Richelieu Hardware Ltd.

Good afternoon, ladies and gentlemen, and welcome to Hishamir Hardware's TrueScore 2025 Results Conference Call. At this time, all lines are in the listen-only mode. Following the presentation, we will conduct a question-and-answer session, which will be restricted to analysts only. And if at any time during this call you require needed assistance, please press star zero for the operator. Also note that this call is being recorded on April 10, 2025. Bonjour, Mesdames et Messieurs, et bienvenue au résultat du premier trimestre 2025 de Quintaillerie-Richelieu. Présentement, vos lignes sont en mode d'écoute seulement. Suite à la présentation, nous allons procéder à une période de questions et réponses qui sera restreinte aux analystes seulement. Si vous avez besoin d'assistance au cours de l'appel, appuyez sur l'étoile et zéro. Veuillez aussi prendre note que cet appel est enregistré le 10 avril 2025. J'aimerais maintenant céder la parole à M. Richard Lord, Please accept the address. La parole est à vous.

Merci. Thank you. Good afternoon, ladies and gentlemen, and welcome to the additional conference call for the first quarter ended February 28, 2025. With me is Antoine Auclair, CFO and COO. As usual, note that some of today's issues include follow-up information, which is provided with the usual disclaimer, as reported in our financial findings. Richelieu made a strong start in 2025. While the first quarter is generally the weakest period of the year, and market conditions remain relatively stagnant, our total sales climbed by 8.6%, driven equally by internal growth and acquisition. This increase reflects the good performance of the manufacturers' market, where sellers were up 10% thanks to our strategy of innovation, acquisition, market penetration, and value-added service. In the retailers and renovation superstore market, overall sales were stable compared with the first quarter of 2024. In order to maintain our strategic advantage as market leader, we are investing substantially in this market to update our programs and product lines in the retailer stores, as well as introducing new products. We see these initiatives are already starting to bear fruit, with sales growth in Canada. We are also very pleased with our five acquisitions completed, including four in the first quarter and one following the end of the quarter. On December 1st, we acquired Mill Supply, operating in Batmout, Nova Scotia, and Charlottetown, Brentwood, Rhode Island. This acquisition, which was targeted since a long time, extends our presence in the Alifax region, where we already operate two sensors. In January, we acquired Darren Distributing, a specialized hardware and decorative software distributor in Denver, Colorado, marking our entry in this strategic market provision. Then we closed the acquisition of Midwest Specialty Products, a distributor of decorative surfaces, including quartz, which reinforces our presence in the Minneapolis area, where we already are established. In February, we have followed Modulex Partikel, located in Hillside, New Jersey. This distributor of Division 10 products for the construction market enables us to extend our presence in the greater New York area. Our most recent acquisition, completed on April 1st, is Roth & O'Hara Architectural Products, a distributor of exclusive architectural panels and related products, working closely with architects and designers, and IM Commercial Woodworkers, with one distribution center in Vineland, New Jersey. These strategic acquisitions highlight our commitment to extend our reach and increase our product offering across North America. In addition to contributing $15 million in sales, these five acquisitions strengthen our position in certain markets, open up new ones, add new products to our range, and create opportunities for new synergies. Together with the four acquisitions completed in 2024, they add, unfortunately, $120 million in real estate. The last few years have been years of major investment with our network. Just to name a few in the U.S., we increased our footprint in Detroit, Atlanta, Fort Myers, Chicago, Pantano, Nashville, and Seattle region. We also started two pinfield locations in Minneapolis and Cal State, New Jersey. In Canada, we completed last year the opening of our brand new 250,000 square feet building in Calgary, while consolidating two centers, giving us the opportunity to be a one-stop shop for all Western retail customers. We also undertook the same projects out of Kitchener, Ontario, for Eastern retail customers. Early this year, we concluded the consolidation of two centers into one 140,000 square feet building in Vancouver, serving the whole market. We are pleased with these investments that were required to continue to gain market shares and to offer a first-class service for customers. Part 1 will now review the financial highlights of the first quarter. Thank you, sir.

First quarter sales reached $442 million. up 8.6%, driven equally by internal growth and acquisitions. Sales from manufacturers stood at $385 million, up 9.9%, including 5.1% from internal growth. In the hardware retailers and renovation superstores market, sales remained stable at $56.6 million. In Canada, sales amounted to $242 million, up 4.1%. Our sales to manufacturers reached $195 million, and hardware retailers and innovation superstore market sales stood at $46.3 million, up 5%. In the U.S., sales grew to $140 million in U.S. dollars, up 7.6%, reflecting a 10% increase in the manufacturers' market, mostly resulting from acquisition, while sales to retailers and innovation superstore markets were down. In Canadian dollars, sales in the U.S. reached $200 million, an increase of 14.5%, representing 45% of total sales. First quarter EBITDA reached $42.4 million, up $2 million, or 5% over 2024. The lower margin from our recent acquisition, the increased marketing costs for new product lines at our retail customers affected the EBITDA margin slightly downward to 9.6% compared to 9.9% last year. First quarter net earnings attributable to shareholders totaled $13.9 million, a decrease of 8.6% from the first quarter of 2024, mainly due to an increase in amortization expense resulting from the capex investment and lease asset additions from the expansion project and business acquisition made during the previous fiscal year and the first quarter of 2025. Consequently, value to net earnings per share was $0.25 compared with $0.27 last year. First quarter cash flow from operating activities before net change in non-cash working capital balances was $37 million or $0.67 per value to shares. The net change in non-cash working capital used cash flow of $34 million. As a result, operating activities provided a cash inflow of $3.7 million compared to a cash inflow of $0.5 million in the first quarter of 2024. We paid dividend of $8.5 million to shareholders and we invested $25 million including $20 million for four business acquisitions and $5 million in packets. At the end of the quarter, financial situation was healthy and solid with working capital of $613.2 million and almost no debt. I now turn it over to Richard.