Richelieu Hardware Ltd.

Good afternoon, ladies and gentlemen, and welcome to the four-quarter results call. At this time, all lines are in the list . Following the presentation, we will conduct a question and answer session. If at any time during this call you require needed assistance, please message the operator. Note that this call is being recorded on January 15th, 2026. Bonjour, mesdames, messieurs, et bienvenue au résultat du deuxième trimestre 2025, le quinquennat richelieu. Présentement, vos lignes sont en cours de couture seulement. Suite à la présentation, nous allons procéder à une série de questions et réponses qui seront restreintes aux annales seulement. Si vous avez besoin d'assistance au cours de l'appel, appuyez sur le toit le zéro. Veuillez prendre note que cet appel est enregistré le 15 janvier 2026. J'aimerais maintenant soulever la parole à M. Richard Lange, président et chef de la direction. La parole est à vous.

Merci, thank you. Good afternoon, ladies and gentlemen, and welcome to RicherU's conference call for the fourth quarter and the year ended November 30th, 2025. With me is Antoine Auclair, CFO and COO. As usual, note that some of today's issues include forward-looking information which is provided with the usual disclaimer, as reported in our financial findings. Overall, we delivered a strong fourth quarter with good progress in our main market segments. We also closed three new acquisitions during the year, building on the six acquisitions completed earlier in the fiscal, two in Canada, and four in the U.S. For the quarter, sales increased by 7.3% to $511 million. EBITDA increased by 9.1%, Diluted earnings per share increased by 4.5%, and cash flow from operations reached 68.7 million, including a $30 million reduction in inventory. These results highlight the strength of our model and our operating discipline. The fourth quarter was active on the acquisition front. We closed Ideal Security in September, FinMac Lumber and in October. Ideal Security, located in the Greater Montreal area, distributes specialized hardware products for doors and window market, and serves hardware retailers and innovation superstore market, as well as online retail platform. Finn McEmberg is a specialized wood product distributor based in Winnipeg, serving Western Canada. Klasson Grounds, based in Ontario, strengthens our offering with a wide range of letter, number, sign and mailboxes, key links and key cutting machines for the hardware retailers and the Renovation Superstore market. We are very pleased with this acquisition, partially with Ideal and Klasson, which expand our issue portfolio of private brands for the retailers and Renovation Superstore market to 10. These acquisitions reinforce our position in this key market segment and support our one-stop-shop strategy, supported by our distribution centers in Calgary for Western Canada customers, Kitchener for Eastern Canada, and Chicago for the U.S. market. Private brands and exclusive products remain an important differentiator for the showroom. A significant proportion of our sales is generated through these offerings, which support customer satisfaction and loyalty while reinforcing our competitive positioning and margin profile. The strong fourth quarter rose total sales for the year to 1.96 billion, up 7.2%. Even though for the year increased by 6.2%, and cash flow from our position reached $202 million. We closed the year with a positive cash position, almost no debt, and a working capital of $622 million, which means a solid and healthy financial position and a not-sending balance sheet. I will now ask Councilman to review the financial highlights for the quarter and the year ended, November 30th, 2025.

Thanks, Richard. Our fourth quarter sales reached 511 million, up 7.3%. Sales to manufacturers stood at 459.9 million, up 9.1%, with 5.9% from internal growth and 3.2% from acquisitions. In the hardware retailers and renovation superstores market, sales were down 6.4%. In Canada, sales amounted to $282 million, up $6.8 million, or 2.5%. Sales to manufacturers reached $241 million, an increase of 4.6%. In the retailer's market, sales totaled $41 million, down 10.7% this quarter, mainly due to timing differences. On a year-to-date basis, sales are in line with last year. In the U.S., sales totaled $164 million in U.S. dollars, up 12.3%. Sales to manufacturers reached $157 million in U.S. dollars, up 12.9%, including 8.8% internal growth, mainly driven by price increases. In the retailer's market, sales were up 1.4%. Total sales in U.S. reached $229 million in Canadian dollars, an increase of 13.9%, representing 45% of total sales. Total sales for 2025 reached $1.96 billion, an increase of 7.2%, of which 3.2% from acquisition and 4% from internal growth. Sales to manufacturers reached $1.7 billion, up 8%, of which 4.4% from internal growth and 2.6% from acquisitions. Sales to hardware retailers grew by 1.6%. In Canada, sales totaled 1.1 billion, up 2.2%, primarily driven by acquisitions. Sales to manufacturers amounted to 897 million, up 2.8%. Sales to hardware retailers and renovation superstores were 175 million, essentially flat compared with last year. In the U.S., Sales amounted to $638 million in U.S. dollars, up 10.9%, of which 5% from internal growth and 5.9% from acquisition. They reached $893 million in Canadian dollars, up 13.9%, accounting for 45% of total sales. Sales to manufacturers reached $604 million in U.S. dollars, an increase of 11.1%, and sales to hardware retailers were up by 7.8%. Fourth quarter EBITDA amounted to 59.2 million compared to 54.3 million in the fourth quarter of 2024, up 9.1%. Our gross margin remained stable and the EBITDA margin stood at 11.6% compared to 11.4% in the same period last year. Fourth quarter net earnings attributable to shareholders totaled 25.6 million compared with 24.4 million last year. Diluted net earnings per share were $0.46 compared with $0.44 last year, an increase of 4.5%. For the year, net earnings reached $86 million, or $1.55 per diluted share, compared with $1.53 last year, an increase of 1.3%. Fourth quarter adjusted cash flow from operating activities was $48.3 million, or $0.87 per share. Net change in non-cash working capital balances represented a cash inflow of $20.4 million, driven by a $30.1 million reduction in inventories. Consequently, we generated $68.7 million in cash flow from operating activities, compared with $27.2 million in the fourth quarter of 2024. For a year, operating activities generated a cash inflow of $202.4 million, compared with $133.6 million last year. Over the year, we paid $34 million in dividend, representing a payout ratio of 37.5%. We also repurchased common share for $16 million, including $13 million in the fourth quarter. In total, we returned $15 million to shareholders this year. Investing activities used cash flow of $62 million, including $47.1 million for nine business acquisitions completed this fiscal year. and $15.2 million primarily for the purchase of equipment aimed at maintaining and improving operational efficiency.