Mullen Group Ltd. 2023 Update and 2024 Business Plan

OKOTOKS, AB, Dec. 11, 2023 /PRNewswire/ - (TSX: MTL) Mullen Group Ltd. ("Mullen Group", "We", "Our" and/or the "Corporation"), one of Canada's largest logistics providers announced today that the budget and business plan for 2024 has been approved by the Board of Directors ("Board").

"In preparing our business plan for the upcoming year we considered the outlook for the economy, geopolitical uncertainties, and the prospects for the sectors of the economy we service. And clearly there are reasons to be cautious, just as there were last year when we outlined our plan for 2023. But this economy is proving more resilient than we gave it credit for. Consumer spending has remained strong, despite higher interest rates and initiatives by the central banks to cool the economy," commented Mr. Murray K. Mullen, Senior Executive Officer and Chair.

"Based upon our October and November results, we now expect to finish the year on a positive note, with quarterly revenues close to our early projections of $500.0 million. More impressive is that we are projecting OIBDA to exceed $80.0 million. With the strong finish to the year, it is now realistic to suggest that the full year 2023 results will exceed our earlier projections. The new OIBDA range for fiscal 2023 is tracking towards $325.0 - $330.0 million. This is obviously very good news for our shareholders and provides a solid backdrop heading into 2024, validating not only the strength of our business model but also our strategy of focusing on costs and acquisitions that add value. Actual results will be finalized in early February 2024, at which time the audited financial results for 2023 will be released.

"In developing our plan for 2024 we considered many factors to determine if there would be any significant changes in the economic outlook or within the industry verticals we service. Generally speaking, we see little evidence of sustained economic growth. As such, we have presumed that overall demand next year will remain consistent with current levels. On the supply side, however, we see potential opportunity. Many of our competitors are struggling under the pressures of elevated debt levels, higher interest costs, and tighter lending standards. We believe that our business is uniquely positioned to capitalize as the competition struggles under the weight of these challenges. This is, in our opinion, the best opportunity to grow in 2024, but the timing we are uncertain of. For this reason, the budget we present for 2024 does not factor in this potential. What we are more certain about is that we will be well positioned to grow when the right opportunities are available. Until then our current robust and diversified business model will, once again, generate solid results and free cash, funds we can use to grow or return to shareholders," added Mr. Mullen.

HIGHLIGHTS OF 2024 BUSINESS PLAN AND BUDGET

In order to achieve the operating results outlined in the 2024 Budget, we have established and will be focusing on the following priorities:

1. CAPITAL INVESTMENTS: $80.0 million in new, more efficient operating assets, exclusive of corporate acquisitions or investment in facilities, land and buildings.

a. $70.0 million: Maintenance Capital - to improve our Business Units
b. $10.0 million Sustainability Focused Capital - continued focus on emission reduction

2. PRIORITIZE MARGIN OVER MARKET SHARE: work with Business Units to drive process improvements.

a. Effective Deployment of Technology
b. Optimize Operations of the Business Units
c. Monetize Non-Core Assets

3. PURSUE ACQUISITIONS: be opportunistic with consolidation opportunities that are synergistic and accretive.

a. Tuck-ins: opportunities that make our existing Business Units more profitable
b. Strategic: opportunities to expand our network

4. MAINTAIN BALANCE SHEET FLEXIBILITY

One of the main components of our 2024 Business Plan is to return cash to shareholders by way of monthly dividends and a share buyback plan. The Board has determined that the appropriate allocation for 2024 will be:

1. Dividends to shareholders will remain consistent at $0.06 per Common Share each month or $0.72 per Common Share on an annualized basis.
2. In March 2024, we intend on requesting approvals from the Toronto Stock Exchange to renew the normal course issuer bid ("NCIB") program. For the eleven month period ending November 30, 2023, we repurchased 4,774,759 Common Shares for $69.9 million under the NCIB.

Mullen Group is one of Canada's largest logistics providers. Our network of independently operated businesses provide a wide range of service offerings including less-than-truckload, truckload, warehousing, logistics, transload, oversized, third-party logistics and specialized hauling transportation. In addition, we provide a diverse set of specialized services related to the energy, mining, forestry and construction industries in western Canada, including water management, fluid hauling and environmental reclamation. The corporate office provides the capital and financial expertise, legal support, technology and systems support, shared services and strategic planning to its independent businesses.

Mullen Group is a publicly traded corporation listed on the Toronto Stock Exchange under the symbol "MTL". Additional information is available on our website at www.mullen-group.com or on the Corporation's issuer profile on SEDAR+ at www.sedarplus.ca.

Contact Information

Mr. Murray K. Mullen- Chair, Senior Executive Officer and President
Mr. Richard J. Maloney - Senior Operating Officer
Mr. Carson P. Urlacher - Senior Accounting Officer
Ms. Joanna K. Scott - Senior Corporate Officer

121A - 31 Southridge Drive
Okotoks, Alberta, Canada T1S 2N3
Telephone: 403-995-5200
Fax: 403-995-5296

Mullen Group may make statements in this news release that reflect its current beliefs and assumptions and are based on information currently available to it and contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") and future oriented financial information ("FOFI") within the meaning of applicable securities laws. This news release may contain forward-looking statements and FOFI that are subject to risk factors associated with the overall economy and the oil and natural gas business. These forward-looking statements and FOFI relate to future events and Mullen Group's future performance. All forward looking statements and FOFI contained herein that are not clearly historical in nature constitute forward-looking statements and/or FOFI, and the words "may", "will", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "propose", "predict", "potential", "continue", "aim", or the negative of these terms or other comparable terminology are generally intended to identify forward-looking statements and/or FOFI. Such forward-looking statements and FOFI represent Mullen Group's internal projections, estimates, expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These forward-looking statements and FOFI involve known or unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements and FOFI. Mullen Group believes that the expectations reflected in these forward-looking statements and FOFI are reasonable; however, undue reliance should not be placed on these forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. In particular, forward-looking statements and FOFI include but are not limited to the following: (i) our financial goals and expectations for 2024; (ii) our capital expenditure plans for 2024; (iii) our fourth quarter revenues will reach $500.0 million and more impressive is that we are projecting OIBDA to exceed $80.0 million; (iv) with a strong finish to the year, it is now realistic to suggest that the full year 2023 results will exceed our earlier projections; (v) the new OIBDA range for fiscal 2023 is tracking towards $325.0 - $330.0 million; (vi) our strategic initiatives for 2024 including but not limited to potential acquisitions both strategic and tuck-in; and (vii) our plan to renew our normal course issuer bid. These forward-looking statements and FOFI are based on certain assumptions and analysis made by Mullen Group in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. These assumptions include but are not limited to the following: (i) Mullen Group will generate sufficient cash in excess of our financial obligations to support the dividend; (ii) Mullen Group's Business Units will require capital to support their ongoing operations and growth opportunities and that we will generate sufficient cash in excess of our financial obligations to support the capital expenditures; (iii) Mullen Group's expectation as to how our current Business Units will perform in 2024; (iv) Mullen Group's expectation as to how our current Business Units will perform in fourth quarter 2023; (v) We see little evidence of sustained economic growth. As such, we have presumed that overall demand next year will remain consistent with current levels; (vi) On the supply side, however, we see potential opportunity. Many of our competitors are struggling under the pressures of elevated debt levels, higher interest costs, and tighter lending standards. We believe that our business is uniquely positioned to capitalize as the competition struggles under the weight of these challenges. This is, in our opinion, the best opportunity to grow in 2024, but the timing we are uncertain of; (vii) What we are more certain about is that we will be well positioned to grow when the right opportunities are available. Until then our current robust and diversified business model will, once again, generate solid results and free cash, funds we can use to grow or return to shareholders; (viii) Mullen Group will have ample liquidity to pursue acquisitions that are synergistic and accretive, if available; (ix) Mullen Group will have an opportunity to monetize non-core assets, deploy technology and optimize operations of our Business Units; and * Mullen Group's intention to renew its normal course issuer bid will be approved by regulatory authorities. For further information on any strategic, financial, operational and other outlook on Mullen Group's business please refer to Mullen Group's Management's Discussion and Analysis available for viewing on Mullen Group's issuer profile on SEDAR+ at www.sedarplus.ca. Additional information on risks that could affect the operations or financial results of Mullen Group may be found under the heading "Principal Risks and Uncertainties" starting on page 48 of the 2022 Annual Financial Review as well as in reports on file with applicable securities regulatory authorities and may be accessed through Mullen Group's issuer profile on the SEDAR+ website at www.sedarplus.ca. The forward-looking statements and FOFI contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements and FOFI contained herein are made as of the date of this news release and Mullen Group disclaims any intent or obligation to update publicly any such forward-looking statements and FOFI, whether as a result of new information, future events or results or otherwise, other than as required by applicable Canadian securities laws. Mullen Group relies on litigation protection for forward-looking statements and FOFI.

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SOURCE Mullen Group Ltd.