Core Insights - Alaris Equity Partners has completed three investments totaling US$52.7 million, contributing an incremental US$6.6 million or 4.3% growth to its run rate partner distributions [1][2] - The Board of Trustees has approved a 9% increase in the distribution, raising the quarterly distribution to $0.37 per trust unit and the annual distribution to $1.48 [2] - Alaris has a strong track record, having invested over $2.9 billion in 43 portfolio companies since its founding in 2004, generating a 16% IRR from exited investments [3][4] Investment Details - The investments include a US$27.0 million initial investment in McCoy Roofing Holdings LLC, along with follow-on investments in Cresa LLC and Carey Electric Contracting Inc [1][10][11] - Alaris' investment in McCoy consists of US$19.0 million in preferred equity and US$8 million in common equity, with an initial annualized distribution of $2.7 million, yielding 14% [7] - If McCoy meets its growth targets, Alaris may fund an additional US$32.0 million in preferred equity [8] Partner Updates - Cresa received an additional US$20.5 million investment, increasing its annualized distribution by 69% to US$7.1 million [10] - Carey received an additional US$5.2 million investment, increasing its annualized distribution by 16% to US$2.2 million [11] - Ohana Growth Partners acquired a Planet Fitness franchisee, enhancing its competitive position and cash flow [12] Market Position and Future Outlook - Alaris is well-positioned in the $3 trillion North American private equity market, with a diversified portfolio and a strong pipeline of investment opportunities [3][14] - The company aims to continue its growth track record while returning excess cash to unitholders through potential future distribution increases and buybacks [5]

Core Viewpoint - FirstService Corporation's subsidiary, Roofing Corp of America, has acquired two roofing companies, Springer-Peterson and A-1 All American, enhancing its market presence in the U.S. Sun Belt region [1][4]. Company Overview - FirstService Corporation is a North American leader in essential outsourced property services, operating through two main platforms: FirstService Residential and FirstService Brands [4][5]. - The company generates over US$5.4 billion in annual revenues and employs approximately 30,000 people across North America [5]. Acquisition Details - Springer-Peterson, founded in 1982 and based in Lakeland, Florida, is a leading provider of roofing installation and repair services to commercial customers in Central Florida [2]. - A-1 All American, established in 1996 and headquartered in San Diego, California, serves a diverse clientele including homeowner associations and hotels [3]. - Both acquisitions are expected to strengthen RCA's market position in Florida and California, bringing a roster of long-standing commercial customers [4].

Financial Data and Key Metrics Changes - Total sales in the second quarter declined by 5% to $1.3 billion, with volume down 7.8%, partially offset by M&A growth of 1.9% and pricing of 0.9% [14][15] - Adjusted EBITDA margin for the second quarter was 20.1%, reflecting a sequential improvement of 110 basis points from the first quarter [17] - Adjusted earnings per diluted share were $5.31, compared to $5.42 in the previous year [18] Business Line Data and Key Metrics Changes - Installation segment sales totaled $780.7 million, down 8.3%, driven by a 10.5% volume decline, partially offset by acquisitions of 1.4% and pricing of 0.9% [15] - Specialty distribution sales improved by 1.1% to $599.2 million, with acquisitions contributing 2.3% and pricing adding 0.8%, despite a 2.1% decline in volume [15][16] Market Data and Key Metrics Changes - Weakness in residential new construction was noted, with single-family demand sliding further year-over-year [7] - Heavy commercial and industrial sectors showed growth, particularly in technology, education, and healthcare [7][14] Company Strategy and Development Direction - The acquisition of Progressive Roofing was completed, establishing a new growth platform in the $75 billion commercial roofing services market [4][8] - The company aims to diversify its business, with commercial and industrial sales now accounting for approximately 40% of total sales, up from 15% in 2015 [11] - The total addressable market for insulation and commercial roofing is nearly $95 billion, indicating significant growth opportunities [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying fundamentals of the business, emphasizing a flexible and diversified business model [24] - The company anticipates continued challenges in the residential market, projecting low double-digit declines in residential sales for the year [21] - The guidance for full-year sales is expected to be between $5.15 billion and $5.35 billion, with M&A expected to add approximately $300 million to sales [21][22] Other Important Information - The company repurchased approximately 455,000 shares, returning $136 million in capital to shareholders [9][20] - Total liquidity at the end of the quarter was $1.8 billion, with total debt at $2.4 billion [18][19] Q&A Session Summary Question: Impact of Progressive on margins and sales synergy opportunities - Management indicated that Progressive is expected to contribute approximately $215 million in incremental sales, with EBITDA around 20%, not significantly dilutive to current margins [27][28] Question: Details on residential market softness - Management noted that the residential market is primarily affected by single-family construction, with light commercial also facing challenges, while heavy commercial remains strong [31][34] Question: Pricing and cost dynamics - Management acknowledged a $30 million headwind in the second half due to price-cost dynamics, with expectations of tougher comparisons on pricing [56][57] Question: Outlook for M&A in commercial roofing - Management expressed optimism about the M&A pipeline in commercial roofing, with several larger deals anticipated [101][102] Question: Staffing adjustments in response to market conditions - Management confirmed that they have calibrated staffing levels in response to current market conditions, with ongoing monitoring for further adjustments if necessary [96][98]

Financial Data and Key Metrics Changes - Total sales in Q2 2025 declined by 5% to $1,300,000,000, with volume down 7.8%, partially offset by M&A contributing 1.9% and pricing contributing 0.9% [13][14] - Adjusted EBITDA for Q2 was $261,300,000, representing a margin of 20.1%, which improved by 110 basis points from Q1 and was down only 20 basis points year-over-year [15][16] - Adjusted earnings per diluted share were $5.31, compared to $5.42 in the previous year [17] Business Line Data and Key Metrics Changes - Installation segment sales totaled $780,700,000, down 8.3%, driven by a 10.5% volume decline, partially offset by acquisitions and pricing [14] - Specialty distribution sales improved by 1.1% to $599,200,000, with acquisitions growing sales by 2.3% and pricing adding 0.8% [14][15] - Adjusted EBITDA margin for the installation segment was 22.3%, up 120 basis points sequentially and flat year-over-year [16] Market Data and Key Metrics Changes - The residential new construction market remained weak, with single-family demand sliding further year-over-year [6][7] - Heavy commercial and industrial sectors showed growth, particularly in technology, education, and healthcare [6][14] - The company noted a mixed economic environment affecting consumer confidence, particularly in the housing market [6][7] Company Strategy and Development Direction - The acquisition of Progressive Roofing aims to establish a new growth platform in the $75 billion commercial roofing services market, enhancing service offerings and exposure to non-cyclical revenue [4][5] - The company has diversified its business, with commercial and industrial sales now accounting for approximately 40% of total sales, up from 15% in 2015 [10] - The total addressable market for insulation and commercial roofing is nearly $95 billion, indicating significant growth opportunities [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying fundamentals of the business, emphasizing the ability to adjust operations as demand changes [24] - The company anticipates continued challenges in the residential market, projecting low double-digit declines in residential sales for the year [21][33] - Management highlighted a robust pipeline of acquisition candidates and remains disciplined around valuation to drive shareholder returns [7][20] Other Important Information - The company repurchased approximately 455,000 shares, returning $136,000,000 to shareholders in Q2 [8][20] - Total liquidity at the end of Q2 was $1,800,000,000, with total debt at $2,400,000,000 [17][18] Q&A Session Summary Question: Impact of Progressive on margins and future contributions - Management indicated that Progressive is expected to contribute approximately $215,000,000 in incremental sales, with EBITDA around 20%, not significantly dilutive to current margins [27][28] Question: Details on residential market softness - Management noted that the residential market is primarily affected by single-family construction, with light commercial also facing challenges, while heavy commercial remains strong [31][33] Question: Pricing and cost dynamics - Management acknowledged a $30,000,000 headwind in the second half due to pricing pressures, particularly in the residential distribution side, while maintaining solid pricing in commercial products [55][56] Question: Outlook for M&A in commercial roofing - Management expressed optimism about the M&A pipeline in commercial roofing, with several larger deals anticipated and a disciplined approach to acquisitions [99][100] Question: Staffing adjustments in response to market conditions - Management confirmed that they have calibrated staffing levels appropriately and will continue to monitor the situation as market conditions evolve [91][93]