Stella-Jones Inc.

Good morning and thank you for standing by. Good morning and thank you for standing by. Welcome to Stella Jones' second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will hold a question and answer session. To queue up for a question by phone, please press star 1 and a moderator will contact you. If anyone experiences technical difficulties hearing the conference call, please press star zero for the operator at any time. I would like to remind everyone that this conference call is being recorded on Thursday, August 6, 2026. I will now turn the call over to David Galison, Vice President of Investor Relations of Stella Jones.

Thank you, John. And good morning, everyone. Earlier this morning, we issued our press release reporting our results for the second quarter of 2026. Along with our MD&A, it can be found in the investor relations section of our website at www.stella-jones.com, as well as on CDAR+. As a reminder, all figures expressed on today's call are in Canadian dollars unless otherwise stated. Please note that comments made on today's call may contain forward-looking information. and this information by its nature is subject to risks and uncertainties. Actual results may differ materially from the views expressed today. Further information on these risks and uncertainties, please consult the company's relevant filings on CDAR+. These documents are also available in the investor relations section of Stella Jones website at www.stella-jones.com. Additionally, during this conference call, the company may refer to non-GAAP measures which have no standardized meeting under GAAP and are not likely to be comparable to similar measures presented by other issuers. For more information, please refer to the company's latest MD&A available on Stella Jones' website and on CDAR+. Lastly, we have prepared a corresponding presentation which we encourage you to follow along with during this call. I'll now hand the call over to Eric Vachon, President and Chief Executive Officer of Stella Jones, for a strategic business update, followed by Silvana Travaglini, Senior Vice President and Chief Financial Officer of Stella Jones, who will provide a more detailed financial overview of the quarter. Eric, over to you.

Thank you, David, and good morning, everyone. Today we reported second quarter results that reflect continued strength in utility products supported by positive volume momentum in wood utility poles and a solid contribution from our recently acquired Cross Arms business. In railway ties, stronger commercial activity provided a significant offset to lower Class 1 volumes while our network optimization plan continued to advance and remains on track to support profitability improvement. In residential lumber, pricing and volumes remained below prior year levels, although trends improved towards the end of the quarter and into Q3. While underlying business conditions remained supportive, profitability in the quarter was affected by several near-term cost headwinds, including higher site-specific environmental and maintenance costs, temporary inefficiencies from our steel structure capacity expansion project, and increased fuel costs. These pressures were amplified by the lag in recurring certain cost increases through pricing. Excluding items that are not expected to repeat, margin performance in the quarter would have been closer to 17.5%. Margin improvement is also expected to be driven by a greater contribution from higher margin businesses, such as cross arms and steel structures, along with a better railway tie sales profile, including more TSO volumes and higher value rail products. Together, these factors support our expectation that EBITDA margin should improve in the second half of 2026, while remaining below our three year target range for the full year. In parallel, we continue to advance our continuous improvement and footprint optimization initiatives, which we expect will drive efficiencies, strengthen margins, and enhance profitability over time. Combined with a more supportive business mix and favorable end-market fundamentals, these actions reinforce our view that the current level of margin performance does not represent a structural change in the earnings power of the business. Accordingly, we remain confident in our ability to achieve our stated three-year average adjusted EBITDA margin objectives of 17.5 to 18.5%. Turning to a performance and overview of our main product categories and starting with utility products. We remain encouraged by the strength of the business which continues to be a key growth driver. In wood utility poles, momentum remained positive in the second quarter, although the volume's growth moderated from the strong pace seen in the first quarter. Importantly, on a year-to-date basis, volume growth remained in line with our mid-single-digit outlook, supported by the continued strength in our contract-based business. Spot pricing has also stabilized broadly on a sequential basis and we expect the additional capacity coming online later this year, which we mentioned in our Q1 call, to have only a negligible impact on overall spot pricing. When fully operational, we believe the new capacity will represent less than 1% of the total North American treating capacity. Turning to our continuous improvement initiatives, we are now planning the next phase of our network optimization, focusing on our wood utility pole facilities. The objective is to consolidate some capacity so we can fully realize the benefits of investments already made, as well as increasing plant specialization. Most of the network is already operating on a single product basis with only a few facilities left to transition. Another important consideration as we develop our optimization plan is the current preservative availability in Canada, where approval of DCOI, the main oil-based alternative to Penta, remains outstanding. We expect these optimization efforts to improve utilization, enhance profitability, and free up capacity to support growth in the wood utility poles. Beyond the operating and financial benefits of these optimization initiatives, They will also contribute to the broader sustainability strategy. By streamlining our production footprint across both railway ties and utility poles, we're actively improving the GHG emission profile of our network, keeping us on track to meet our long-term sustainability targets. Turning to our latest acquisitions, The integration of a cross arms business continues to go well and the business performed in line with our expectations, providing a solid contribution to the results. We are also seeing strong interest from our existing customer base as the product offers a natural value added extension to our utility pole offering. To this end, we began recording Canadian sales in the quarter, demonstrating the progress we are making in leveraging our established network and deep customer relationships to broaden our share of customer spend. For steel structures, sales in the quarter were lower compared to the prior year, primarily due to temporary lost production time and lower throughput during the equipment changeover related to our capacity expansion program. We continue to make solid progress in the seal structure capacity expansion. In Candiac, the plant modernization remains on track to double capacity to 20,000 tons by Q3 of 2026 with full ramp-up by year-end. Demand for lattice towers remains strong and the capacity is already substantially allocated through the end of 2027. Our team has also secured one customer contract for approximately one-third of the production capacity in CONDIAC for the next 10 years. In the U.S., we continue to advance the development of our Fayetteville, Tennessee facility. Our focus to date has been on finalizing key vendor agreements, advancing permit work, and preparing the site and equipment plans needed to move into execution. As a reminder, the site includes an existing newly constructed building that is suitable for operations, which helps mitigate execution risk. The project remains on track and we continue to expect this investment of approximately 50 million US dollars to add another 20,000 tons to our steel structure production capacity. Commissioning is expected in late 2027 with full production by the end of 2028. We also have received strong initial support from existing U.S. customers that are currently served from Condiac to place order in 2027 with the new facility as part of its ISO and customer certifications and ramp-up. These early volumes should help support commissioning and a smoother startup. We are also seeing increased interest from Canadian customers for steel transmission structures, which over time should give us greater flexibility to shift U.S. demand to Fayetteville while backfilling capacity in Candiac with Canadian demand. Turning to railway ties, second quarter results reflected similar market conditions to Q1 this year. As expected, Class 1 volumes remained lower in the quarter. However, we continued to see growth in our commercial business, which was able to offset a meaningful portion of the decline in Class 1 volumes. During the quarter, we began executing on the network optimization plan outlined in Q1, continuing to consolidate our footprint and reallocating volumes to most efficient facilities to better align business with the current demand. While these actions resulted in some one-time costs in the quarter, we expect these initiatives to improve returns over time. At the same time, we remain focused on growth. During the quarter, we finalized one Class 1 contract renewal that includes volume growth and we are seeing interest from that customer in bridge timbers which could provide incremental upside. Looking ahead, we are actively negotiating another Class 1 contract renewal and we are encouraged by additional volumes that were added to our forecasting starting in 2027 which stem from capital investments expected to conclude this year. We expect to finalize this contract negotiation in Q4. This pipeline of renewals remains an important part of our strategy to strengthen our position and expand our product offering. We also continue to see a constructing funding backdrop in the commercial market. Although CRISI grants are scheduled to expire in 2026, previously awarded funding should continue to support project activity through 2028. Beyond that, proposed enhancements to the 45G tax credit could provide an additional source of support for short-line investments. Turning to residential lumber, results were softer in the quarter, but recent trends in both pricing and volumes have been encouraging, and we continue to expect full-year sales to remain within our $600 million to $650 million target range. Beyond our operational focus, we remain equally committed to sustainable development of our business. During the quarter, we published our 2025 Sustainability Report. The report reflects meaningful progress against our priorities, including a reduction in our injury rate frequency, which declined year over year, and that reflects our continued focus on the safety of our people. We achieved a 23% reduction in Scope 1 and 2 greenhouse gas emissions against our 2022 baseline, driven by operational improvements, including waste heat recovery and expanded solar energy use. We also advanced our commitment to Indigenous people, with 96% of our Canadian salaried employees completing Indigenous cultural awareness training. Ultimately, this report is a reflection of the dedication and effort of our people across the organization, and we are proud of what we've accomplished together in 2025. With this, I will turn the call over to Silvana Travaglini, who will provide an update on her financial performance in Q2. Silvana?