ADENTRA Inc.

Good morning, my name is Joanna and I will be your conference operator today. I would like to welcome everyone to the ADEMTRA third quarter 2025 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question during this time, simply press star then the number one on your telephone keypad. To withdraw your question, please press star then the number two. With me on the call are Rob Brown, Adentra's President and CEO, and Fez Kamali, Vice President and CFO. Adentra's third quarter 2025 earnings release, financial statements, MTNA, and other quarterly filings are available on the investor section of our website at www.adentragroup.com. These statements have also been filed on Adentra's profile on CDAR Plus at www.cdarplus.ca. I want to remind listeners that management's comments during this call may include forward-looking statements. These statements involve various known and unknown risks and uncertainties and are based on management's current expectations and beliefs, which may prove to be incorrect. Actual results could differ materially from those described in these forward-looking statements. Please refer to the text in Edentra's earnings press release and financial filings for a discussion of the risks and uncertainties associated with these forward-looking statements. All dollar figures referred to today are in U.S. dollars unless stated otherwise. I would now like to turn the call over to Rob Brown. Please go ahead.

Thanks, and good morning, everyone. We delivered strong results in the third quarter, highlighting the resilience and consistency of the Dentures operating model. We grew sales, adjusted EBITDA, and maintained strong earnings despite a continued soft residential construction market and an uncertain macro backdrop. For the quarter, we generated sales of $592 million, up 4% year over year, adjusted EBITDA of $49.9 million, and adjusted EPS of $0.70. Organic sales grew 1.7% as product prices continued to firm throughout the year. Given our price pass-through model, these pricing gains supported gross profit growth even in a stable volume environment. Wolf Distributing, which we acquired in mid-2024, also contributed to our top-line performance. Gross margin came in at 21.4%, up slightly from last year, reflecting continued discipline in pricing and procurement. Operating expenses rose by 5%, driven by inflationary pressures on premises and wages, as well as mark-to-market LTIP adjustments related to share price gains. Earnings per share were 42 cents, consistent with last year's Q3 result. We also continued to convert earnings into cash, generating 60.6 million of operating cash flow in the quarter. That includes $35 million from operating cash flow before changes in working capital and an additional $25 million from working capital release as we executed our plan to reduce inventory ahead of the seasonally slower fourth quarter. We returned $7.4 million to shareholders during the quarter through dividends and buybacks under our normal course issuer bid. Since launching the program in March, we've repurchased more than 740,000 shares. We're about 3% of the outstanding shares at an average price of Canadian $29 per share. Our leverage ratio is 2.7 times down from the seasonal peak in Q2. We expect it to be closer to the mid twos by the end of the year. That positions us well for capital deployment on potential M&A activity in 2026. On the strategic front, over the last five years, we've acquired companies representing 1.1 billion in acquired revenue. These companies have significantly diversified our product offering and expanded our exposure to higher margin specialty categories. The integration of Wolf, which was acquired in July 2024, continues to perform on plan, broadening our Midwest presence and enhancing access to the ProDealer channel. From a trade perspective, our product mix remains well-balanced. Roughly 30% of our products are subject to country-specific tariffs at average rates around 20%. Importantly, the recent U.S. Section 232 review of wood products largely excluded our product categories. We continue to manage tariff exposure through our price pass-through model and diversified global sourcing network spanning 30 plus countries. providing us with diverse product options and different price points for our customers. If tariffs increase product costs, we adjust pricing accordingly to hold gross margin percentage. In addition, our cost-conscious management approach remains a key competitive advantage. We're focused on asset efficiency and continuous improvement in returns on capital deployed. This discipline, combined with a scalable operating model, positions us to benefit from operating leverage as volumes recover. With that, I'll turn it over to Fez to walk through the financials in more detail.

Thanks, Rob, and good morning, everyone. As Rob noted, third quarter results demonstrate stable performance across our business. Let me take you through the numbers. Sales were $592.1 million. up 4.1% from the prior year. That includes a 2.4% contribution from Wolf and 1.7% organic growth, driven mainly by product price appreciation. In the U.S., sales rose 4.4% to $548 million, with Wolf accounting for roughly 2.6 points of growth and organic sales, adding 1.8 points. In Canada, sales in Canadian dollars were up 1.2%, reflecting higher prices offset by slightly lower volumes. Gross margin increased 4% to 126 million, with margin rate up slightly to 21.4%. That reflects effective pricing discipline and procurement execution across our operations. Operating expenses were 101.6 million, of 5% year-over-year. The increase was driven by higher premise costs, wage inflation, and a $1.4 million mark-to-market adjustment on long-term incentives. Importantly, we continue to invest selectively in our people and infrastructure to support sustainable growth while maintaining strong cost discipline. Adjusted EBITDA was $49.9 million up 3.9% from last year. Adjusted EBITDA margin was 8.4%, consistent with the prior year and in line with our target range at this point in the cycle. Net income was 10.1 million, or 42 cents per share, broadly in line with Q3 2024. On an adjusted basis, net income was 17.2 million, and adjusted EPS was $0.70 compared to $0.74 a year ago. Operating cash flow was $60.6 million compared to $67.7 million in Q3 last year. The slight decline reflects timing differences in tax payments and working capital. Year-to-date cash flow from operations totaled $61 million. Leverage stood at 2.7 times net debt to EBITDA at quarter end. we remain comfortable with our balance sheet position and expect further deleveraging through the end of the year. Lastly, the board approved an increase in our annual dividend to Canadian 64 cents per share, reflecting confidence in our stable cash generation and long-term outlook. With that, I'll turn the call back to Rob for his closing remarks before the Q&A. Rob?