by $10 million on the revolving credit facility. At quarter end, the company’s net debt to adjusted ebitda ratio was 3.7x or 2.6 times if lease liabilities are excluded. This ratio reflects the impact of a larger first quarter of 2025 which included a strong result in our now divested Brazilian pipe coating business being replaced by a slightly smaller first quarter of 2026. We anticipate this ratio will move lower throughout the remainder of the year and remain committed to debt reduction activities. Our strengthened outlook, including a clearer view on likely U.S. tariff risks and impact, has positioned the Company to resume share repurchases under its NCIB during the current quarter and continuing for the foreseeable future. Subsequent to the current quarter end, the Company renewed its credit facility through October 2030. This renewal provides funding stability and additional flexibility to continue growing the business while taking advantage of appropriate high high return opportunities as they may arise. We thank our banks for their continued support and partnership. I will now turn it back over
Mike Reeves (President and CEO)
to Mike thank you, Tom From a market perspective, conditions largely remain consistent with what we shared during our fourth quarter call, with strong and rising demand for products serving retail and backup fuel, water management, power generation, utility and data center end markets. We’ve also seen constructive activity in the mining sector, particularly in Canada and certain international markets. Mining was the largest single end market by revenue in our connection Technology segment during the first quarter of 2026 and I’ll talk in more detail about it later. In oilfield markets, our customers have remained cautious despite a structural rise in oil prices. We have not yet seen a meaningful change in U.S. onshore customer spending and currently anticipate U.S. activity levels will remain relatively flat during the second quarter. However, we believe the first half of 2026 represents the cyclic low for North American drilling and completion activity and anticipate a gradual upward trend commencing in the second half of 2026. In parallel, we have seen some promising demand indications in certain international markets. With an expanding product portfolio and enhanced production capacity, FlexPipe is well positioned to benefit from these increasingly favorable market conditions. In automotive, we have observed modest downward revisions to global production expectations, with particular pressure in Europe. Despite this, we also continue to see average electronic content in newly launched vehicle platforms rise, creating an ongoing opportunity for matter to grow market share. We are watching the Middle East conflict closely and as I mentioned earlier, are seeing petroleum derived raw material costs move higher, though availability has not been an issue. That said, the potential for broader economic impact rises the longer this conflict continues. External conditions remain dynamic and we have appropriate contingency plans ready if needed. However, our focus is firmly on those things. We can control commercial execution, operational efficiency, technology development and targeted growth in end markets where we see durable demand and attractive returns, all of which contributed to sequential margin expansion in Q1. If we look more closely at our mining related business within the surface and underground mining sector, which we serve via premium wire and cable products. Our exposure spans a variety of subsectors and geographies. We benefit from a relatively consistent baseline of maintenance and repair demand at existing mine sites in all geographies which is often enhanced by project specific revenue typically tied to mine extensions or new mine initiation. In Canada and other international locations, this project driven revenue tends to have less quarter to quarter consistency. Our current exposure skews towards US and Canadian markets, although we have a long established history beyond North America and invested last year to enhance our international commercial presence within each mine site. NATO’s rugged waterproof crush and wear resistant cables are used to reliably bring electrical power to heavy equipment. From massive mobile shovels in surface mines to high speed conveyors in underground environments. Our products serve as heavy duty extension cords for some of the largest, most demanding machines in the world and are critical to keeping production running. With rising demand for copper, precious metals, critical minerals, metallurgical coal and other mined commodities, and slowly improving regulatory environments for new mine permitting in North America, we believe MATTER stands to benefit from a multi decade mining upcycle which is one of the reasons we are investing to increase productive capacity and efficiency in Amerkable’s US manufacturing facility over the next 18 months. Our teams performed well in Q1 and our outlook continues to strengthen. The pace of operational efficiency improvement was consistent with our expectations and strong commercial execution, particularly within Xerces and the mining and utility sectors of our wire and cable businesses helped partially offset typical early year seasonal slowness. As we move through the year, we expect adjusted EBITDA in Q2 will improve from Q1 supported by continued commercial success, further operational efficiency gains and seasonally favorable patterns that typically make Q2 and Q3 our strongest quarters. These factors, plus a sizable international flex pipe order which was secured subsequent to quarter end and a growing order book for our new 8 inch flex pipe products support our favorable outlook for the second half …
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