Titan America - Earnings Call - Q2 2025

Transcript

Operator (participant)

Greetings, and welcome to Titan America's Q2 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Daniel Scott, Investor Relations. Thank you. You may begin.

Daniel Scott (Senior VP of Investor Relations)

Thank you, operator, and good afternoon to everyone on the line. Thank you for joining us for Titan America's Q2 2025 conference call. I am joined by Bill Zarkalis, President and Chief Executive Officer of Titan America, and Larry Wilt, Chief Financial Officer. Before we begin, I would like to remind you that earlier this afternoon, we released Titan America's Q2 financial results, which are available on our website at ir.titanamerica.com, along with today's accompanying slide presentation. This call is being recorded, and a replay will be made available on our investor relations website. During the call, we will present both IFRS and non-IFRS financial measures. The most direct comparable IFRS measures and reconciliations for non-IFRS measures are available in today's press release and accompanying slides. Certain statements on today's call may be deemed to be forward-looking statements.

Such statements can be identified by terms such as expect, believe, intend, anticipate, and may, among others, or by the use of the future tense. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as the risks and uncertainties described in our SEC filings. I would now like to turn the call over to Bill. Bill, please go ahead.

Bill Zarkalis (President and CEO)

Thank you, Dan, and good afternoon, everyone, and thank you for joining us today for our Q2 2025 financial results call. If you turn to slide four in the presentation, I'd like to begin by highlighting our key messages for the quarter. We delivered resilient results in the Q2 despite weather-related challenges and continued softness in the residential market. Our vertically integrated business model and strategic market positioning enabled us to navigate these challenges effectively. As we discussed on our last call, our Q2 results in the Florida segment were adversely impacted by the timing of our annual major maintenance outage at Pennsuco, which last year occurred primarily in the first quarter, while this year it took place in the second. On a year-to-date basis, Adjusted EBITDA in our Florida segment improved year-over-year.

On the other hand, our Mid-Atlantic segment experienced particularly harsh weather in the Q2 that significantly reduced available workdays and, consequently, sales volumes, revenue, and profitability. Our investments in aggregates capacity, operational excellence, and digital transformation initiatives have supported our margins in a challenging first half of 2025. Today, we are reaffirming our full-year 2025 outlook based on the strength of our order book and an expected weaker set of comparables, considering that in the second half of 2024, our operations were severely impacted by three significant hurricanes. Turning now to slide five, it is clear that the softness in demand in the residential sector remains the near-term challenge in our market, driven by high interest rates and housing affordability. In the recent trends report, the American Cement Association estimates that U.S.

cement consumption in the first five months of 2025 has declined on average by 6%, while states like Florida, New York, and North Carolina suffered double-digit declines. On the economic backdrop, uncertainty still prevails. However, recent policy developments are creating a more supportive backdrop for our business. Let me highlight some green shoots. The One Big Beautiful Bill provides greater policy certainty and enhanced capital incentives aimed at encouraging investment activity. In addition, recently emerging agreements with key trade partners, such as the European Union and Japan, should reduce this element of uncertainty that was present in the operating environment of the first half. Although consumer confidence remains at relatively low levels, we are seeing gradual improvement in sentiment, alongside continued strength in infrastructure investment and selective non-residential sectors, including data centers and energy projects that drive strong demand for our products.

Most importantly, our order book remains robust across both geographic segments. Overall, we remain confident about the secular trends that will drive growth in the construction industry in our markets. On slide six, I'd like to highlight select strategic investments we are making to best position our company to meet the increased demand we expect in high-growth end markets as uncertainty abates. These investments are increasing our capacity, improving reliability, and enhancing overall service for our customers. As examples, on the downstream side, we are building the Leesburg ready-mix plant in the high-growth Northern Virginia market. We are also proud to announce the recent commissioning of our new ready-mix plant, serving the greater Jacksonville area, a market experiencing strong growth from inbound migration, business expansion, and corporate relocations.

Moreover, we are excited that the adjacent Jacksonville Block Plant is progressing well and is expected to be operational by the end of 2026. On the logistics front, we are expanding the Charlotte Cement Terminal to enhance the reach of our Roanoke Cement Plant, while in Florida, we received investment grants from the Florida Department of Transportation to help fund the expansion of our aggregate distribution terminals in Jacksonville and Melbourne. These terminals will serve both our downstream units and our external customers, expanding our participation in these high-growth markets. On slide seven, I'd like to highlight some key projects we are participating in across our segments. In the Mid-Atlantic region, we are supplying cement for the runway and ramp paving project at the Charlotte Douglas International Airport, which is expected to continue through the Q2 of 2027.

Our ready-mix facilities are actively supporting construction at the North Carolina Global TranSPark in Kingston, a major industrial and business park serving the aviation, aerospace, and advanced materials industries. Additionally, we are supporting Virginia's first onshore wind project, the Rock Forge Wind Farm, supplying cement for foundation work beginning in the Q4 of 2025, with expected completion in the Q2 of 2026. This new energy source will power a recently announced data and AI center in Botetourt County near the Roanoke Cement Plant in Southwest Virginia. In Florida, we are participating in an equally impressive array of projects. We are a key supplier of materials for the new North Pavilion at Tampa General Hospital, which is a project that expands critical care capacity with state-of-the-art technology to enhance patient outcomes.

Finally, two exciting infrastructure projects in Florida utilizing our cement, aggregates, and ready-mix concrete: the Golden Glades Interchange in Miami and the Okeechobee Road Construction Project. These major infrastructure investments feature highway widening, tens of miles of concrete paving, and multiple flyover bridges. They are two of many state-funded projects in Florida aimed at reducing congestion, modernizing some of the region's busiest freight corridors, and improving safety and quality of living in the densely populated Southeast Florida region. These projects demonstrate not only the breadth of our market reach but also our technical capabilities in providing specialized solutions across diverse construction sectors. Before I hand it over to Larry for a detailed financial review, I want to acknowledge the dedication of our team members, who continue to execute well despite continued challenging conditions. Their commitment to operational excellence and customer service remains the foundation of our success.

Larry will now provide a more detailed breakdown of our financial results and segment performance. Larry.

Larry Wilt (CFO)

Thank you, Bill, and good afternoon, everyone. Moving to slide eight, let me share an overview of our Q2 and year-to-date 2025 financial highlights. Revenue and Adjusted EBITDA for the Q2 of 2025 were $429 million and $99 million, respectively, compared to $433 million and $117 million, respectively, in the Q2 of 2024. Overall, our Q2 2025 financial performance was negatively impacted by the timing of our annual major maintenance campaign at the Pennsuco Cement Plant, softer residential construction conditions across our regions, and adverse weather, particularly in the Mid-Atlantic region, where a significant percentage of available workdays were affected. On a year-to-date basis, which removes the timing impact of the annual major maintenance programs, our Adjusted EBITDA margin was 21.8% for the six months ended June 2025, compared to 22.6% in the prior year period.

We view most of the weather-related headwinds as temporary and atypical and expect meaningful improvement in the second half of the year, driven by our strong project order book. As a reminder, we experienced three significant hurricanes in our service areas in the late summer and autumn of 2024, so comparisons are expected to ease through the back half of 2025. Turning to slide nine, let me walk you through our Q2 2025 volume performance by product line. Overall, we are pleased to see the benefits from our vertically integrated positions and strategic investments helping to partially offset softer demand for construction materials and weather-related headwinds during the quarter. In the Q2, cement volumes were down 5.4%, ready-mix concrete volumes were down 1.6%, and concrete block volumes were down 3.7% as compared to the prior year period.

That said, we are pleased to deliver outstanding performance in aggregates, where volumes were up 18% year-over-year. Fly ash volumes were also up 19.9% year-over-year on a low base. This performance under challenging conditions demonstrates how our vertically integrated positions and strategic investments enable good performance in a challenging environment. On slide 10, we are pleased to report the resilient pricing across our product lines despite the soft quarter. Our pricing gains from 2022 through 2024 have been broadly sustained despite the challenging demand environment, reflecting the strength of our market positions. For the Q2, cement pricing decreased modestly by 1.2% per ton, while aggregates and fly ash pricing increased 5.5% and 7.5% per ton, respectively. Ready-mix concrete pricing improved 0.6% per cubic yard, while concrete block pricing declined 2.5% per unit.

Our pricing performance demonstrates our disciplined approach and the unique value proposition we provide to our customers, even in challenging market conditions. Turning to the segment performance on slides 11 and 12, in Florida, our segment revenues increased 1.2% in the quarter as compared to the Q2 of 2024, while segment Adjusted EBITDA was $62.2 million as compared to $70.9 million in the previous period. As previously mentioned, the year-over-year performance reflects the timing impacts of our annual major maintenance outage at Pennsuco. On a year-to-date basis, which normalizes the timing impact of our maintenance programs, our Florida segment improved year-over-year with segment-Adjusted EBITDA reaching $133 million, an increase of 4.6% on revenues of $514 million, an increase of 0.8%. This strong performance was supported by exceptional aggregates results, where our strategic capacity investments generated both volume growth and margin expansion.

The Florida market continues to be characterized by positive momentum in key commercial and infrastructure sectors, even as residential demand remains subdued. Overall, we believe we are well positioned to capitalize on the state's strong fundamentals. On slide 12, our Mid-Atlantic segment faced more significant headwinds so far this year. In the Q2, revenue in the Mid-Atlantic segment declined 3.8%, and segment-Adjusted EBITDA declined 17.4% compared to the Q2 of 2024. Year to date, the Mid-Atlantic segment generated $307.7 million in revenue, a decrease of 4.6% as compared to the prior year, while segment-Adjusted EBITDA was $51.5 million in the first half of 2025 as compared to $67.4 million in the prior year period. Our Mid-Atlantic results reflect the significant weather-related impacts experienced in both the Q2 and the first half of 2025.

Despite the weather challenges experienced so far this year, the underlying market fundamentals remain solid, with infrastructure and commercial investments providing a strong foundation for expected growth. Investment in data centers is continuing, and construction activity in the New Jersey and New York metro areas is strengthening with support from major infrastructure projects. With our strong order book heading into the second half of the year, we are well positioned to capture a rebound in activity in this market, assuming year-over-year weather comparisons improve. Turning now to our balance sheet and cash flows on slides 13 through 15. As of June 30, 2025, we had $148.8 million in cash and cash equivalents and a total debt of $471.8 million. Our net debt position was $323 million, representing a ratio of 0.89 times trailing 12 months Adjusted EBITDA, a substantial improvement from the 1.21x number at the end of 2024.

Our low leverage ratio reflects both the proceeds from our successful IPO in February and continued strong operational performance. Importantly, we have no meaningful debt maturities before July 2027, providing us with excellent financial stability. For the six months ended June 30, 2025, cash flows provided by operations were $108.1 million, and net capital expenditures were $82 million, resulting in free cash flow of $26.1 million during the period. Our investments are focused on several key areas: enhanced aggregate production capacity to accelerate sales growth, vertically integrated investments in ready-mix concrete and concrete block facilities that support upstream volumes and returns, our low capital intensity Type 1T cement investment program, and the front-loaded cement projects completed during our annual maintenance outages that position us well for the remainder of the year.

The strength of our balance sheet, with low leverage and ample liquidity, provides us with flexibility to continue investing in growth opportunities while maintaining our commitment to returning capital to shareholders through our regular dividend program. On slide 16, I'll remind you of our capital allocation approach. We remain focused on three key priorities. First, continuing to invest in organic growth opportunities, including capacity expansions and greenfield projects that enhance our market-leading positions. Second, pursuing strategic M&A opportunities that either build upon or expand our existing positions or provide access to adjacent value chain opportunities, all while maintaining a healthy net leverage profile. Third, providing returns to shareholders through our regular quarterly dividends. To that point, the Board of Directors today approved a return of capital distribution of $0.04 per share, payable on October 15 to shareholders of record as of October 3, 2025.

With that, I'll turn it back to Bill for his closing remarks.

Bill Zarkalis (President and CEO)

Thank you, Larry. Before we move to the Q&A portion of our call, let me address our outlook for the remainder of 2025, as shown on slide 17. We are reaffirming our full-year 2025 outlook of mid-single-digit revenue growth, with modest improvement in Adjusted EBITDA margins compared to full-year 2024. As I mentioned in my opening remarks, our outlook is based on the strength of our order books and an expected weaker set of comparables, considering that in the second half of 2024, our operations were severely impacted by three significant hurricanes. We are well positioned to capture emerging opportunities driven by powerful structural trends in our core markets. Federal and state infrastructure programs are gaining momentum as projects transition from design to active construction, while the data center sector continues a strong trajectory, fueled by cloud computing and artificial intelligence investments.

Although the residential markets face temporary headwinds from higher borrowing costs, the substantial housing shortage across our region creates compelling long-term demand potential. Additionally, we are witnessing positive momentum in non-residential construction, especially manufacturing, water, and energy infrastructure, and distribution facilities, as reshoring initiatives and digital commerce growth support investment projects. Our targeted capacity expansions and operational improvements are already generating tangible benefits, enhancing our ability to serve customers as market conditions strengthen. With our solid financial foundation and our focus on operational excellence and low cost to serve, we maintain the agility to pursue strategic growth initiatives while continuing our disciplined approach to shareholder returns. Despite near-term challenges in the first half, we remain well-equipped to leverage the favorable fundamentals across our markets and create sustained value for our investors. With that, I'll turn the call over to the operator for the Q&A session. Operator.

Operator (participant)

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we pull for questions. Our first question is from Anthony Pettinari with Citi. Please proceed.

Anthony Pettinari (Homebuilding and Products Analyst)

Good afternoon.

Hi, Tony.

You saw really strong aggregates and fly ash volumes in the quarter despite kind of weaker ready-mix and cement, and I guess the industry probably being down a little bit. I wonder if you could talk just a little bit more about that. I mean, is that essentially all new capacity or new customers? As we think about kind of the second half of the year, would you expect that kind of relative outperformance to continue, or do the comps for aggregates and fly ash get a little tougher? Just any additional color you can give there?

Larry Wilt (CFO)

Yeah. Hi, Tony. It's Larry. I think on the aggregates side, we see continued improvement in that year-over-year through the back part of the year. The main piece of that comes from that Pennsuco facility where we've described some of the investments that we've made, although we also made investments, as you know, down in Southwest Florida at that Corkscrew facility as well. We see good, strong performance out of both of those assets coming through. In terms of mix, you're right. It doesn't necessarily follow the ready-mix because we're selling not only to our internal ready-mix but also to different channels. For example, some infrastructure products take a different product rather than the stone that we sell through the FDOT and other kinds of applications that go through the ready-mix business.

On the fly ash side, when you look at fly ash, you got to be reminded this is a low base, all right? We do expect further improvement in fly ash based on some additional volume that we expect to come our way in the second half of the year, but it's from a pretty low base. This is why the percentages get so eye-popping in that case.

Bill Zarkalis (President and CEO)

Tony, this is Bill, just to add to what Larry said. Fundamentally, as you said, it's new capacity. We have extra volume, and we're covering, you know, utilizing our integrated business model. We can sell more to existing customers where we sell our, you know, cement or concrete or masonry or a block. We sell through these channels the extra capacity that we have. We acquire some new customers. Fundamentally, it's complementing our integrated model, which was, you know, by having new capacity in aggregates, both in terms of production capacity and also logistics capacity. As you saw with our new terminals, we're reaching further in our markets and closer to our customers.

Anthony Pettinari (Homebuilding and Products Analyst)

Got it. That's very helpful. Just switching gears, is it possible to say how much of the cement that you sold and consumed in the quarter was imported, or maybe how did that differ from recent quarters? Now that we have maybe a little bit more clarity on tariffs, can you talk about sort of the environment or the impact, if any, to your business and the markets where you are?

Bill Zarkalis (President and CEO)

First, on the mix, let me say upfront, there's no change in the integrated areas in relation to the ratio between our strong local production, obviously, in Florida and also in Virginia and North Carolina. As you know, the area where we service 100% through imported cement is the New York, New Jersey terminal. In the rest of the areas, we remain a strong producer, complementing our local production with imports. No change in the ratios there. Larry, on the other.

Larry Wilt (CFO)

With respect to tariffs, you meant the tariffs didn't come into effect until April. As you know, it took some time for those products to arrive because it was effective that date, say, 20, 30 days en route to the U.S. About $1.6 million incurred, not all of it sold. The P&L impact of that through the first half of the year, Q2 of the year, would have been something in the rough order of $1 million, $1.2 million, something like that.

Anthony Pettinari (Homebuilding and Products Analyst)

Okay, that's very helpful. I'll turn it over.

Thanks, Tony.

Operator (participant)

Our next question is from Phil Ng with Jefferies. Please proceed.

Phil Ng (Managing Director and Senior Equity Research Analyst)

Hey, guys. Great to see you reiterate your full-year guidance. I guess a question around that. You're calling for mid-single-digit sales growth for the full year. You're down about 1.5% in the first half. It implicitly implies about, call it, 11% growth in the back half, appreciating you had some easy comps from wet weather and whatnot. It'd be helpful to give us a little flavor in terms of what you're seeing from a volume standpoint, call it in July, and what you're kind of expecting in the back half. Separately, from a pricing standpoint, I think most of the heavy material companies that have reported have generally not called for much pricing, whether it's cement or ready-mix.

Curious what you're seeing in your markets and implicitly in your guide, you know, how much traction are you seeing on some of these pricing initiatives you've had in place to start the year?

Larry Wilt (CFO)

I think it's fair of Bill to say, given the weather impacts from a year ago, this is more of a volume impact than a price impact, although we don't have no price impact. Ready-mix, as you know, is something that's bid day-to-day. Those higher prices come through the channels with a bit of a lag. That's going to come through in the second half as we see. We look at the mix of the product revenues that we have. We talked about the aggregates story a minute ago. Your math is good, right? The percentages you referenced. When we break that down and compare it H1 versus H2, that would take you roughly at about a, you know, say, 7%-8% revenue increase, of which 20%-25% may come from aggregates.

That leaves a balance of, you know, call it 5%-7%, give or take, for all the other products coming through in that easier comparison that you're describing.

Phil Ng (Managing Director and Senior Equity Research Analyst)

Larry, you're seeing that type of trend right now in terms of volumes in that, call it, 5%-7% range, give or take?

Larry Wilt (CFO)

Every market can be a little bit different, but we see good traction in parts of our business, certainly in July.

Bill Zarkalis (President and CEO)

We see the rebound in the Mid-Atlantic, which was hit very hard by the weather. As you know, and some of you have reported, the increased rainfall just in the months of April and May in the Mid-Atlantic, Virginia, and North Carolina was 33%. In many metropolitan areas in Virginia and North Carolina, we lost anywhere between 8 up to 15, 16 working days, which is up to 20% of the workdays in the quarter. It was hit very hard. With July, with improving weather, we immediately see double-digit type of growth in the Mid-Atlantic. That makes us more comfortable about the Q2 with order books strong. Job sites and projects are not canceled. They're just delayed by the bad weather. That is why you see us more optimistic about the second half with easier comparables also versus the second half of last year.

Phil Ng (Managing Director and Senior Equity Research Analyst)

Okay. Similarly, margins, you're calling for pretty good margin expansion. Larry, if I heard you correctly, you're not expecting much cement price increases at this point. What are some of the levers at your disposal outside of, you know, obviously, better fixed cost leverage from buying this kind of.

Bill Zarkalis (President and CEO)

This is Bill, the comment that Larry made. Overall, we see strong continued pricing momentum and power. Perhaps I have to make a comment here in relation to prices. Cement prices are affected as we report on a delivered basis on how much is the percentage of FOB sales versus delivered sales, which changes really the mix of the price. That's one element that we have to take into account. When you compare bulk with bulk and FOB deliveries, you will see that our prices in cement are going up. Also, there is another important fact that is related to the channel mix. For example, bagged cement has a price which can be up to 50% higher than bulk cement.

Bulk cement is especially affected by the residential softness because this reduces the mix, the percentage of bagged cement in the mix, and therefore affects the overall average price that we report. When you see like for like, the momentum in cement pricing continues upward. You see also the strong momentum in the downstream product lines. That makes us feel more comfortable in the Q2 in relation to both volume primarily, but also price continuing and having better comparables as related to the first half of this year, but also the second half of last year.

Phil Ng (Managing Director and Senior Equity Research Analyst)

Okay. Appreciate the color. Thank you.

Bill Zarkalis (President and CEO)

Thank you.

Operator (participant)

Our next question is from Wesley Brooks with HSBC. Please proceed.

Wesley Brooks (Research Analyst)

Hi. Thanks for taking my question. Hi, Bill, Larry.

Bill Zarkalis (President and CEO)

Hi, Larry.

Wesley Brooks (Research Analyst)

A couple of questions from me. Just coming back to not the FX impact, but with the weaker U.S. dollar and you importing a significant portion of your cement, how is that priced? Is that priced in U.S. $ or in EUR? Is there an FX impact we should be thinking about there given the U.S. $?

Larry Wilt (CFO)

Yeah. No, thanks for the question, Wesley. Cement and ocean freight are both denominated in dollars, right? We don't see FX impacts on those two products.

Wesley Brooks (Research Analyst)

Okay. That's taken at the parent level then. I just wanted to kind of dig into the residential side of it. Obviously, everything we see looks pretty dire in terms of the secondary market and permits, particularly in Florida. I mean, what are you seeing? Is there anything that suggests, aside from the weather, we could be finding a bottom there? I mean, what are you seeing in terms of the outlook going past the next few months?

Larry Wilt (CFO)

I think our view wouldn't be that different from others that you would have heard from. While interest rates remain high, affordability is a challenge that delays the recovery, but the recovery will come. You know the story about underbuilding 3million-5 million homes, particularly in places like Florida where we operate. It doesn't mean that everything is weak at the same time. You can think about sectors like multifamily, which begins to see some growth come back into that sector, even as single-family homes are under some pressure, as you would describe.

Bill Zarkalis (President and CEO)

Yeah. Wesley, you remember very well that one of our key strengths is our flexible participation strategy. We participate across a cross-section of the market, and we have more than 65% of our participation in private non-residential and also in public infrastructure segments. We have the ability to participate wherever, you know, it's a checkerboard economy. There are areas, even in Florida, where the residential market continues strong. Jacksonville, certain parts of Southeast in multifamily. As we participate and we have the ability to target areas where the growth is, it allows us to mitigate some of the impacts. You see the strong performance that we delivered in Florida despite the softness in residential overall.

Wesley Brooks (Research Analyst)

Okay, thanks. Yeah, I'll pass it on.

Operator (participant)

Our next question is from Chad Dillard with Bernstein. Please proceed.

Chad Dillard (Senior Analyst)

Hey, good evening, guys.

Larry Wilt (CFO)

Hey Chad.

Chad Dillard (Senior Analyst)

Just got a couple of questions for you. On your comment about seeing a strong order book, I was hoping you could put a finer point on that. How far out does this extend? Can you talk about the mix of resi versus non-resi versus public infrastructure? What's the year-on-year change in the order book? Secondly, you guys talk about having some easier comps in the back end of the year. I was hoping you could put maybe some numbers on that. In the second half of 2024, what were the number of down days versus what you were budgeting? How many operating days in the second half of the year?

Larry Wilt (CFO)

Let's check the order book first, right?

When you think about our order book, Chad, the way we describe it is purchase orders and looking really at the multifamily, looking at the commercial projects, looking at the infrastructure projects that we have. It doesn't include, for example, the ready residential piece of single-family homes, for example. It's not what we would classify as an order book. When you look at some of the details of that, certainly, year-over-year and progressing through the year, the bidding activity and the success on that has been strong year-over-year. We don't give a finer point to it, but we have, in what we described for the back half of the year, good visibility to what's on the books there, provided the weather cooperates in the back half of this year. If you remember last year, we had three hurricanes that came through.

All the attention clearly got paid to Florida, given this is where the landfall often was, but it traveled up north through the central part of Carolina and through the South Carolina, Virginia, and North Carolina coastal areas as well, which had a big impact. Lost a lot of days in the second half of the year, particularly in the September-October timeframe and into November, with some of the job sites, given the water impact of this, the job sites elongated even long after the storm had traveled past. That's the back half comp that we've got. I'm afraid, Chad, I don't have right in front of me today the exact number of days that were lost, but we can certainly come back to you on that point.

Chad Dillard (Senior Analyst)

Okay. Appreciate that. That's all for me.

Thanks, Chad.

Operator (participant)

Our next question is from [Sharif El-Assabi] with Bank of America. Please proceed.

Hey, good afternoon.

Hi

I just wanted to touch on the guidance once more. You've reiterated this outlook. When you introduced it in Q4, underlying that guide was a rebound in residential in the back half and positive pricing momentum, which resi mix is impacting. Just given weaker housing trends and the knock-on pricing impact, how have your underlying assumptions for guidance changed, if at all, to be maintained for the year?

Bill Zarkalis (President and CEO)

We said from the get-go that we expect this year our results to be weighted in the second half. This, of course, is related to the weather phenomena, for sure. Also, the stronger comparables that we expected in the second half because of the very weak second half of 2023. Also, in relation to the strong now, we reiterate our guidance because of the strong order book that we see and the momentum and the secular trends that continue strong, especially as we see the infrastructure and the commercial projects accelerating. These are some of the key elements that we see overall for the second half of the year, and we reiterate overall our guidance.

it fair to characterize as non-residential strength offsetting the residential weakness within the guidance?

We think that the residential softness is going to continue in the second half.

Thank you.

Larry Wilt (CFO)

Thank you.

Operator (participant)

As a reminder, just star one on your telephone keypad if you would like to ask a question. Our next question is from Brian Brophy with Stifel. Please proceed.

Brian Brophy (Equity Analyst)

Thanks. Good afternoon, everybody. Most of my questions have been answered here. Just one on one for me. You touched on some of the Type 1T investments that you're making in some of your opening comments. Just curious if you could give us an update on what you're seeing there, how customer adoption is unfolding, and how we should think about that over the next couple of years. Thanks.

Larry Wilt (CFO)

Yeah. I think we can separate a couple of things, Brian. We've got the main capital projects that we work on, some of the ones, for example, the calcined clay ad roll. There's a long-term project, but in the interim, we do some work with fly ash as a Type 1T product that we're selling with good demand through selected channels, primarily those that have a CO2 element that like this product into the warehouses and other applications. Think about some of the data centers and other products that are there, warehouses, the Amazon, and those types of entities would be in some high demand there. It's more of a, you know, the demand is satisfied by what we're able to produce. If we could produce more, I think we would have even further demand in that case.

Bill Zarkalis (President and CEO)

At this point in time, overall, in relation to our investments, we continue investing in preparing our production of calcined clay. This is a fundamental project, as we have announced, that is going to also lead to an increase in our production capacity. We produce commercial quantities, both in the Mid-Atlantic and also in Florida, of Type 1T cement. Just last week, we approved yet another 1T grade, a high-performance with low-carbon profile product, which was approved by the Department of Transportation here in Florida. We channel these commercial quantities mainly through our captive channels, through our own ready-mix channels and downstream channels. We test with selected customers in the Mid-Atlantic and also here in Florida, mainly customers that seek, like Larry mentioned, high performance and also a low-carbon profile.

In this way, we test an array of different end users as we prepare for the more expanded commercial campaign into the marketplace. In relation to the demand, as Larry mentioned, it's mainly into high-performance and low-carbon profile type of products. You can imagine this is major end users in the marketplace that require such products. Differentiated, high-value pools with high growth into the future.

Brian Brophy (Equity Analyst)

Thanks. That's helpful. I'll pass it on.

Larry Wilt (CFO)

Thank you, Brian.

Operator (participant)

There are no further questions at this time. I would like to turn the floor back over to Bill Zarkalis for closing remarks.

Bill Zarkalis (President and CEO)

Thank you, Sherry. I appreciate it. Thank you all for your time today. We appreciate your interest in Titan America. We look forward to updating you on our progress on our Q3 call. Have a great rest of the day. Thank you so much. Take care.

Operator (participant)

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.