Richelieu Hardware Ltd.

Good morning, ladies and gentlemen, and welcome to the Richelieu Hardware third quarter results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session, which will be restricted to analysts only. If at any time during this call you require immediate assistance, please press star zero for the operator. Also know that this call is being recorded on October 8, 2026. Bonjour Mesdames et Messieurs et bienvenue au résultat du troisième trimestre 2026 de Quinquairie 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, veuillez appuyer sur l'étoile et zéro. Veuillez aussi prendre note que cet appel est enregistré le 8 octobre 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 morning, ladies and gentlemen, and welcome to Richard Lord's conference call for the third quarter and first nine months ended August 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 filings. Our third quarter was marked by strong growth and strategic expansion, once again demonstrating the strength of our business model and our ability to capitalize on new opportunities. We are particularly proud of the acquisition of Penrod, the largest in our history, which we completed on September 1, following The acquisition of Solutions Acoustiques and Winnec in Canada during the third quarter. So far this year, our acquisition strategy has positioned us for sound future growth with a total of five acquisitions, adding $145 million in annual sales, expanding our market expertise, diversifying our specialized customer base, and providing significant additional network coverage in strategic markets. Our sustained investment in innovation, our various private label brands, our diversified market segment and our distinctive service offering, including richelieu.com, provide us with competitive advantages that help us remain competitive in an uncertain economy. During the quarter, sales reach and a total of 562 million with growth across all market segments in Canada and in the U.S., including initial shipments to our major U.S. retail customers. Our U.S. operations continue to be a key driver in our growth. In Canadian dollars, our U.S. sales accounted for 46.6% of total sales for the quarter. Sales to manufacturers in the U.S. now represent 49% Our total sales to manufacturers, highlighting the strength of our presence in this market. EBITDA was up 15% to $65 million, supported by sales growth and favorable impact of a $3 million refund of U.S. tariff, representing about 60 basic points to our EBITDA margin of 11.7%. Now let's take a look at our most recent acquisitions. Completed in the third quarter, Solutions Acoustiques based in the Montreal area is renowned for its standard decorative and high-performance acoustic solutions, a growing market, and WINEQ, which operates three distribution centers of specialized hardware in the Greater Toronto area. On September 1, we completed the acquisition of the Penrod Company's hardware division, adding annual sales of $60 million in U.S. dollars and seven distribution centers across the U.S. For us, this is an outstanding opportunity to strengthen our position with a diversified customer base of door manufacturers, architects, residential and commercial contractors, and specialty distributors. I will now ask Antoine to review the financial highlights for the quarter and the first nine months.

Thanks, Richard. In the third quarter, sales reached $562 million, up 12.6%, or $62.8 million, driven by 10% internal growth and a 2.6% contribution from acquisitions. At comparable exchange rate, sales growth would have been 11.3%. In Canada, Sales totaled $300 million, up 10.2%, with strong growth from all regions. Sales to manufacturers amounted to $252 million, up 11.4%, while sales to the hardware retailers totaled $48 million, up 4.6%. In the U.S., sales reached $187 million in U.S. dollars, up 12.9%. Sales to manufacturers reached $172 million in U.S. dollar, up 9.3%, with 7% from internal growth. In the hardware retailers and renovation superstores market, sales reached $14.7 million, up 86.1%, mainly reflecting initial deliveries to a major customer in the U.S. In Canadian dollars, total sales in the U.S. reached $262 million, up 15.4% over last year and accounting for 46.6% of total sales. For the first nine months, total sales reached nearly $1.6 billion, up 7.2%, of which 4.6% resulted from internal growth and 2.6% from acquisition. In comparable exchange rate, sales growth would have been 7.9%. In Canada, sales reached $841 million, up 6.5%, including 4.5% internal growth and 2% from acquisition. Sales to manufacturers totaled $704 million, up $47.7 million, or 7.3%. Sales to hardware retailers and renovation superstores were $136.8 million, compared to $132.9 million, up 2.9%. In the U.S., Sales amounted to $518 million in USD, up 9.4%, with 3.3% from internal growth and 6.1% from acquisitions. They reached $717 million in CAD, up 8%, accounting for 46% of total sales. In USD, sales to manufacturers totaled $485 million, an increase of $37.5 million, or 8.4%, driven by 5.3% internal growth and 3.1% from acquisitions. Sales to hardware retailers and renovation superstores amounted to $33 million which represents an increase of $6.9 million or 26.4% with 20.1% coming from internal growth and 6.3% from acquisitions. Third quarter EBITDA reached $65.5 million up $8.5 million or 14.8% from last year. EBITDA margin was 11.7% compared to 11.4% last year. The slight increase reflects the impact of the reimbursement of tariffs which represent $3 million and was recorded as a reduction of cost of goods sold. Excluding this reimbursement, EBITDA margin would have been 11.1%. For the first nine months, EBITDA totaled $164.8 million, up 6.5%, with the EBITDA margin at 10.6%. Third quarter net earnings attributable to shareholders reached $29.2 million, up 22.4%, while diluted net earnings per share increased 23.3% to $0.53 from $0.43 last year. Excluding the reimbursement of tariff, EPS would have been $0.49, representing a 14.1% increase from last year. For the first nine months, net earnings attributable to shareholders reached $66.9 million, up 11%. Diluted net earnings per share increased to $1.21 compared to $1.08 last year, up 12%. Third quarter cash flow from operating activities before net change in non-cash working capital reached $54.5 million, up 13.5% from $48.1 million last year. The change in non-cash working capital represented a cash inflow of $4.8 million, primarily driven by a $24.7 million change in accounts payable, while accounts receivable, inventories, and other items used $19.9 million in cash. As a result, operating activities generated a cash inflow of $59.4 million for the quarter. For the first nine months, cash flow from operating activities represented a cash inflow of $95.9 million, For the first 9 months, Financing activities use cash flow of $21.7 million compared to $70.1 million in 2025. In the first nine months, we invested $45.8 million, including $31.7 million for four business acquisitions and $14.1 million primarily for equipment required to maintain and improve operational efficiency, including IT equipment. We continue to maintain a strong balance sheet with working capital of $702 million, and a working capital ratio of 3.2 to 1. I now turn it over to Richard.