ADF Group Inc.

Good morning, ladies and gentlemen, and welcome to the ADF Group Inc. Results for the three-month period ended April 30, 2026 conference call. At this time, note that all participants' lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. And if at any time during this call you require needed assistance, please press star zero for the operator. I'm sorry, star zero for the operator. Also note that this call is being recorded on Tuesday, June 9, 2026. I would now like to turn the conference over to Mr. Jean-Francois Boursy, Chief Financial Officer. Please go ahead, sir.

Yes, ma'am. Good morning and welcome to ADF's conference call covering the first quarter ended April 30, 2026. I am with Keir Kostini, Chief Operating Officer of ADF, who will be available to answer your questions at the end of the call. We are currently an hour from hosting our 2026 Annual Shareholders Meeting, which will take place here at our corporate office in Petbun. I will now update you on our quarterly results, which were disclosed earlier this morning by press release. First, a word of caution. Please note that some of the issues discussed today may include forward-looking statements. These are documented in ADF Group's Management Report, The first quarter ended April 30, 2026, which were filed with CDR this morning. Our fiscal 2027 is off to an excellent start. Even if we are dealing with the numerous and never-ending past changes, we are still keeping our focus and managing these challenges proactive. Revenues during the three-month period ended April 30, 2026, Total $99.3 million, 78.8% higher than the $55.5 million for the same period ended a year ago. The increase comes from the recently signed contracts, which are now in fabrication. It is also worth mentioning that our first quarter revenues a year ago were negatively impacted by the then recently announced The gross margin at $24.0 million almost doubled when compared with the same period of the previous fiscal year. Gross margin as a percentage of revenues went from 22% during the three-month period ended April 30, 2025, to 24.2% during the same period ended April 30, 2026. The increase in margin, both in dollars and as a percentage of revenues, is explained by the higher revenues, which improves the absorption of fixed costs, despite higher input prices, including the price of steel and the recent changes to tariffs. The revenues and margin for the quarter ending April 30th, 2026, are now inclusive of the group law acquisition which was finalized in September 2025. As such, our revenues and growth margin for the quarter ended April 30, 2026, included $18.1 million and $1.3 million, respectively, coming from growth loss. For the three-month period ended April 30, 2026, Selling and administrative expenses amounted to $7.6 million, boasting a $4.2 million increase compared with the same period a year. This variation is mainly explained by the adjustment in the market value of deferred shared units and in performance shared units granted to external board of directors members and certain members of senior management, in line with the variation in the corporation share price during the periods analyzed. The acquisition of Group Law also had an upward impact on selling administrative expenses of $1.1 million during the three-month period ended April 30, 2026. We therefore close our first quarter with an income of $12 million, or 42 cents per share, compared to $8.7 million, or 30 cents per share for the same quarter, a year ago. Our balance sheet remains very strong. We closed our first quarter and did last April 30th with cash and cash equivalent of $62.1 million, only $0.6 million lower than our January 31st, 2026, ending back. Working capital stood at $111.9 million for a 2.2 to 1 ratio. Acquisition of property, planning equipment, and intangible assets for the first quarter and the last April 30th total $9 million, including the modification of an existing fabrication bay in Tabun, the start of the expansion capex in Metabichuan for Gopla, and the redesign of the corporation's integrated ERP software package. We actually had the first shovel ceremony last week for our LAR extension project. We expect foliar paybacks to be approximately $35 million. Finally, we closed the corridor with a record-breaking backlog of $645.8 million. This backlog includes $266.5 million coming from GoPla, which includes the multi-year contract announced last April. Worth mentioning, the April 30, 2026 backlog includes 72% of Canadian projects. As previously mentioned, we are very satisfied with the results of our first order, which is highlighted by the progress of our operating activities and the ongoing growth of our order backlog. As announced this past April, we have finalized a long-term contract in the hydroelectric sector in Quebec for Gauguin, which confirms our optimism expressed in our year-end reporting and communication, Annihilates the importance of the investments we will make in the coming quarters to not only increase the production capacity of Glucolab's plant, but also outfit it with state-of-the-art equipment. Our financial position remains strong, and we are continuing our discussion with the goal of securing adequate financing for our capital investment in Lex Asia. As such, We were able to reach an agreement with the federal government for a $12.5 million loan, which, subject to certain conditions, would be 50% forgivable and 50% interest-free. We expect to have the full financing package confirmed before the end of the second quarter and being next July 31st. Though our market remains active, U.S. virus policy remains a significant irritant and will continue to have pressure directly and indirectly for our cost structure. This being said, and as shown by our results for the first quarter, our proactive approach allows us to continue our orderly growth and minimize the risks associated with existing uncertainties. Thank you for your interest and confidence in ADF. Gary and I will now answer your questions.

Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touch-down phone. You will then hear a prompt that your hand has been raised. And should you wish to withdraw from the polling process, please press star followed by two. And if you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. Thank you. And your first question will be from Nicholas Cotellucci at Atrium. Please go ahead.