ADENTRA Inc.

Good morning. Welcome to Adentra's first quarter 2026 results conference call. All lines have been placed on mute to prevent background noise. After the speakers' remarks, there will be a question and answer session. With me on the call today are Rob Brown, Adentra's President and Chief Executive Officer, and Fez Kormily, Vice President and Chief Financial Officer. Adentra's earnings release, financial statements, and MD&A for the quarter ended March 31st, 2026 are available on the investor section of our website or and on CDAR+. Before we begin, I'd like to remind listeners that management's comments may include forward-looking statements. Actual results could differ materially due to risks and uncertainties outlined in our violence. All dollar figures mentioned today are in U.S. dollars unless otherwise indicated. I will now turn the call over to Rob Brown. Please go ahead.

Thanks, Operator, and good morning, everyone. We began 2026 with solid performance despite an increasingly uncertain macroeconomic backdrop. This morning, I'll speak to how we are managing near-term conditions and how we're positioning the business to drive longer-term value. Before turning to the quarter, I want to briefly frame the strategic priorities guiding our decisions in 2026. These are areas where we are investing with discipline, where we see clear opportunities to strengthen the business structurally, and importantly, where progress is largely within our control. There are three core areas of focus. First, advancing an AI-enabled operating model. Over the past 18 months, we've built a strong foundation in data governance and systems integration. We're now moving into development of dynamic pricing and sales optimization tools that we believe will help our teams make better, more consistent, data-driven decisions in real time. These capabilities are designed to drive structurally better margins, asset utilization, and generate incremental revenue through continuous compounding improvements across our network. We're taking a disciplined, results-oriented approach, developing tools with clear applications, testing them in targeted environments, and then plan to scale what proves effective. We're focused on speed, accountability, and measurable outcomes with the objective of driving sustained margin improvement, incremental growth, and stronger returns on invested capital over time. Second area of focus is strengthening our global supply chain. We're continuing to diversify our sourcing footprint and build greater flexibility into our supply network, including developing new capabilities in regions where we had little or no presence just a few years ago. This work is about more than cost. It is about reducing risk and increasing optionality in an increasingly complex global trade environment. It also supports profitability through access to differentiated and proprietary products while positioning us to support future growth, including acquisitions. Third area of focus is maintaining a disciplined and active approach to M&A. We continue to nurture a robust pipeline of opportunities and have the balance sheet flexibility to execute when the right business becomes available. A focus remains on transactions that are strategically aligned, operationally actionable, and capable of delivering meaningful synergies. Taken together, these priorities reflect a consistent approach. Investing in areas that strengthen our platform, improve returns on invested capital, durable, longer-term value. At the same time, we are clear-eyed about the macro environment. Demand remains impacted by affordability constraints, and we continue to see pressure from mortgage rates, inflation, and broader geopolitical uncertainty. We're managing the business accordingly, with a strong focus on cost discipline, pricing execution, and working capital efficiency. while continuing to invest in initiatives that will drive longer-term performance. With that context, let me turn to our first quarter performance. In the first quarter, we generated sales of $562.7 million, up 3.7% year over year, driven by a combination of higher volumes and improved pricing. Importantly, this growth was entirely organic, reflecting the strength of our platform and our ability to continue gaining share. We saw particularly strong demand in roofing products, supported by storm-related activity and customer purchasing ahead of expected price increases. Gross margin was 20.2%, remaining above our benchmark of 20.0%, go down from last year, primarily due to product mix. Roofing products carry lower margins, but generate strong returns on invested capital, and we expect mix to normalize. At the same time, we maintained strong cost discipline with operating expenses increasing less than 1% year over year, reflecting the benefits of premise and headcount reductions last year. as well as a continued focus on efficiency across the business. Adjusted EBITDA was $38.3 million and adjusted EPS was $0.38, demonstrating resilience in a softer environment. From a cash flow perspective, we delivered a significant year-over-year improvement driven by working capital management. Our balance sheet remains strong with leverage at 2.4 times versus three times in T1 last year, positioning us well to execute on our capital allocation priorities. Overall, the quarter reflects the resilience of our operating model and our ability to perform in a more challenging environment. With that, I'll turn the call over to Fez to review the financials in more detail.

Thanks, Rob, and good morning, everyone. As a reminder, all figures are U.S. dollars, less otherwise stated. For the three months ended March 31, 2026, Identra generated sales of $562.7 million, an increase of 3.7% year-over-year. This growth was primarily driven by a 2.1% increase in volumes and a 1.3% increase in product pricing. Regionally, U.S. sales increased 3.9%, driven by both volume and pricing improvements. Canadian sales declined 50%, reflecting softer demands and pricing pressures. Gross profit was $113.7 million, or 20.2% of sales, compared to 21.6% last year. The decrease primarily reflects product mix, particularly the increased weighting of lutein products as well as other mixed changes across the portfolio. Operating expenses were $100.4 million, up 0.5% year-over-year. The increase was mainly driven by higher lease premise costs and higher outage expense. These were partially upset by lower personnel costs as a result of ongoing cost control initiatives. Adjusted EBITDA was $38.3 million, down 4.1% year-over-year. Net income was $2 million compared to $4.1 million last year. On an adjusted basis, adjusted net income was $9.3 million compared to $10.8 million, and adjusted EPS was $0.38 compared to $0.42 last year. Cash flow from operations improved significantly. with 6.2 million used compared to 33.5 million used in Q1 2025. This improvement was primarily driven by more efficient working capital management. We ended the quarter with a leverage ratio of 2.4 times, maintaining strong financial flexibility. Our capital allocation priorities remain unchanged and include maintaining a strong balance sheet, investing in organic growth, pursuing M&A, and returning capital to shareholders through dividends and opportunistic share repurchases. With that, I'll turn the call back to Bob.