Richelieu Hardware Ltd.

Good afternoon, ladies and gentlemen, and welcome to Richard Lieu Hardware Second Quarter Results Conference Call. At this time, all participant lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session, which will be restricted to analysts only. In fact, 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 July 9, 2026. Bonjour Mesdames et Messieurs et bienvenue au résultat du deuxième trimestre 2025-2026 de Kinkari et 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, s'il vous plaît, appuyez sur l'étoile de zéro. Veuillez prendre note que cet appel est enregistré le 9 juillet 2026. J'aimerais maintenant céder la parole à M. Richard Lord, Président et Chef de la Direction. La parole est à vous.

Merci. Thank you. Good afternoon, ladies and gentlemen, and welcome to Richard Hughes's conference call for the second quarter and first half, ended May 31, 2026. 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. We recorded good growth and positive results during the second quarter. We are really focused on acquisition strategy, completing one new acquisition, followed by two quarter ones after the end of the quarter. Three promising acquisitions leading our criteria and further strengthening our leading position in this high growth market segment. Thanks to steady growth in our main market segment in Canada and the U.S., our sales increased respectively by 5.5 and 4.4% in U.S. dollar for the U.S. sales. Our total sales of 532.1 million, up 3.9%, an increase that would have been 5% on a comparable currency to 2025. Our sales to manufacturers accounted for 8.9% of our total sales, reaching $473.7 million, up 3.8%, driven equally by internal growth and acquisitions. Our sales to retailers and their innovation superstores increased by 4.2% to $58.4 million. We did that, reached $56.1 billion, and net income attributed to shareholders was up 3.2% to $23.2 million. Regarding the execution of our acquisition strategy, since the beginning of the year, we have completed four acquisitions. One in the US during the first quarter, another in Quebec during the second quarter, and two additional acquisitions after the end of the quarter in Canada. On May 1st, we acquired Finium, a distributor and manufacturer based in Frampton, Quebec. Special Agree in premium wall covering panels with high aesthetic, decorative, and acoustic value. These products stand out for their unique design, quality, and installation ease for both residential and commercial applications, and they fit perfectly with our decorative panel offering. On June 26, we completed the acquisition of Solution Acoustics, which operates in the Greater Montreal, and has as a specialized distributor in acoustic solutions known for their performance and architectural design. Then, on July 8, we completed the acquisition of Winnec, a distributor of specialized hardware operating in the GTU area with three distribution centers. This reinforces our position in the free market of Ontario. These four acquisitions, completed since the beginning of the year, have approximately $45 million in annual sales, bring new value expertise, new products, new customers, and further enhance the value we provide to our customers. In fact, the addition of Finium and Solutions Acoustiques strengthens our leadership in decorative and acoustic solutions to high-growth market segments, while further expanding our presence among architects and designers. This strategy builds on the recognition we received earlier this year with our Best of QBIS awards in two different product categories, and reflects our commitment to differentiate ourselves and remain a leader in innovation. I will now ask Antoine to review the financial highlights for the quarter and the first six months.

Thanks Richard. In the second quarter, sales reached $532.1 million, up 3.9%, or $19.9 million, given by 1.8% internal growth and 2.1% from acquisitions. At comparable exchange rates, sales growth would have been 5%. In Canada, sales totaled $291 million, up 5.5%, despite flat sales in Ontario, where the market conditions remain more challenging. Sales to manufacturers amounted to $246 million, up 4.5%, while sales to the hardware retailers totaled $45 million, up 11.6%. In the U.S., sales grew to $175 million in U.S. dollars, up 4.4%. Sales to manufacturers reached $166 million in U.S. dollars, up 5.6%, with 3.1% coming from internal growth. In the hardware retailers and innovation superstores market, sales reached 9.6 million, down 12.7%. In Canadian dollars, total sales in the U.S. reached 241 million, up 1.9% over last year, and accounting for 45% of total sales. Sales to our U.S. manufacturers market now represent 48% of total sales to manufacturers, further reflecting the growing importance of our U.S. operations. For the first half, total sales reached nearly $1 billion, up 4.4%, of which 1.9% resulted from internal growth and 2.5% from acquisition. In comparable exchange rate, sales growth would have been 5.9%. In Canada, sales reached $541 million, up 4.5%, including 2.9% from internal growth and 1.6% from acquisitions. Sales to manufacturers totaled $452 million, up $21.6 million, or 5%. Sales to hardware retailers and renovation super stores were $88.7 million, compared to $86.8 million, up 2.2%. In the U.S., sales amounted to $231 million in U.S. dollars, up 7.5%, with 3.7% from internal growth and 3.8% from acquisitions. They reached $455 million and $10 million, up 4.2%, accounting for 46% of total sales. In US dollars, sales to manufacturers totaled $313 million, an increase of $23.2 million, or 8%, driven by 4.5% internal growth and 3.5% from acquisitions. Sales to hardware retailers and renovation superstores stayed the same compared to last year. Second quarter EBITDA reached 56.1 million, up 1 million or 1.7% from last year. EBITDA margin was 10.6% compared to 10.8% last year. Slight decrease in percentage reflects the impact of tariffs, which proportionately increased both sales and cost of sales. First half EBITDA totaled 99.4 million, up 1.8%, with the EBITDA margin at 10%. Second quarter net earnings attributable to shareholders amounted to $23.2 million, up 3.2%, while diluted net earnings per share increased 2.4% to $0.42 from $0.41 last year. First half net earnings attributable to shareholders reached $37.6 million, up 3.5%. Diluted net earnings per share stood at $0.68 compared to $0.66 last year. Second quarter cash flow from operating activities before net change in non-cash working capital reached $47.9 million, up 2.4% from $46.8 million last year. Change in non-cash working capital used cash flow of $28.5 million, primarily driven by a $14.8 million increase in accounts receivable and $9.4 million increase in inventories. As a result, operating activities generated a cash inflow of $19.4 million for the quarter. For the first half, cash flows from operating activities represented a cash inflow of $36.6 million compared to a cash inflow of $51 million last year. For the second quarter, financing activities used $33.5 million in cash compared to $23.3 million last year, primarily reflecting higher cash returns to shareholders through $7.6 million of common share repurchase, in addition to quarterly dividend payment of $8.6 million. First half financing activities used cash flow of $58.6 million compared to $44.7 million in 2025. In the first half, we invested $26 million, including $15.3 million for two business acquisitions and $10.7 million primarily for equipment required to maintain and improve operation efficiency, including IT equipment. We continue to maintain an outstanding balance sheet with working capital of $629.5 million. I now turn it over to Richard.