Toromont Industries Ltd.

Good morning. Today's Thursday, May 1st, 2025. Welcome to the Toromont Industries Limited first quarter 2025 results conference call. Please be advised that this call is being recorded and all lines have been placed on mute to prevent any background noise. Your host for today will be Mr. John Doolittle, Executive Vice President and Chief Financial Officer. Please go ahead, sir.

Okay. Thank you very much, Angeline. Good morning, everyone. Thanks a lot for joining us today to discuss Torremont's results for the first quarter of 2025. Also on the call with me, as usual, is Mike McMillan, our President and Chief Executive Officer. Mike and I will be referring to the presentation that is available on our website. To start, I would like to refer our listeners to slide two, which contains our advisory regarding forward-looking information statements. After our prepared remarks, we'll be more than happy to answer questions. So let's get started, move to slide three, and over to you, Mike.

Great, thanks very much John. Good morning everyone. I'm pleased with the performance of the team in the quarter. In a somewhat challenging market, we had consolidated revenue growth of 7% overall, growth in both the equipment group and Simcoe. Although we did not match our bottom line performance from last year, due largely to business mix and lower interest income, the team managed expenses very well and enhanced our already solid financial position. The equipment group continued to execute well against order backlog. Revenue increased on improved new equipment deliveries in construction, mining, and power systems, which includes the newly acquired AVL operations. Rental revenue improved in the quarter, reflecting the larger fleet, while used equipment sales declined year over year. Product support revenue decreased on lower parts volume and was partially offset by higher service activity. Operating income was lower versus the prior year as expected, given a strong comparator, which reflected the dynamics at play at the time, along with unfavorable sales mix, lower gross margins, and slightly higher expenses. Simcoe revenue and bottom line improvements demonstrated the team's strong execution. Simcoe had a solid start to the year in both Canada and the U.S. against a strong order backlog resulting in good package revenue growth. Product support activity continues to demonstrate good growth in the U.S. and Canada, supported by our larger technician workforce. Operating income increased on the higher revenue and good execution, partially offset by unfavorable sales mix, that is, lower product support revenue to total revenue, and slightly higher expenses to support activity and growth. As previously announced, we acquired a 60% ownership interest in ABL Manufacturing Inc., at the end of January. We see a good fit for this business with our current operations and markets. While we expect the business to be accretive to results, the business is building its productive capacity and the bottom line contribution is not expected to be significant over the near term. We will also buy out the remaining ownership by 2031, which will follow a predefined schedule. At this time, I'd like to also welcome Vince DiCristofaro, the president of AVL, and the AVL team to the Toromon family. During Q1, our solid financial position was maintained while we continued to exercise disciplined capital management and allocation. Across the organization, we continued to focus on our long-term investment strategies and remained committed to our operating disciplines while driving aftermarket strategies and delivering customer solutions. On slide four, I'd like to touch on a few key financial highlights. Investment in non-cash working capital increased 40% versus a year ago with higher levels of inventory, higher accounts receivable, slightly offset by lower accounts payable balances due primarily to the timing of equipment received. Accounts receivable increased in part reflecting higher revenue as well as receivables acquired with AVL. DSO increased up one day compared with last year at 42 days overall. Our team continues to do a nice job closely managing the aging of our receivables and monitoring customer credit levels and metrics. Inventory levels are higher than the prior year, driven by a number of factors, including delivery timing, inflation, foreign exchange rates on U.S. source supplies, improving availability through the supply chain, and activity levels. We ended the first quarter with ample liquidity, including cash of $977 million, an additional $456 million available to us on our existing credit facilities. We successfully issued a $300 million in senior debentures in the quarter as a result of our plan to refinance one of our bonds, which was due to mature later this year. Our net debt to total capitalization ratio was negative 1%. Overall, our balance sheet remains well positioned to support operational needs and we are prepared to manage challenges related to the economic variables and business conditions. As one would expect, we will continue to exercise the operational and financial discipline as we support our customer requirements and evaluate investment opportunities that may develop over time. Toromont targets a return on equity of 18% over a business cycle. Return on equity was slightly above this target level at 18.5% compared to 22% for Q1 of 2024. Return on capital employed was 24.1%, comparatively lower than 29% in Q1 of 2024. Both of these metrics reflect our higher capital investment and comparatively lower earnings. And finally, as announced yesterday, the Board of Directors approved the regular quarterly dividend of 52 cents per share payable on July 3rd, 2025, to shareholders on record on June 6th of 2025. John, I'll turn it over to you for some more detailed comments on the results.