Good morning, and thank you for standing by. Welcome to Stella-Jones Fourth Quarter 2022 Earnings Call. [Operator Instructions]. I would like to remind everyone that this conference call is being recorded on Wednesday, March 8, 2023. Please note that comments made on today's call may contain forward-looking information, and this information, by its nature, is subject to risks and uncertainties. Actual results may differ materially from the views expressed today. For future information on these risks and uncertainties, please consult the company's relevant filings on SEDAR. These documents are also available in the Investor Relations section of Stella-Jones website at www.stella-jones.com. We have also prepared our corresponding presentation, which we encourage you to follow along with during this call. I will now pass the call over to Eric Vachon, President and Chief Executive Officer of Stella-Jones. Eric?

Thank you, Julie. Good morning, everyone, and thank you for joining us today. I'm here with Silvana Travaglini, Senior Vice President and Chief Financial Officer of Stella-Jones, and we thank you for joining us for this discussion of the financial and operating results for Stella-Jones' Fourth Quarter ended December 31, 2022. Earlier this morning, we issued our press release reporting 2022 fourth quarter and year-end results. Along with our MD&A, it can be found in the Investor Relations section of our website at www.stella-jones.com and will be posted on SEDAR today as well. As a reminder, all figures expressed on today's call are in Canadian dollars, unless otherwise stated. I will begin today's call by providing a business update before turning the call over to Silvana for a more detailed financial review. I will conclude the call with a progress update on our 2022, 2024 goals before opening the floor to your questions. I'm proud this morning to begin the call by stating that 2022 was a year of exceptional performance for Stella-Jones. The company generated robust financial and operating results and in doing so, demonstrated and reinforced its leading position as a key player in the industrial infrastructure product space. We achieved total sales of $3 billion, up 11% from nearly $2.8 billion last year, and our EBITDA increased 12% to a record $448 million. 2022 represents the 22nd consecutive year that Stella-Jones has posted an annual sales increase, which speaks to our resilient business model and the strong fundamentals in which it is anchored. Our sales growth was largely attributed to the strong performance of our infrastructure-related product categories, namely utility poles, railway ties and industrial products, which all met or surpassed our targets. Allow me to briefly review the performance of our product categories in 2022. Our utility poles product category delivered exceptional results throughout 2022, with sales growing to $1.2 billion compared to sales of $925 million last year. Utility pole sales benefited from strong market dynamics and the contribution of our accretive acquisitions. On an organic basis, utility pole sales increased by over 20% in 2022. Our pole procurement team rose to the challenge this past year, leveraging relationships to meet growing customer demand and laying down the foundation to access new procurement areas. We are currently seeing significant investments being made by utility companies to ensure the infrastructure will support North America's future needs, and we expect this trend to continue. Utilities are investing to maintain their current networks, facilitate increased broadband network use, support demand generated by electric vehicles and build newer and stronger lines, all while looking to their supply partners for long-term commitments. On the railway tie front, sales reached $750 million in 2022 compared to sales of $700 million last year, an organic growth rate of 4%. Railway tie sales benefited from sales price adjustments to cover higher costs, but Class 1 volumes pulled back year-over-year. Procurement in the latter part of 2021 and the first 3 quarters of 2022 was challenging. The tightness in untreated railway tie availability drew down our dry inventory position. This resulted in a rise in untreated tie costs, and we progressively pass these costs through to our customers. Capacity usage also increased given the long production cycles when treating ties that are not completely dried. A process also referred to as boultonizing. On a positive note, more untreated ties became available in Q4 2022 and in the first month of 2023. At the current rate of procurement, untreated tie inventories will be replenished by midyear with optimal dry inventory levels being reached in the second half of 2023. This will, in turn, reduce the number of both nice charges and open opportunities to address more customer demand, which is being driven by steady railroad maintenance and ongoing infrastructure spend. Industrial product sales grew to $143 million compared to $121 million in 2021. The organic increase of 15% was mainly attributable to higher demand for industrial products such as pilings, timbers and bridges. Our industrial product category perfectly complements our rail and utility offerings and will benefit from infrastructure public spending. Sales for residential lumber pulled back this year to $744 million in 2022 from $773 million last year, but did not pull back as much as expected. Residential lumber sales continued to benefit from above-normalized pricing levels in 2020. Our residential lumber product category supports select customers that recognize the value of Stella-Jones' premium lumber program and complementary products and services. Over the years, we have proven our ability to keep retailers and big-box stores well supplied which in turn has enabled our customers to grow their market presence. On the acquisition front, 2020 was the first full year of contribution from our Cahaba acquisition which was completed in the fourth quarter of 2021. Cahaba, now known as the Stella-Jones Brierfield facility is a well-established producer of treated wood poles and engages in raw material procurement at its treating operations in Alabama. The facility's performance far exceeded our expectations this year, contributing to our sales growth in utility poles. Accretive acquisitions remain an integral part of Stella-Jones' growth. In 2022, we continued on this path with the purchase of the wood utility pole manufacturing business of Texas Electric Cooperatives or TEC in Jasper, Texas. TEC joining our fall added a 43rd wood treating facility to our network and further expanded our capacity to supply the growing needs of North American utilities. This mark our second wood treating facility in the state of Texas, the second largest economic region of the United States, and we expect TEC to enable us to leverage the economic scale -- the economies of scale while expanding our customer base. North American demand for utility poles is strong. And as mentioned earlier, we expect it to continue to grow in the coming years. As we prepare for this growth, securing fiber is top of mind. With this, I'm pleased to announce that Stella-Jones acquired industries poles and pilings in February 2023 for a consideration of USD 12.5 million. Industry is specialized in procuring, peeling and drying SYP poles and is a great addition to our existing networks of pole peeling facilities. We continue to consistently -- apologies. We consistently seek accretive acquisition opportunities that will support our growth for our current businesses as well as expand product offering in our -- for our infrastructure customers. In addition to being underscored by a robust operating and financial results, 2022 also demonstrated the resilient nature of our business model as well as Stella-Jones capability to deliver outstanding performances amidst challenging macroeconomic conditions. The global economy continues to wrestle with inflationary cost pressures, fluctuating commodity prices and supply chain constraints. Regardless of these trying circumstances, I'm proud to say that Stella-Jones was able to meet demand and continue to serve our loyal customer base. This can be attributed to a number of factors. First, Stella-Jones benefits from long-standing procurement relationships. Our skilled and resourceful procurement teams were especially diligent in securing the fiber needs to meet demand, which enabled us to continue to provide essential products to our customers. Second, our contractual sales agreement structure continue to provide us with the ability to pass through cost increases, which helps us insulate from rising costs, particularly important in the current inflationary climate. And finally, our expansive North American presence places us in a unique position to serve our customers both efficiently and cost effectively based throughout Canada and the United States. The ability to continue to deliver the value and returns to shareholders in 2022 is another indication of a resilient model and solid business fundamentals. We ended the year better positioned than ever to continue our growth trajectory, and I look forward to what is still ahead to come. Before I turn the call over to Silvana, I want to provide an update on ESG. We are mindful of how our operations impact the planet and the communities in which we operate. And as a result, we continue to prioritize easy consideration across all facets of our business. We were pleased with our efforts in 2022 to better our ESG approach and are dedicated to continuous improvement of our sustainability and health and safety practices through ongoing learning, training and data collection. I look forward to the publication of our next ESG report later this year, where we will be sharing our 5-year strategy along with the targets for the metrics we track. One notable ESG event in 2022 was the completion of our very first solar panel installation at our railway tie manufacturing facility in Clanton, Alabama. This installation, which was commissioned a few weeks ago, is already meeting its target of 70% coverage of the facilities' electricity requirements. This is the first of several solar energy conversions we are planning and an important step on our path to sustainability of which we are very proud. I will now hand the call over to Silvana, who will review our financial performance in more detail.

Thank you, Eric, and good morning, everyone. Today, we reported net income for the fourth quarter of $36 million or $0.61 per share compared with $22 million or $0.34 per share last year. For the full year, net income was up 6% to $241 million from $227 million in 2021. Earnings per share was $3.93, an increase of 13% compared to $3.49 in 2021. During the fourth quarter, we generated sales of $665 million, up from $545 million for the same period last year. Sales in the fourth quarter benefited from a 17% organic increase in infrastructure-related sales, the contribution of our acquisitions and a favorable currency impact. The 17% organic growth of infrastructure-related sales was largely fueled by higher pricing. Utility pole sales were up 27%, railway ties sales increased in the low single-digit range and industrial products sales grew by 20%. Residential lumber sales were down slightly compared to the same period last year, and this was largely attributable to lower volumes. As Eric mentioned earlier, in 2022, the company achieved total sales of $3.1 billion, up 11% from last year. Sales from our utility poles product category, which accounted for 40% of total sales in 2022 were largely driven by an organic growth of 21%. Approximately 75% of the organic sales increase was due to higher pricing with 25%, making up increased volumes to cater to the strong demand. Railway ties sales accounted for 24% of total sales in 2022, up 4% from last year, an increase that was entirely attributable to higher prices. Volumes were lower year-over-year due to the reduction of the maintenance program of certain Class 1 customers. Sales in residential lumber accounted for 24% of total sales. The pullback in sales of 5% in 2022 was attributable to both lower pricing and volumes. Finally, industrial product sales represented 5% of total sales and were up 15% from last year. 65% of the increase was due to higher volumes. In 2022, we realized a record fourth quarter EBITDA of $87 million compared to $65 million in the fourth quarter of last year, representing a margin of 13.1% versus 9.5% in 2021. The increase in absolute dollars and as a percentage of sales was primarily attributable to pricing gains outpacing cost increases for certain infrastructure-related product categories as well as the improvement in the EBITDA of residential lumber compared to the marginal EBITDA generated in the fourth quarter of last year. Residential lumber results in Q4 of 2021 were impacted by the drop in demand in the second half of the year and the resulting higher cost of inventory on hand. For the year, we generated $448 million of EBITDA, representing a 12% increase over last year and a record for the company. The EBITDA margin was relatively unchanged at 14.6% compared to 14.5% last year, reflecting the company's ability to optimize its operational efficiencies and cover all cost increases. Adjusting for other losses, which were largely related to the retirement of idled equipment, we achieved an EBITDA margin closer to 15% in 2022. During the fourth quarter, we invested $136 million in inventory, acquired TEC continued to make capital expenditures to maintain and expand our operating assets and returned capital to shareholders. The significant increase in inventory in the last quarter of the year was to replenish in part our untreated tie inventory given the availability, increased log purchases to meet the growing utility pole demand and build the seasonal residential lumber inventory. We consider this an investment in our ability to continue to provide service to our customers and meet demand when many in the industry could not. For the year, the company generated cash from operations of $255 million. Our solid cash flow generation is how Stella-Jones delivers value to shareholders. In 2022, we returned $230 million of capital through share buybacks and payment of dividends. During the year, the dividend paid to shareholders amounted to $0.80 per share, representing an 11% increase compared to 2021. And as part of our normal course issuer bid, we repurchased approximately 4.7 million shares for $181 million. We ended the year with a net debt-to-EBITDA ratio of 2.5x, which is within our stated expectations. In line with our commitment to return capital to shareholders yesterday, the Board of Directors declared a quarterly dividend of $0.23 per share representing an increase of 15% over the previously quarterly dividend, and we continue to repurchase shares under the current NCIB program as announced last November. We hold a strong financial position and ended the year with available liquidity of nearly $260 million. Subsequent to year-end, we announced that we amended the terms of our farm credit facility to increase the amount available by USD 200 million and extended the term of the revolving facility to March 2028. The ability to amend our credit facility at attractive terms is a testament to the strength of our business, especially given the current macroeconomic environment. In summary, our strong financial performance has set us up well to meet our capital requirements and remain on track in achieving our growth objectives in 2023. With that, I will now pass it on to Eric for his concluding remarks. Eric?

Thank you, Silvana. Last year, we laid out financial objective for the 3-year period from 2022 to 2024. Our performance this past year positions us well to meet or exceed these targets. From a sales perspective, we benefited from strong demand on the utility pole side and better-than-expected residential lumber sales to push us to the high end of our guidance. While we are pleased with these results, we're still working towards the sales mix that we have forecasted. We have targeted infrastructure-related product categories, to comprise between 75% and 80% of our total sales. We are on our way to attain this objective, having achieved this target in the fourth quarter and being just under 70% in 2022. Given the organic growth in utility poles in 2022, which is projected to continue into 2023 as well as the contribution from our recent TEC acquisition, we fully expect to exceed our current sales goals for utility poles. For residential lumber, our 3-year plan is targeting for sales to represent between 20% and 25% of total sales, while residential lumber sales for 2022 remain above projected levels, the relative portion of residential lumber sales decreased to meet our target range. Given the current market condition of lumber, we continue to expect residential lumber sales to pull back and stabilize to deliver between $600 million and $650 million on an annual basis. The forecast for utility pole growth CapEx stood between $90 million and $100 million. Over the last 18 months, we committed to equipment purchases and spent $33 million of this envelope in the past year. We have successfully changed 3 treating cylinders, increasing our Douglas Fir network treating capacity by 15%. Additionally, we will benefit in 2023 from the production of 2 new SYP pole peeling and drying facilities starting midyear. As Silvana mentioned during her remarks, we returned $230 million of capital to shareholders in 2022, which is just under half of the target we outlined between $500 million and $600 million. Our EBITDA growth in 2022 has translated to more free cash flow and debt leverage opportunities that who we have wisely used to the benefit of our shareholders. In 2023, we look to build on our achievements from this past year to support future growth of our infrastructure product categories, continue to return capital to shareholders and achieve our margin goals. We look forward to providing more details in that regard at our inaugural Investor Day, which we will be hosting on May 25 in Toronto. 2022 was a momentous year for Stella-Jones in terms of performance, which would not have been possible without the effort, expertise and dedication of our employees all across North America, all of whom understand the importance of delivering the best for our customers every day. And for this, I say thank you. This concludes our prepared remarks. Thank you for your time, and we will now open the line for questions.

[Operator Instructions]. Your first question comes from Walter Spracklin from RBC Capital Markets.

This is James McGarragle, I'm on for Walter this morning. Congrats on the quarter and hope everyone is keeping well. I wanted to ask a question on your utility pole guidance. Again, you said you expect that to exceed your prior targets, that was up high single. I know your competitor last week they were talking about potentially pole sales up as high as 30%. So that's a pretty big discrepancy between above high single. So are you -- is what your competitors said, is that consistent with what you're seeing early in the year? And if you're able to provide a little bit more color on what you meant by exceed high single-digit growth?

Yes, certainly, James. So well, thank you for the question. First, our organic growth in 2022 was just over 20%, actually 21%. And as I just mentioned in my last comment, we expect this organic growth to continue through 2023. And we will be supporting that growth with the industry's acquisition as well as the new pole peeling yards that will be online this year. So we've secured -- we secured the procurement aspect of it, and we are also seeing the demand increase or to be at that level from our customer base.

Okay. So then just to clarify, the organic growth of last year should apply then again into 2023?

Yes, we -- yes, exactly.

Okay. Perfect. And then on the acquisition pipeline, can you provide a little bit of an update on what you're seeing there? I know it seems like there's a lot of opportunity in poles and you're investing organically heavily there. So is that going to be the focus on a more organic investment on the pole side? Or could we potentially see a pickup in M&A activity in 2023 as well?

Ideally, with the combination and I said ideally because we cannot dictate the rhythm of M&A. But rest assured, as I mentioned, we keep discussing -- we keep seeking accretive acquisitions, and we are continuing discussions with potential targets. So I would like to think that we could support our future growth with organic and M&A, but the 20% growth, just to be clear, does not include speculation at any M&A. So this would be totally off of our current footprint and in capital investment.

Okay. I appreciate the color, and I'll turn the line over.

Your next question comes from Hamir Patel from CIBC Capital Markets.

Silvana, I just wanted to clarify 1 of your comments on annual -- for annual '22 pole performance. Did I hear you right that 75% of the gain there was price? And any visibility you can give us on -- for the fourth quarter, how much of the increase there was price versus volume?

Yes. So you're correct, Hamir, that 75% was pricing, relatively the same percentage in the fourth quarter, maybe just a little bit higher. And basically, the volume piece is really just getting limited by the capacity constraints. So we're pretty much selling everything that we really able to produce in trade.

Okay. Great. And Silvana, would you happen to have the price volume splits for ties and res lumber in Q4 as well?

So for ties, it's completely -- it's all pricing. So volumes were slightly down, both in the quarter and year-to-date. And for residential lumber for the quarter, it's all volume. Pricing high was pretty much in line with last year's Q4 and year-to-date, I would say mostly volume pricing was down, but not as much as the volume.

Okay. Great. That's helpful. And then, Eric, I wanted to ask about on the res lumber business, I believe you mentioned kind of the sales there trending to $600 million to $650 million over time. Is that a range you would expect in '23? And what sort of price deflation would you expect? Because I know 1 of your major big-box customers is kind of playing to flat volumes in '23?

Yes, correct. So yes, so the $600 million to $650 million would be our expectation for '23. We base our forecasting based on the 2x6 off of random lengths. And year-over-year, we're seeing a reduction in that pricing close to 15%. Canadian dollars delivered Montreal, if you're going to do the math. And also keep in mind that there's an accessory portion into sales, which is driven mostly by composite products, which -- that is not pulling back and then obviously is following current inflationary trends, if you want.

Okay. Great. And just the last question I had, Eric, just on poles and ties, what sort of pricing pass-through trends are you seeing in '23, just given -- I know there's a lag there on the pass-throughs and just how raw materials fared in recent months?

Right. For railway ties, we're seeing the price of untreated ties sort of level off. There's still slight increases. So we'll see a bit more adjustments to our customers in the next quarter, maybe the next 2 quarters, maybe 1% or 2 as far as we can tell at this point. And at that point, hoping that the procurement trend continues. I'm hoping we'll be able to see a bit of a stabilization in the entire market. For utility poles, we had price increases at different times through 2022. So the first aspect is, obviously, we'll be benefiting increases from the second half of last year, will be benefiting the first half of this year. We're still seeing some price increases generated by the -- our contracts for inflationary adjustments, for example, which we would see materialize in our pricing in 2023. So pricing will definitely be part of that organic growth, but definitely volume as well.

That's all I had. I'll turn it over.

Your next question comes from Benoit Poirier from Desjardins Capital Markets.

Congrats for the strong finish. Yes. Just to look at the railway ties regarding the incidents that have taken place at Norfolk Southern was affected this -- was Stella-Jones affected in any way? And do you believe that this could lead to a potential future uptick in truck maintenance from Class 1 looking forward to 2023 and beyond?

So first, just to be clear, we're not -- Stella-Jones is not being tied to the unfortunate incidents that happened on their track. Secondly, I think our railwork customers are all very much focused on the quality of the maintenance of their network as well as the safety of the train. So unfortunate incident, could it sort of recenter some interests to ensure that maintenance is sustained. But I don't think we would see an uptick in sales. So I think our customers do a good job at maintaining their networks.

Okay. Perfect. And Silvana, you mentioned some color about the inventory replenishment that will be going through mid-2023. How should we look at the working cap going into 2023, on the back of this inventory replenishment for railway ties. And if you could share some color about the market dynamics with the sawmills and the pricing for untreated ties. That would be great.

So in terms of the capital investment in inventory expected in 2023, I mean, it could go as high total for the company to go as higher than $100 million. So part of that is, as you mentioned, and as Eric mentioned, is the replenishment of the entry to tie inventory. The costs are stabilizing, so we wouldn't be expecting any significant increases there, at least not on the tie side. The other big piece of the inventory build that we would be expecting in 2023 is for the pole. So with the continued increase in demand to support the sales that we're seeing and the sales growth that we would be expecting, we would also be expecting to invest more in our -- in the purchases of logs this year. So I would say those are kind of the 2 main factors. Residential lumber, we're not seeing any significant swings. There might be a little bit less cost but nothing significant.

Okay. And what about CapEx range for 2023, Silvana?

So for 2023, we would expect at least for the growth piece, as we mentioned, we've already spent about $30 million of the $100 million we'd expect probably the remaining -- 60% of the remaining in 2023 and the rest in 2024 in addition to the typical $50 million to $60 million range that we're still seeing in 2023 for our regular CapEx.

Okay. Perfect. And just from an EBITDA margin standpoint, if we remove the -- some other losses for the year, your EBITDA margin was just under 15%. And now given your comments about boultonization reduced contribution from residential lumber going into 2023, how should we look at the margin going into 2023?

I'll take -- I'll start. I'll give the first part of the answer, Silvana you could chime in. So Benoit, we were still targeting the 15%. I mean, the boultonizing piece, it is using more sale time. I can't say that the cost impact is that much important. But we do have a pass-through on that additional cost in our contracts for the boultonizing piece. So on the railway tie side. So I don't feel that, that would impact our margin percentages. And I feel quite optimistic about us being able to achieve the 15% level starting this year.

Perfect. That's great color.

Your next question comes from Michael Tupholme from TD Securities.

To pick up on a few of the things that have already been discussed, but a couple of clarifications and then some additional detail maybe. So just to be totally clear, Eric, for poles in 2023, is the suggestion that you think organic growth can be somewhere in and around that 20% range kind of broadly consistent with what you did in 2022?

Correct.

Okay. Perfect. And then I know the visibility as we go further out, gets more challenging. But if we think about beyond 2023, would you be guiding us back to that high single-digit range as we look beyond this year? Or has there been sort of a -- the entire sort of view shifted upward in terms of what you think you can do in this business organically?

So Mike, for now, I'll stick to our high single digit because that's what we had in our current guidance. And we'll be providing some more color at our Investor Day on May 25. We're currently doing a deep dive will be 1.5 years into our current goals. And I think it will be an opportunity for us to discuss a bit more of the long-term views. But as I stated earlier in my comments, we see our utility customers continue to invest looking for long-term partnerships. We have some visibility several years out with certain customers right now and they're looking to tie up Stella-Jones' ability to supply to be able to realize their projects. So it will be an interesting chat on May 25 as we expose more. And as well, where we'll have our senior team also talk to utility poles instead of me expressing it, you'll hear it from our senior team as well.

Okay. That's helpful. Look forward to that detail. Just in terms of the mix or the composition of this growth you expect in poles in 2023, is that expected to be broadly similar to what you saw in 2022 in terms of 75% driven by price and the balance volume?

I would think so. Yes. The volume aspect is consistently growing with very solid dynamics. But obviously, the pricing comes into play when you're in the market dynamics where there's more demand and supply. But definitely, a good assumption would be to use the 75-25 going forward for '23.

Okay. That's helpful. And then when we think about the demand side, I think in your prepared remarks, you called out some of the factors that are driving demand. So there's aging poles need to be replaced as a baseline and perhaps a step up in that level of replacement activity, but you called out broadband network expansion initiatives and growth in EV demand hardening of the grid. So when we think about all of these things, are all of those contributing to demand to the fullest potential already in what we saw in 2022 or things like broadband network expansion and EV demands. Like is that going to drive further growth as we look out further? Or is that all happening right now?

So they're not all driving at the similar level, right? So the replacement cycle because of aging infrastructure is at the forefront of the demand, broadband expansion is something we've been hearing about a lot in the last 2 years, and we're seeing those volume demand actually materialize now, but I believe we'll see more of that going forward. And then electric vehicles and hardening of the network, I do think that demand has still some potential growth going forward. And some of these projects will also be supported by infrastructure spend by governments that we haven't necessarily seen the fall or very -- actually not much of the impact so far. So there is the U.S. bill, obviously, for infrastructure. We're also hearing about the Canadian government that's looking to invest in infrastructure. We hear it through our partner, the electricity Canada that the government is very much interested in ensuring that there's a resilient network in Canada, and that will also bolster demand going forward.

Okay. And do you think that through the various tuck-in acquisitions you've been able to do and others that maybe could come forward as well as just I suppose maybe availability improving within -- in terms of fiber within the pole business? Like are you going to be able to sort of fully capitalize on that demand? Or do you think that the strong demand drivers, but some of the supply side constraints are going to limit the ability?

So our plan is to meet every single part of the demand we can. So we did the acquisition of Industries earlier this year to secure some fiber supply on the pole side. We embarked in our CapEx growth for utility poles last year. And to be transparent, we sort of were seeing these dynamics, and I'll thank the Board of Directors for supporting management in our views and supporting the CapEx spend. And as I also mentioned, we have 2 new pole peeling and drying yards online by midyear. And more to come, obviously, M&A will support it. We're pulling all the levers right now that we can to address the demand. And our team is completely focused on this organic growth opportunity that we're seeing. It's for us to seize. We're very well positioned. We've got a great North American footprint, and we can build upon that to add capacity at pole peeling and drying yards and procurement as well as in Canada as well, we're working on another project in BC to be able to support more fiber procurement. And we can follow up in future conference calls how we're progressing on that because it will be key to our ability to maintain this leadership position we are currently having in the market.

That's helpful. And yes, clearly, you're doing everything you can to put yourself in a position to meet that demand. And I guess just shifting over to railway ties, as you look ahead to 2023, can you talk about what you expect to see from a volume perspective there, it was flattish in 2022? And I guess, more specifically, any indications from your Class 1 and non-Class 1 customers in terms of CapEx and what they're looking at for 2023?

So in 2022, we actually saw a slight pullback in Class 1 customers. So looking into '23, we see similar volumes right now. There is some demand dynamics that are strong, especially in the non-Class 1 market. And I guess our bottleneck is really the procurement piece. So as I mentioned, we're seeing more availability in the last, let's say, 4 months. We're very pleased with that. We're replenishing our inventory levels. So that's a question of can we -- how soon will we get the dry inventory to service our customers and continue to boultonize or not dry to service clients. So we're very closely monitoring our procurement and inventory levels. So our first priorities to service our current contracts with Class 1 and some commercial customers that also have a few multiyear contracts. So we need to honor our engagements there. And then we're looking to optimize the opportunity, I guess, in the commercial business where we do see healthy demand. And so in the back half of the year, if things continue on this trend, we'll be able to capitalize. And there, there might be some volume, but I guess I'll confirm it on our next call. So for now, if I summarize it for '23, volumes are flat, and we'll see some pricing uptick as we're catching up on our pass-throughs.

Okay. That's all very helpful. I'll get back in the queue.

[Operator Instructions]. Mr. Vachon, there are no further questions at this time. Please proceed with your closing remarks.

Well, thank you, Julie, and thank you, everyone, for joining us today. We look forward to speaking with you on our next call in early May with our first 2023 earnings call.

Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines.